Exhibit 10.3

 

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AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

 

WELLS FARGO CAPITAL FINANCE, LLC,

as Agent,

 

THE LENDERS THAT ARE PARTIES HERETO,

as the Lenders,

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,

as Parent,

 

AVENTINE RENEWABLE ENERGY, INC.,

AVENTINE RENEWABLE ENERGY — AURORA WEST, LLC,

AVENTINE RENEWABLE ENERGY — MT VERNON, LLC,

AVENTINE RENEWABLE ENERGY — CANTON, LLC,

AVENTINE POWER, LLC,

 

and

 

NEBRASKA ENERGY, L.L.C.,

as Borrowers

 

Dated as of July 20, 2011

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

DEFINITIONS AND CONSTRUCTION

1

 

 

 

1.1

Definitions

1

 

1.2

Accounting Terms

37

 

1.3

Code

38

 

1.4

Construction

38

 

1.5

Time References

38

 

1.6

Schedules and Exhibits

38

 

 

 

 

2.

LOANS AND TERMS OF PAYMENT

39

 

 

 

 

2.1

Revolving Loans

39

 

2.2

[Intentionally Omitted.]

40

 

2.3

Borrowing Procedures and Settlements

40

 

2.4

Payments; Reductions of Commitments; Prepayments

46

 

2.5

Promise to Pay

48

 

2.6

Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations

49

 

2.7

Crediting Payments

50

 

2.8

Designated Account

51

 

2.9

Maintenance of Loan Account; Statements of Obligations

51

 

2.10

Fees

51

 

2.11

Letters of Credit

51

 

2.12

LIBOR Option

57

 

2.13

Capital Requirements

58

 

2.14

[Intentionally Omitted]

59

 

2.15

Joint and Several Liability of Borrowers

60

 

 

 

 

3.

CONDITIONS; TERM OF AGREEMENT

61

 

 

 

 

3.1

Conditions Precedent to the Initial Extension of Credit

61

 

3.2

Conditions Precedent to all Extensions of Credit

62

 

3.3

Maturity

62

 

3.4

Effect of Maturity

62

 

3.5

Early Termination by Borrowers

62

 

3.6

Conditions Subsequent

62

 

 

 

 

4.

REPRESENTATIONS AND WARRANTIES

62

 

 

 

 

4.1

Due Organization and Qualification; Subsidiaries

63

 

4.2

Due Authorization; No Conflict

63

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

 

4.3

Governmental Consents

64

 

4.4

Binding Obligations; Perfected Liens

64

 

4.5

Title to Assets; No Encumbrances

64

 

4.6

Jurisdiction of Organization; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims

64

 

4.7

Litigation

65

 

4.8

Compliance with Laws

65

 

4.9

No Material Adverse Effect

65

 

4.10

Solvency

65

 

4.11

Employee Benefits

66

 

4.12

Environmental Condition

66

 

4.13

Intellectual Property

66

 

4.14

Deposit Accounts and Securities Accounts

66

 

4.15

Complete Disclosure

66

 

4.16

Patriot Act

67

 

4.17

Indebtedness

67

 

4.18

Payment of Taxes

67

 

4.19

Margin Stock

67

 

4.20

Governmental Regulation

67

 

4.21

OFAC

67

 

4.22

Employee and Labor Matters

68

 

4.23

Parent as a Holding Company

68

 

4.24

Leases

68

 

4.25

Eligible Accounts

68

 

4.26

Eligible Inventory

68

 

4.27

Locations of Inventory

68

 

4.28

Inventory Records

69

 

4.29

Bankruptcy

69

 

 

 

 

5.

AFFIRMATIVE COVENANTS

69

 

 

 

 

5.1

Financial Statements, Reports, Certificates

69

 

5.2

Collateral Reporting

69

 

5.3

Existence

69

 

5.4

Maintenance of Properties; Operation of Facilities

69

 

5.5

Taxes

69

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

 

5.6

Insurance

69

 

5.7

Inspection

70

 

5.8

Compliance with Laws

70

 

5.9

Environmental

70

 

5.10

Disclosure Updates

71

 

5.11

Formation of Subsidiaries

71

 

5.12

Further Assurances

72

 

5.13

Lender Meetings

72

 

5.14

Location of Inventory

72

 

5.15

Compliance with ERISA and the IRC

72

 

5.16

Hedge Agreements

73

 

5.17

Deposit Accounts and Securities Accounts

73

 

 

 

 

6.

NEGATIVE COVENANTS

73

 

 

 

 

 

6.1

Indebtedness

73

 

6.2

Liens

73

 

6.3

Restrictions on Fundamental Changes

73

 

6.4

Disposal of Assets

74

 

6.5

Change Name

74

 

6.6

Nature of Business

74

 

6.7

Prepayments and Amendments

74

 

6.8

Restricted Payments

75

 

6.9

Accounting Methods

75

 

6.10

Investments; Controlled Investments

75

 

6.11

Transactions with Affiliates

75

 

6.12

Use of Proceeds

76

 

6.13

Limitation on Issuance of Equity Interests

76

 

6.14

Inventory with Bailees

76

 

6.15

Parent as Holding Company

77

 

 

 

 

7.

FINANCIAL COVENANTS

77

 

 

 

 

 

7.1

Minimum Liquidity

77

 

7.2

Ethanol Production at Pekin Plant

77

 

 

 

 

8.

EVENTS OF DEFAULT

77

 

 

 

 

 

8.1

Payments

77

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

 

8.2

Covenants

78

 

8.3

Judgments

78

 

8.4

Voluntary Bankruptcy, etc.

78

 

8.5

Involuntary Bankruptcy, etc.

78

 

8.6

Default Under Other Agreements

78

 

8.7

Representations, etc.

79

 

8.8

Guaranty

79

 

8.9

Security Documents

79

 

8.10

Loan Documents

79

 

8.11

Change in Control

79

 

8.12

Employee Benefits

79

 

8.13

Restraining Orders

79

 

 

 

 

9.

RIGHTS AND REMEDIES

79

 

 

 

 

 

9.1

Rights and Remedies

79

 

9.2

Remedies Cumulative

80

 

 

 

 

10.

WAIVERS; INDEMNIFICATION

80

 

 

 

 

 

10.1

Demand; Protest; etc.

80

 

10.2

The Lender Group’s Liability for Collateral

80

 

10.3

Indemnification

80

 

 

 

 

11.

NOTICES

81

 

 

 

12.

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

82

 

 

 

13.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

83

 

 

 

 

 

13.1

Assignments and Participations

83

 

13.2

Successors

86

 

 

 

 

14.

AMENDMENTS; WAIVERS

86

 

 

 

 

 

14.1

Amendments and Waivers

86

 

14.2

Replacement of Certain Lenders

87

 

14.3

No Waivers; Cumulative Remedies

88

 

 

 

 

15.

AGENT; THE LENDER GROUP

88

 

 

 

 

 

15.1

Appointment and Authorization of Agent

88

 

15.2

Delegation of Duties

89

 

15.3

Liability of Agent

89

 

15.4

Reliance by Agent

89

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

 

15.5

Notice of Default or Event of Default

90

 

15.6

Credit Decision

90

 

15.7

Costs and Expenses; Indemnification

91

 

15.8

Agent in Individual Capacity

91

 

15.9

Successor Agent

91

 

15.10

Lender in Individual Capacity

92

 

15.11

Collateral Matters

92

 

15.12

Restrictions on Actions by Lenders; Sharing of Payments

93

 

15.13

Agency for Perfection

94

 

15.14

Payments by Agent to the Lenders

94

 

15.15

Concerning the Collateral and Related Loan Documents

94

 

15.16

Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information

94

 

15.17

Several Obligations; No Liability

95

 

 

 

 

16.

WITHHOLDING TAXES

95

 

 

 

 

 

16.1

Payments

95

 

16.2

Exemptions

96

 

16.3

Reductions

97

 

16.4

Refunds

97

 

 

 

 

17.

GENERAL PROVISIONS

98

 

 

 

 

 

17.1

Effectiveness

98

 

17.2

Section Headings

98

 

17.3

Interpretation

98

 

17.4

Severability of Provisions

98

 

17.5

Bank Product Providers

98

 

17.6

Debtor-Creditor Relationship

99

 

17.7

Counterparts; Electronic Execution

99

 

17.8

Revival and Reinstatement of Obligations; Certain Waivers

99

 

17.9

Confidentiality

99

 

17.10

Survival

100

 

17.11

Patriot Act

101

 

17.12

Integration

101

 

17.13

Parent as Agent for Borrowers

101

 

17.14

No Novation

102

 

v

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

 

17.15

Intercreditor Legend

102

 

vi

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EXHIBITS AND SCHEDULES

 

Exhibit A-1

Form of Assignment and Acceptance Agreement

Exhibit B-1

Form of Borrowing Base Certificate

Exhibit C-1

Form of Compliance Certificate

Exhibit L-1

Form of LIBOR Notice

 

 

Schedule A-1

Agent’s Account

Schedule A-2

Authorized Persons

Schedule C-1

Commitments

Schedule D-1

Designated Account

Schedule E-1

Eligible Inventory Locations

Schedule E-2

Existing Letters of Credit

Schedule P-1

Permitted Investments

Schedule P-2

Permitted Liens

Schedule R-1

Real Property Collateral

Schedule 1.1(a)

Specified Account Debtors

Schedule 3.1

Conditions Precedent

Schedule 3.6

Conditions Subsequent

Schedule 4.1(b)

Capitalization of Parent

Schedule 4.1(c)

Capitalization of Parent’s Subsidiaries

Schedule 4.6(a)

Name and Jurisdiction of Organization

Schedule 4.6(b)

Chief Executive Offices

Schedule 4.6(c)

Tax Identification Numbers and Organizational Identification Numbers

Schedule 4.6(d)

Commercial Tort Claims

Schedule 4.7(b)

Litigation

Schedule 4.11

Employee Benefit Plans

Schedule 4.12

Environmental Matters

Schedule 4.13

Intellectual Property

Schedule 4.14

Deposit Accounts and Securities Accounts

Schedule 4.17

Indebtedness

Schedule 4.27

Locations of Inventory

Schedule 5.1

Financial Statements, Reports, Certificates

Schedule 5.2

Collateral Reporting

Schedule 5.16

Hedge Agreements

Schedule 6.6

Nature of Business

Schedule 6.14

Inventory with Bailees

 

vii

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AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), is entered into
as of July 20, 2011, by and among the lenders identified on the signature pages
hereof (each of such lenders, together with its successors and permitted
assigns, is referred to hereinafter as a “Lender,” as that term is hereinafter
further defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability
company, as agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), AVENTINE RENEWABLE ENERGY
HOLDINGS, INC., a Delaware corporation (“Parent”), AVENTINE RENEWABLE ENERGY,
INC., a Delaware corporation (“AREI”), AVENTINE RENEWABLE ENERGY — AURORA WEST,
LLC, a Delaware limited liability company (“ARE-AW”), AVENTINE RENEWABLE ENERGY
— MT VERNON, LLC, a Delaware limited liability company (“ARE-MT), AVENTINE
RENEWABLE ENERGY — CANTON, LLC, a Delaware limited liability company (“ARE-C”),
AVENTINE POWER, LLC, a Delaware limited liability company (“Power”), and
NEBRASKA ENERGY, L.L.C., a Kansas limited liability company (“Nebraska”;
together with Parent, AREI, ARE-AW, ARE-MT, ARE-C, and Power, are referred to
hereinafter each individually as a “Borrower,” and individually and
collectively, jointly and severally, as “Borrowers”).

 

WHEREAS, Agent, certain of the Lenders and Borrowers are parties to that certain
Revolving Credit and Security Credit Agreement, dated as of March 15, 2010 (the
“Original Closing Date”) (as amended, restated, supplemented, or otherwise
modified from time to time prior to the date hereof, the “Original Credit
Agreement”); and

 

WHEREAS, Agent, the Lenders, and Borrowers desire to amend and restate the
Original Credit Agreement in its entirety (other than Section 4, which is being
amended and restated as the Guaranty and Security) subject to the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to amend
and restate the Original Credit Agreement in its entirety (other than Section 4,
which is being amended and restated as the Guaranty and Security) as follows:

 

The parties agree as follows:

 

1.                                       DEFINITIONS AND CONSTRUCTION.

 

1.1                                       Definitions.  As used in this
Agreement, the following terms shall have the following definitions:

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).

 

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by Parent or any of its Subsidiaries in a Permitted
Acquisition; provided, that such Indebtedness (a) is either purchase money
Indebtedness or a Capital Lease with respect to Equipment or mortgage financing
with respect to Real Property, (b) was in existence prior to the date of such
Permitted Acquisition, and (c) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.

 

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“Acquisition” means (a) the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all or substantially all of the Equity Interests of any other
Person.

 

“Additional Documents” has the meaning specified therefor in Section 5.12.

 

“Administrative Borrower” has the meaning specified therefor in Section 17.13.

 

“Administrative Questionnaire” has the meaning specified therefor in Section
13.1(a).

 

“Affected Lender” has the meaning specified therefor in Section 2.13(b).

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

 

“Agent” has the meaning specified therefor in the preamble to this Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1
(or such other Deposit Account of Agent that has been designated as such, in
writing, by Agent to Administrative Borrower and the Lenders).

 

“Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent
under the Loan Documents and securing the Obligations.

 

“Amendment to Indiana Port Lease Agreement” means an amendment to the Indiana
Port Lease Agreement, in form and substance satisfactory to Agent, in its sole
discretion, executed and delivered by the parties thereto.

 

“Applicable Margin” means, as of any date of determination and with respect to
Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set
forth in the following table that corresponds to the Average Daily Net
Availability of Borrowers for the most recently completed fiscal quarter;
provided, that for the period from the Closing Date through and including
September 30, 2011, the Applicable Margin shall be set at the margin in the row
styled “Level II”; provided further, that any time an Event of Default has
occurred and is continuing, the Applicable Margin shall be set at the margin in
the row styled “Level III”:

 

Level

 

Average Daily Net
Availability

 

Applicable Margin Relative
to Base Rate Loans (the
“Base Rate Margin”)

 

Applicable Margin
Relative to LIBOR
Rate Loans (the
“LIBOR Rate
Margin”)

I

 

> an amount equal to the result of 66% multiplied by the Maximum Revolver Amount

 

2.00 percentage points

 

3.00 percentage points

 

2

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II

 

< an amount equal to the result of 66% multiplied by the Maximum Revolver Amount
and > the result of 33% multiplied by the Maximum Revolver Amount

 

2.25 percentage points

 

3.25 percentage points

III

 

< an amount equal to the result of 33% multiplied by the Maximum Revolver Amount

 

2.50 percentage points

 

3.50 percentage points

 

The Applicable Margin shall be re-determined as of the first day of each fiscal
quarter of Parent.

 

“Application Event” means the occurrence of (a) a failure by Borrowers to repay
in full all of the Obligations in full on the Maturity Date, or (b) an Event of
Default and the election by Agent or the Required Lenders to require that
payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii).

 

“AREI” has the meaning specified therefor in the preamble to this Agreement.

 

“AREI Mortgage Assignment” means the assignment of mortgage, security agreement,
assignment of rents and leases and fixture filing, dated as of even date
herewith, by PNC to Agent with respect to that certain Mortgage, Security
Agreement, Assignment of Rents and Leases and Fixture Filing, executed by AREI
in favor of PNC, dated as of March 22, 2011, and recorded on April 18, 2011, as
Instrument No. 201100006947, Official Records of Tazewell County, Illinois, the
form and substance of which is reasonably satisfactory to Agent.

 

“ARE-AW” has the meaning specified therefor in the preamble to this Agreement.

 

“ARE-AW Mortgage Assignment” means the assignment of deed of trust, security
agreement, assignment of rents and leases and fixture filing, dated as of even
date herewith, by PNC to Agent with respect to that certain Deed of Trust,
Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed
by ARE-AW in favor of Chicago Title Insurance Company, as Trustee for the
benefit of PNC, dated as of March 22, 2011, and recorded on March 29, 2011, in
Mortgage Book 267, Page 80, Official Records of Hamilton County, Nebraska, the
form and substance of which is reasonably satisfactory to Agent.

 

“ARE-C” has the meaning specified therefor in the preamble to this Agreement.

 

“ARE-C Mortgage Assignment” means the assignment of mortgage, security
agreement, assignment of rents and leases and fixture filing, dated as of even
date herewith, by PNC to Agent with respect to that certain Mortgage, Security
Agreement, Assignment of Rents and Leases and Fixture Filing, executed by ARE-C
in favor of PNC, dated as of March 22, 2011, and recorded on April 1, 2011, as
Instrument No. 1139256, Official Records of Fulton County, Illinois, the form
and substance of which is reasonably satisfactory to Agent.

 

“ARE-MT” has the meaning specified therefor in the preamble to this Agreement.

 

“ARE-MT Mortgage Assignment” means the assignment of leasehold mortgage,
security agreement, assignment of rents and leases and fixture filing, dated as
of even date herewith, by PNC to Agent with respect to that certain Mortgage,
Security Agreement, Assignment of Rents and Leases and Fixture Filing,

 

3

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executed by ARE-MT in favor of PNC, dated as of March 22, 2011, and recorded on
April 14, 2011, as Instrument No. 201101532, Official Records of Posey County,
Indiana, the form and substance of which is reasonably satisfactory to Agent.

 

“Assignee” has the meaning specified therefor in Section 13.1(a).

 

“Assignment Agreement” means an assignment and acceptance agreement, dated as of
even date with this Agreement, executed and delivered by PNC and Agent,
acknowledged by Parent and each of its Subsidiaries, the form and substance of
which is reasonably satisfactory to Agent.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.

 

“Assignment of Patent and Trademark Security Agreement” means an assignment of
patent and trademark security agreement, dated as of even date with this
Agreement, executed and delivered by PNC in favor Agent, acknowledged by Parent
and each of its Subsidiaries, in the form and substance of which is reasonably
satisfactory to Agent.

 

“Authorized Person” means any one of the individuals identified on Schedule A-2,
as such schedule is updated from time to time by written notice from
Administrative Borrower to Agent.

 

“Availability” means, as of any date of determination, the amount that Borrowers
are entitled to borrow as Revolving Loans under Section 2.1 (after giving effect
to the then outstanding Revolver Usage).

 

“Average Daily Net Availability” means, with respect to any period, the sum of
the aggregate amount of Availability for each Business Day in such period
(calculated as of the end of each respective Business Day) divided by the number
of Business Days in such period.

 

“Backstop Purchasers” means Brevan Howard Asset Management LLP, Brigade Capital
Management LLC, Davidson Kempner Capital Management LLC, Nomura Corporate
Research & Asset Management, Inc., Whitebox Advisors, Senator Investment Group
LP, and SEACOR Capital Corporation, each as investment manager, for and on
behalf of certain funds.

 

“Back Stop Permitted Holders” has the meaning specified therefor in the
definition of Permitted Holder.

 

“Bank Product” means any one or more of the following financial products or
accommodations extended to Parent or its Subsidiaries by a Bank Product
Provider:  (a) credit cards (including commercial credit cards (including
so-called “procurement cards” or “P-cards”)), (b) credit card processing
services, (c) debit cards, (d) stored value cards, (e) Cash Management Services,
or (f) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time
by Parent or any of its Subsidiaries with a Bank Product Provider in connection
with the obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by

 

4

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a Bank Product Agreement and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts
that Agent or any Lender is obligated to pay to a Bank Product Provider as a
result of Agent or such Lender purchasing participations from, or executing
guarantees or indemnities or reimbursement obligations to, a Bank Product
Provider with respect to the Bank Products provided by such Bank Product
Provider to Parent or its Subsidiaries.

 

“Bank Product Provider” means Wells Fargo or any of its Affiliates (including
WFCF).

 

“Bank Product Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate to establish (based upon the Bank
Product Providers’ determination of the liabilities and obligations of Parent
and its Subsidiaries in respect of Bank Product Obligations) in respect of Bank
Products then provided or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

 

“Base Rate” means the greatest of (a) the Federal Funds Rate plus ½%, (b) the
LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3
months and shall be determined on a daily basis), plus 1 percentage point, and
(c) the rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco, California as its “prime rate”, with the
understanding that the “prime rate” is one of Wells Fargo’s base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate.

 

“Base Rate Loan” means each portion of the Revolving Loans that bears interest
at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which Parent or any of its Subsidiaries or ERISA Affiliates has been
an “employer” (as defined in Section 3(5) of ERISA) within the past six years.

 

“Board of Directors” means, as to any Person, the board of directors (or
comparable managers) of such Person or any committee thereof duly authorized to
act on behalf of the board of directors (or comparable managers).

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to this Agreement.

 

“Borrower Materials” has the meaning specified therefor in Section 17.9(c).

 

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a
Swing Loan, or by Agent in the case of an Extraordinary Advance.

 

“Borrowing Base” means, as of any date of determination, the result of:

 

(a)                                  85% of the amount of Eligible Accounts,
less the amount, if any, of the Dilution Reserve, plus

 

(b)                                 the lowest of

 

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(i) $37,500,000,

 

(ii) (A) 70% multiplied by the sum of the value (calculated at the lower of cost
or market on a first in, first out basis; provided, however, that with respect
to (x) ethanol, (y) Ethanol Byproduct, and (z) corn purchased by Borrowers to be
used to prepare first quality finished goods held for sale in the ordinary
course of Borrowers’ business, market shall be based on the price of corn,
ethanol or Ethanol Byproduct, as applicable, as listed by the Chicago Board of
Trade at the close of business on the date prior to the date of delivery of each
Borrowing Base Certificate pursuant to Schedule 5.2, adjusted by the local
basis) of (1) Eligible Finished Goods Inventory at such time, and (2) Eligible
Raw Materials Inventory at such time, plus (B) 85% multiplied by the Net
Recovery Percentage identified in the most recent inventory appraisal ordered
and obtained by Agent multiplied by the value (calculated at the lower of cost
or market on a basis consistent with Borrowers’ historical accounting practices)
of Eligible Work-in-Process Inventory,

 

(iii) (A) 85% multiplied by the sum of the Net Recovery Percentage identified in
the most recent inventory appraisal ordered and obtained by Agent multiplied by
the value (calculated at the lower of cost or market on a basis consistent with
Borrowers’ historical accounting practices) of (1) Eligible Finished Goods
Inventory (such determination may be made as to different categories of Eligible
Finished Goods Inventory based upon the Net Recovery Percentage applicable to
such categories) at such time, and (2) Eligible Raw Materials Inventory (such
determination may be made as to different categories of Eligible Raw Materials
Inventory based upon the Net Recovery Percentage applicable to such categories)
at such time, plus (B) 85% multiplied by the sum of the Net Recovery Percentage
identified in the most recent inventory appraisal ordered and obtained by Agent
multiplied by the value (calculated at the lower of cost or market on a basis
consistent with Borrowers’ historical accounting practices) of Eligible
Work-in-Process Inventory (such determination may be made as to different
categories of Eligible Work-in-Process Inventory based upon the Net Recovery
Percentage applicable to such categories) at such time, minus

 

(c)                                  the aggregate amount of reserves, if any,
established by Agent under Section 2.1(c).

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of California,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.

 

“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

 

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“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time
deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States or any state thereof or the District of Columbia or any
United States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $1,000,000,000, (e) Deposit
Accounts maintained with (i) any bank that satisfies the criteria described in
clause (d) above, or (ii) any other bank organized under the laws of the United
States or any state thereof so long as the full amount maintained with any such
other bank is insured by the Federal Deposit Insurance Corporation, (f)
repurchase obligations of any commercial bank satisfying the requirements of
clause (d) of this definition or recognized securities dealer having combined
capital and surplus of not less than $1,000,000,000, having a term of not more
than seven days, with respect to securities satisfying the criteria in clauses
(a) or (d) above, (g) debt securities with maturities of six months or less from
the date of acquisition backed by standby letters of credit issued by any
commercial bank satisfying the criteria described in clause (d) above, and (h)
Investments in money market funds substantially all of whose assets are invested
in the types of assets described in clauses (a) through (g) above.

 

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement,  merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

 

“Change in Control” means that:

 

(a)  the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Borrowers or any one or more of their Subsidiaries, taken as a whole, to any
“person” (within the meaning of Section 13(d) of the Exchange Act);

 

(b)  the stockholders of any one or more Borrowers approve a plan for the
liquidation or dissolution of any one or more of the Borrowers;

 

(c)  any Person or Persons acting together (other than Permitted Holders) that
would constitute a group (for purposes of Section 13(d) of the Exchange Act, or
any successor provision thereto) (a “group”), together with any Affiliates or
related Persons thereof, is or becomes the “Beneficial Owner,” directly or
indirectly, of at least 35% of the voting power of the Voting Stock of Parent;

 

(d)  individuals who on the Closing Date constituted the Board of Directors of
Parent (together with any new directors whose election by the Board of Directors
of Parent or whose nomination by the Board of Directors of Parent for election
by Parent’s stockholders was approved by a vote of at least a majority of the
Board of Directors of Parent then in office who either were members of the Board
of Directors of Parent on the Closing Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors of Parent then in office;

 

(e)  the failure at any time of (i) Parent to legally and beneficially own and
control 100% of the issued and outstanding shares of Equity Interests of each
other Loan Party, other than Nebraska; (ii) Parent

 

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to legally and beneficially own and control 78.4% of the issued and outstanding
shares of Equity Interests of Nebraska or AREI to legally and beneficially own
and control 21.6% of the issued and outstanding shares of Equity Interests of
Nebraska; or (iii) Parent to have the ability to elect all of the members of the
Board of Directors of each other Loan Party; or

 

(f)  the occurrence of any “Change of Control” as defined in the Term Loan
Agreement.

 

“Closing Date” means the date of the making of the initial Revolving Loan (or
other extension of credit) under this Agreement.

 

“Code” means the California Uniform Commercial Code, as in effect from time to
time.

 

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by the Parent or its Subsidiaries in or upon which a
Lien is granted by such Person in favor of Agent or the Lenders under any of the
Loan Documents.

 

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in the Loan Parties’ books and records, Equipment, or Inventory, in each case,
in form and substance reasonably satisfactory to Agent.

 

“Commitment” means, with respect to each Lender, its Commitment, and, with
respect to all Lenders, their Commitments, as such Dollar amounts are set forth
beside such Lender’s name under the applicable heading on Schedule C-1 or in the
Assignment and Acceptance pursuant to which such Lender became a Lender under
this Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1.

 

“Competitor” means any Person which is a direct competitor of a Borrower or its
Subsidiaries if, at the time of a proposed assignment, Agent and the assigning
Lender have actual knowledge that such Person is a direct competitor of such
Borrower or its Subsidiaries; provided, that in connection with any assignment
or participation, the Assignee or Participant with respect to such proposed
assignment or participation that is an investment bank, a commercial bank, a
finance company, a fund, or other Person which merely has an economic interest
in any such direct competitor, and is not itself such a direct competitor of a
Borrower or its Subsidiaries, shall not be deemed to be a direct competitor for
the purposes of this definition.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by a Financial Officer of Parent to Agent.

 

“Confidential Information” has the meaning specified therefor in Section
17.9(a).

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. 
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Parent or one of its
Subsidiaries, Agent, and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).

 

“Copyright Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

 

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

 

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“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under this Agreement on the date that it is required
to do so under this Agreement (including the failure to make available to Agent
amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified any Borrower,
Agent, or any Lender in writing that it does not intend to comply with all or
any portion of its funding obligations under this Agreement, (c) 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 (as
reasonably determined by Agent) under which it has committed to extend credit,
(d) failed, within 1 Business Day after written request by Agent, to confirm
that it will comply with the terms of this Agreement relating to its obligations
to fund any amounts required to be funded by it under this Agreement, (e)
otherwise failed to pay over to Agent or any other Lender any other amount
required to be paid by it under this Agreement on the date that it is required
to do so under this Agreement, or (f)(i) becomes or is insolvent or has a parent
company that has become or is insolvent or (ii) becomes the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, or custodian or 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.

 

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).

 

“Deposit Account” means any deposit account (as that term is defined in the
Code).

 

“Designated Account” means the Deposit Account of Administrative Borrower or
AREI identified on Schedule D-1 (or such other Deposit Account of Administrative
Borrower or AREI located at Designated Account Bank that has been designated as
such, in writing, by Administrative Borrower to Agent).

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1 (or
such other bank that is located within the United States that has been
designated as such, in writing, by Administrative Borrower to Agent).

 

“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 90 consecutive days, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to Borrowers’ Accounts
during such period, by (b) Borrowers’ billings with respect to Accounts during
such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.

 

“Disbursement Letter” means a letter agreement, dated as of even date with this
Agreement, executed and delivered by Parent, each of its Subsidiaries, PNC and
Agent, the form and substance of which is reasonably satisfactory to Agent.

 

“Disqualified Equity Interests” shall mean any Equity Interest that, by its
terms (or by the terms of any security or other Equity Interests into which it
is convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable (other than solely
for Qualified Equity Interests), pursuant to a sinking fund obligation or
otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations that are accrued and payable and the termination of
the Commitments), (b) is redeemable at the option of the holder

 

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thereof (other than solely for Qualified Equity Interests), in whole or in part,
(c) provides for the scheduled payments of dividends in cash, or (d) is or
becomes convertible into or exchangeable for Indebtedness or any other Equity
Interests that would constitute Disqualified Equity Interests, in each case,
prior to the date that is 180 days after the Maturity Date.

 

“Dollars” or “$” means United States dollars.

 

“Eligible Accounts” means those Accounts created by any Borrower in the ordinary
course of its business, that arise out of such Borrower’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, however, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
field examination performed by (or on behalf of) Agent from time to time after
the Closing Date.  In determining the amount to be included, Eligible Accounts
shall be calculated net of customer deposits, unapplied cash, taxes, discounts,
credits, allowances, and rebates.  Eligible Accounts shall not include the
following:

 

(a)                                  Accounts that (i) an Account Debtor listed
on Schedule 1.1(a) (as such Schedule may be updated from time to time with prior
written consent of Agent) has failed to pay within the lesser of (A) a period of
time equal to the amount of days of the selling terms for such Account
multiplied by 3 and (B) 45 days, and (ii) an Account Debtor, other than an
Account Debtor listed on Schedule 1.1(a), has failed to pay within the lesser of
(A) a period of time equal to the amount of days of the selling terms for such
Account multiplied by 3 and (B) 30 days,

 

(b)                                 Accounts owed by an Account Debtor (or its
Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above,

 

(c)                                  Accounts with respect to which the Account
Debtor is an Affiliate of a Borrower or an employee or agent of a Borrower or
any Affiliate of a Borrower,

 

(d)                                 Accounts arising in a transaction wherein
goods are placed on consignment or are sold pursuant to a guaranteed sale, a
sale or return, a sale on approval, a bill and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional,

 

(e)                                  Accounts that are not payable in Dollars,

 

(f)                                    Accounts with respect to which the
Account Debtor (i) does not maintain its chief executive office in the United
States, (ii) is not organized under the laws of the United States or any state
thereof, or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof, unless (A) the Account is supported by an irrevocable letter of credit
reasonably satisfactory to Agent (as to form, substance, and issuer or domestic
confirming bank) that has been delivered to Agent and is directly drawable by
Agent, or (B) the Account is covered by credit insurance in form, substance, and
amount, and by an insurer, reasonably satisfactory to Agent,

 

(g)                                 Accounts with respect to which the Account
Debtor is either (i) the United States or any department, agency, or
instrumentality of the United States (exclusive, however, of Accounts with
respect to which Borrowers have complied, to the reasonable satisfaction of
Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of
the United States,

 

(h)                                 Accounts with respect to which the Account
Debtor is a creditor of a Borrower, has or has asserted a right of recoupment or
setoff, or has disputed its obligation to pay all or any portion of the Account,
to the extent of such claim, right of recoupment or setoff, or dispute,

 

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(i)                                     Accounts with respect to (i) an Account
Debtor with (A) a corporate credit rating from S&P of BBB or higher or (B) a
corporate credit rating from Moody’s of Baa2 or higher, in each case whose total
obligations owing to Borrowers exceed 35% (such percentage, as applied to a
particular Account Debtor, being subject to reduction by Agent in its Permitted
Discretion if the creditworthiness of such Account Debtor deteriorates) of all
Eligible Accounts, to the extent of the obligations owing by such Account Debtor
in excess of such percentage and (ii) an Account Debtor, other than an Account
Debtor included in the foregoing clause (i), whose total obligations owing to
Borrowers exceed 10% (such percentage, as applied to a particular Account
Debtor, being subject to reduction by Agent in its Permitted Discretion if the
creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts,
to the extent of the obligations owing by such Account Debtor in excess of such
percentage; provided, however, that, in each case, the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentage shall be
determined by Agent based on all of the otherwise Eligible Accounts prior to
giving effect to any eliminations based upon the foregoing concentration limit,

 

(j)                                     Accounts with respect to which the
Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone
out of business, or as to which a Borrower has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,

 

(k)                                  Accounts, the collection of which, Agent,
in its Permitted Discretion, believes to be doubtful, including by reason of the
Account Debtor’s financial condition,

 

(l)                                     Accounts that are not subject to a valid
and perfected first priority Agent’s Lien,

 

(m)                               Accounts with respect to which (i) the goods
giving rise to such Account have not been shipped and billed to the Account
Debtor, or (ii) the services giving rise to such Account have not been performed
and billed to the Account Debtor,

 

(n)                                 Accounts with respect to which the Account
Debtor is a Sanctioned Person or Sanctioned Entity,

 

(o)                                 Accounts that represent the right to receive
progress payments or other advance billings that are due prior to the completion
of performance by Borrowers of the subject contract for goods or services, or

 

(p)                                 Accounts owned by a target acquired in
connection with a Permitted Acquisition, until the completion of an appraisal
and field examination with respect to such target, in each case, reasonably
satisfactory to Agent (which appraisal and field examination may be conducted
prior to the closing of such Permitted Acquisition).

 

“Eligible Finished Goods Inventory” shall mean Inventory that qualifies as
Eligible Inventory and consists of first quality finished goods held for sale in
the ordinary course of Borrowers’ business.

 

“Eligible Inventory” means Inventory of a Borrower, that complies with each of
the representations and warranties respecting Eligible Inventory made in the
Loan Documents, and that is not excluded as ineligible by virtue of one or more
of the excluding criteria set forth below; provided, however, that such criteria
may be revised from time to time by Agent in Agent’s Permitted Discretion to
address the results of any field examination or appraisal performed by Agent
from time to time after the Closing Date.  In determining the amount to be so
included, Inventory shall be valued at the lower of cost or market on a basis
consistent with Borrowers’ historical accounting practices.  An item of
Inventory shall not be included in Eligible Inventory if:

 

(a)                                  a Borrower does not have good, valid, and
marketable title thereto,

 

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(b)                                 a Borrower does not have actual and
exclusive possession thereof (either directly or through a bailee or agent of
such Borrower),

 

(c)                                  it is not located at one of the locations
in the continental United States set forth on Schedule E-1 (as such Schedule may
be updated from time to time with prior written consent of Agent) (or in-transit
from one such location to another such location),

 

(d)                                 it is in-transit to or from a location of a
Borrower (other than in-transit from one location set forth on Schedule E-1 (as
such Schedule may be updated from time to time with prior written consent of
Agent) to another location set forth on Schedule E-1 and other than ethanol that
is in transit from one location set forth on Schedule E-1 to an Account Debtor
with respect to which Eligible Accounts will be created by delivery of such
Inventory to such Account Debtor),

 

(e)                                  it is located on real property leased by a
Borrower or in a contract warehouse, in each case, unless it is subject to a
Collateral Access Agreement executed by the lessor or warehouseman, as the case
may be, and unless it is segregated or otherwise separately identifiable from
goods of others, if any, stored on the premises,

 

(f)                                    it is the subject of a bill of lading or
other document of title,

 

(g)                                 it is not subject to a valid and perfected
first priority Agent’s Lien,

 

(h)                                 it consists of goods returned or rejected by
a Borrower’s customers,

 

(i)                                     it consists of goods that are obsolete
or slow moving, restrictive or custom items, or goods that constitute spare
parts, packaging and shipping materials, supplies used or consumed in Borrowers’
business, bill and hold goods, defective goods, “seconds”, or Inventory acquired
on or held on consignment,

 

(j)                                     it is subject to third party trademark,
licensing or other proprietary rights, unless Agent is satisfied that such
Inventory can be freely sold by Agent on and after the occurrence of an Event of
a Default despite such third party rights,

 

(k)                                  it was acquired in connection with a
Permitted Acquisition, until the completion of an appraisal and field
examination of such Inventory, in each case, reasonably satisfactory to Agent
(which appraisal and field examination may be conducted prior to the closing of
such Permitted Acquisition), or

 

(l)                                     it consists of goods which have been
paid for by or on behalf of an Account Debtor prior to the delivery of such
goods to such Account Debtor.

 

“Eligible Raw Material Inventory” shall mean Inventory that qualifies as
Eligible Inventory and consists of goods that are first quality raw materials to
the extent such goods are used to prepare Eligible Work-in-Process Inventory;
provided, however, that, anything to the contrary contained herein
notwithstanding, the value of such Inventory shall not include the value of any
labor or other services rendered to produce such Inventory or the cost of
converting such Inventory into Eligible Work-in-Process Inventory.

 

“Eligible Work-in-Process Inventory” shall mean Inventory that qualifies as
Eligible Inventory and consists of goods that are first quality work-in-process
to the extent such goods are used to prepare Eligible Finished Goods; provided,
however, that, anything to the contrary contained herein notwithstanding, the
value of such Inventory shall not include the value of any labor or other
services rendered to produce such Inventory or the cost of converting such
Inventory into Eligible Finished Goods.

 

“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA (a) that is maintained for employees of any Loan Party or
any ERISA Affiliate, (b) that

 

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has at any time within the preceding six (6) years been maintained for the
employees of any Loan Party or any current or former ERISA Affiliate, (c) to
which any Loan Party or any ERISA Affiliate makes contributions or is required
to make contributions, (d) to which any Loan Party or any ERISA Affiliate has
made or has been required to make contributions at any time within the preceding
six (6) years or (e) to which any Loan Party to any ERISA Affiliate has, or has
had at any time within the preceding six (6) years, any liability, contingent or
otherwise.

 

“Environmental Action” means any actual or, to the knowledge of a Responsible
Officer, threatened complaint, summons, citation, notice, directive, order,
claim, litigation, investigation, judicial or administrative proceeding,
judgment, letter, or other written communication from any Governmental
Authority, or any third party either involving violations by any Borrower or any
Subsidiary of Borrower of Environmental Laws, or related to any Releases of
Hazardous Materials (a) occurring at any assets, properties, or businesses owned
or operated by any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, including those arising from adjoining properties or
businesses, or (b) arising from facilities which received Hazardous Materials
generated by any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest.

 

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, relating to the environment,
the effect of the environment on employee health, or Hazardous Materials, in
each case as amended from time to time.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any violations of or non-compliance with Environmental Laws, Releases
of Hazardous Substances, claims or demands for, or Remedial Action required, by
any Governmental Authority or any third party relating to or otherwise impacting
any assets or properties owned or operated by any Borrower or their Subsidiary.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

 

“Equipment” means equipment (as that term is defined in the Code).

 

“Equity Interest” means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

 

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Parent or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Parent or its Subsidiaries under IRC Section 414(c), (c) solely for
purposes of Section 302 of ERISA and Section 412 of the IRC, any organization
subject to ERISA that is a member of an affiliated service group of which Parent
or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person
subject to ERISA that is a party

 

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to an arrangement with Parent or any of its Subsidiaries and whose employees are
aggregated with the employees of Parent or its Subsidiaries under IRC Section
414(o).

 

“Estoppel Agreement” means a letter agreement, dated as of even date with this
Agreement, executed and delivered by Parent and each of its Subsidiaries in
favor of Agent, the form and substance of which is reasonably satisfactory to
Agent.

 

“Ethanol Byproduct” means the byproduct created in the production of ethanol.

 

“Event of Default” has the meaning specified therefor in Section 8.

 

“Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Parent and its Subsidiaries aged in excess of historical levels with respect
thereto and all book overdrafts of Parent and its Subsidiaries in excess of
historical practices with respect thereto, in each case as determined by Agent
in its Permitted Discretion.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

 

“Existing Port of Indiana Subordination Agreement” means that certain
Subordination Agreement, dated as of March 22, 2011, among Term Loan Agent, PNC,
The Ports of Indiana, a body corporate and politic existing under the laws of
the State of Indiana, formerly known as the Indiana Port Commission, and
Aventine Renewable Energy — Mt Vernon, LLC.

 

“Extraordinary Advances” has the meaning specified therefor in Section
2.3(d)(i).

 

“Fee Letter” means that certain fee letter, dated as of even date with this
Agreement, by and among Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
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 such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by it.

 

“Financial Condition Certificate” means that certain financial condition
certificate, dated as of even date with this Agreement, executed by a Financial
Officer of each of Borrowers, in form and substance reasonably satisfactory to
Agent.

 

“Financial Officer” means with respect to any Person, the chief financial
officer, chief accounting officer, vice president of finance, treasurer,
assistant treasurer or controller of such Person.

 

“Foreign Lender” means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii).

 

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

 

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“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

 

“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

 

“Guarantors” means each Person that becomes a guarantor after the Closing Date
pursuant to Section 5.11 and “Guarantor” means any one of them.

 

“Guaranty and Security Agreement” means that certain Amended and Restated
Guaranty and Security Agreement, dated as of even date with this Agreement, in
form and substance reasonably satisfactory to Agent, executed and delivered by
each Loan Party to Agent.

 

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable Environmental Laws as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, and (c) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement” means (a) a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code and (b) all agreements with respect
to carbon credits, renewable identification numbers and other similar rights
issued by the United States Environmental Protection Agency or any other
Governmental Authority, rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
cross product hedges, forward commodity contracts, equity or equity index swaps
or options, bond or bond price or bond index swaps or options of forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, carbon credits, renewable
identification numbers under the Renewable Fuel Standard program under the
Foreign Policy Act of 2005 and other similar rights, or any other similar
transactions or any combination of the foregoing (including options to enter
into any of the foregoing), whether or not any such transaction is governed by
or subject to any master agreement, entered into for the purpose of hedging the
risk associated with Parent’s and its Subsidiaries’ operations and not for
speculative purposes.

 

“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Parent or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Hedge
Providers.

 

“Hedge Provider” means Wells Fargo or any of its Affiliates.

 

“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, (e) all obligations of such Person to pay the deferred purchase price
of assets (other than trade payables incurred in the ordinary course of business
and repayable in accordance with customary trade

 

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practices and, for the avoidance of doubt, other than royalty payments payable
in the ordinary course of business in respect of non-exclusive licenses), (f) to
the extent not otherwise included in this definition, all monetary obligations
of such Person owing under Hedge Agreements (which amount shall be calculated
based on the amount that would be payable by such Person if the Hedge Agreement
were terminated on the date of determination), (g) any Disqualified Equity
Interests of such Person, and (h) any obligation of such Person guaranteeing or
intended to guarantee (whether directly or indirectly guaranteed, endorsed,
co-made, discounted, or sold with recourse) any obligation of any other Person
that constitutes Indebtedness under any of clauses (a) through (g) above.  For
purposes of this definition, (i) the amount of any Indebtedness represented by a
guaranty or other similar instrument shall be the lesser of the principal amount
of the obligations guaranteed and still outstanding and the maximum amount for
which the guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
which is limited or is non-recourse to a Person or for which recourse is limited
to an identified asset shall be valued at the lesser of (A) if applicable, the
limited amount of such obligations, and (B) if applicable, the fair market value
of such assets securing such obligation.

 

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3.

 

“Indiana Port Lease Agreement” means the Lease Agreement, dated as of October
31, 2006, between the Indiana Port Lessor and the Indiana Port Lessee, as
amended by 8 amendments prior to the Closing Date, and as the same may be
amended, restated, supplemented or otherwise modified from time to time after
the Closing Date in a manner satisfactory to Agent.

 

“Indiana Port Lease Collateral” means (a) prior to the Port Lien Release Date,
any Inventory, Equipment or Fixtures of the Indiana Port Lessee that are now or
hereafter located on the Indiana Port Leased Premises, but only for the period
of time that the Indiana Port Lease Agreement is in full force and effect and
ARE-MT is the Indiana Port Lessee, and (b) after the Port Lien Release Date, any
Equipment or Fixtures of the Indiana Port Lessee that are now or hereafter
located on the Indiana Port Leased Premises, but only for the period of time
that the Indiana Port Lease Agreement is in full force and effect and ARE-MT is
the Indiana Port Lessee.

 

“Indiana Port Leased Premises” means the real property leasehold interest
located at 7201 Port Road, Mt. Vernon, Indiana 47620 that is leased by the
Indiana Port Lessee from the Indiana Port Lessor pursuant to the Indiana Port
Lease Agreement.

 

“Indiana Port Lessee” means the lessee under the Indiana Port Lease Agreement. 
As of the date of this Agreement, the Indiana Port Lessee is ARE-MT.

 

“Indiana Port Lessor” means The Ports of Indiana, a body corporate and politic
existing under the laws of the State of Indiana, and its successors and assigns.

 

“Ineligible Institution” shall mean the Persons identified in writing to Agent
by Borrowers on or prior to the Closing Date, which listing is consented to in
writing by Agent (such consent not to be unreasonably withheld or delayed).

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

 

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“Intercompany Subordination Agreement” means an intercompany subordination
agreement, dated as of even date with this Agreement, executed and delivered by
Parent, each of its Subsidiaries, and Agent, the form and substance of which is
reasonably satisfactory to Agent.

 

“Intercreditor Agreement” means that certain Amended and Restated Intercreditor
Agreement, dated as of even date with this Agreement, executed by and among Term
Loan Agent and Agent (as assignee from PNC, as agent under the Original Credit
Facility), and acknowledged by Borrowers, in form and substance satisfactory to
Agent, and as the same may be further amended, modified or restated in
accordance with the terms hereof.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, that (a)
interest shall accrue at the applicable rate based upon the LIBOR Rate from and
including the first day of each Interest Period to, but excluding, the day on
which any Interest Period expires, (b) any Interest Period that would end on a
day that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day, (c) with respect
to an 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), the Interest Period shall end on the
last Business Day of the calendar month that is 1, 2, or 3 months after the date
on which the Interest Period began, as applicable, and (d) Borrowers may not
elect an Interest Period which will end after the Maturity Date.

 

“Inventory” means inventory (as that term is defined in the Code).

 

“Inventory Reserves” means, as of any date of determination, (a) Landlord
Reserves and (b) those reserves that Agent deems necessary or appropriate, in
its Permitted Discretion and subject to Section 2.1(c), to establish and
maintain (including reserves for slow moving Inventory, for Inventory shrinkage,
and for unpaid corn in order to mitigate the effects of the Perishable
Agricultural Commodities Act of 1930) with respect to Eligible Inventory.

 

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) payroll, commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide Accounts arising in the ordinary course of
business), or acquisitions of Indebtedness, Equity Interests, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP. 
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustment for increases or
decreases in value, or write-ups, write-downs, or write-offs with respect to
such Investment.

 

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by any Borrower in
favor of Issuing Lender or Underlying Issuer and relating to such Letter of
Credit.

 

“Issuing Lender” means WFCF or any other Lender that, at the request of
Borrowers and with the consent of Agent, agrees, in such Lender’s sole
discretion, to become an Issuing Lender for the purpose of

 

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issuing Letters of Credit or Reimbursement Undertakings pursuant to Section 2.11
and Issuing Lender shall be a Lender.

 

“Landlord Reserve” means, as to each location at which any Borrower has
Inventory located and as to which a Collateral Access Agreement has not been
received by Agent, a reserve in an amount equal to the greater of (a) the number
of months rent for which the landlord will have, under applicable law, a Lien in
the Inventory of Borrower to secure the payment of rent or other amounts under
the lease relative to such location, or (b) 3 months rent under the lease
relative to such location.

 

“Lender” has the meaning set forth in the preamble to this Agreement, shall
include Issuing Lender and the Swing Lender, and shall also include any other
Person made a party to this Agreement pursuant to the provisions of Section 13.1
and “Lenders” means each of the Lenders or any one or more of them.

 

“Lender Group” means each of the Lenders (including Issuing Lender and the Swing
Lender) and Agent, or any one or more of them.

 

“Lender Group Expenses” means all (a) costs or expenses (including taxes and
insurance premiums) required to be paid by Parent or its Subsidiaries under any
of the Loan Documents that are paid, advanced, or incurred by the Lender Group,
(b) documented out-of-pocket fees or charges paid or incurred by Agent in
connection with the Lender Group’s transactions with Parent or its Subsidiaries
under any of the Loan Documents, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record
searches, filing fees, recording fees, publication, appraisal (including
periodic collateral appraisals or business valuations to the extent of the fees
and charges (and up to the amount of any limitation) contained in this Agreement
or the Fee Letter), real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) Agent’s customary fees and charges
(as adjusted from time to time) with respect to the disbursement of funds (or
the receipt of funds) to or for the account of Borrowers (whether by wire
transfer or otherwise), together with any documented out-of-pocket costs and
expenses incurred in connection therewith, (d) customary charges imposed or
incurred by Agent resulting from the dishonor of checks payable by or to any
Loan Party, (e) reasonable and documented out-of-pocket costs and expenses paid
or incurred by the Lender Group to correct any default or enforce any provision
of the Loan Documents, or during the continuance of an Event of Default, in
gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral, or any
portion thereof, irrespective of whether a sale is consummated, (f) documented
field examination, appraisal, electronic reporting, and valuation fees and
expenses (including travel, meals, and lodging) of Agent related to any
inspections, field examinations, appraisals, establishment of electronic
reporting, or valuation to the extent of the fees and charges (and up to the
amount of any limitation) provided in Section 2.10, (g) Agent’s reasonable costs
and expenses (including reasonable documented attorneys fees and expenses)
relative to third party claims or any other lawsuit or adverse proceeding paid
or incurred, whether in enforcing or defending the Loan Documents or otherwise
in connection with the transactions contemplated by the Loan Documents, Agent’s
Liens in and to the Collateral, or the Lender Group’s relationship with Parent
or any of its Subsidiaries, (h) Agent’s reasonable documented costs and expenses
(including reasonable documented attorneys fees and due diligence expenses)
incurred in advising, structuring, drafting, reviewing, administering (including
travel, meals, and lodging), syndicating (including reasonable costs and
expenses relative to CUSIP, DXSyndicate™, SyndTrak or other communication costs
incurred in connection with a syndication of the loan facilities), or amending,
waiving, or modifying the Loan Documents, (i) Agent’s and each Lender’s
reasonable documented costs and expenses (including reasonable documented
attorneys, accountants, consultants, and other advisors fees and expenses)
incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
“workout,” a “restructuring,” or an Insolvency Proceeding concerning Parent or
any of its Subsidiaries or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether a lawsuit
or other adverse proceeding is brought, or in taking any enforcement action or
any Remedial Action with respect to the Collateral, and (j) the fees, charges,
commissions and costs provided for in Section 2.11(j) (including any fronting
fees) and all other fees, charges, commissions, costs and expenses for
amendments, renewals, extensions, transfers, or

 

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drawings from time to time charged by the Underlying Issuer or incurred or
charged by Issuing Lender in respect of Letters of Credit and out-of-pocket
fees, costs, and expenses charged by the Underlying Issuer or incurred or
charged by Issuing Lender in connection with the issuance, amendment, renewal,
extension, or transfer of, or drawing under, any Letter of Credit or any demand
for payment thereunder.

 

“Lender Group Representatives” has the meaning specified therefor in Section
17.9.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by Issuing Lender or a letter of credit (as that term is defined in
the Code) issued by Underlying Issuer, as the context requires.

 

“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit Fees and all fees, charges and
commissions provided for in Section 2.11(j) (including any fronting fees) will
continue to accrue while the Letters of Credit are outstanding) to be held by
Agent for the benefit of the Lenders in an amount equal to 103% of the then
existing Letter of Credit Usage, (b) delivering to Agent documentation executed
by all beneficiaries under the Letters of Credit, in form and substance
reasonably satisfactory to Agent and Issuing Lender, terminating all of such
beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a
standby letter of credit, in form and substance reasonably satisfactory to
Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an
amount equal to 103% of the then existing Letter of Credit Usage (it being
understood that the Letter of Credit Fee and all fronting fees set forth in this
Agreement will continue to accrue while the Letters of Credit are outstanding
and that any such fees that accrue must be an amount that can be drawn under any
such standby letter of credit).

 

“Letter of Credit Disbursement” means a payment made by Issuing Lender or
Underlying Issuer pursuant to a Letter of Credit.

 

“Letter of Credit Exposure” means, as of any date of determination with respect
to any Lender, such Lender’s Pro Rata Share of the Letter of Credit Usage on
such date.

 

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b).

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i).

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a).

 

“LIBOR Rate” means the rate per annum rate appearing on Macro*World’s
(www.mworld.com; the “Service”) Page BBA LIBOR - USD) (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service) 2 Business Days prior to the commencement of the requested Interest
Period, for a term and in an amount comparable to the Interest Period and the
amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan
or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan
to a LIBOR Rate Loan) by Borrower in accordance with this Agreement, which
determination shall be conclusive in the absence of manifest error.

 

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“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at
a rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.

 

“Liquidity Requirement” has the meaning specified therefor in Section 7.1.

 

“Loan” shall mean any Revolving Loan, Swing Loan or Extraordinary Advance made
hereunder.

 

“Loan Account” has the meaning specified therefor in Section 2.9.

 

“Loan Documents” means this Agreement, the Resignation and Appointment
Agreement,  the Assignment Agreement, the Assignment of Patent and Trademark
Security Agreement, any Borrowing Base Certificate, the Control Agreements, the
Copyright Security Agreement, the Estoppel Agreement, the Fee Letter, the
Financial Condition Certificate, the Guaranty and Security Agreement, the
Intercompany Subordination Agreement, the Intercreditor Agreement, any Issuer
Documents, the Letters of Credit, the Mortgages, the Patent Security Agreement,
the Perfection Certificate, the PNC Mortgage Assignments, the Existing Port of
Indiana Subordination Agreement,  the Trademark Security Agreement, any note or
notes executed by any Borrower in connection with this Agreement and payable to
any member of the Lender Group, and any other instrument or agreement entered
into, now or in the future, by Parent or any of its Subsidiaries and any member
of the Lender Group in connection with this Agreement.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” means (a) a material adverse effect in the business,
operations, results of operations, assets, liabilities or financial condition of
Parent and its Subsidiaries, taken as a whole, (b) a material impairment of
Parent’s or its Subsidiaries’ ability to perform their obligations under the
Loan Documents to which they are parties or of the Lender Group’s ability to
enforce the Obligations or realize upon the Collateral (other than as a result
of an action taken or not taken that is solely in the control of Agent), or (c)
a material impairment of the enforceability or priority of Agent’s Liens with
respect to all or a material portion of the Collateral as a result of an action
or failure to act on the part of Parent or its Subsidiaries.

 

“Maturity Date” means the earlier of (a) July 20, 2015, and (b) the date that is
six (6) months before the maturity date of the Term Loan Indebtedness under the
Term Loan Agreement, or if fully refinanced or fully replaced, the maturity date
of the fully refinanced or fully replaced Term Loan Indebtedness.

 

“Maximum Interest” shall mean, for any period of determination, the highest rate
of interest permitted to be paid under this Agreement under any law that a court
of competent jurisdiction shall, in a final determination, deem applicable.

 

“Maximum Revolver Amount” means $50,000,000, decreased by the amount of
reductions in the Commitments made in accordance with Section 2.4(c).

 

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“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.

 

“Mortgages” means, individually and collectively, one or more mortgages, deeds
of trust, or deeds to secure debt, executed and delivered by Parent or its
Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral.

 

“Mt Vernon Facility” means that certain ethanol production facility of Borrowers
located in Mount Vernon, Indiana.

 

“Multiemployer Plan” means any multiemployer plan within the meaning of Section
3(37) of ERISA with respect to which any Loan Party, any of their Subsidiaries,
or any of their ERISA Affiliates has an obligation to contribute or otherwise
has any liability.

 

“Nebraska” has the meaning specified therefor in the preamble to this Agreement.

 

“Nebraska Mortgage Assignment” means the assignment of deed of trust, security
agreement, assignment of rents and leases and fixture filing, dated as of even
date herewith, by PNC to Agent with respect to that certain Deed of Trust,
Security Agreement, Assignment of Rents and Leases and Fixture Filing, executed
by Nebraska in favor of Chicago Title Insurance Company, as Trustee for the
benefit of PNC, dated as of March 22, 2011, and recorded on March 29, 2011, in
Mortgage Book 267, Page 82, Official Records of Hamilton County, Nebraska, the
form and substance of which is reasonably satisfactory to Agent.

 

“Net Recovery Percentage” means, as of any date of determination, the percentage
of the book value of Borrowers’ Inventory that is estimated to be recoverable in
an orderly liquidation of such Inventory net of all associated costs and
expenses of such liquidation, such percentage to be determined as to each
category of Inventory and to be as specified in the most recent appraisal
received by Agent from an appraisal company selected by Agent.

 

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a).

 

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

 

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Reimbursement Undertakings or with respect to Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Loan Account pursuant to this Agreement), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, and all covenants and duties of any other kind and
description owing by any Loan Party arising out of, under, pursuant to, in
connection with, or evidenced by this Agreement or any of the other Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all other
expenses or other amounts that any Borrower is required to pay or reimburse by
the Loan Documents or by law or otherwise in connection with the Loan Documents,
(b) all debts, liabilities, or obligations (including reimbursement obligations,
irrespective of whether contingent) owing by any Borrower or any other Loan
Party to an Underlying Issuer now or hereafter arising from or in respect of an
Underlying Letters of Credit, and (c) all Bank Product Obligations.  Without
limiting the generality of the foregoing, the Obligations of Borrowers under the
Loan Documents include the obligation to pay (i) the principal of the Revolving
Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary
to reimburse Issuing Lender for amounts paid or payable pursuant to Letters of
Credit or Reimbursement Undertakings and the

 

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amount necessary to reimburse Underlying Issuer for amounts paid or payable
pursuant to Letters of Credit, (iv) Letter of Credit commissions, charges,
expenses, and fees, (v) Lender Group Expenses, (vi) fees payable under this
Agreement or any of the other Loan Documents, and (vii) indemnities and other
amounts payable by any Loan Party under any Loan Document.  Any reference in
this Agreement or in the other Loan Documents to the Obligations shall include
all or any portion thereof and any extensions, modifications, renewals, or
alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

“Original Closing Date” has the meaning specified therefor in the preamble to
this Agreement.

 

“Original Credit Agreement” has the meaning specified therefor in the preamble
to this Agreement.

 

“Original Credit Facility” means the credit facility that is evidenced by the
Original Credit Agreement.

 

“Original Loan Documents” means the Original Credit Agreement and the Other
Documents (as such term is defined in the Original Credit Agreement), each an
“Original Loan Document”.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e).

 

“Overadvance” means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11.

 

“Parent” has the meaning specified therefor in the preamble to this Agreement.

 

“Participant” has the meaning specified therefor in Section 13.1(e).

 

“Patent Security Agreement” has the meaning specified therefor in the Guaranty
and Security Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.17.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Pekin Plant” means that certain ethanol production plant located at 1300 S.
Second Street, Pekin, Illinois, 61554.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code.

 

“Perfection Certificate” means that certain perfection certificate, dated on or
before the date of this Agreement, executed by each of Borrowers, in form and
substance reasonably satisfactory to Agent.

 

“Permitted Acquisition” means any Acquisition so long as:

 

(a)                                  no Default or Event of Default shall have
occurred and be continuing or would result from the consummation of the proposed
Acquisition and the proposed Acquisition is consensual,

 

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(b)                                 no Indebtedness will be incurred, assumed,
or would exist with respect to Parent or its Subsidiaries as a result of such
Acquisition, other than Indebtedness permitted under clauses (f) or (g) of the
definition of Permitted Indebtedness and no Liens will be incurred, assumed, or
would exist with respect to the assets of Parent or its Subsidiaries as a result
or such Acquisition other than Permitted Liens,

 

(c)                                  Borrowers have provided Agent with written
confirmation, supported by reasonably detailed calculations, that on a pro forma
basis (including pro forma adjustments arising out of events which are directly
attributable to such proposed Acquisition, are factually supportable, and are
expected to have a continuing impact, in each case, determined as if the
combination had been accomplished at the beginning of the relevant period; such
eliminations and inclusions determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the SEC) created by adding the historical combined financial statements
of Parent and its Subsidiaries (including the combined financial statements of
any other Person or assets that were the subject of a prior Permitted
Acquisition during the relevant period) to the historical consolidated financial
statements of the Person to be acquired (or the historical financial statements
related to the assets to be acquired) pursuant to the proposed Acquisition,
Parent and its Subsidiaries (i) would have been in compliance with the financial
covenants in Section 7 for the 4 fiscal quarter period ended immediately prior
to the proposed date of consummation of such proposed Acquisition, and (ii) are
projected to be in compliance with the financial covenants in Section 7 for the
4 fiscal quarter period ended one year after the proposed date of consummation
of such proposed Acquisition,

 

(d)                                 Borrowers have provided Agent with their due
diligence package relative to the proposed Acquisition, including forecasted
balance sheets, profit and loss statements, and cash flow statements of the
Person or assets to be acquired, all prepared on a basis consistent with such
Person’s (or assets’) historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions for the 1 year
period following the date of the proposed Acquisition, on a quarter by quarter
basis), in form and substance (including as to scope and underlying assumptions)
reasonably satisfactory to Agent,

 

(e)                                  Borrowers shall have Availability plus
Qualified Cash in an amount equal to or greater than $20,000,000 immediately
after giving effect to the consummation of the proposed Acquisition,

 

(f)                                    Borrowers have provided Agent with
written notice of the proposed Acquisition at least 15 Business Days prior to
the anticipated closing date of the proposed Acquisition and, not later than 5
Business Days prior to the anticipated closing date of the proposed Acquisition,
copies of the acquisition agreement and other material documents relative to the
proposed Acquisition, which agreement and documents must be reasonably
acceptable to Agent,

 

(g)                                 the assets being acquired (other than a de
minimis amount of assets in relation to Parent’s and its Subsidiaries’ total
assets), or the Person whose Equity Interests are being acquired, are useful in
or engaged in, as applicable, the business of Parent and its Subsidiaries or a
business reasonably related thereto,

 

(h)                                 the assets being acquired (other than a de
minimis amount of assets in relation to the assets being acquired) are located
within the United States or the Person whose Equity Interests are being acquired
is organized in a jurisdiction located within the United States,

 

(i)                                     the subject assets or Equity Interests,
as applicable, are being acquired directly by a Borrower (other than Parent) or
one of its Subsidiaries that is a Loan Party, and, in connection therewith, the
applicable Borrower or the applicable Loan Party shall have complied with
Section 5.11 or 5.12, as applicable, and, in the case of an acquisition of
Equity Interests, the applicable Borrower or the applicable Loan Party shall
have demonstrated to Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties, and

 

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(j)                                     the purchase consideration payable in
respect of all Permitted Acquisitions (including the proposed Acquisition and
including deferred payment obligations) shall not exceed $10,000,000 in the
aggregate; provided, that the purchase consideration payable in respect of any
single Acquisition or series of related Acquisitions shall not exceed $2,000,000
in the aggregate.

 

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.

 

“Permitted Dispositions” means:

 

(a) sales, abandonment, or other dispositions of Equipment that is substantially
worn, damaged, or obsolete or no longer used or useful in the ordinary course of
business and leases or subleases of Real Property not useful in the conduct of
the business of Parent and its Subsidiaries,

 

(b) sales of Inventory to buyers in the ordinary course of business,

 

(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents,

 

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,

 

(e) the granting of Permitted Liens,

 

(f) (i) the sale, without recourse, of Accounts arising in the ordinary course
of business, but only in connection with the compromise or collection thereof,
and (ii) the discount, without recourse, of Accounts arising in the ordinary
course of business,

 

(g) any involuntary loss, damage or destruction of property,

 

(h) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,

 

(i) the leasing or subleasing of assets of Parent or its Subsidiaries in the
ordinary course of business,

 

(j) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Parent,

 

(k)(i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of Parent and its Subsidiaries to the extent not
economically desirable in the conduct of their business or (ii) the abandonment
of patents, trademarks, copyrights, or other intellectual property rights in the
ordinary course of business so long as (in each case under clauses (i) and
(ii)), (A) with respect to copyrights, such copyrights are not material revenue
generating copyrights, and (B) such lapse is not materially adverse to the
interests of the Lender Group,

 

(l)  the making of Restricted Payments that are expressly permitted to be made
pursuant to this Agreement,

 

(m)  the making of Permitted Investments,

 

(n)  so long as no Event of Default has occurred and is continuing or would
immediately result therefrom, transfers of assets (i) from Parent or any of its
Subsidiaries to a Borrower (other than Parent), and (ii) from any Subsidiary of
Parent that is not a Loan Party to any other Subsidiary of Parent, and

 

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(o)  sales or dispositions of assets (other than Accounts, Inventory, or Equity
Interests of Subsidiaries of Parent) in the ordinary course of business not
otherwise permitted in clauses (a) through (n) above so long as made at fair
market value and the aggregate fair market value of all assets disposed of in a
fiscal year (including the proposed disposition) would not exceed $5,000,000.

 

“Permitted Holder” means, at any time, (a) each of the Backstop Purchasers, any
of their respective Affiliates and managed funds or accounts by such Backstop
Purchaser or Affiliate (collectively, the “Back Stop Permitted Holders”), (b)
Persons Controlled by any Back Stop Permitted Holder, (c) trusts for the benefit
of any Back Stop Permitted Holder that is an individual Person or the spouses,
issue, parents or other relatives of such individual Person, and (d) in the
event of the death of any Back Stop Permitted Holder that is an individual
Person, heirs or testamentary legatees of such Person.

 

“Permitted Indebtedness” means:

 

(a) Indebtedness evidenced by this Agreement or the other Loan Documents, as
well as Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,

 

(b) Indebtedness set forth on Schedule 4.17 and any Refinancing Indebtedness in
respect of such Indebtedness,

 

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,

 

(d) endorsement of instruments or other payment items for deposit,

 

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary
course of business with respect to surety and appeal bonds, performance bonds,
bid bonds, appeal bonds, completion guarantee and similar obligations; (ii)
unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions; and (iii)
unsecured guarantees with respect to Indebtedness of Parent or one of its
Subsidiaries, to the extent that the Person that is obligated under such
guaranty could have incurred such underlying Indebtedness,

 

(f) unsecured Indebtedness of Parent or its Subsidiaries that is incurred on the
date of the consummation of a Permitted Acquisition solely for the purpose of
consummating such Permitted Acquisition so long as (i) no Event of Default has
occurred and is continuing or would result therefrom, (ii) such unsecured
Indebtedness is not incurred for working capital purposes, (iii) such unsecured
Indebtedness does not mature prior to the date that is 12 months after the
Maturity Date, (iv) such unsecured Indebtedness does not amortize until 12
months after the Maturity Date, (v) such unsecured Indebtedness does not provide
for the payment of interest thereon in cash or Cash Equivalents prior to the
date that is 12 months after the Maturity Date, and (vi) such Indebtedness is
subordinated in right of payment to the Obligations on terms and conditions
reasonably satisfactory to Agent,

 

(g) Acquired Indebtedness in an amount not to exceed $3,000,000 outstanding at
any one time,

 

(h) Indebtedness incurred in the ordinary course of business under performance,
surety, statutory, or appeal bonds,

 

(i) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to Parent or any of its Subsidiaries, so long as the amount of
such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,

 

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(j) the incurrence by Parent or its Subsidiaries of Indebtedness under Hedge
Agreements that are incurred in the ordinary course of business, directly or
indirectly, to hedge commodity prices (including both input prices and output
prices), currency or interest rate risks, in each case, in amounts reasonably
related to Borrowers’ and their respective Subsidiaries’ projected activities
and consistent with prudent industry practices,

 

(k) Indebtedness incurred in the ordinary course of business in respect of
credit cards, credit card processing services, debit cards, stored value cards,
purchase cards (including so-called “procurement cards” or “P-cards”), or Cash
Management Services,

 

(l) unsecured Indebtedness of Parent owing to former employees, officers, or
directors (or any spouses, ex-spouses, or estates of any of the foregoing)
incurred in connection with the repurchase by Parent of the Equity Interests of
Parent that has been issued to such Persons, so long as (i) no Default or Event
of Default has occurred and is continuing or would result from the incurrence of
such Indebtedness, (ii) the aggregate amount of all such Indebtedness
outstanding at any one time does not exceed $5,000,000, and (iii) such
Indebtedness is subordinated to the Obligations on terms and conditions
reasonably acceptable to Agent,

 

(m) unsecured Indebtedness owing to sellers of assets or Equity Interests to a
Loan Party that is incurred by the applicable Loan Party in connection with the
consummation of one or more Permitted Acquisitions so long as (i) the aggregate
principal amount for all such unsecured Indebtedness does not exceed $5,000,000
at any one time outstanding, (ii) is subordinated to the Obligations on terms
and conditions reasonably acceptable to Agent, and (iii) is otherwise on terms
and conditions (including all economic terms and the absence of covenants)
reasonably acceptable to Agent,

 

(n) contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligation of Parent or
the applicable Loan Party incurred in connection with the consummation of one or
more Permitted Acquisitions,

 

(o) Indebtedness composing Permitted Investments,

 

(p)  unsecured Indebtedness incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business,

 

(q)  accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness,

 

(r)  the Term Loan Indebtedness so long as the Intercreditor Agreement is in
full force and effect,

 

(s)  any Investment in a Person, other than a Borrower, engaged in the business
of Parent and its Subsidiaries as of the Closing Date and any other activities
that are related ancillary or complementary to such business having an aggregate
value (calculated at the lower of cost or market on a basis consistent with such
Person’s historical accounting practices) not to exceed 15% of the total
consolidated assets of Parent and its Subsidiaries as shown on Borrowers most
recent consolidated balance sheet at the time of such Investment (with the value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value); provided, however, that (i) no Default or Event of
Default has occurred and is continuing or would result from such Investment;
(ii) such Person shall not use the proceeds of such Investment to purchase,
redeem, retire or otherwise acquire for value any shares of stock of Parent; and
(iii) Borrowers shall have Excess Availability of at least $20,000,000
immediately prior to and after giving effect to such Investment, and

 

(t)  any other unsecured Indebtedness incurred by Parent or any of its
Subsidiaries in an aggregate outstanding amount not to exceed $10,000,000 at any
one time.

 

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“Permitted Intercompany Advances” means loans made by (a) a Loan Party to
another Loan Party, (b) a Subsidiary of Parent that is not a Loan Party to
another Subsidiary of Parent that is not a Loan Party, and (c) a Subsidiary of
Parent that is not a Loan Party to a Loan Party, so long as the parties thereto
are party to the Intercompany Subordination Agreement.

 

“Permitted Investments” means:

 

(a) Investments in cash and Cash Equivalents,

 

(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,

 

(c) advances made in connection with purchases of goods or services in the
ordinary course of business,

 

(d) Investments received in settlement of amounts due to any Loan Party or any
of its Subsidiaries effected in the ordinary course of business or owing to any
Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries,

 

(e) Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule P-1,

 

(f) guarantees permitted under the definition of Permitted Indebtedness,

 

(g) Permitted Intercompany Advances,

 

(h) Equity Interests or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,

 

(i) deposits of cash made in the ordinary course of business to secure
performance of operating leases,

 

(j) (i) non-cash loans and advances to employees, officers, and directors of
Parent or any of its Subsidiaries for the purpose of purchasing Equity Interests
in Parent so long as the proceeds of such loans are used in their entirety to
purchase such Equity Interests in Parent, and (ii) loans and advances to
employees and officers of Parent or any of its Subsidiaries in the ordinary
course of business for any other business purpose and in an aggregate amount not
to exceed $1,000,000 at any one time,

 

(k) Permitted Acquisitions,

 

(l) Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to Indebtedness that is permitted under clause (j) of
the definition of Permitted Indebtedness,

 

(m) equity Investments by any Loan Party in any Subsidiary of such Loan Party
which is required by law to maintain a minimum net capital requirement or as may
be otherwise required by applicable law,

 

(n) (i) equity Investments by Parent in any other Loan Party, existing as of the
Closing Date, (ii) equity Investments by AREI in Nebraska, and (iii) equity
Investments by any Loan Party in any other Loan

 

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Party so long as such other Loan Party was formed or acquired after the Closing
Date in accordance with this Agreement and so long as Borrowers have complied
with Sections 5.11 and 5.12 of this Agreement,

 

(o)  Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition, and

 

(p) so long as no Event of Default has occurred and is continuing or would
result therefrom, any other Investments in an aggregate amount not to exceed
$1,000,000 during the term of this Agreement.

 

“Permitted Liens” means

 

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

(b) Liens for unpaid taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) do not have priority over
Agent’s Liens and the underlying taxes, assessments, or charges or levies are
the subject of Permitted Protests,

 

(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3,

 

(d) Liens set forth on Schedule P-2; provided, that to qualify as a Permitted
Lien, any such Lien described on Schedule P-2 shall only secure the Indebtedness
that it secures on the Closing Date and any Refinancing Indebtedness in respect
thereof,

 

(e) the interests of lessors under operating leases and non-exclusive licensors
under license agreements,

 

(f) purchase money Liens or the interests of lessors under Capital Leases to the
extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as (i) such Lien attaches only to the asset purchased or acquired
and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that
was incurred to acquire the asset purchased or acquired or any Refinancing
Indebtedness in respect thereof,

 

(g) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business and not in connection with the borrowing of money,
and which Liens either (i) are for sums not yet delinquent, or (ii) are the
subject of Permitted Protests,

 

(h) Liens on amounts deposited to secure Parent’s and its Subsidiaries
obligations in connection with worker’s compensation or other unemployment
insurance,

 

(i) Liens on amounts deposited to secure Parent’s and its Subsidiaries
obligations in connection with the making or entering into of bids, tenders, or
leases in the ordinary course of business and not in connection with the
borrowing of money,

 

(j) Liens on amounts deposited to secure Parent’s and its Subsidiaries
reimbursement obligations with respect to surety or appeal bonds obtained in the
ordinary course of business,

 

(k) with respect to any single tract or parcel of, or multiple contiguous tracts
or parcels of, Real Property, (i) survey exceptions, easements, ordinances,
subdivision approvals, restrictive covenants, and dedications for public use,
(ii) reservations of, or rights of others for, licenses and rights-of-way for
sewers, electric lines, telegraph and telephone lines, and other similar
purposes, (iii) zoning or other restrictions as to

 

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the use of such Real Property, and (iv) mineral leases existing as of the date
hereof, leases which are disclosed on Schedule R-1 attached hereto, and leases
which are in effect as of the date hereof and disclosed in any mortgagee policy
of title insurance issued or endorsed to Agent in accordance with Schedule 3.6
attached hereto and relating to any portion of the Real Property Collateral,
that, in each case, were not incurred in connection with Indebtedness and do not
in the aggregate have a materially adverse effect on the value of such Real
Property or materially impair or negatively affect the current or hereafter
contemplated use or operation of such Real Property,

 

(l) non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,

 

(m) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

 

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of (i)
banks or other depository institutions, solely to the extent incurred in
connection with the maintenance of such Deposit Accounts in the ordinary course
of business, and (ii) Jefferies Bache, LLC, solely to the extent incurred in
connection with the maintenance of the commodities account referenced on
Schedule 4.14 in the ordinary course of business,

 

(o) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness,

 

(p) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods,

 

(q) Liens solely on any cash earnest money deposits made by Parent or any of its
Subsidiaries in connection with any letter of intent or purchase agreement with
respect to a Permitted Acquisition,

 

(r) Liens assumed by Parent or its Subsidiaries in connection with a Permitted
Acquisition that secure Acquired Indebtedness,

 

(s) (i) prior to the Port Lien Release Date, the Lien in favor of the Indiana
Port Lessor pursuant to the Indiana Port Lease Agreement on any Indiana Port
Lease Collateral securing the obligations of the Indiana Port Lessee under the
Indiana Port Lease Agreement so long as such Lien is subordinated to Agent’s
Lien on any such Indiana Port Lease Collateral pursuant to the Existing Port of
Indiana Subordination Agreement, and (ii) after the Port Lien Release Date, the
Lien in favor of the Indiana Port Lessor pursuant to the Indiana Port Lease
Agreement on any Indiana Port Lease Collateral consisting of Equipment and
Fixtures of ARE-MT securing the obligations of the Indiana Port Lessee under the
Indiana Port Lease Agreement so long as such Lien is subordinated to Agent’s
Lien on any such Indiana Port Lease Collateral pursuant to the Existing Port of
Indiana Subordination Agreement,

 

(t) leases or subleases granted to others that do not materially interfere with
the ordinary course of business of Parent and its Subsidiaries taken as whole so
long as the aggregate fair market value of all Collateral subject to such Liens
pursuant to this clause (t) does not exceed $500,000,

 

(u) Liens securing reimbursement Obligations with respect to letters of credit
that encumber documents and other property relating to such letters of credit
and the products and proceeds thereof so long as the aggregate amount of
obligations secured by Liens incurred pursuant to this clause does not exceed
$500,000 at any one time outstanding,

 

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(v)  Liens consisting of conditional sale, title retention, consignment or
similar arrangements for the sale of goods acquired by Parent or any of its
Subsidiaries in the ordinary course of business in accordance with the past
practices of Parent and its Subsidiaries prior to the Closing Date so long as
the aggregate fair market value of all Collateral subject to such Liens pursuant
to this clause does not exceed $500,000,

 

(w)  Liens securing the Term Loan Indebtedness so long as the Intercreditor
Agreement is in full force and effect,

 

(x)  Liens in favor of the Term Loan Agent to secure Indebtedness consisting of
the Obligations (as such term is defined in the Term Loan Agreement) permitted
by clause (r) of the definition of Permitted Indebtedness so long as the
Intercreditor Agreement is in full force and effect, and

 

(y)  other Liens which do not secure Indebtedness for borrowed money or letters
of credit and as to which the aggregate amount of the obligations secured
thereby does not exceed $250,000.

 

“Permitted Protest” means the right of Parent or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on Parent’s or its Subsidiaries’ books and
records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Parent or its Subsidiary, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of Agent’s Liens.

 

“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Indebtedness (other than the Obligations, but including Capitalized Lease
Obligations), incurred after the Closing Date and at the time of, or within 20
days after, the acquisition of any fixed assets for the purpose of financing all
or any part of the acquisition cost thereof, in an aggregate principal amount
outstanding at any one time not in excess of $5,000,000.

 

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

 

“Platform” has the meaning specified therefor in Section 17.9(c).

 

“PNC” means PNC Bank, National Association, a national association.

 

“PNC Mortgage Assignments” means, collectively, (i) the ARE-AW Mortgage
Assignment, (ii) the ARE-C Mortgage Assignment, (iii) the ARE-MT Mortgage
Assignment, (iv) AREI Mortgage Assignment and (v) the Nebraska Mortgage
Assignment.

 

“Port Lien Release Date” has the meaning specified therefor in Section 2.1(d).

 

“Port of Indiana Access Agreement” means a landlord waiver between the Indiana
Port Lessor and Agent with respect to the Indiana Port Leased Premises, in form
and substance reasonably satisfactory to Agent, executed and delivered by the
parties thereto.

 

“Port of Indiana Estoppel Letter” means a letter agreement from the Indiana Port
Lessor to Agent, in form and substance satisfactory to Agent, in its sole
discretion, executed and delivered by the parties thereto.

 

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“Port of Indiana Lien Release” means an agreement among the Indiana Port Lessor,
the Indiana Port Lessee, Term Loan Agent, and Agent whereby the Liens of the
Indiana Port Lessor in and to the Indiana Port Lease Collateral consisting of
Inventory of ARE-MT is released, in form and substance satisfactory to Agent, in
its sole discretion, executed and delivered by the parties thereto.

 

“Port of Indiana Subordination Agreement” mean a subordination agreement,
executed and delivered by Term Loan Agent, Agent, Ports of Indiana, a body
corporate and politic existing under the laws of the State of Indiana, formerly
known as the Indiana Port Commission, and ARE-MT, the form and substance of
which is satisfactory to Agent, in its sole discretion, executed and delivered
by the parties thereto.

 

“Port Reserve” means, as of any date of determination, those reserves that Agent
deems necessary or appropriate, in its Permitted Discretion, to establish and
maintain as a result of the Lien of the Indiana Port Lessor on the Inventory of
the Port of Indiana Lessee and other rights of the Indiana Port Lessor under the
Indiana Port Lease Agreement.

 

“Power” has the meaning specified therefor in the preamble to this Agreement.

 

“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Parent’s historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)  with respect to a Lender’s obligation to make all or a portion of the
Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the Revolving Loans, and with
respect to all other computations and other matters related to the Commitments
or the Revolving Loans, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of
all Lenders,

 

(b)  with respect to a Lender’s obligation to participate in the Letters of
Credit, with respect to such Lender’s obligation to reimburse Issuing Lender,
and with respect to such Lender’s right to receive payments of Letter of Credit
Fees, and with respect to all other computations and other matters related to
the Letters of Credit, the percentage obtained by dividing (i) the Revolving
Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of
all Lenders; provided, that if all of the Revolving Loans have been repaid in
full and all Commitments have been terminated, but Letters of Credit remain
outstanding, Pro Rata Share under this clause shall be determined as if the
Commitments had not been terminated and based upon the Commitments as they
existed immediately prior to their termination, and

 

(c)  with respect to all other matters and for all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 15.7), the percentage obtained by dividing (i) the Revolving Loan
Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to Section 13.1; provided, that if all of the
Loans have been repaid in full, all Letters of Credit have been made the subject
of Letter of Credit Collateralization, and all Commitments have been terminated,
Pro Rata Share under this clause shall be determined as if the Revolving Loan
Exposures had not been repaid, collateralized, or terminated and shall be based
upon the Revolving Loan Exposures as they existed immediately prior to their
repayment, collateralization, or termination.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i).

 

“Public Lender” has the meaning specified therefor in Section 17.9(c).

 

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“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
fair market value of any Equity Interests of Parent issued in connection with
such Acquisition), paid or delivered by Parent or one of its Subsidiaries in
connection with such Acquisition (whether paid at the closing thereof or payable
thereafter and whether fixed or contingent), but excluding therefrom (a) any
cash of the seller and its Affiliates used to fund any portion of such
consideration and (b) any cash or Cash Equivalents acquired in connection with
such Acquisition.

 

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Parent and its Subsidiaries that is in
Deposit Accounts or in Securities Accounts, or any combination thereof, and
which such Deposit Account or Securities Account is the subject of a Control
Agreement and is maintained by a branch office of the bank or securities
intermediary located within the United States.

 

“Qualified Equity Interest” means and refers to any Equity Interests issued by
Parent (and not by one or more of its Subsidiaries) that is not a Disqualified
Equity Interest.

 

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by Parent or its Subsidiaries and the improvements thereto.

 

“Real Property Collateral” means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by Parent or its Subsidiaries.

 

“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(c), to establish and maintain (including reserves for
rebates, discounts, warranty claims, and returns) with respect to the Eligible
Accounts.

 

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

 

“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness so long as:

 

(a) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and the fees and expenses
incurred in connection therewith and by the amount of unfunded commitments with
respect thereto,

 

(b) such refinancings, renewals, or extensions do not result in a shortening of
the average weighted maturity (measured as of the refinancing, renewal, or
extension) of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are or could reasonably be
expected to be materially adverse to the interests of the Lenders,

 

(c) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and

 

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended.

 

“Reimbursement Undertaking” has the meaning specified therefor in Section
2.11(a).

 

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“Related Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course and that is administered, advised or managed by
(a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.

 

“Release” means any release, spill, leak, discharge, presence of, abandonment,
disposal, pumping, pouring, emitting, emptying, injecting, leaching, dumping,
depositing, dispersing, allowing to escape or migrate into or otherwise enter
the environment (including ambient air, surface water, groundwater, wetlands,
land, surface, and subsurface strata or within any building, structure, facility
or fixture).

 

“Remedial Action” means all actions required to be taken under Environmental
Laws to (a) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate, or in any way address a Release of Hazardous Materials, (b) restore or
reclaim natural resources or the environment, or (c) perform any pre-remedial
studies, investigations, or post-remedial operation and maintenance activities.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(b).

 

“Report” has the meaning specified therefor in Section 15.16.

 

“Required Availability” means that the sum of (a) Excess Availability, plus (b)
Qualified Cash exceeds $45,000,000.

 

“Required Lenders” means, at any time, Lenders having or holding more than 50%
of the sum of the aggregate Revolving Loan Exposure of all Lenders; provided,
that (i) the Revolving Loan Exposure of any Defaulting Lender shall be
disregarded in the determination of the Required Lenders, and (ii) at any time
at any time there are 2 or more Lenders, “Required Lenders” must include at
least 2 Lenders (who are not Affiliates of one another).

 

“Reserves” means, as of any date of determination, those reserves (other than
Receivable Reserves, Bank Product Reserves, and Inventory Reserves) that Agent
deems necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain (including reserves with respect to
(a) sums that Parent or its Subsidiaries are required to pay under any Section
of this Agreement or any other Loan Document (such as taxes, assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts
payable under such leases) and has failed to pay, and (b) amounts owing by
Parent or its Subsidiaries to any Person to the extent secured by a Lien on, or
trust over, any of the Collateral (other than a Permitted Lien), which Lien or
trust, in the Permitted Discretion of Agent likely would have a priority
superior to the Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral) with respect to the
Borrowing Base.

 

“Resignation and Appointment Agreement” means an resignation and appoint
agreement, dated as of even date with this Agreement, executed and delivered by
PNC, Parent, each of its Subsidiaries, and Agent, the form and substance of
which is reasonably satisfactory to Agent.

 

“Responsible Officer” means, with respect to any Borrower, the chief executive
officer, president, any executive officer, any Financial Officer, or any vice
president of such Person or, with respect to financial matters, the Financial
Officer of such Person.

 

“Restricted Payment” means to (a) declare or pay any dividend or make any other
payment or distribution, directly or indirectly, on account of Equity Interests
issued by Parent (including any payment in connection with any merger or
consolidation involving Parent) or to the direct or indirect holders of Equity
Interests issued by Parent in their capacity as such (other than dividends or
distributions payable in Qualified Equity Interests issued by Parent or
warrants, options, or other rights to acquire such Qualified Equity

 

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Interests), or (b) purchase, redeem, make any sinking fund or similar payment,
or otherwise acquire or retire for value (including in connection with any
merger or consolidation involving Parent) any Equity Interests issued by Parent
(other than payments, acquisitions or retirements for value effected solely with
Qualified Equity Interests issued by Parent or warrants, options, or other
rights to acquire such Qualified Equity Interests), (c) make any payment to
retire, or to obtain the surrender of, any outstanding warrants, options, or
other rights to acquire Equity Interests of Parent now or hereafter outstanding
(other than payments effected solely with Qualified Equity Interests issued by
Parent or warrants, options, or other rights to acquire such Qualified Equity
Interests), and (d) make, or cause or suffer to permit any of Parent’s
Subsidiaries to make, any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans, plus (b) the amount of the Letter of
Credit Usage.

 

“Revolving Loan Exposure” means, with respect to any Lender, as of any date of
determination (a) prior to the termination of the Commitments, the amount of
such Lender’s Commitment, and (b) after the termination of the Commitments, the
aggregate outstanding principal amount of the Revolving Loans of such Lender.

 

“Revolving Loans” has the meaning specified therefor in Section 2.1(a).

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.

 

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the
Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i).

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i).

 

“Solvent” means, with respect to any Person as of any date of determination,
that (a) at fair valuations, the sum of such Person’s debts (including
contingent liabilities) is less than all of such Person’s assets, (b) such
Person is not engaged or about to engage in a business or transaction for which
the remaining assets of such Person are unreasonably small in relation to the
business or transaction or for which the property remaining with such Person is
an unreasonably small capital, (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is “solvent” or not “insolvent”, as applicable within the
meaning given those terms and similar terms under applicable laws relating to
fraudulent transfers and conveyances.  For purposes of this definition, the
amount of any contingent liability at any time

 

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shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of
Financial Accounting Standard No. 5).

 

“Subordinated Indebtedness” means any unsecured Indebtedness of Parent or its
Subsidiaries incurred from time to time that is subordinated in right of payment
to the Obligations and that (a) is only guaranteed by the Guarantors, (b) is not
subject to scheduled amortization, redemption, sinking fund or similar payment
and does not have a final maturity, in each case, on or before the date that is
six months after the Maturity Date, (c) does not include any financial covenants
or any covenant or agreement that is more restrictive or onerous on any Loan
Party in any material respect than any comparable covenant in this Agreement,
and (d) contains customary subordination (including customary payment blocks
during a payment default under any “senior debt” designated thereunder) and
turnover provisions and shall be limited to cross-payment default and
cross-acceleration to other “senior debt” designated thereunder.

 

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the Equity Interests having ordinary voting power to elect a majority
of the Board of Directors of such corporation, partnership, limited liability
company, or other entity.

 

“Swing Lender” means WFCF or any other Lender that, at the request of Borrowers
and with the consent of Agent agrees, in such Lender’s sole discretion, to
become the Swing Lender under Section 2.3(b).

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b).

 

“Swing Loan Exposure” means, as of any date of determination with respect to any
Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

 

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect to
such payments and all interest, penalties or similar liabilities with respect
thereto; provided, that Taxes shall exclude (i) any tax imposed on the net
income or net profits of any Lender or any Participant (including any branch
profits taxes) and franchise taxes, in each case imposed by the jurisdiction (or
by any political subdivision or taxing authority thereof) in which such Lender
or such Participant is organized or the jurisdiction (or by any political
subdivision or taxing authority thereof) in which such Lender’s or such
Participant’s principal office is located in each case as a result of a present
or former connection between such Lender or such Participant and the
jurisdiction or taxing authority imposing the tax (other than any such
connection arising solely from such Lender or such Participant having executed,
delivered or performed its obligations or received payment under, or enforced
its rights or remedies under this Agreement or any other Loan Document); (ii)
taxes resulting from a Lender’s or a Participant’s failure to comply with the
requirements of Section 16.2 or 16.3, and (iii) any United States federal
withholding taxes that would be imposed on amounts payable to a Foreign Lender
based upon the applicable withholding rate in effect at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office),
except that Taxes shall include (A) any amount that such Foreign Lender (or its
assignor, if any) was previously entitled to receive pursuant to Section 16.1,
if any, with respect to such withholding tax at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), and (B)
additional United States federal withholding taxes that may be imposed after the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), as a result of a change in law, rule, regulation, order or
other decision with respect to any of the foregoing by any Governmental
Authority.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a).

 

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“Term Loan Indebtedness” means the Indebtedness incurred by Borrowers under the
Term Loan Documents in an aggregate principal amount not to exceed (a) an amount
equal to $225,000,000 minus the aggregate amount of all repayments, mandatory
prepayments, and optional prepayments of the principal of such Indebtedness
(other than in connection with Refinancing Indebtedness), plus (b) 15% of the
amount resulting from the calculation in clause (a) (the “Term Loan Cushion”);
provided, however, that any Indebtedness incurred under Secured Hedge Agreements
(as defined in the Intercreditor Agreement) may not exceed an aggregate amount
equal to $10,000,000.

 

“Term Loan Agent” means collectively the “Administrative Agent” and “Collateral
Agent” as such terms are defined in the Term Loan Agreement and any Person
acting in a similar capacity under any amendment, restatement, supplement,
replacement or refinancing thereof.  The Term Loan Agent on the date of this
Agreement is Citibank, N.A.

 

“Term Loan Agreement” means that certain Senior Secured Term Loan Credit
Agreement dated as of December 22, 2010, by and among Parent, as borrower, the
Term Loan Lenders, the Term Loan Agent, and the other parties thereto, as such
is amended, modified, supplemented, restated, replaced or refinanced from time
to time if and to the extent not prohibited pursuant to the Intercreditor
Agreement.

 

“Term Loan Documents” means the “Loan Documents” as such term is defined in the
Term Loan Agreement and any documents, instruments and agreements entered into
in connection with any amendment, supplement, restatement, replacement or
refinancing thereof, as amended, modified, supplemented or restated from time to
time if and to the extent not prohibited pursuant to the Intercreditor
Agreement.

 

“Term Loan Indebtedness” means the Indebtedness incurred by Parent under the
Term Loan Documents in an aggregate principal amount not to exceed $225,000,000,
minus the aggregate amount of all repayments of the principal of the obligations
under the Term Loan Agreement (other than repayments of such obligations in
connection with a refinancing, replacement, renewal or extension thereof), plus
interest permitted pursuant to the Intercreditor Agreement.

 

“Term Loan Lenders” means the lenders from time to time party to the Term Loan
Agreement.

 

“Termination Event” means (a) a “Reportable Event” described in Section 4043 of
ERISA for which the notice requirement has not been waived by the PBGC, (b) the
withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a “substantial employer” as defined in Section
4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination, under Section 4041 of ERISA, if the plan assets are
not sufficient to pay all plan liabilities, (d) the institution of proceedings
to terminate, or the appointment of a trustee with respect to, any Pension Plan
by the PBGC, (e) any other event or condition which would constitute grounds
under Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan, (f) the imposition of a Lien pursuant
to Section 412 or 430 of the IRC or Section 302 or 4068 of ERISA, (g) the
partial or complete withdrawal of any Loan Party or any ERISA Affiliate from a
Multiemployer Plan (other than any complete withdrawal that would not constitute
an Event of Default under Section 8.12), (h) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, (i) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate or to appoint a trustee to
administer a Multiemployer Plan under Section 4042 of ERISA, (j) any Pension
Plan being in “at risk status” within the meaning of IRC Section 430(i), (k) any
Multiemployer Plan being in “endangered status” or “critical status” within the
meaning of IRC Section 432(b), (l) with respect to any Pension Plan, any Loan
Party or any ERISA Affiliate incurring a substantial cessation of operations
within the meaning of ERISA Section 4062(e); or (m) any event that causes any
Loan

 

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Party or any of their ERISA Affiliates to incur liability under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 4971 or 4975 of the IRC.

 

“Trademark Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

 

“UCP 600” means the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce and
in effect as of July 1, 2007 (or such later version thereof as may be in effect
at the time of issuance).

 

“Underlying Issuer” means Wells Fargo or one of its Affiliates.

 

“Underlying Letter of Credit” means a Letter of Credit that has been issued by
an Underlying Issuer.

 

“United States” means the United States of America.

 

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b).

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8.

 

“Voting Stock” means, with respect to any Person, Equity Interests of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

 

“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company.

 

1.2                                 Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP;
provided, that if Administrative Borrower notifies Agent that Borrowers request
an amendment to any provision hereof to eliminate the effect of any Accounting
Change occurring after the Closing Date or in the application thereof on the
operation of such provision (or if Agent notifies Administrative Borrower that
the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
Accounting Change or in the application thereof, then Agent and Borrowers agree
that they will negotiate in good faith amendments to the provisions of this
Agreement that are directly affected by such Accounting Change with the intent
of having the respective positions of the Lenders and Borrowers after such
Accounting Change conform as nearly as possible to their respective positions as
of the later of (i) the date of this Agreement or (ii) the date of the most
recent amendment to any provision hereof to eliminate the effect of any
Accounting Change or in the application thereof on the operation of such
provision and, until any such amendments have been agreed upon and agreed to by
the Required Lenders, the provisions in this Agreement shall be calculated as if
no such Accounting Change had occurred.  When used herein, the term “financial
statements” shall include the notes and schedules thereto.  Whenever the term
“Parent” is used in respect of a financial covenant or a related definition, it
shall be understood to mean Parent and its Subsidiaries on a consolidated basis,
unless the context clearly requires otherwise.  Notwithstanding anything to the
contrary contained herein, (a) all financial statements delivered hereunder
shall be prepared, and all financial covenants contained herein shall be
calculated, without giving effect to any election under the Statement of
Financial Accounting Standards No. 159  (or any similar accounting principle)
permitting a Person to value its financial liabilities or Indebtedness at the
fair value thereof, and (b) the term “unqualified opinion” as used herein to
refer to opinions or reports provided by accountants shall mean an opinion or
report that is (i) unqualified, and (ii) does not include any

 

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explanation, supplemental comment, or other comment concerning the ability of
the applicable Person to continue as a going concern or concerning the scope of
the audit.

 

1.3                                 Code.  Any terms used in this Agreement that
are defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein; provided, that to the extent that the Code is
used to define any term herein and such term is defined differently in different
Articles of the Code, the definition of such term contained in Article 9 of the
Code shall govern.

 

1.4                                 Construction.  Unless the context of this
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”.  The words “hereof”, “herein”, “hereby”, “hereunder”, and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document, as the case may be, as a whole and not to
any particular provision of this Agreement or such other Loan Document, as the
case may be.  Section, subsection, clause, schedule, and exhibit references
herein are to this Agreement unless otherwise specified.  Any reference in this
Agreement or in any other Loan Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean (a)
the payment or repayment in full in immediately available funds of (i) the
principal amount of, and interest accrued with respect to, all outstanding
Loans, together with the payment of any premium applicable to the repayment of
the Loans, (ii) all Lender Group Expenses that have accrued regardless of
whether demand has been made therefor, (iii) all fees or charges that have
accrued hereunder or under any other Loan Document (including the Letter of
Credit Fee and the Unused Line Fee), (b) in the case of contingent reimbursement
obligations with respect to Letters of Credit, providing Letter of Credit
Collateralization, (c) in the case of obligations with respect to Bank Products
(other than Hedge Obligations), providing Bank Product Collateralization, (d)
the receipt by Agent of cash collateral in order to secure any other contingent
Obligations for which a claim or demand for payment has been made at such time
or in respect of matters or circumstances known to Agent or a Lender at the time
that are reasonably expected to result in any loss, cost, damage or expense
(including attorneys fees and legal expenses), such cash collateral to be in
such amount as Agent reasonably determines is appropriate to secure such
contingent Obligations, (e) the payment or repayment in full in immediately
available funds of all other Obligations (including the payment of any
termination amount then applicable (or which would or could become applicable as
a result of the repayment of the other Obligations) under Hedge Agreements
provided by Hedge Providers) other than (i) unasserted contingent
indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge
Obligations) that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding without being required to be repaid or cash
collateralized, and (iii) any Hedge Obligations that, at such time, are allowed
by the applicable Hedge Provider to remain outstanding without being required to
be repaid, and (f) the termination of all of the Commitments of the Lenders. 
Any reference herein to any Person shall be construed to include such Person’s
successors and assigns.  Any requirement of a writing contained herein or in any
other Loan Document shall be satisfied by the transmission of a Record.

 

1.5                                 Time References.  Unless the context of this
Agreement or any other Loan Document clearly requires otherwise, all references
to time of day refer to Pacific Standard Time or Pacific Daylight Saving Time,
as in effect in Los Angeles, California on such day.  For purposes of the
computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to and including”; provided that, with respect to a computation of fees
or interest payable to Agent or any Lender, such period shall in any event
consist of at least one full day.

 

1.6                                 Schedules and Exhibits.  All of the
schedules and exhibits attached to this Agreement shall be deemed incorporated
herein by reference.

 

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2.                                       LOANS AND TERMS OF PAYMENT.

 

2.1                                 Revolving Loans.

 

(a)                                  Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender agrees (severally,
not jointly or jointly and severally) to make revolving loans (“Revolving
Loans”) to Borrowers in an amount at any one time outstanding not to exceed the
lesser of:

 

(i)                           such Lender’s Commitment, or

 

(ii)                        such Lender’s Pro Rata Share of an amount equal to
the lesser of:

 

(A)                              the amount equal to (1) the Maximum Revolver
Amount less (2) the sum of (y) the Letter of Credit Usage at such time, plus (z)
the principal amount of Swing Loans outstanding at such time, and

 

(B)                                the amount equal to (1) the Borrowing Base at
such time less (2) the sum of (y) the Letter of Credit Usage at such time, plus
(z) the principal amount of Swing Loans outstanding at such time.

 

(b)                                 Amounts borrowed pursuant to this Section
2.1 may be repaid and, subject to the terms and conditions of this Agreement,
reborrowed at any time during the term of this Agreement.  The outstanding
principal amount of the Revolving Loans, together with interest accrued and
unpaid thereon, shall constitute Obligations and shall be due and payable on the
Maturity Date or, if earlier, on the date on which they are declared due and
payable pursuant to the terms of this Agreement.

 

(c)                                  Anything to the contrary in this Section
2.1 notwithstanding, Agent shall have the right (but not the obligation), in the
exercise of its Permitted Discretion, to establish and increase or decrease
Receivable Reserves, Inventory Reserves, Bank Product Reserves, and other
Reserves.  The amount of any Receivable Reserve, Inventory Reserve, Bank Product
Reserve, or other Reserve established by Agent shall have a reasonable
relationship to the event, condition, other circumstance, or fact that is the
basis for such reserve.  Upon establishment or increase in reserves, Agent
agrees to make itself available to discuss the reserve or increase, and
Borrowers may take such action as may be required so that the event, condition,
circumstance, or fact that is the basis for such reserve or increase no longer
exists, in a manner and to the extent reasonably satisfactory to Agent in the
exercise of its Permitted Discretion.  In no event shall such opportunity limit
the right of Agent to maintain, establish, or change such Receivable Reserve,
Inventory Reserve, Bank Product Reserve, or other Reserves, unless Agent shall
have determined, in its Permitted Discretion, that the event, condition, other
circumstance, or fact that was the basis for such Receivable Reserve, Inventory
Reserve, Bank Product Reserve, or other Reserves or such change no longer exists
or has otherwise been adequately addressed by Borrowers, and

 

(d)                                 Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right (but not the obligation), in its
sole discretion, to establish a Port Reserve in an amount equal to the value
(calculated at the lower of cost or market on a first in, first out basis;
provided, however, that with respect to (x) ethanol, (y) Ethanol Byproduct, and
(z) corn purchased by Borrowers to be used to prepare first quality finished
goods held for sale in the ordinary course of Borrowers’ business, market shall
be based on the price of corn, ethanol or Ethanol Byproduct, as applicable, as
listed by the Chicago Board of Trade at the close of business on the date prior
to the date of delivery of each Borrowing Base Certificate pursuant to Schedule
5.2, adjusted by the local basis) of the Inventory located at the Indiana Port
Leased Premises, to be adjusted on a weekly basis; provided, however, that upon
Agent’s receipt of either (i) (A) Port of Indiana Lien Release, (B) Port of
Indiana Estoppel Letter, (C) Port of Indiana Access Agreement, (D) an amendment
to the financing statement filed by the Indiana Port Lessor in the office of the
Secretary of State of Indiana, amending the collateral description contained
therein to remove the term “inventory” therefrom, and (E) an amendment to the
financing statement filed by the Indiana Port Lessor in the appropriate office
of Posey County, Indiana,

 

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amending the collateral description contained therein to remove the term
“inventory” therefrom, , in each case, in form and substance satisfactory to
Agent, in Agent’s sole discretion, the amount of the Port Reserve shall be
reduced to $0 (the date of such reduction, the “Port Lien Release Date”); or
(ii) (A) Port of Indiana Subordination Agreement, (B) Amendment to Indiana Port
Lease Agreement, (C) Port of Indiana Estoppel Letter, and (D) Port of Indiana
Access Agreement, in each case, in form and substance satisfactory to Agent, in
Agent’s sole discretion, the amount of the Port Reserve shall be reduced to $0.

 

2.2                                 [Intentionally Omitted.]

 

2.3                                 Borrowing Procedures and Settlements.

 

(a)                                  Procedure for Borrowing Revolving Loans. 
Each Borrowing shall be made by a written request by an Authorized Person
delivered to Agent and received by Agent no later than 10:00 a.m. on the
Business Day that is the requested Funding Date specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date (which shall be a Business
Day); provided, that Agent may, in its sole discretion, elect to accept as
timely requests that are received later than 10:00 a.m. on the Business Day that
is the requested Funding Date.  At Agent’s election, in lieu of delivering the
above-described written request, any Authorized Person may give Agent telephonic
notice of such request by the required time.  In such circumstances, Borrowers
agree that any such telephonic notice will be confirmed in writing within 24
hours of the giving of such telephonic notice, but the failure to provide such
written confirmation shall not affect the validity of the request.

 

(b)                                 Making of Swing Loans.  In the case of a
request for a Revolving Loan and so long as either (i) the aggregate amount of
Swing Loans made since the last Settlement Date, minus all payments or other
amounts applied to Swing Loans since the last Settlement Date, plus the amount
of the requested Swing Loan does not exceed $5,000,000, or (ii) Swing Lender, in
its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing
limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan
made by Swing Lender pursuant to this Section 2.3(b) being referred to as a
“Swing Loan” and all such Revolving Loans being referred to as “Swing Loans”)
available to Borrowers on the Funding Date applicable thereto by transferring
immediately available funds in the amount of such requested Borrowing to the
Designated Account.  Each Swing Loan shall be deemed to be a Revolving Loan
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other Revolving Loans, except that all payments
(including interest) on any Swing Loan shall be payable to Swing Lender solely
for its own account.  Subject to the provisions of Section 2.3(d)(ii), Swing
Lender shall not make and shall not be obligated to make any Swing Loan if Swing
Lender has actual knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed
the Availability on such Funding Date.  Swing Lender shall not otherwise be
required to determine whether the applicable conditions precedent set forth in
Section 3 have been satisfied on the Funding Date applicable thereto prior to
making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens,
constitute Revolving Loans and Obligations, and bear interest at the rate
applicable from time to time to Revolving Loans that are Base Rate Loans.

 

(c)                                  Making of Revolving Loans.

 

(i)                           In the event that Swing Lender is not obligated to
make a Swing Loan, then after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Agent shall notify the Lenders by telecopy, telephone, email, or
other similar form of transmission, of the requested Borrowing; such
notification shall be sent (A) if the request by Borrowers is received by Agent
no later than 10:00 a.m. on the Business Day that is the requested Funding Date,
not later than 12:00 p.m. (or such later time as Agent may elect in its sole
discretion (but subject to clauses (Y) and (Z) below)) on the Business Day that
is the Funding Date applicable thereto, and (B) if the request by Borrowers is
received by Agent after 10:00 a.m. on the Business Day that is the requested
Funding Date and if Agent elects to accept such request as timely (as
contemplated by Section 2.3(a)), promptly after the receipt of such request by
Agent, but in no event later than 10:00 a.m. (or such later

 

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time as Agent may elect in its sole discretion (but subject to clauses (Y) and
(Z) below)) on the Business Day that is the first Business Day after the
requested Funding Date applicable thereto.  If (Y) Agent has notified the
Lenders of a requested Borrowing not later than 12:00 p.m. on the Business Day
that is the Funding Date applicable thereto, then each Lender shall make the
amount of such Lender’s Pro Rata Share of the requested Borrowing available to
Agent in immediately available funds, to Agent’s Account, not later than 1:30
p.m. on the Funding Date applicable thereto, and (Z) if Agent has notified the
Lenders of a requested Borrowing later than 12:00 p.m. on the Business Day that
is the requested Funding Date applicable thereto, then each Lender shall make
the amount of such Lender’s Pro Rata Share of the requested Borrowing available
to Agent in immediately available funds, to Agent’s Account, as promptly as
practicable, but in any event not later than 10:00 a.m. on the Business Day that
is the first Business Day after the requested Funding Date applicable thereto. 
After Agent’s receipt of the proceeds of such Revolving Loans from the Lenders,
Agent shall make the proceeds thereof available to Borrowers on the applicable
Funding Date (or the Business Day following the requested Funding Date, as
applicable) by transferring immediately available funds equal to such proceeds
received by Agent to the Designated Account; provided, that, subject to the
provisions of Section 2.3(d)(ii), no Lender shall have an obligation to make any
Revolving Loan, if (1) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing unless such condition has been waived, or (2) the requested
Borrowing would exceed the Availability on such Funding Date.

 

(ii)                        Unless Agent receives notice from a Lender prior to
(A) 1:00 p.m. on the Business Day that is the requested Funding Date relative to
a requested Borrowing as to which Agent has notified the Lenders of a requested
Borrowing not later than 12:00 p.m. on the Business Day that is the Funding Date
applicable thereto, or (B) 9:30 a.m. on the Business Day that is the first
Business Day after the requested Funding Date relative to a requested Borrowing
as to which Agent has notified the Lenders of a requested Borrowing after 12:00
p.m. on the Business Day that is the Funding Date applicable thereto if Agent
has notified the Lenders of a requested Borrowing later than 12:00 p.m. on the
Business Day that is the requested Funding Date applicable thereto, that such
Lender will not make available as and when required hereunder to Agent for the
account of Borrowers the amount of that Lender’s Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such assumption, make
available to Borrowers on or prior to such date a corresponding amount.  If, on
the requested Funding Date, any Lender shall not have remitted the full amount
that it is required to make available to Agent in immediately available funds
(irrespective of whether its obligation is to remit the funds on the next
Business Day) and if Agent has made available to Borrowers such amount on the
requested Funding Date, then such Lender shall make the amount of such Lender’s
Pro Rata Share of the requested Borrowing available to Agent in immediately
available funds, to Agent’s Account, no later than 10:00 a.m. on the Business
Day that is the first Business Day after the requested Funding Date applicable
thereto (in which case, the interest accrued on such Lender’s portion of such
Borrowing for the Funding Date shall be for Agent’s separate account).  If any
Lender shall not remit the full amount that it is required to make available to
Agent in immediately available funds as and when required hereby and if Agent
has made available to Borrowers such amount, then that Lender shall be obligated
to immediately remit such amount to Agent, together with interest at the
Defaulting Lender Rate for each day until the date on which such amount is so
remitted.  A notice submitted by Agent to any Lender with respect to amounts
owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error. 
If the amount that a Lender is required to remit is made available to Agent,
then such payment to Agent shall constitute such Lender’s Revolving Loan for all
purposes of this Agreement.  If such amount is not made available to Agent on
the Business Day following the Funding Date, Agent will notify Administrative
Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay
such amount to Agent for Agent’s account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Revolving Loans composing such
Borrowing.

 

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(d)                                 Protective Advances and Optional
Overadvances.

 

(i)                           Any contrary provision of this Agreement or any
other Loan Document notwithstanding, at any time, (A) after the occurrence and
during the continuance of a Default or an Event of Default, or (B) that any of
the other applicable conditions precedent set forth in Section 3 are not
satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time to
time in Agent’s sole discretion, to make Revolving Loans to, or for the benefit
of, Borrowers on behalf of the Lenders that Agent, in its Permitted Discretion
deems necessary or desirable (1) to preserve or protect the Collateral, or any
portion thereof, or (2) to enhance the likelihood of repayment of the
Obligations (other than the Bank Product Obligations) (the Revolving Loans
described in this Section 2.3(d)(i) shall be referred to as “Protective
Advances”).

 

(ii)                        Any contrary provision of this Agreement or any
other Loan Document notwithstanding, the Lenders hereby authorize Agent or Swing
Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but
is not obligated to, knowingly and intentionally, continue to make Revolving
Loans (including Swing Loans) to Borrowers notwithstanding that an Overadvance
exists or would be created thereby, so long as (A) after giving effect to such
Revolving Loans, the outstanding Revolver Usage does not exceed the Borrowing
Base by more than $3,000,000, and (B) after giving effect to such Revolving
Loans, the outstanding Revolver Usage (except for and excluding amounts charged
to the Loan Account for interest, fees, or Lender Group Expenses) does not
exceed the Maximum Revolver Amount.  In the event Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the immediately
foregoing provisions, regardless of the amount of, or reason for, such excess,
Agent shall notify the Lenders as soon as practicable (and prior to making any
(or any additional) intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group Expenses) unless
Agent determines that prior notice would result in imminent harm to the
Collateral or its value, in which case Agent may make such Overadvances and
provide notice as promptly as practicable thereafter), and the Lenders thereupon
shall, together with Agent, jointly determine the terms of arrangements that
shall be implemented with Borrowers intended to reduce, within a reasonable
time, the outstanding principal amount of the Revolving Loans to Borrowers to an
amount permitted by the preceding sentence.  In such circumstances, if any
Lender objects to the proposed terms of reduction or repayment of any
Overadvance, the terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.  The foregoing
provisions are meant for the benefit of the Lenders and Agent and are not meant
for the benefit of Borrowers, which shall continue to be bound by the provisions
of Section 2.4(e)(1).  Each Lender shall be obligated to settle with Agent as
provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of
such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported
to such Lender, any intentional Overadvances made as permitted under this
Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan
Account of interest, fees, or Lender Group Expenses.

 

(iii)                     Each Protective Advance and each Overadvance (each an
“Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder,
except that no Extraordinary Advance shall be eligible to be a LIBOR Rate Loan
and, prior to Settlement therefor, all payments on the Extraordinary Advances
shall be payable to Agent solely for its own account.  The Extraordinary
Advances shall be repayable on demand, secured by Agent’s Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to
time to Revolving Loans that are Base Rate Loans.  The provisions of this
Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the
Lenders and are not intended to benefit any Borrower (or any other Loan Party)
in any way.

 

(e)                                  Settlement.  It is agreed that each
Lender’s funded portion of the Revolving Loans is intended by the Lenders to
equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving
Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of any Borrower)
that in order to facilitate the administration of this Agreement and the other
Loan Documents, settlement among the Lenders as to the Revolving Loans, the
Swing Loans, and the Extraordinary Advances shall take place on a periodic basis
in accordance with the following provisions:

 

(i)                           Agent shall request settlement (“Settlement”) with
the Lenders on a weekly basis, or on a more frequent basis if so determined by
Agent (1) on behalf of Swing Lender, with respect to the outstanding Swing
Loans, (2) for itself, with respect to the outstanding Extraordinary Advances,
and (3) with

 

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respect to Borrowers’ or their Subsidiaries’ payments or other amounts received,
as to each by notifying the Lenders by telecopy, telephone, or other similar
form of transmission, of such requested Settlement, no later than 2:00 p.m. on
the Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”).  Such notice of
a Settlement Date shall include a summary statement of the amount of outstanding
Revolving Loans, Swing Loans, and Extraordinary Advances for the period since
the prior Settlement Date.  Subject to the terms and conditions contained herein
(including Section 2.3(g)):  (y) if the amount of the Revolving Loans (including
Swing Loans and Extraordinary Advances) made by a Lender that is not a
Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans
(including Swing Loans and Extraordinary Advances) as of a Settlement Date, then
Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer in
immediately available funds to a Deposit Account of such Lender (as such Lender
may designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Revolving
Loans (including Swing Loans and Extraordinary Advances), and (z) if the amount
of the Revolving Loans (including Swing Loans and Extraordinary Advances) made
by a Lender is less than such Lender’s Pro Rata Share of the Revolving Loans
(including Swing Loans and Extraordinary Advances) as of a Settlement Date, such
Lender shall no later than 12:00 p.m. on the Settlement Date transfer in
immediately available funds to Agent’s Account, an amount such that each such
Lender shall, upon transfer of such amount, have as of the Settlement Date, its
Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary
Advances).  Such amounts made available to Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the
applicable Swing Loans or Extraordinary Advances and, together with the portion
of such Swing Loans or Extraordinary Advances representing Swing Lender’s Pro
Rata Share thereof, shall constitute Revolving Loans of such Lenders.  If any
such amount is not made available to Agent by any Lender on the Settlement Date
applicable thereto to the extent required by the terms hereof, Agent shall be
entitled to recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate.

 

(ii)                        In determining whether a Lender’s balance of the
Revolving Loans, Swing Loans, and Extraordinary Advances is less than, equal to,
or greater than such Lender’s Pro Rata Share of the Revolving Loans, Swing
Loans, and Extraordinary Advances as of a Settlement Date, Agent shall, as part
of the relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to principal, interest,
fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds
of Collateral.

 

(iii)                     Between Settlement Dates, Agent, to the extent
Extraordinary Advances or Swing Loans are outstanding, may pay over to Agent or
Swing Lender, as applicable, any payments or other amounts received by Agent,
that in accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to the Extraordinary Advances
or Swing Loans.  Between Settlement Dates, Agent, to the extent no Extraordinary
Advances or Swing Loans are outstanding, may pay over to Swing Lender any
payments or other amounts received by Agent, that in accordance with the terms
of this Agreement would be applied to the reduction of the Revolving Loans, for
application to Swing Lender’s Pro Rata Share of the Revolving Loans.  If, as of
any Settlement Date, payments or other amounts of Parent or its Subsidiaries
received since the then immediately preceding Settlement Date have been applied
to Swing Lender’s Pro Rata Share of the Revolving Loans other than to Swing
Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent
for the accounts of the Lenders, and Agent shall pay to the Lenders (other than
a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)),
to be applied to the outstanding Revolving Loans of such Lenders, an amount such
that each such Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Revolving Loans.  During the period
between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Extraordinary Advances, and each Lender with respect to the Revolving
Loans other than Swing Loans and Extraordinary Advances, shall be entitled to
interest at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lender, Agent, or the Lenders, as
applicable.

 

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(iv)       Anything in this Section 2.3(e) to the contrary notwithstanding, in
the event that a Lender is a Defaulting Lender, Agent shall be entitled to
refrain from remitting settlement amounts to the Defaulting Lender and, instead,
shall be entitled to elect to implement the provisions set forth in
Section 2.3(g).

 

(f)            Notation.  Agent, as a non-fiduciary agent for Borrowers, shall
maintain a register showing the principal amount of the Revolving Loans, owing
to each Lender, including the Swing Loans owing to Swing Lender, and
Extraordinary Advances owing to Agent, and the interests therein of each Lender,
from time to time and such register shall, absent manifest error, conclusively
be presumed to be correct and accurate.

 

(g)           Defaulting Lenders.

 

(i)         Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by any Borrower to Agent for the Defaulting Lender’s benefit or
any proceeds of Collateral that would otherwise be remitted hereunder to the
Defaulting Lender, and, in the absence of such transfer to the Defaulting
Lender, Agent shall transfer any such payments (A) first, to Swing Lender to the
extent of any Swing Loans that were made by Swing Lender and that were required
to be, but were not, paid by the Defaulting Lender, (B) second, to Issuing
Lender, to the extent of the portion of a Letter of Credit Disbursement that was
required to be, but was not, paid by the Defaulting Lender, (C) third, to each
Non-Defaulting Lender ratably in accordance with its Commitment (but, in each
case, only to the extent that such Defaulting Lender’s portion of a Revolving
Loan (or other funding obligation) was funded by such other Non-Defaulting
Lender), (D) to a suspense account maintained by Agent, the proceeds of which
shall be retained by Agent and may be made available to be re-advanced to or for
the benefit of Borrowers (upon the request of Borrowers subject to the
conditions set forth in Section 3.2) as if such Defaulting Lender had made its
portion of Revolving Loans (or other funding obligations) hereunder, and
(E) from and after the date on which all other Obligations have been paid in
full, to such Defaulting Lender in accordance with tier (L) of
Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its
discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender.  Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided,
that the foregoing shall not apply to any of the matters governed by
Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall
remain effective with respect to such Defaulting Lender until the earlier of
(y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Lender,
and Borrowers shall have waived, in writing, the application of this
Section 2.3(g) to such Defaulting Lender, or (z) the date on which such
Defaulting Lender makes payment of all amounts that it was obligated to fund
hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of
the amounts that it was obligated to fund hereunder, and, if requested by Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder (on which earlier date, so long as no Event of Default has occurred
and is continuing, any remaining cash collateral held by Agent pursuant to
Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this
Section 2.3(g) shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by Borrowers of their duties and
obligations hereunder to Agent, Issuing Lender, or to the Lenders other than
such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that
it was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrowers, at their
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share

 

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of the outstanding Obligations (other than Bank Product Obligations, but
including (1) all interest, fees, and other amounts that may be due and payable
in respect thereof, and (2) an assumption of its Pro Rata Share of its
participation in the Letters of Credit); provided, that any such assumption of
the Commitment of such Defaulting Lender shall not be deemed to constitute a
waiver of any of the Lender Groups’ or any Borrower’s rights or remedies against
any such Defaulting Lender arising out of or in relation to such failure to
fund.  In the event of a direct conflict between the priority provisions of this
Section 2.3(g) and any other provision contained in this Agreement or any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other.  In the event of any actual, irreconcilable conflict that
cannot be resolved as aforesaid, the terms and provisions of this
Section 2.3(g) shall control and govern.

 

(ii)        If any Swing Loan or Letter of Credit is outstanding at the time
that a Lender becomes a Defaulting Lender then:

 

(A)          such Defaulting Lender’s Swing Loan Exposure and Letter of Credit
Exposure shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective Pro Rata Shares but only to the extent (y) the sum of all
Non-Defaulting Lenders’ Revolving Loan Exposures plus such Defaulting Lender’s
Swing Loan Exposure and Letter of Credit Exposure does not exceed the total of
all Non-Defaulting Lenders’ Commitments and (z) the conditions set forth in
Section 3.2 are satisfied at such time;

 

(B)           if the reallocation described in clause (A) above cannot, or can
only partially, be effected, Borrowers shall within one Business Day following
notice by Agent to Administrative Borrower (y) first, prepay such Defaulting
Lender’s Swing Loan Exposure (after giving effect to any partial reallocation
pursuant to clause (A) above) and (z) second, cash collateralize such Defaulting
Lender’s Letter of Credit Exposure (after giving effect to any partial
reallocation pursuant to clause (A) above), pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
Agent, for so long as such Letter of Credit Exposure is outstanding; provided,
that Borrowers shall not be obligated to cash collateralize any Defaulting
Lender’s Letter of Credit Exposure if such Defaulting Lender is also the Issuing
Lender;

 

(C)           if Borrowers cash collateralize any portion of such Defaulting
Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii),
Borrowers shall not be required to pay any Letter of Credit Fees to Agent for
the account of such Defaulting Lender pursuant to Section 2.6(b) with respect to
such cash collateralized portion of such Defaulting Lender’s Letter of Credit
Exposure during the period such Letter of Credit Exposure is cash
collateralized;

 

(D)          to the extent the Letter of Credit Exposure of the Non-Defaulting
Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of
Credit Fees payable to the Non-Defaulting Lenders pursuant to
Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’
Letter of Credit Exposure;

 

(E)           to the extent any Defaulting Lender’s Letter of Credit Exposure is
neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii),
then, without prejudice to any rights or remedies of the Issuing Lender or any
Lender hereunder, all Letter of Credit Fees that would have otherwise been
payable to such Defaulting Lender under Section 2.6(b) with respect to such
portion of such Letter of Credit Exposure shall instead be payable to the
Issuing Lender until such portion of such Defaulting Lender’s Letter of Credit
Exposure is cash collateralized or reallocated;

 

(F)           so long as any Lender is a Defaulting Lender, the Swing Lender
shall not be required to make any Swing Loan and the Issuing Lender shall not be
required to issue, amend, or increase any Letter of Credit, in each case, to the
extent (y) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter
of Credit can not be reallocated pursuant to this Section 2.3(g)(ii) or (z) the
Swing Lender or Issuing Lender, as applicable, has not otherwise entered into
arrangements reasonably satisfactory to

 

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the Swing Lender or Issuing Lender, as applicable, and Borrowers to eliminate
the Swing Lender’s or Issuing Lender’s risk with respect to the Defaulting
Lender’s participation in Swing Loans or Letters of Credit; and

 

(G)           Agent may release any cash collateral provided by Borrowers
pursuant to this Section 2.3(g)(ii) to the Issuing Lender and the Issuing Lender
may apply any such cash collateral to the payment of such Defaulting Lender’s
Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by
Borrowers pursuant to Section 2.11(a).

 

(h)           Independent Obligations.  All Revolving Loans (other than Swing
Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares.  It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loan (or other extension of credit) hereunder,
nor shall any Commitment of any Lender be increased or decreased as a result of
any failure by any other Lender to perform its obligations hereunder, and
(ii) no failure by any Lender to perform its obligations hereunder shall excuse
any other Lender from its obligations hereunder.

 

2.4           Payments; Reductions of Commitments; Prepayments.

 

(a)           Payments by Borrowers.

 

(i)         Except as otherwise expressly provided herein, all payments by any
Borrower shall be made to Agent’s Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 1:30 p.m. on the
date specified herein.  Any payment received by Agent later than 1:30 p.m. shall
be deemed to have been received (unless Agent, in its sole discretion, elects to
credit it on the date received) on the following Business Day and any applicable
interest or fee shall continue to accrue until such following Business Day.

 

(ii)        Unless Agent receives notice from Administrative Borrower prior to
the date on which any payment is due to the Lenders that Borrowers will not make
such payment in full as and when required, Agent may assume that Borrowers have
made (or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender.  If and to the extent Borrowers do not make
such payment in full to Agent on the date when due, each Lender severally shall
repay to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

 

(b)           Apportionment and Application.

 

(i)         So long as no Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
principal and interest payments received by Agent shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and
expenses received by Agent (other than fees or expenses that are for Agent’s
separate account or for the separate account of Issuing Lender) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee or expense relates.  Subject
to Section 2.4(b)(iv) and Section 2.4(e), all payments to be made hereunder by
Borrowers shall be remitted to Agent and all such payments, and all proceeds of
Collateral received by Agent, shall be applied, so long as no Application Event
has occurred and is continuing, to reduce the balance of the Revolving Loans
outstanding and, thereafter, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.

 

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(ii)        At any time that an Application Event has occurred and is continuing
and except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to Agent and all proceeds of Collateral received by Agent
shall be applied as follows:

 

(A)          first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,

 

(B)           second, to pay any fees or premiums then due to Agent under the
Loan Documents until paid in full,

 

(C)           third, to pay interest due in respect of all Protective Advances
until paid in full,

 

(D)          fourth, to pay the principal of all Protective Advances until paid
in full,

 

(E)           fifth, ratably, to pay any Lender Group Expenses (including cost
or expense reimbursements) or indemnities then due to any of the Lenders under
the Loan Documents, until paid in full,

 

(F)           sixth, ratably, to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,

 

(G)           seventh, to pay interest accrued in respect of the Swing Loans
until paid in full,

 

(H)          eighth, to pay the principal of all Swing Loans until paid in full,

 

(I)            ninth, ratably, to pay interest accrued in respect of the
Revolving Loans (other than Protective Advances) until paid in full,

 

(J)            tenth, ratably (i) to pay the principal of all Revolving Loans
until paid in full, and (ii) to Agent, to be held by Agent, for the benefit of
Issuing Lender (and for the ratable benefit of each of the Lenders that have an
obligation to pay to Agent, for the account of Issuing Lender, a share of each
Letter of Credit Disbursement), as cash collateral in an amount up to 103% of
the Letter of Credit Usage (to the extent permitted by applicable law, such cash
collateral shall be applied to the reimbursement of any Letter of Credit
Disbursement as and when such disbursement occurs and, if a Letter of Credit
expires undrawn, the cash collateral held by Agent in respect of such Letter of
Credit shall, to the extent permitted by applicable law, be reapplied pursuant
to this Section 2.4(b)(ii), beginning with tier (A) hereof),

 

(K)          eleventh, ratably to the Bank Product Providers based upon amounts
then certified by the applicable Bank Product Provider to Agent (in form and
substance satisfactory to Agent) to be due and payable to such Bank Product
Providers on account of Bank Product Obligations,

 

(L)           twelfth, to pay any other Obligations other than Obligations owed
to Defaulting Lenders,

 

(M)         thirteenth, ratably to pay any Obligations owed to Defaulting
Lenders; and

 

(N)          fourteenth, to Borrowers (to be wired to the Designated Account) or
such other Person entitled thereto under applicable law.

 

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(iii)       Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e).

 

(iv)       In each instance, so long as no Application Event has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by any
Borrower to Agent and specified by such Borrower to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Loan Document.

 

(v)        For purposes of Section 2.4(b)(ii), “paid in full” of a type of
Obligation means payment in cash or immediately available funds of all amounts
owing on account of such type of Obligation, including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.

 

(vi)       In the event of a direct conflict between the priority provisions of
this Section 2.4 and any other provision contained in this Agreement or any
other Loan Document, it is the intention of the parties hereto that such
provisions be read together and construed, to the fullest extent possible, to be
in concert with each other.  In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, if the conflict relates to the provisions
of Section 2.3(g) and this Section 2.4, then the provisions of
Section 2.3(g) shall control and govern, and if otherwise, then the terms and
provisions of this Section 2.4 shall control and govern.

 

(c)           Reduction of Commitments.  The Commitments shall terminate on the
Maturity Date.  Borrowers may reduce the Commitments to an amount (which may be
zero) not less than the sum of (A) the Revolver Usage as of such date, plus
(B) the principal amount of all Revolving Loans not yet made as to which a
request has been given by Borrowers under Section 2.3(a), plus (C) the amount of
all Letters of Credit not yet issued as to which a request has been given by
Borrowers pursuant to Section 2.11(a).  Each such reduction shall be in an
amount which is not less than $5,000,000 (unless the Commitments are being
reduced to zero and the amount of the Commitments in effect immediately prior to
such reduction are less than $5,000,000), shall be made by providing not less
than 10 Business Days prior written notice to Agent, and shall be irrevocable. 
Once reduced, the Commitments may not be increased.  Each such reduction of the
Commitments shall reduce the Commitments of each Lender proportionately in
accordance with its ratable share thereof.

 

(d)           Optional Prepayments.  Borrowers may prepay the principal of any
Revolving Loan at any time in whole or in part, without premium or penalty.

 

(e)           Mandatory Prepayments.  If, at any time, (A) the Revolver Usage on
such date exceeds (B) the Borrowing Base reflected in the Borrowing Base
Certificate most recently delivered by Borrowers to Agent, then Borrowers shall
immediately prepay the Obligations in accordance with Section 2.4(f)(i) in an
aggregate amount equal to the amount of such excess.

 

(f)            Application of Payments.  Each prepayment pursuant to
Section 2.4(e) shall, (A) so long as no Application Event shall have occurred
and be continuing, be applied, first, to the outstanding principal amount of the
Revolving Loans until paid in full, and second, to cash collateralize the
Letters of Credit in an amount equal to 103% of the then outstanding Letter of
Credit Usage, and (B) if an Application Event shall have occurred and be
continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

2.5           Promise to Pay.  Borrowers agree to pay the Lender Group Expenses
on the earlier of (a) the first day of the month following the date on which the
applicable Lender Group Expenses were first incurred or (b) the date on which
demand therefor is made by Agent.  Borrowers agree to pay in full all of the
Obligations (including principal, interest, premiums, if any, fees, costs, and
expenses (including Lender Group Expenses)) on the Maturity Date or, if earlier,
on the date on which the Obligations (other than the Bank

 

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Product Obligations) become due and payable pursuant to the terms of this
Agreement.  Borrowers agree that their obligations contained in the first
sentence of this Section 2.5 shall survive payment or satisfaction in full of
all other Obligations.

 

2.6           Interest Rates and Letter of Credit Fee:  Rates, Payments, and
Calculations.

 

(a)           Interest Rates.  Except as provided in Section 2.6(c), all
Obligations (except for undrawn Letters of Credit) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest as follows:

 

(i)         if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate
equal to the LIBOR Rate plus the LIBOR Rate Margin, and

 

(ii)        otherwise, at a per annum rate equal to the Base Rate plus the Base
Rate Margin.

 

(b)           Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable
benefit of the Lenders), a Letter of Credit fee (the “Letter of Credit Fee”)
(which fee shall be in addition to the fees, charges, commissions, and costs set
forth in Section 2.11(j)) which shall accrue at a per annum rate equal to the
LIBOR Rate Margin times the undrawn amount of all outstanding Letters of Credit.

 

(c)           Default Rate.  Upon the occurrence and during the continuation of
an Event of Default and at the election of Agent or the Required Lenders,

 

(i)         all Obligations (except for undrawn Letters of Credit) that have
been charged to the Loan Account pursuant to the terms hereof shall bear
interest at a per annum rate equal to 2 percentage points above the per annum
rate otherwise applicable thereunder, and

 

(ii)        the Letter of Credit Fee shall be increased to 2 percentage points
above the per annum rate otherwise applicable hereunder.

 

(d)           Payment.  Except to the extent provided to the contrary in
Section 2.10 or Section 2.12(a), (i) all interest, all Letter of Credit Fees,
and all other fees payable hereunder or under any of the other Loan Documents
shall be due and payable, in arrears, on the first day of each month and
(ii) all costs and expenses payable hereunder or under any of the other Loan
Documents, and all Lender Group Expenses shall be due and payable, in arrears,
on the first day of each month at any time that Obligations or Commitments are
outstanding.  Each Borrower hereby authorizes Agent, from time to time without
prior notice to such Borrower, to charge (A) on the first day of each month, all
interest accrued during the prior month on the Revolving Loans hereunder, (B) on
the first day of each month, all Letter of Credit Fees accrued or chargeable
hereunder during the prior month, (C) on the first day of each month, the Unused
Line Fee accrued during the prior month pursuant to Section 2.10(b), (D) as and
when incurred or accrued, all audit, appraisal, valuation, or other charges or
fees payable hereunder pursuant to Section 2.10(c), (E) as and when due and
payable, all other fees payable hereunder or under any of the other Loan
Documents, (F) as and when incurred or accrued, all Lender Group Expenses,
(G) as and when incurred or accrued, all fees, charges, commissions, and costs
provided for in Section 2.11(j), (H) as and when incurred or accrued, all fees
and costs provided for in Section 2.10, and (I) as and when due and payable all
other payment obligations payable under any Loan Document or any Bank Product
Agreement (including any amounts due and payable to the Bank Product Providers
in respect of Bank Products) to the Loan Account, which amounts thereafter shall
constitute Revolving Loans hereunder and, initially, shall accrue interest at
the rate then applicable to Revolving Loans that are Base Rate Loans.  Any
interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable
hereunder or under any other Loan Document or under any Bank Product Agreement
that are charged to the Loan Account shall thereupon constitute Revolving Loans
hereunder, shall constitute Obligations hereunder, and shall initially accrue
interest at the rate then applicable to Revolving Loans that are Base Rate Loans
(unless and until converted into LIBOR Rate Loans in accordance with the terms
of this Agreement).

 

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(e)           Computation.  All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year, in each case, for
the actual number of days elapsed in the period during which the interest or
fees accrue.  In the event the Base Rate is changed from time to time hereafter,
the rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

 

(f)            Intent to Limit Charges to Maximum Lawful Rate.  The Lender Group
and all other parties to the Loan Documents intend to contract in strict
compliance with applicable usury law from time to time in effect.  In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, or interest in
excess of the Maximum Interest.  No Loan Party, endorser, or other Person
hereafter becoming liable for payment of any Obligation shall ever be liable to
pay interest thereon in excess of the Maximum Interest, and the provisions of
this section shall control over all other provisions of the Loan Documents which
may be in conflict or apparent conflict herewith.  If (i) the maturity of any
Obligation is accelerated for any reason, (ii) any Obligation is prepaid and as
a result any amounts held to constitute interest are determined to be in excess
of the Maximum Interest, or (iii) any Lender or any other holder of any or all
of the Obligations shall otherwise collect moneys that are determined to
constitute interest which would otherwise increase the interest and other
amounts deemed interest on any or all of the Obligations to an amount in excess
of the Maximum Interest, then all sums determined to constitute interest in
excess of the Maximum Interest shall, without penalty, be promptly applied to
reduce the then outstanding principal of the related Obligations or, at such
Lender’s or holder’s option, promptly returned to Borrower upon such
determination.  In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the Maximum Interest, the Lender Group
and Loan Parties shall to the greatest extent permitted under applicable law,
(x) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (y) exclude the voluntary prepayments and the effects thereof,
and (z) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the instruments evidencing
Obligations in accordance with the amounts outstanding from time to time
thereunder and the Maximum Interest in order to lawfully charge the Maximum
Interest.  If at any time mandatory provisions of law provide for the
application of an interest ceiling under Chapter 303 of the Texas Finance Code
(the “Texas Finance Code”) as amended, at such time, the ceiling shall be the
“weekly ceiling” as defined in the Texas Finance Code; provided that if any
applicable law permits greater interest, the law permitting the greatest
interest shall apply.  To the extent that the interest rate or rates otherwise
payable under this Agreement plus any other amounts paid under this Agreement or
any other Loan Document are limited under applicable law, each Lender agrees to
limit the interest to which it is otherwise entitled to the Maximum Interest. 
Such limitation for each Lender for any period shall be in an amount equal to
such Lender’s Pro Rata Share multiplied by the difference between the applicable
interest rate under this Agreement and the Maximum Interest.  For purposes of
this calculation at any date of determination, any fees or charges included in
the calculation of interest not directly related to a particular type of
Obligation shall be allocated ratably to each Lender based upon the outstanding
Obligations of each Lender compared to all Obligations.  As provided in
Section 12(a), this Agreement shall be governed by, and construed in accordance
with, the laws of the State of California.  The foregoing provisions are
included solely out of an abundance of caution and shall not be construed to
mean that any of the above referenced provisions of Texas law are in any way
applicable to this Agreement, the other Loan Documents, or the Obligations.

 

2.7           Crediting Payments.  The receipt of any payment item by Agent
shall not be required to be considered a payment on account unless such payment
item is a wire transfer of immediately available federal funds made to Agent’s
Account or unless and until such payment item is honored when presented for
payment.  Should any payment item not be honored when presented for payment,
then Borrowers shall be deemed not to have made such payment and interest shall
be calculated accordingly.  Anything to the contrary contained herein
notwithstanding, any payment item shall be deemed received by Agent only if it
is received into Agent’s Account on a Business Day on or before 1:30 p.m.  If
any payment item is received into Agent’s Account on a non-Business Day or after
1:30 p.m. on a Business Day (unless Agent, in its sole

 

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discretion, elects to credit it on the date received), it shall be deemed to
have been received by Agent as of the opening of business on the immediately
following Business Day.

 

2.8           Designated Account.  Agent is authorized to make the Revolving
Loans, and Issuing Lender is authorized to issue the Letters of Credit, under
this Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if pursuant to
Section 2.6(d).  Borrowers agree to establish and maintain the Designated
Account with the Designated Account Bank for the purpose of receiving the
proceeds of the Revolving Loans requested by Borrowers and made by Agent or the
Lenders hereunder.  Unless otherwise agreed by Agent and Borrowers, any
Revolving Loan or Swing Loan requested by Borrowers and made by Agent or the
Lenders hereunder shall be made to the Designated Account.

 

2.9           Maintenance of Loan Account; Statements of Obligations.  Agent
shall maintain an account on its books in the name of Borrowers (the “Loan
Account”) on which Borrowers will be charged with all Revolving Loans (including
Extraordinary Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Borrowers or for any Borrower’s account, the Letters of Credit issued
or arranged by Issuing Lender for any Borrower’s account, and with all other
payment Obligations hereunder or under the other Loan Documents, including,
accrued interest, fees and expenses, and Lender Group Expenses.  In accordance
with Section 2.7, the Loan Account will be credited with all payments received
by Agent from Borrowers or for any Borrower’s account.  Agent shall make
available to Borrowers monthly statements regarding the Loan Account, including
the principal amount of the Revolving Loans, interest accrued hereunder, fees
accrued or charged hereunder or under the other Loan Documents, and a summary
itemization of all charges and expenses constituting Lender Group Expenses
accrued hereunder or under the other Loan Documents, and each such statement,
absent manifest error, shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after Agent first makes such a statement available to Borrowers,
Borrowers shall deliver to Agent written objection thereto describing the error
or errors contained in such statement.

 

2.10         Fees.

 

(a)           Agent Fees.  Borrowers shall pay to Agent, for the account of
Agent, as and when due and payable under the terms of the Fee Letter, the fees
set forth in the Fee Letter.

 

(b)           Unused Line Fee.  Borrowers shall pay to Agent, for the ratable
account of the Lenders, on the first day of each month from and after the
Closing Date up to the first day of the month prior to the date on which the
Obligations are paid in full and on the date on which the Obligations are paid
in full, an unused line fee (the “Unused Line Fee”) in an amount equal to 0.50%
per annum times the result of (i) the aggregate amount of the Commitments, less
(ii) the average amount of the Revolver Usage during the immediately preceding
month (or portion thereof).

 

(c)           Field Examination and Other Fees.  Borrowers shall pay to Agent,
field examination, appraisal, and valuation fees and charges, as and when
incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner,
plus out-of-pocket expenses for each field examination of the Loan Parties
performed by personnel employed by Agent, and (ii) the customary fees or charges
paid, incurred or charged by Agent (but, in any event, no less than a charge of
$1,000 per day, per Person, plus out-of-pocket expenses) if it elects to employ
the services of one or more third Persons to perform field examinations of
Parent or its Subsidiaries, to establish electronic collateral reporting
systems, to appraise the Collateral, or any portion thereof, or to assess
Parent’s or its Subsidiaries’ business valuation; provided, that so long as no
Event of Default shall have occurred and be continuing, Borrowers shall not be
obligated to reimburse Agent for more than 3 field examinations during any
calendar year, or more than 2 appraisals of the Collateral during any calendar
year.

 

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2.11         Letters of Credit.

 

(a)           Subject to the terms and conditions of this Agreement, upon the
request of Borrowers made in accordance herewith, Issuing Lender agrees to
issue, or to cause an Underlying Issuer (including, as Issuing Lender’s agent)
to issue, a requested Letter of Credit for the account of Borrowers.  If Issuing
Lender, at its option, elects to cause an Underlying Issuer to issue a requested
Letter of Credit, then Issuing Lender agrees that it will enter into
arrangements relative to the reimbursement of such Underlying Issuer (which may
include, among, other means, by becoming an applicant with respect to such
Letter of Credit or entering into undertakings which provide for reimbursements
of such Underlying Issuer with respect to such Letter of Credit; each such
obligation or undertaking, irrespective of whether in writing, a “Reimbursement
Undertaking”) with respect to Letters of Credit issued by such Underlying Issuer
for the account of Borrowers.  By submitting a request to Issuing Lender for the
issuance of a Letter of Credit, Borrowers shall be deemed to have requested that
Issuing Lender issue or that an Underlying Issuer issue the requested Letter of
Credit and to have requested Issuing Lender to issue a Reimbursement Undertaking
with respect to such requested Letter of Credit if it is to be issued by an
Underlying Issuer (it being expressly acknowledged and agreed by each Borrower
that Borrowers are and shall be deemed to be an applicant (within the meaning of
Section 5-102(a)(2) of the Code) with respect to each Underlying Letter of
Credit).  Each request for the issuance of a Letter of Credit, or the amendment,
renewal, or extension of any outstanding Letter of Credit, shall be made in
writing by an Authorized Person and delivered to Issuing Lender via hand
delivery, telefacsimile, or other electronic method of transmission reasonably
in advance of the requested date of issuance, amendment, renewal, or extension. 
Each such request shall be in form and substance reasonably satisfactory to
Issuing Lender and (i) shall specify (A) the amount of such Letter of Credit,
(B) the date of issuance, amendment, renewal, or extension of such Letter of
Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name
and address of the beneficiary of the Letter of Credit, and (E) such other
information (including, the conditions to drawing, and, in the case of an
amendment, renewal, or extension, identification of the Letter of Credit to be
so amended, renewed, or extended) as shall be necessary to prepare, amend,
renew, or extend such Letter of Credit, and (ii) shall be accompanied by such
Issuer Documents as Agent, Issuing Lender or Underlying Issuer may request or
require.  Anything contained herein to the contrary notwithstanding, Issuing
Lender may, but shall not be obligated to, issue or cause the issuance of a
Letter of Credit or to issue a Reimbursement Undertaking in respect of an
Underlying Letter of Credit, in either case, that supports the obligations of
Parent or its Subsidiaries (1) in respect of (A) a lease of real property, or
(B) an employment contract, or (2) at any time that one or more of the Lenders
is a Defaulting Lender.

 

(b)           Issuing Lender shall have no obligation to issue a Letter of
Credit or a Reimbursement Undertaking in respect of an Underlying Letter of
Credit, in either case, if any of the following would result after giving effect
to the requested issuance:

 

(i)         the Letter of Credit Usage would exceed $17,500,000,

 

(ii)        the Letter of Credit Usage would exceed the Maximum Revolver Amount
less the outstanding amount of Revolving Loans (including Swing Loans), or

 

(iii)       the Letter of Credit Usage would exceed the Borrowing Base at such
time less the outstanding principal balance of the Revolving Loans (inclusive of
Swing Loans) at such time.

 

(c)           In the event there is a Defaulting Lender as of the date of any
request for the issuance of a Letter of Credit, the Issuing Lender shall not be
required to issue or arrange for such Letter of Credit to the extent (y) the
Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of
Credit may not be reallocated pursuant to Section 2.3(g)(ii) or (z) the Issuing
Lender has not otherwise entered into arrangements reasonably satisfactory to it
and Borrowers to eliminate the Issuing Lender’s risk with respect to the
participation in such Letter of Credit of the Defaulting Lender, which
arrangements may include Borrowers cash collateralizing such Defaulting Lender’s
Letter of Credit Exposure in accordance with Section 2.3(g)(ii). 
Additionally, Issuing Lender shall have no obligation to issue a Letter of
Credit or a Reimbursement Undertaking in respect of an Underlying Letter of
Credit, in either case, if (I) any order, judgment, or decree of any
Governmental Authority or arbitrator shall, by its terms, purport to enjoin or
restrain Issuing Lender from issuing such Letter of Credit or Reimbursement
Undertaking or Underlying Issuer from issuing such Letter of

 

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Credit, or any law applicable to Issuing Lender or Underlying Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over Issuing Lender or Underlying
Issuer shall prohibit or request that Issuing Lender or Underlying Issuer
refrain from the issuance of letters of credit generally or such Letter of
Credit or Reimbursement Undertaking (as applicable) in particular, or (II) the
issuance of such Letter of Credit would violate one or more policies of Issuing
Lender or Underlying Issuer applicable to letters of credit generally.

 

(d)           Any Issuing Lender (other than Wells Fargo or any of its
Affiliates) shall notify Agent in writing on each Business Day of all Letters of
Credit issued on the prior Business Day by such Issuing Lender; provided that
(y) until Agent advises any such Issuing Lender that the provisions of
Section 3.2 are not satisfied, or (z) the aggregate amount of the Letters of
Credit issued in any such week exceeds such amount as shall be agreed by Agent
and such Issuing Lender, such Issuing Lender shall be required to so notify
Agent in writing only once each week of the Letters of Credit issued by such
Issuing Lender during the immediately preceding week as well as the daily
amounts outstanding for the prior week, such notice to be furnished on such day
of the week as Agent and Issuing Lender may agree.  Borrowers and the Lender
Group hereby represent that the only letters of credit issued on behalf of any
one or more of the Borrowers as of the Closing date are the letters of credit
described on Schedule E-2.  Each Letter of Credit shall be in form and substance
reasonably acceptable to Issuing Lender, including the requirement that the
amounts payable thereunder must be payable in Dollars.  If Issuing Lender makes
a payment under a Letter of Credit or an Underlying Issuer makes a payment under
an Underlying Letter of Credit, Borrowers shall pay to Agent an amount equal to
the applicable Letter of Credit Disbursement on the date such Letter of Credit
Disbursement is made and, in the absence of such payment, the amount of the
Letter of Credit Disbursement immediately and automatically shall be deemed to
be a Revolving Loan hereunder (notwithstanding any failure to satisfy any
condition precedent set forth in Section 3) and, initially, shall bear interest
at the rate then applicable to Revolving Loans that are Base Rate Loans. If a
Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder,
Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to
Issuing Lender shall be automatically converted into an obligation to pay the
resulting Revolving Loan.  Promptly following receipt by Agent of any payment
from any Borrower pursuant to this paragraph, Agent shall distribute such
payment to Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.11(b) to reimburse Issuing Lender, then to such Lenders
and Issuing Lender as their interests may appear.

 

(e)           Promptly following receipt of a notice of a Letter of Credit
Disbursement pursuant to Section 2.11(a), each Lender agrees to fund its Pro
Rata Share of any Revolving Loan deemed made pursuant to Section 2.11(a) on the
same terms and conditions as if Borrowers had requested the amount thereof as a
Revolving Loan and Agent shall promptly pay to Issuing Lender the amounts so
received by it from the Lenders.  By the issuance of a Letter of Credit or a
Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of
Credit or a Reimbursement Undertaking) and without any further action on the
part of Issuing Lender or the Lenders, Issuing Lender shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have purchased, a
participation in each Letter of Credit issued by Issuing Lender and each
Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to
pay to Agent, for the account of Issuing Lender, such Lender’s Pro Rata Share of
any Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer
under the applicable Letter of Credit.  In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay
to Agent, for the account of Issuing Lender, such Lender’s Pro Rata Share of
each Letter of Credit Disbursement made by Issuing Lender or an Underlying
Issuer and not reimbursed by Borrowers on the date due as provided in
Section 2.11(a), or of any reimbursement payment that is required to be refunded
(or that Agent or Issuing Lender elects, based upon the advice of counsel, to
refund) to Borrowers for any reason.  Each Lender acknowledges and agrees that
its obligation to deliver to Agent, for the account of Issuing Lender, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section 2.11(b) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation of a
Default or an Event of Default or the failure to satisfy any condition set forth
in Section 3.  If any such Lender fails to make available to Agent the amount

 

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of such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided
in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.

 

(f)            Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group and each Underlying Issuer harmless from any damage, loss,
cost, expense, or liability (other than Taxes, which shall be governed by
Section 16), and reasonable and documented attorneys fees and expenses incurred
by Issuing Lender, any other member of the Lender Group, or any Underlying
Issuer arising out of or in connection with any Reimbursement Undertaking or any
Letter of Credit; provided, that no Borrower shall be obligated hereunder to
indemnify the Lender Group or any Underlying Issuer for any loss, cost, expense,
or liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of Issuing Lender, any
other member of the Lender Group, or any Underlying Issuer.  Each Borrower
agrees to be bound by the Underlying Issuer’s regulations and interpretations of
any Letter of Credit or by Issuing Lender’s interpretations of any Reimbursement
Undertaking even though this interpretation may be different from such
Borrower’s own.  Each Borrower understands that the Reimbursement Undertakings
may require Issuing Lender to indemnify the Underlying Issuer for certain costs
or liabilities arising out of claims by Borrowers against such Underlying
Issuer.  Each Borrower hereby agrees to indemnify, save, defend, and hold
Issuing Lender and the other members of the Lender Group harmless with respect
to any loss, cost, expense (including reasonable and documented attorneys fees
and expenses), or liability (other than Taxes, which shall be governed by
Section 16) incurred by them as a result of Issuing Lender’s indemnification of
an Underlying Issuer; provided, that no Borrower shall be obligated hereunder to
indemnify for any such loss, cost, expense, or liability that a court of
competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of Issuing Lender or any other member of the
Lender Group.

 

(g)           Each Lender and each Borrower agree that, in paying any drawing
under a Letter of Credit, neither Issuing Lender nor any Underlying Issuer (as
applicable) shall have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit or the Underlying Letter of Credit (as applicable)) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of Issuing Lender,
any Underlying Issuer, Agent, any of the Lender-Related Persons or Agent-Related
Persons, nor any correspondent, participant or assignee of Issuing Lender shall
be liable to any Lender or any Loan Party for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; (iii) 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 or any error in
interpretation of technical terms; or (iv) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Issuer Document.  Borrowers hereby assume all risks of the acts or
omissions of any beneficiary or transferee with respect to their use of any
Letter of Credit; provided, that this assumption is not intended to, and shall
not, preclude Borrowers from pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None
of Issuing Lender, any Underlying Issuer, Agent, any of the Lender-Related
Persons or Agent-Related Persons, nor any correspondent, participant or assignee
of Issuing Lender or any Underlying Issuer shall be liable or responsible for
any of the matters described in clauses (i) through (vi) of Section 2.11(h) or
for any action, neglect or omission under or in connection with any Letter of
Credit or Issuer Document, including in connection with the issuance or any
amendment of any Letter of Credit, the failure to issue or amend any Letter of
Credit, the honoring or dishonoring of any demand under any Letter of Credit, or
the following of any Borrower’s instructions or those contained in the Letter of
Credit or any modifications, amendments, or supplements thereto, and such action
or neglect or omission will bind Borrowers.  In furtherance and not in
limitation of the foregoing, Issuing Lender and each Underlying Issuer 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 (or Issuing Lender and any Underlying Issuer may
refuse to accept and make payment upon

 

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such documents if such documents are not in strict compliance with the terms of
such Letter of Credit and may disregard any requirement in a Letter of Credit
that notice of dishonor be given in a particular manner and any requirement that
presentation be made at a particular place or by a particular time of day), and
neither Issuing Lender nor any Underlying Issuer 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.  Neither Issuing Lender nor any
Underlying Issuer shall be responsible for the wording of any Letter of Credit
(including any drawing conditions or any terms or conditions that are
ineffective, ambiguous, inconsistent, unduly complicated or reasonably
impossible to satisfy), notwithstanding any assistance Issuing Lender or any
Underlying Issuer may provide to any Borrower with drafting or recommending text
for any letter of credit application or with the structuring of any transaction
related to any Letter of Credit, and each Borrower hereby acknowledges and
agrees that any such assistance will not constitute legal or other advice by
Issuing Lender or any Underlying Issuer or any representation or warranty by
Issuing Lender or any Underlying Issuer that any such wording or such Letter of
Credit will be effective.  Without limiting the foregoing, Issuing Lender or any
Underlying Issuer may, as it deems appropriate, modify or alter and use in any
Letter of Credit the terminology contained on the letter of credit application
for such Letter of Credit.  Each Borrower hereby acknowledges and agrees that
neither any Underlying Issuer nor any member of the Lender Group shall be
responsible for delays, errors, or omissions resulting from the malfunction of
equipment in connection with any Letter of Credit.

 

(h)           The obligation of Borrowers to reimburse Issuing Lender for each
drawing under each Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

(i)         any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document,

 

(ii)        the existence of any claim, counterclaim, setoff, defense or other
right that Parent or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), Issuing Lender or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction,

 

(iii)       any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit,

 

(iv)       any payment by Issuing Lender under such Letter of Credit against
presentation of a draft or certificate that does not substantially or strictly
comply with the terms of such Letter of Credit (including, without limitation,
any requirement that presentation be made at a particular place or by a
particular time of day), or any payment made by Issuing Lender under such Letter
of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,

 

(v)        any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or discharge of, Parent or any of
its Subsidiaries, or

 

(vi)       the fact that any Default or Event of Default shall have occurred and
be continuing.

 

(i)            Each Borrower hereby authorizes and directs any Underlying Issuer
to deliver to Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer

 

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pursuant to such Underlying Letter of Credit and to accept and rely upon Issuing
Lender’s instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.

 

(j)            Each Borrower acknowledges and agrees that any and all standard
fees, charges, and commissions in effect from time to time, of Issuing Lender
relating to Letters of Credit or incurred by Issuing Lender relating to
Underlying Letters of Credit, upon the issuance of any Letter of Credit, upon
the payment or negotiation of any drawing under any Letter of Credit, or upon
the occurrence of any other activity with respect to any Letter of Credit
(including the transfer, amendment or cancellation of any Letter of Credit),
together with any and all fronting fees in effect from time to time related to
Letters of Credit, shall be Lender Group Expenses for purposes of this
Agreement, and shall be reimbursable immediately by Borrowers to Agent for the
account of Issuing Lender; it being acknowledged and agreed by each Borrower
that, as of the Closing Date, Issuing Lender is entitled to charge Borrowers a
fronting fee of 0.25% per annum times the undrawn amount of each Underlying
Letter of Credit and that such fronting fee may be changed from time to time.

 

(k)           If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by
Issuing Lender, any other member of the Lender Group, or Underlying Issuer with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Federal Reserve Board as from time to time in effect (and
any successor thereto):

 

(i)         any reserve, deposit, or similar requirement is or shall be imposed
or modified in respect of any Letter of Credit issued or caused to be issued
hereunder or hereby, or

 

(ii)        there shall be imposed on Issuing Lender, any other member of the
Lender Group, or Underlying Issuer any other condition regarding any Letter of
Credit or Reimbursement Undertaking,

 

and the result of the foregoing is to increase, directly or indirectly, the cost
to Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
of issuing, making, participating in, or maintaining any Reimbursement
Undertaking or Letter of Credit or to reduce the amount receivable in respect
thereof, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay within 30 days after
demand therefor, such amounts as Agent may specify to be necessary to compensate
Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans hereunder; provided, that (A) no Borrower
shall be required to provide any compensation pursuant to this
Section 2.11(k) for any such amounts incurred more than 180 days prior to the
date on which the demand for payment of such amounts is first made to Borrowers,
and (B) if an event or circumstance giving rise to such amounts is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.  The determination by Agent of any amount
due pursuant to this Section 2.11(k), as set forth in a certificate setting
forth the calculation thereof in reasonable detail, shall, in the absence of
manifest or demonstrable error, be final and conclusive and binding on all of
the parties hereto.

 

(l)            Unless otherwise expressly agreed by Issuing Lender and Borrowers
when a Letter of Credit is issued, (i) the rules of the ISP and the UCP 600
shall apply to each standby Letter of Credit, and (ii) the rules of the UCP 600
shall apply to each commercial Letter of Credit.

 

(m)          In the event of a direct conflict between the provisions of this
Section 2.11 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other.  In
the event of any

 

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actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.11 shall control and govern.

 

2.12         LIBOR Option.

 

(a)           Interest and Interest Payment Dates.  In lieu of having interest
charged at the rate based upon the Base Rate, Borrowers shall have the option,
subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or
a portion of the Revolving Loans be charged (whether at the time when made
(unless otherwise provided herein), upon conversion from a Base Rate Loan to a
LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan)
at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans
shall be payable on the earliest of (i) the last day of the Interest Period
applicable thereto, (ii) the date on which all or any portion of the Obligations
are accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof.  On the last day of each
applicable Interest Period, unless Borrowers properly have exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder.  At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request
that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

 

(b)           LIBOR Election.

 

(i)         Borrowers may, at any time and from time to time, so long as no
Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. at least 3 Business Days prior to
the commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice
of Borrowers’ election of the LIBOR Option for a permitted portion of the
Revolving Loans and an Interest Period pursuant to this Section shall be made by
delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline,
or by telephonic notice received by Agent before the LIBOR Deadline (to be
confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to
5:00 p.m. on the same day).  Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each of the affected Lenders.

 

(ii)        Each LIBOR Notice shall be irrevocable and binding on Borrowers.  In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense actually
incurred by Agent or any Lender as a result of (A) the payment of any principal
of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (B) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (C) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A
certificate of Agent or a Lender delivered to Borrowers setting forth in
reasonable detail any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.12 shall be conclusive absent manifest
error.  Borrowers shall pay such amount to Agent or the Lender, as applicable,
within 30 days of the date of its receipt of such certificate.

 

(iii)       Unless Agent, in its sole discretion, agrees otherwise, Borrowers
shall have not more than 5 LIBOR Rate Loans in effect at any given time. 
Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate Loans of at
least $1,000,000.

 

(c)           Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate
Loans at any time; provided, that in the event that LIBOR Rate Loans are
converted or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any prepayment through the required
application by Agent of any payments or proceeds of Collateral in accordance
with Section 2.4(b) or for any other reason, including early termination of the
term of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold

 

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Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.12 (b)(ii).

 

(d)           Special Provisions Applicable to LIBOR Rate.

 

(i)         The LIBOR Rate may be adjusted by Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or increased
costs, in each case, due to changes in applicable law (other than changes in
laws relative to Taxes, which shall be governed by Section 16) occurring
subsequent to the commencement of the then applicable Interest Period, including
changes in tax laws (except changes of general applicability in corporate income
tax laws) and changes in the reserve requirements imposed by the Board of
Governors of the Federal Reserve System (or any successor), which additional or
increased costs would increase the cost of funding or maintaining loans bearing
interest at the LIBOR Rate.  In any such event, the affected Lender shall give
Administrative Borrower and Agent notice of such a determination and adjustment
and Agent promptly shall transmit the notice to each other Lender and, upon its
receipt of the notice from the affected Lender, Administrative Borrower may, by
notice to such affected Lender (A) require such Lender to furnish to
Administrative Borrower a statement setting forth in reasonable detail the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to
which such adjustment is made (together with any amounts due under
Section 2.12(b)(ii)).

 

(ii)        In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
or application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender’s notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.

 

(e)           No Requirement of Matched Funding.  Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.

 

2.13         Capital Requirements.

 

(a)           If, after the date hereof, any Lender determines that (i) the
adoption of or change in any law, rule, regulation or guideline regarding
capital or reserve requirements for banks or bank holding companies, or any
change in the interpretation, implementation, or application thereof by any
Governmental Authority charged with the administration thereof, or
(ii) compliance by such Lender or its parent bank holding company with any
guideline, request or directive of any such entity regarding capital adequacy
(whether or not having the force of law), has the effect of reducing the return
on such Lender’s or such holding company’s capital as a consequence of such
Lender’s Commitments hereunder to a level below that which such Lender or such
holding company could have achieved but for such adoption, change, or compliance
(taking into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity’s capital) by any amount deemed by such Lender to be material, then
such Lender may notify Administrative Borrower and Agent thereof.  Following
receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined,
payable within 30 days after presentation by such Lender of a statement in the
amount and setting forth in reasonable detail such Lender’s calculation thereof
and the assumptions upon

 

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which such calculation was based (which statement shall be deemed true and
correct absent manifest error).  In determining such amount, such Lender may use
any reasonable averaging and attribution methods.  Failure or delay on the part
of any Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s right to demand such compensation; provided
that no Borrower shall be required to compensate a Lender pursuant to this
Section for any reductions in return incurred more than 180 days prior to the
date that such Lender notifies Administrative Borrower of such law, rule,
regulation or guideline giving rise to such reductions and of such Lender’s
intention to claim compensation therefor; provided further that if such claim
arises by reason of the adoption of or change in any law, rule, regulation or
guideline that is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.

 

(b)           If any Lender requests additional or increased costs referred to
in Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under
Section 2.12(d)(ii) relative to changed circumstances (any such Lender, an
“Affected Lender”), then such Affected Lender shall use reasonable efforts to
promptly designate a different one of its lending offices or to assign its
rights and obligations hereunder to another of its offices or branches, if
(i) in the reasonable judgment of such Affected Lender, such designation or
assignment would eliminate or reduce amounts payable pursuant to
Section 2.12(d)(i) or Section 2.13(a), as applicable, or would eliminate the
illegality or impracticality of funding or maintaining LIBOR Rate Loans and
(ii) in the reasonable judgment of such Affected Lender, such designation or
assignment would not subject it to any material unreimbursed cost or expense and
would not otherwise be materially disadvantageous to it.  Borrowers agree to pay
all reasonable out-of-pocket costs and expenses incurred by such Affected Lender
in connection with any such designation or assignment.  If, after such
reasonable efforts, such Affected Lender does not so designate a different one
of its lending offices or assign its rights to another of its offices or
branches so as to eliminate Borrowers’ obligation to pay any future amounts to
such Affected Lender pursuant to Section 2.12(d)(i) or Section 2.13(a), as
applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers
(without prejudice to any amounts then due to such Affected Lender under
Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the
effective date of any such assignment the Affected Lender withdraws its request
for such additional amounts under Section 2.12(d)(i) or Section 2.13(a), as
applicable, or indicates that it is no longer unlawful or impractical to fund or
maintain LIBOR Rate Loans, may seek a substitute Lender reasonably acceptable to
Agent to purchase the Obligations owed to such Affected Lender and such Affected
Lender’s Commitments hereunder (a “Replacement Lender”), and if such Replacement
Lender agrees to such purchase, such Affected Lender shall assign to the
Replacement Lender its Obligations and Commitments, pursuant to an Assignment
and Acceptance Agreement, and upon such purchase by the Replacement Lender, such
Replacement Lender shall be deemed to be a “Lender” for purposes of this
Agreement and such Affected Lender shall cease to be a “Lender” for purposes of
this Agreement.

 

(c)           Notwithstanding anything herein to the contrary, the issuance of
any rules, regulations or directions under the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith after the date of this Agreement
shall be deemed to be a change in law, rule, regulation or guideline for
purposes of Sections 2.12 and 2.13 and the protection of Sections 2.12 and 2.13
shall be available to each Lender and Issuing Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed, so long as it shall be customary for lenders or issuing banks affected
thereby to comply therewith.  Notwithstanding any other provision herein, no
Lender or Issuing Lender shall demand compensation pursuant to this Section 2.13
if it shall not at the time be the general policy or practice of such Lender or
Issuing Lender (as the case may be) to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if any.

 

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2.14         [Intentionally Omitted.]

 

2.15         Joint and Several Liability of Borrowers.

 

(a)           Each Borrower is accepting joint and several liability hereunder
and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement and by
the Bank Product Providers under the Bank Product Agreements, for the mutual
benefit, directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.

 

(b)           Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including any Obligations arising under
this Section 2.15), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them.

 

(c)           If and to the extent that any Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation until such time as all of the Obligations are paid in full.

 

(d)           The Obligations of each Borrower under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of the provisions of this Agreement (other than this
Section 2.15(d)) or any other circumstances whatsoever.

 

(e)           Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any Revolving Loan or Letters of Credit issued under or pursuant to
this Agreement, notice of the occurrence of any Default, Event of Default, or of
any demand for any payment under this Agreement, notice of any action at any
time taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement).  Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Agent, any other member of the Lenders Group or any Bank
Product Provider at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement or any other Loan Document, any and all other indulgences
whatsoever by Agent or Lenders in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Borrower.  Without limiting the
generality of the foregoing, each Borrower assents to any other action or delay
in acting or failure to act on the part of any Agent, any other member of the
Lender Group or any Bank Product Provider with respect to the failure by any
Borrower to comply with any of its respective Obligations, including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations thereunder,
which might, but for the provisions of this Section 2.15 afford grounds for
terminating, discharging or relieving any Borrower, in whole or in part, from
any of its Obligations under this Section 2.15, it being the intention of each
Borrower that, so long as any of the Obligations hereunder remain unsatisfied,
the Obligations of each Borrower under this Section 2.15 shall not be discharged
except by performance and then only to the extent of such performance.  The
Obligations of each Borrower under this Section 2.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any other
Borrower or any Agent, any other member of the Lender Group or any Bank Product
Provider.

 

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(f)            Each Borrower represents and warrants to the Lender Group and the
Bank Product Providers that such Borrower is currently informed of the financial
condition of Borrowers and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. 
Each Borrower further represents and warrants to the Lender Group and the Bank
Product Providers that such Borrower has read and understands the terms and
conditions of the Loan Documents.  Each Borrower hereby covenants that such
Borrower will continue to keep informed of Borrowers’ financial condition and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.

 

(g)           The provisions of this Section 2.15 are made for the benefit of
Agent, each other member of the Lender Group, each Bank Product Provider, and
their respective successors and assigns, and may be enforced by it or them from
time to time against any or all Borrowers as often as occasion therefor may
arise and without requirement on the part of Agent, any other member of the
Lender Group, any Bank Product Provider, or any of their successors or assigns
first to marshal any of its or their claims or to exercise any of its or their
rights against any Borrower or to exhaust any remedies available to it or them
against any Borrower or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other remedy.  The
provisions of this Section 2.15 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied.  If at
any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by Agent or
any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or
otherwise, the provisions of this Section 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.

 

(h)           Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to Agent, any other member of the Lender Group or any
Bank Product Provider with respect to any of the Obligations or any collateral
security therefor until such time as all of the Obligations have been paid in
full in cash.  Any claim which any Borrower may have against any other Borrower
with respect to any payments to Agent, any other member of the Lender Group or
any Bank Product Provider hereunder, under the other Loan Documents or under any
of the Bank Product Agreements are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.

 

(i)            Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.4(b).

 

3.             CONDITIONS; TERM OF AGREEMENT.

 

3.1           Conditions Precedent to the Initial Extension of Credit.  The
obligation of each Lender to make its initial extension of credit provided for
hereunder is subject to the fulfillment, to the satisfaction of Agent and each
Lender, of each of the conditions precedent set forth on Schedule 3.1 (the
making of such initial extension of credit by a Lender being conclusively deemed
to be its satisfaction or waiver of the conditions precedent ).

 

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3.2         Conditions Precedent to all Extensions of Credit.  The obligation of
the Lender Group (or any member thereof) to make any Revolving Loans hereunder
(or to extend any other credit hereunder) at any time shall be subject to the
following conditions precedent:

 

(a)           the representations and warranties of Parent or its Subsidiaries
contained in this Agreement or in the other Loan Documents shall be true,
correct and complete in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be
true, correct and complete in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date); and

 

(b)           no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof.

 

3.3           Maturity.  This Agreement shall continue in full force and effect
for a term ending on the Maturity Date.  The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.

 

3.4           Effect of Maturity.  On the Maturity Date, all commitments of the
Lender Group to provide additional credit hereunder shall automatically be
terminated and all of the Obligations immediately shall become due and payable
without notice or demand and Borrowers shall be required to repay all of the
Obligations in full.  No termination of the obligations of the Lender Group
(other than payment in full of the Obligations and termination of the
Commitments) shall relieve or discharge any Loan Party of its duties,
obligations, or covenants hereunder or under any other Loan Document and Agent’s
Liens in the Collateral shall continue to secure the Obligations and shall
remain in effect until all Obligations have been paid in full and the
Commitments have been terminated.  When all of the Obligations have been paid in
full and the Lender Group’s obligations to provide additional credit under the
Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole
expense, execute and deliver any termination statements, Lien releases,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, Agent’s Liens and all notices of security interests
and liens previously filed by Agent.

 

3.5           Early Termination by Borrowers.  Borrowers have the option, at any
time upon 10 Business Days prior written notice to Agent, to terminate this
Agreement and terminate the Commitments hereunder by repaying to Agent all of
the Obligations in full.  The foregoing notwithstanding, (a) Borrowers may
rescind termination notices relative to proposed payments in full of the
Obligations with the proceeds of third party Indebtedness if the closing for
such issuance or incurrence does not happen on or before the date of the
proposed termination (in which case, a new notice shall be required to be sent
in connection with any subsequent termination), and (b) Borrowers may extend the
date of termination at any time with the consent of Agent (which consent shall
not be unreasonably withheld or delayed).

 

3.6           Conditions Subsequent.  The obligation of the Lender Group (or any
member thereof) to continue to make Revolving Loans (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of the conditions subsequent set forth on Schedule 3.6 (the failure by
Borrowers to so perform or cause to be performed such conditions subsequent as
and when required by the terms thereof (unless such date is extended, in
writing, by Agent, which Agent may do without obtaining the consent of the other
members of the Lender Group), shall constitute an Event of Default).

 

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4.             REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Revolving Loan (or other extension of credit) made thereafter, as though
made on and as of the date of such Revolving Loan (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be
true, correct and complete in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:

 

4.1           Due Organization and Qualification; Subsidiaries.

 

(a)           Each Loan Party (i) is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified could
reasonably be expected to result in a Material Adverse Effect, and (iii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is a party and to carry out the transactions
contemplated thereby.

 

(b)           Set forth on Schedule 4.1(b) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement) is a complete and accurate description of the authorized Equity
Interest of Parent, by class, and, as of the Closing Date, a description of the
number of shares of each such class that are issued and outstanding.  Other than
as described on Schedule 4.1(b), there are no subscriptions, options, warrants,
or calls relating to any shares of Parent’s Equity Interest, including any right
of conversion or exchange under any outstanding security or other instrument. 
No Borrower is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its Equity Interest or any security
convertible into or exchangeable for any of its Equity Interest.

 

(c)           Set forth on Schedule 4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement), is a complete and accurate list of Parent’s direct and indirect
Subsidiaries, showing: (i) the number of shares of each class of common and
preferred Equity Interests authorized for each of such Subsidiaries, and
(ii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Parent.  All of the outstanding Equity Interest
of each Subsidiary of Parent has been validly issued and is fully paid and
non-assessable.

 

(d)           Except as set forth on Schedule 4.1(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Parent’s
Subsidiaries’ Equity Interest, including any right of conversion or exchange
under any outstanding security or other instrument.

 

4.2           Due Authorization; No Conflict.

 

(a)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Loan Party.

 

(b)           As to each Loan Party, the execution, delivery, and performance by
such Loan Party of the Loan Documents to which it is a party do not and will not
(i) violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other Governmental Authority binding on any Loan Party or its Subsidiaries,
(ii) conflict with, result in a breach of,

 

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or constitute (with due notice or lapse of time or both) a default under any
material agreement of any Loan Party or its Subsidiaries where any such
conflict, breach or default could individually or in the aggregate reasonably be
expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any assets of
any Loan Party, other than Permitted Liens, or (iv) require any approval of any
holder of Equity Interest of a Loan Party or any approval or consent of any
Person under any material agreement of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect and
except, in the case of material agreements, for consents or approvals, the
failure to obtain could not individually or in the aggregate reasonably be
expected to cause a Material Adverse Effect.

 

4.3           Governmental Consents.  The execution, delivery, and performance
by each Loan Party of the Loan Documents to which such Loan Party is a party and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than
registrations, consents, approvals, notices, or other actions that have been
obtained and that are still in force and effect and except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Agent for filing or recordation, as of the Closing Date.

 

4.4           Binding Obligations; Perfected Liens.

 

(a)           Each Loan Document has been duly executed and delivered by each
Loan Party that is a party thereto and is the legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally.

 

(b)           Agent’s Liens are validly created, perfected (other than (i) in
respect of motor vehicles that are subject to a certificate of title,
(ii) money, (iii) letter-of-credit rights (other than supporting obligations),
(iv) commercial tort claims (other than those that, by the terms of the Guaranty
and Security Agreement, are required to be perfected), (v) any Deposit Accounts
and Securities Accounts not subject to a Control Agreement as permitted by
Section 6.10, and subject only to the filing of financing statements, and the
recordation of the Mortgages, in each case, in the appropriate filing offices,
and (vi) assets for which the perfection steps set forth in Sections 7(a) and
7(b) of the Guaranty and Security Agreement are not required to be performed by
such Sections), and first priority Liens, subject only to (y) Permitted Liens
which are non-consensual Permitted Liens, permitted purchase money Liens, or the
interests of lessors under Capital Leases and (z) the Liens granted under the
Term Loan Documents that are expressly permitted under the terms of the
Intercreditor Agreement to be first priority Liens.

 

4.5           Title to Assets; No Encumbrances.  Each of the Loan Parties and
its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee
interests in Real Property), (b) valid leasehold interests in (in the case of
leasehold interests in real or personal property), and (c) good and marketable
title to (in the case of all other personal property), all of their respective
assets reflected in their most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements to the extent permitted hereby.  All of such assets are
free and clear of Liens except for Permitted Liens.

 

4.6           Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.

 

(a)           The name (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of each Loan Party and each of its Subsidiaries is
set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time
to reflect changes resulting from transactions permitted under this Agreement).

 

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(b)           The chief executive office of each Loan Party and each of its
Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such
Schedule may be updated from time to time to reflect changes resulting from
transactions permitted under this Agreement).

 

(c)           Each Loan Party’s and each of its Subsidiaries’ tax identification
numbers and organizational identification numbers, if any, are identified on
Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect
changes resulting from transactions permitted under this Agreement).

 

(d)           As of the Closing Date, no Loan Party and no Subsidiary of a Loan
Party holds any commercial tort claims that exceed $1,000,000 in amount, except
as set forth on Schedule 4.6(d).

 

4.7           Litigation.

 

(a)           There are no actions, suits, or proceedings pending or, to the
knowledge of Borrowers, after due inquiry, threatened in writing against a Loan
Party or any of its Subsidiaries that either individually or in the aggregate
could reasonably be expected to result in a Material Adverse Effect.

 

(b)           Schedule 4.7(b) sets forth a complete and accurate description,
with respect to each of the actions, suits, or proceedings with asserted
liabilities in excess of, or that could reasonably be expected to result in
liabilities in excess of, $1,000,000 that, as of the Closing Date, is pending
or, to the knowledge of Borrowers, threatened against a Loan Party or any of its
Subsidiaries, of (i) the parties to such actions, suits, or proceedings,
(ii) the nature of the dispute that is the subject of such actions, suits, or
proceedings, (iii) the procedural status, as of the Closing Date, with respect
to such actions, suits, or proceedings, and (iv) whether any liability of the
Loan Parties’ and their Subsidiaries in connection with such actions, suits, or
proceedings is covered by insurance.

 

4.8           Compliance with Laws.  No Loan Party nor any of its Subsidiaries
(a) is in violation of any applicable laws, rules, regulations, executive
orders, or codes (except with respect to Environmental Laws, compliance with
which is addressed in Section 4.12) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or (b) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.

 

4.9           No Material Adverse Effect.  All historical financial statements
relating to the Loan Parties and their Subsidiaries that have been delivered by
any Borrower to Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Subsidiaries’ consolidated financial
condition as of the date thereof and results of operations for the period then
ended.  Since March 31, 2011, no event, circumstance, or change has occurred
that has or could reasonably be expected to result in a Material Adverse Effect
with respect to the Loan Parties and their Subsidiaries.

 

4.10         Solvency.

 

(a)           Each Loan Party is Solvent.

 

(b)           No transfer of property is being made by any Loan Party and no
obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of such
Loan Party.

 

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4.11         Employee Benefits.  Except as set forth on Schedule 4.11, no Loan
Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains
or contributes to any Benefit Plan.

 

4.12         Environmental Condition.  Except as set forth on Schedule 4.12,
(a) to Borrowers’ knowledge after due inquiry, no Loan Party’s nor any of its
Subsidiaries’ properties or assets is in violation, in any material respect, of
any applicable Environmental Law, (b) Borrowers or their Subsidiaries possess
all material authorizations (including without limitation all permits,
approvals, licenses, filings, or registrations) from Governmental Authorities
required under Environmental Law to conduct their ethanol production operations,
such authorizations are in full force and effect, and Borrowers or their
Subsidiaries are operating in material compliance with all such authorizations,
(c) to Borrowers’ knowledge, after due inquiry, no Releases of Hazardous
Materials have occurred at any of Loan Party’s nor any of its Subsidiaries’
properties or assets that would necessitate Remedial Action under any
Environmental Laws, (d) to Borrowers’ knowledge, after due inquiry, no Loan
Party nor any of its Subsidiaries has ever received notice regarding any actual
or alleged violation of or non-compliance with Environmental Laws, (e) no Loan
Party nor any of its Subsidiaries has received notice that a Lien arising under
any Environmental Law has attached to any revenues or to any Real Property owned
or operated by a Loan Party or its Subsidiaries, and (f) no Loan Party nor any
of its Subsidiaries nor any of their respective facilities or operations is
subject to any obligation under any written order, consent decree, or settlement
agreement with any Person relating to any Environmental Law or Environmental
Liability that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

 

4.13         Intellectual Property.  Each Loan Party and its Subsidiaries own,
or hold licenses in, all trademarks, trade names, copyrights, patents, and
licenses that are necessary to the conduct of its business as currently
conducted, and attached hereto as Schedule 4.13 (as updated from time to time)
is a true, correct, and complete listing of all material trademarks, trade
names, copyrights, patents, and licenses as to which Parent or one of its
Subsidiaries is the owner or is an exclusive licensee; provided, that Borrowers
may amend Schedule 4.13 to add additional intellectual property so long as such
amendment occurs by written notice to Agent not less than 30 days after the date
on which the applicable Loan Party or its Subsidiary acquires any such property
after the Closing Date at the time that Parent provides its Compliance
Certificate pursuant to Section 5.1.

 

4.14         Deposit Accounts and Securities Accounts.  Set forth on Schedule
4.14 (as updated pursuant to the provisions of the Guaranty and Security
Agreement from time to time) is a listing of all of the Loan Parties’ and their
Subsidiaries’ Deposit Accounts and Securities Accounts, including, with respect
to each bank or securities intermediary (a) the name and address of such Person,
and (b) the account numbers of the Deposit Accounts or Securities Accounts
maintained with such Person.

 

4.15         Complete Disclosure.  All written factual information taken as a
whole (other than forward-looking information and projections and information of
a general economic nature and general information about Borrowers’ industry)
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent or any Lender (including all information contained in the Schedules hereto
or in the other Loan Documents) for purposes of or in connection with this
Agreement or the other Loan Documents, and all other such factual information
taken as a whole (other than forward-looking information and projections and
information of a general economic nature and general information about
Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its
Subsidiaries in writing to Agent or any Lender will be, true and accurate, in
all material respects, on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.  The Projections delivered to Agent on June 7, 2011 represent, and as
of the date on which any other Projections are delivered to Agent, such
additional Projections represent, Borrowers’ good faith estimate, on the date
such Projections are delivered, of the Loan Parties’ and their Subsidiaries’
future performance for the periods covered thereby based upon assumptions
believed by Borrowers to be reasonable at the time of the delivery thereof to
Agent (it being understood that such Projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Loan Parties and their Subsidiaries, and no

 

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assurances can be given that such Projections will be realized, and although
reflecting Borrowers’ good faith estimate, projections or forecasts based on
methods and assumptions which Borrowers believed to be reasonable at the time
such Projections were prepared, are not to be viewed as facts, and that actual
results during the period or periods covered by the Projections may differ
materially from projected or estimated results).

 

4.16         Patriot Act.  To the extent applicable, each Loan Party is in
compliance, in all material respects, with the (a) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (b) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part
of the proceeds of the loans made hereunder will be used by any Loan Party or
any of their Affiliates, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

4.17         Indebtedness.  Set forth on Schedule 4.17 is a true and complete
list of all Indebtedness of each Loan Party and each of its Subsidiaries
outstanding immediately prior to the Closing Date that is to remain outstanding
immediately after giving effect to the closing hereunder on the Closing Date and
such Schedule accurately sets forth the aggregate principal amount of such
Indebtedness as of the Closing Date.

 

4.18         Payment of Taxes.  Except as otherwise permitted under Section 5.5,
all tax returns and reports of each Loan Party and its Subsidiaries required to
be filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon a Loan Party and its Subsidiaries and upon their respective assets,
income, businesses and franchises that are due and payable have been paid when
due and payable.  Each Loan Party and each of its Subsidiaries have made
adequate provision in accordance with GAAP for all taxes not yet due and
payable.  No Borrower knows of any proposed tax assessment against a Loan Party
or any of its Subsidiaries that is not being actively contested by such Loan
Party or such Subsidiary diligently, in good faith, and by appropriate
proceedings; provided such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.

 

4.19         Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No part of
the proceeds of the loans made to Borrowers will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or for any purpose that violates the provisions of
Regulation T, U or X of the Board of Governors of the United States Federal
Reserve.

 

4.20         Governmental Regulation.  No Loan Party nor any of its Subsidiaries
is subject to regulation under the Federal Power Act or the Investment Company
Act of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.  No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.  None of the Borrowers are in the business of producing electric power for
delivery to a transmission grid or natural gas to be shipped by interstate
pipeline.

 

4.21         OFAC.  No Loan Party nor any of its Subsidiaries is in violation of
any of the country or list based economic and trade sanctions administered and
enforced by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned
Person or a Sanctioned Entity, (b) has its assets located in Sanctioned
Entities, or (c) derives revenues from investments in, or transactions with
Sanctioned Persons or Sanctioned

 

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Entities.  No proceeds of any loan made hereunder will be used to fund any
operations in, finance any investments or activities in, or make any payments
to, a Sanctioned Person or a Sanctioned Entity.

 

4.22         Employee and Labor Matters.  There is (i) no unfair labor practice
complaint pending or, to the knowledge of Borrowers, threatened against Parent
or its Subsidiaries before any Governmental Authority and no grievance or
arbitration proceeding pending or threatened against Parent or its Subsidiaries
which arises out of or under any collective bargaining agreement and that could
reasonably be expected to result in a material liability, (ii) no strike, labor
dispute, slowdown, stoppage or similar action or grievance pending or threatened
in writing against Parent or its Subsidiaries that could reasonably be expected
to result in a material liability, or (iii) to the knowledge of Borrowers no
union representation question existing with respect to the employees of Parent
or its Subsidiaries and no union organizing activity taking place with respect
to any of the employees of Parent or its Subsidiaries.  None of Parent or its
Subsidiaries has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act or similar state law, which remains
unpaid or unsatisfied.  The hours worked and payments made to employees of
Parent or its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.  All material payments due from
Parent or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of Parent, except where the failure to do so could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

4.23         Parent as a Holding Company.  Parent is a holding company and does
not have any material liabilities (other than (a) liabilities arising under the
Loan Documents and the Term Loan Documents, (b) de minimis liabilities, and
(c) liabilities arising out of agreements listed on Schedule 4.17 to which
Parent is a party), own any material assets (other than de minimis assets and
the Equity Interest of the other Borrowers) or engage in any operations or
business (other than in connection with its ownership of the other Borrowers and
its rights and obligations under the Loan Documents and the Term Loan
Documents).

 

4.24         Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such material leases are valid and subsisting and no material
default by the applicable Loan Party or its Subsidiaries exists under any of
them.

 

4.25         Eligible Accounts.  As to each Account that is identified by any
Borrower as an Eligible Account in a Borrowing Base Certificate submitted to
Agent, such Account is (a) a bona fide existing payment obligation of the
applicable Account Debtor created by the sale and delivery of Inventory or the
rendition of services to such Account Debtor in the ordinary course of
Borrowers’ business, (b) owed to one or more Borrower without any known
defenses, disputes, offsets, counterclaims, or rights of return or cancellation,
and (c) not excluded as ineligible by virtue of one or more of the excluding
criteria (other than Agent-discretionary criteria) set forth in the definition
of Eligible Accounts.

 

4.26         Eligible Inventory.  As to each item of Inventory that is
identified by any Borrower as Eligible Finished Goods Inventory, Eligible Raw
Materials Inventory, or Eligible Work-in-Process Inventory in a Borrowing Base
Certificate submitted to Agent, such Inventory is (a) of good and merchantable
quality, free from known defects, and (b) not excluded as ineligible by virtue
of one or more of the excluding criteria (other than Agent-discretionary
criteria) set forth in the definition of Eligible Inventory.

 

4.27         Locations of Inventory.  The Inventory of the Loan Parties and
their Subsidiaries is not stored with a bailee, warehouseman, or similar party
and is located only at, or in-transit between, the locations identified on
Schedule 4.27 (as such Schedule may be updated pursuant to Section 5.14);
provided, however, that Inventory of the Loan Parties and their Subsidiaries may
be stored with the bailees and warehouseman that are identified by name and
address of location on Schedule 4.27.

 

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4.28         Inventory Records.  Each Loan Party keeps correct and accurate
records itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.

 

4.29         Bankruptcy.  Each Loan Party has emerged from bankruptcy pursuant
to the confirmation order dated March 15, 2011, and the confirmed plans are
effective and have been substantially consummated.

 

5.             AFFIRMATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:

 

5.1           Financial Statements, Reports, Certificates.  Borrowers (a) will
deliver to Agent, with copies to each Lender, each of the financial statements,
reports, and other items set forth on Schedule 5.1 in the manner and no later
than the times specified therein, (b) agree that no Subsidiary of a Loan Party
will have a fiscal year different from that of Parent, (c) agree to maintain a
system of accounting that enables Borrowers to produce financial statements in
accordance with GAAP, and (d) agree that each will, and will cause each other
Loan Party to, (i) keep a reporting system that shows all additions, sales,
claims, returns, and allowances with respect to its and its Subsidiaries’ sales,
and (ii) maintain its billing systems and practices substantially as in effect
as of the Closing Date and shall only make material modifications thereto with
notice to, and with the consent of, Agent.

 

5.2           Collateral Reporting.  Borrowers (a) will deliver to Agent (and if
so requested by Agent, with copies for each Lender) each of the reports set
forth on Schedule 5.2 at the times specified therein, and (b) agree to use
commercially reasonable efforts in cooperation with Agent to facilitate and
implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth on such Schedule.

 

5.3           Existence.  Except as otherwise permitted under Section 6.3 or
Section 6.4, each Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect such Person’s valid
existence and good standing in its jurisdiction of organization and, except as
could not reasonably be expected to result in a Material Adverse Effect, good
standing with respect to all other jurisdictions in which it is qualified to do
business and any rights, franchises, permits, licenses, accreditations,
authorizations, or other approvals material to their businesses.

 

5.4           Maintenance of Properties; Operation of Facilities.

 

(a)           Each Borrower will, and will cause each of its Subsidiaries to,
maintain and preserve all of its assets that are necessary or useful in the
proper conduct of its business in good working order and condition, ordinary
wear, tear, casualty, and condemnation and Permitted Dispositions excepted.

 

(b)           Parent will cause AREI to, and AREI will, operate the Pekin Plant
on a continuous basis, except to perform maintenance on such plant consistent
with historical practices.

 

5.5           Taxes.  Other than an aggregate amount of not more than $250,000
at any one time for Parent and its Subsidiaries, each Borrower will, and will
cause each of its Subsidiaries to, pay in full before delinquency or before the
expiration of any extension period all material governmental assessments and
taxes imposed, levied, or assessed against it, or any of its assets or in
respect of any of its income, businesses, or franchises, except to the extent
that the validity of such governmental assessment or tax is the subject of a
Permitted Protest.

 

5.6           Insurance.  Each Borrower will, and will cause each of its
Subsidiaries to, at Borrowers’ expense, (a) maintain insurance respecting each
Borrower’s and it Subsidiaries’ assets wherever located, covering liabilities,
losses or damages as are customarily insured against by other Persons engaged in

 

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the same or similar businesses that are similarly situated and located.  All
such policies of insurance shall be with financially sound and reputable
insurance companies acceptable to Agent (it being agreed that, as of the Closing
Date, Chartis, Travelers Excess Casualty, Zurich Global Energy, Liberty
International Underwriters, Lloyds of London are acceptable to Agent) and in
such amounts as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and located and, in any
event, in amount, adequacy, and scope reasonably satisfactory to Agent (it being
agreed that the amount, adequacy, and scope of the policies of insurance of each
Borrower and its Subsidiaries in effect as of the Closing Date are acceptable to
Agent).  All property insurance policies covering the Collateral are to be made
payable to Agent for the benefit of Agent and the Lenders, as their interests
may appear, in case of loss, pursuant to a standard loss payable endorsement
with a standard non contributory “lender” or “secured party” clause and are to
contain such other provisions as Agent may reasonably require to fully protect
the Lenders’ interest in the Collateral and to any payments to be made under
such policies.  All certificates of property and general liability insurance are
to be delivered to Agent, with the loss payable (but only in respect of
Collateral) and additional insured endorsements in favor of Agent and shall
provide for not less than 30 days (10 days in the case of non-payment) prior
written notice to Agent of the exercise of any right of cancellation.  If any
Borrower or its Subsidiaries fail to maintain such insurance, Agent may arrange
for such insurance, but at Borrowers’ expense and without any responsibility on
Agent’s part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of claims.  Borrowers
shall give Agent prompt notice of any loss exceeding $1,000,000 covered by its
or its Subsidiaries’ casualty or business interruption insurance.  Upon the
occurrence and during the continuance of an Event of Default, Agent shall have
the sole right to file claims under any property and general liability insurance
policies in respect of the Collateral, to receive, receipt and give acquittance
for any payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.

 

5.7           Inspection.

 

(a)           Each Borrower will, and will cause each of its Subsidiaries to,
permit Agent, any Lender, and each of their respective duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees (provided an authorized
representative of Administrative Borrower shall be allowed to be present) at
such reasonable times and intervals as Agent or any Lender, as applicable, may
designate and, so long as no Default or Event of Default exists, with reasonable
prior notice to Administrative Borrower and during regular business hours.

 

(b)           Each Borrower will, and will cause each of its Subsidiaries to,
permit Agent and each of its duly authorized representatives or agents to
conduct appraisals and valuations at such reasonable times and intervals as
Agent may designate.  Agent agrees to provide Administrative Borrower with a
copy of the report for any appraisal upon request by Borrowers so long as
(i) such report exists, (ii) the third person employed by Agent to perform such
appraisals consents to such disclosure, and (iii) Borrowers execute and deliver
to Agent a non-reliance letter reasonably satisfactory to Agent.  For clarity,
under no circumstances shall Agent be required to provide Administrative
Borrower, or any other Borrower, with copies of field examination reports.

 

5.8           Compliance with Laws.  Each Borrower will, and will cause each of
its Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations, and orders of any Governmental Authority, other than laws, rules,
regulations, and orders the non-compliance with which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

5.9           Environmental.  Each Borrower will, and will cause each of its
Subsidiaries to:

 

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(a)           Keep any property either owned or operated by Parent or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,

 

(b)           Comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests,

 

(c)           Possess all material authorizations (including without limitation
all permits, approvals, licenses, filings, or registrations) from Governmental
Authorities required under Environmental Law to conduct such Borrowers’ ethanol
production operations, maintain such authorizations in full force and effect,
and operate in material compliance with all such authorizations,

 

(d)           Promptly notify Agent of any Release of Hazardous Materials in any
quantity that would require reporting to a Governmental Authority under
Environmental Laws from or at property or assets owned or operated by Parent or
its Subsidiaries, providing Agent with copies of any and all reports,
assessments, or other documentation relating to such release,

 

(e)           Promptly undertake any Remedial Actions required to be taken under
Environmental Law in the event of any material Release or threat of a material
Release of Hazardous Materials that occurs within or otherwise impacts property
owned or operated by Parent or its Subsidiaries, providing Agent with copies of
any and all reports, assessments, or other documentation relating to such
Release, and

 

(f)            Promptly, but in any event within 5 Business Days of its receipt
thereof, provide Agent with written notice received by any Borrower or any of
its Subsidiaries of any of the following:  (i) notice that an Environmental Lien
has been filed against any of the real or personal property of Parent or its
Subsidiaries, (ii) commencement of any Environmental Action or written notice
that an Environmental Action will be filed against Parent or its Subsidiaries,
and (iii) written notice of a violation, citation, or other administrative order
from a Governmental Authority relating to Parent’s or any of its Subsidiaries’
compliance with Environmental Law, providing Agent with copies of any and all
documentation relating to such notices or Environmental Actions.

 

5.10         Disclosure Updates.  Each Borrower will, promptly and in no event
later than 10 Business Days after a Responsible Officer obtains knowledge
thereof, notify Agent if any written information, exhibit, or report furnished
to Agent or the Lenders contained, at the time it was furnished, any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made.  The foregoing to the contrary notwithstanding, any
notification pursuant to the foregoing provision will not cure or remedy the
effect of the prior untrue statement of a material fact or omission of any
material fact nor shall any such notification have the effect of amending or
modifying this Agreement or any of the Schedules hereto.

 

5.11         Formation of Subsidiaries.  Each Borrower will, at the time that
any Loan Party forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date, within (a) 30 days, other than with
respect to title insurance or other documentation with respect to Real Property,
or (b) 90 days, with respect to title insurance and other documentation with
respect to Real Property, after such formation or acquisition (or such later
date as permitted by Agent in its sole discretion), (a) cause such new
Subsidiary to provide to Agent a joinder to the Guaranty and Security Agreement,
together with such other security agreements (including mortgages with respect
to any Real Property owned in fee of such new Subsidiary with a fair market
value greater than $3,000,000), as well as appropriate financing statements (and
with respect to all property subject to a mortgage, fixture filings), all in
form and substance reasonably satisfactory to Agent (including being sufficient
to grant Agent a first priority Lien (subject only to (y) Permitted Liens which
are non-consensual Permitted Liens, permitted purchase money Liens, or the
interests of lessors under Capital Leases and (z) the Liens granted under the
Term Loan Documents that are expressly permitted under the terms of the
Intercreditor Agreement to be first priority Liens) in and to the assets of such
newly formed or acquired Subsidiary), (b) provide, or cause the applicable Loan
Party to

 

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provide, to Agent a pledge agreement (or an addendum to the Guaranty and
Security Agreement) and appropriate certificates and powers or financing
statements, pledging all of the direct or beneficial ownership interest in such
new Subsidiary in form and substance reasonably satisfactory to Agent, and
(c) provide to Agent all other documentation, including one or more opinions of
counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate
with respect to the execution and delivery of the applicable documentation
referred to above (including policies of title insurance or other documentation
with respect to all Real Property owned in fee and subject to a mortgage).  Any
document, agreement, or instrument executed or issued pursuant to this
Section 5.11 shall constitute a Loan Document.

 

5.12         Further Assurances.  Each Borrower will, and will cause each of the
other Loan Parties to, within (a) 30 days, other than with respect to
documentation with respect to Real Property, upon the reasonable request of
Agent, or (b) 90 days, with respect to documentation with respect to Real
Property, execute or deliver to Agent any and all financing statements, fixture
filings, security agreements, pledges, assignments, mortgages, deeds of trust,
opinions of counsel, and all other documents (the “Additional Documents”) that
Agent may reasonably request in form and substance reasonably satisfactory to
Agent, to create, perfect, and continue perfected or to better perfect Agent’s
Liens in all of the assets of each Borrower and its Subsidiaries (whether now
owned or hereafter arising or acquired, tangible or intangible, real or
personal), to create and perfect Liens in favor of Agent in any Real Property
acquired by any Borrower or any other Loan Party with a fair market value in
excess of $3,000,000, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents.  To the maximum extent
permitted by applicable law, if any Borrower or any other Loan Party refuses or
fails to execute or deliver any reasonably requested Additional Documents within
a reasonable period of time following the request to do so, each Borrower and
each other Loan Party hereby authorizes Agent to execute any such Additional
Documents in the applicable Loan Party’s name and authorizes Agent to file such
executed Additional Documents in any appropriate filing office.  In furtherance
of, and not in limitation of, the foregoing, each Loan Party shall take such
actions as Agent may reasonably request from time to time to ensure that the
Obligations are guarantied by any Guarantors and are secured by substantially
all of the assets of Parent and its Subsidiaries, including all of the
outstanding capital Equity Interests of each Borrower (other than Parent) and
each Borrower’s Subsidiaries.

 

5.13         Lender Meetings.  Borrowers will, within 120 days after the close
of each fiscal year of Parent, at the request of Agent or of the Required
Lenders and upon reasonable prior notice, hold a meeting (at a mutually
agreeable location and time or, at the option of Agent, by conference call) with
all Lenders who choose to attend such meeting at which meeting shall be reviewed
the financial results of the previous fiscal year and the financial condition of
Parent and its Subsidiaries and the projections presented for the current fiscal
year of Parent.

 

5.14         Location of Inventory.  Each Borrower will, and will cause each of
its Subsidiaries to, keep its Inventory only at the locations identified on
Schedule 4.27 and their chief executive offices only at the locations identified
on Schedule 4.6(b); provided, however, that any Borrower may amend Schedule 4.27
or Schedule 4.6(b) so long as such amendment occurs by written notice to Agent
on or prior to the date on which such Inventory is moved to such new location or
such chief executive office is relocated and so long as such new location is
within the continental United States and so long as such location is subject to
a Collateral Access Agreement.

 

5.15         Compliance with ERISA and the IRC.  In addition to and without
limiting the generality of Section 5.8, each Borrower will, and will cause each
of its Subsidiaries to, (a) comply in all material respects with applicable
provisions of ERISA, the IRC and the regulations thereunder with respect to all
Employee Benefit Plans, (b) without the prior written consent of Agent and the
Required Lenders, not take any action or fail to take action the result of which
could be a material liability to the PBGC or to a Multiemployer Plan (other than
claims for benefits, contributions or premiums payable in the ordinary course),
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the IRC, other than any prohibited transaction
that could not reasonably be expected to result in material

 

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liability, and (d) operate each Employee Benefit Plan in such a manner that will
not incur any material tax liability under Section 4980B of the IRC, and
(e) furnish to Agent upon Agent’s written request such additional information
about any Employee Benefit Plan for which any Borrower or any Subsidiary, or any
ERISA Affiliate could reasonably expect to incur any material liability as may
be reasonably requested by Agent.

 

5.16         Hedge Agreements.  Each Borrower will, and will cause each of its
Subsidiaries to, allow WFCF (or one or more of its Affiliates) the first
opportunity to bid for all interest rate protection agreements, currency hedge
agreements, and commodity hedge agreements to be entered into by any Borrower or
one of its Subsidiaries; provided, however, that the foregoing shall not apply
to Hedge Agreements entered into with Macquarie Bank Limited so long as such
agreements are permitted by the terms of this Agreement.

 

5.17         Deposit Accounts and Securities Accounts.   Except as permitted
pursuant to Section 6.10(b), from and after the date that is 120 days after the
Closing Date (or such later date as may be agreed to by Agent in its sole
discretion), maintain all of the Deposit Accounts and Securities Accounts of the
Loan Parties and their Subsidiaries that are organized in a jurisdiction in the
United States only at Wells Fargo or one or more of its Affiliates.

 

6.             NEGATIVE COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:

 

6.1           Indebtedness.  Borrowers will not, and will not permit any of
their Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness.

 

6.2           Liens.  Borrowers will not, and will not permit any of their
Subsidiaries to, create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.

 

6.3           Restrictions on Fundamental Changes.  Borrowers will not, and will
not permit any of their Subsidiaries to:

 

(a)           other than in order to consummate a Permitted Acquisition, enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Equity Interests, except for (i) any merger between Loan Parties,
provided, that a Borrower must be the surviving entity of any such merger to
which it is a party and no merger may occur between Parent and any other
Borrower, (ii) any merger between a Loan Party and a Subsidiary of such Loan
Party that is not a Loan Party so long as such Loan Party (other than Parent) is
the surviving entity of any such merger, and (iii) any merger between
Subsidiaries of Parent that are not Loan Parties,

 

(b)           liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), except for (i) the liquidation or dissolution of non-operating
Subsidiaries of Parent with nominal assets and nominal liabilities, (ii) the
liquidation or dissolution of a Loan Party (other than any Borrower) or any of
its wholly-owned Subsidiaries so long as all of the assets (including any
interest in any Equity Interests) of such liquidating or dissolving Loan Party
or Subsidiary are transferred to a Loan Party (other than Parent) that is not
liquidating or dissolving, or (iii) the liquidation or dissolution of a
Subsidiary of Parent that is not a Loan Party (other than any such Subsidiary
the Equity Interests of which (or any portion thereof) is subject to a Lien in
favor of Agent) so long as all of the assets of such liquidating or dissolving
Subsidiary are transferred to a Subsidiary of Parent that is not liquidating or
dissolving, or

 

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(c)           suspend or go out of a substantial portion of its or their
business, except as permitted pursuant to clauses (a) or (b) above or in
connection with a transaction permitted under Section 6.4 or Section 5.4.

 

6.4           Disposal of Assets.  Other than Permitted Dispositions or
transactions expressly permitted by Sections 6.3 or 6.10, Borrowers will not,
and will not permit any of their Subsidiaries to, convey, sell, lease, license,
assign, transfer, or otherwise dispose of (or enter into an agreement to convey,
sell, lease, license, assign, transfer, or otherwise dispose of) any of their
assets.

 

6.5           Change Name.  Borrowers will not, and will not permit any of their
Subsidiaries to change its or their name, organizational identification number,
jurisdiction of organization or organizational identity; provided, that Parent
or any of its Subsidiaries may change its name upon at least 10 days prior
written notice to Agent of such change.

 

6.6           Nature of Business.  Borrowers will not, and will not permit any
of their Subsidiaries to make any change in the nature of their business as
described in Schedule 6.6 or acquire any properties or assets that are not
reasonably related to the conduct of such business activities; provided, that
the foregoing shall not prevent Parent and its Subsidiaries from engaging in any
business that is reasonably related or ancillary to its or their business.

 

6.7           Prepayments and Amendments.  Borrowers will not, and will not
permit any of their Subsidiaries to:

 

(a)           except in connection with Refinancing Indebtedness permitted by
Section 6.1,

 

(i)         optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Parent or its Subsidiaries, other than (A) the Obligations
in accordance with this Agreement, and (B) Permitted Intercompany Advances, or

 

(ii)        make any payment on account of Indebtedness that has been
contractually subordinated in right of payment to the Obligations if such
payment is not permitted at such time under the subordination terms and
conditions, or

 

(b)           directly or indirectly, amend, modify, or change any of the terms
or provisions of

 

(i)         any agreement, instrument, document, indenture, or other writing
evidencing or concerning Permitted Indebtedness other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Intercompany Advances, and
(C) Indebtedness permitted under clauses (c), (h), (j), (k), and (r)  (which is
addressed in clause (ii) below) of the definition of Permitted Indebtedness,

 

(ii)        any Term Loan Document in any manner that is not permitted by the
terms of the Intercreditor Agreement, or

 

(iii)       the Governing Documents of any Loan Party or any of its Subsidiaries
if the effect thereof, either individually or in the aggregate, could reasonably
be expected to be materially adverse to the interests of the Lenders, or

 

(iv)       the Indiana Port Lease Agreement, or

 

(c)           acquire or purchase the Term Loan Indebtedness pursuant to
Section 10.06 of the Term Loan Agreement or otherwise.

 

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6.8           Restricted Payments.  Borrowers will not, and will not permit any
of their Subsidiaries to, make any Restricted Payment; provided, that, so long
as it is permitted by law, and so long as no Default or Event of Default shall
have occurred and be continuing or would result therefrom,

 

(a)           Parent may make distributions to former employees, officers, or
directors of Parent (or any spouses, ex-spouses, or estates of any of the
foregoing) on account of redemptions of Equity Interests of Parent held by such
Persons; provided, that (i) prior to and after giving effect to such
distributions, Excess Availability is at least $15,000,000, (ii) the aggregate
amount of such redemptions made by Parent during any fiscal year of Parent plus
the aggregate amount of such redemptions made by Parent during the term of this
Agreement plus the amount of Indebtedness outstanding under clause (l) of the
definition of Permitted Indebtedness, does not exceed $2,500,000, and (iii) the
aggregate amount of such redemptions made by Parent during the term of this
Agreement plus the aggregate amount of Indebtedness outstanding under clause
(l) of the definition of Permitted Indebtedness, does not exceed $5,000,000, and

 

(b)           Parent may purchase Equity Interests from its or its Subsidiaries’
employees, in an aggregate amount not to exceed $1,000,000 in any fiscal year of
Parent, in connection with the satisfaction of such employees’ tax withholding
obligations pursuant to employee benefit plans or outstanding awards, and
payment of any corresponding requisite amounts to the appropriate Governmental
Authority.

 

6.9           Accounting Methods.  Borrowers will not, and will not permit any
of their Subsidiaries to, modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP).

 

6.10         Investments; Controlled Investments.  Borrowers will not, and will
not permit any of their Subsidiaries to:

 

(a)           except for Permitted Investments, directly or indirectly, make or
acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment, or

 

(b)           other than (i) an aggregate amount of not more than $50,000 at any
one time, in the case of Parent and its Subsidiaries, (ii) amounts deposited
into Deposit Accounts specifically and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for Parent’s or its
Subsidiaries’ employees, and (iii) amounts deposited into a Deposit Account
specifically and exclusively used to accept the proceeds of Term Loan Primary
Collateral (as such term is defined in the Intercreditor Agreement) in
accordance with the terms of the Intercreditor Agreement, make, acquire, or
permit to exist Permitted Investments consisting of cash, Cash Equivalents, or
amounts credited to Deposit Accounts or Securities Accounts unless Parent or its
Subsidiary, as applicable, and the applicable bank or securities intermediary
have entered into Control Agreements with Agent governing such Permitted
Investments in order to perfect (and further establish) Agent’s Liens in such
Permitted Investments. Except as provided in Section 6.10(b)(i), (ii), and
(iii) Borrowers shall not and shall not permit their Subsidiaries to establish
or maintain any Deposit Account or Securities Account unless Agent shall have
received a Control Agreement in respect of such Deposit Account or Securities
Account.

 

6.11         Transactions with Affiliates.  Borrowers will not, and will not
permit any of their Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction with any Affiliate of Parent or any of their
Subsidiaries except for:

 

(a)           transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between Parent or its Subsidiaries, on the one
hand, and any Affiliate of Parent or its Subsidiaries, on the other hand, so
long as such transactions (i) are fully disclosed to Agent prior to the
consummation thereof, if they involve one or more payments by Parent or its
Subsidiaries in excess of $1,000,000 for any single transaction or series of
related transactions, and (ii) are no less favorable, taken as a

 

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whole, to Parent or its Subsidiaries, as applicable, than would be obtained in
an arm’s length transaction with a non-Affiliate,

 

(b)           so long as it has been approved by Parent’s or its applicable
Subsidiary’s Board of Directors in accordance with applicable law, any indemnity
provided for the benefit of directors (or comparable managers) of Parent or its
applicable Subsidiary,

 

(c)           so long as it has been approved by Parent’s or its applicable
Subsidiary’s Board of Directors in accordance with applicable law, the payment
of reasonable compensation, severance, or employee benefit arrangements to
employees, officers, and outside directors of Parent and its Subsidiaries in the
ordinary course of business and consistent with industry practice,

 

(d)           any payments or other transactions pursuant to any tax-sharing
agreement between Parent and any other Person with which Parent files a
consolidated, combined or unitary tax return or with which Parent is part of
consolidated, combined or unitary group for tax purposes,

 

(e)           any transaction with joint venture or similar entity which is
otherwise permitted under this Agreement solely because Parent or a Subsidiary
of Parent owns an equity interest in or otherwise controls such joint venture or
similar entity,

 

(f)            payments of customary and reasonable fees by Parent or any of its
Subsidiaries to the Permitted Holders made for any financing underwriting or
placement services whether structured as fee or as an underwriting discount to
the extent such Permitted Holder is obligated to provide such financing;
provided, however, that (i) each such payment shall be approved by majority of
the disinterested members of the Board of Directors, (ii) the aggregate amount
of such payments in each of Parent’s fiscal years shall not exceed $1,500,000,
(iii) Excess Availability at the time of each such payment is at least
$15,000,000 immediately prior to such payment and after giving effect to such
payment, and (iv) no Default or Event of Default has occurred and is continuing
or would result therefrom, and

 

(g)           transactions permitted by Section 6.3 or Section 6.8, or any
Permitted Intercompany Advance.

 

6.12         Use of Proceeds.  Borrowers will not, and will not permit any of
their Subsidiaries to, use the proceeds of any loan made hereunder for any
purpose other than (a) on the Closing Date, (i) to purchase the Obligations (as
such term is defined in the Original Credit Agreement) under the Original Credit
Agreement, (ii) to repay, in full, the outstanding principal, accrued interest,
and accrued fees and expenses owing under or in connection with the Original
Credit Agreement and all of the Other Documents (as such term is defined in the
Original Credit Agreement, and (iii) to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, the other Loan Documents,
the transactions contemplated hereby and thereby and the refinancing of the
Original Credit Agreement, and (b) thereafter, consistent with the terms and
conditions hereof, for their lawful and permitted purposes (including that no
part of the proceeds of the loans made to Borrowers will be used to purchase or
carry any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such Margin Stock or for any purpose that violates
the provisions of Regulation T, U or X of the Board of Governors of the United
States Federal Reserve).

 

6.13         Limitation on Issuance of Equity Interests.  Except for the
issuance or sale of Qualified Equity Interests by Parent, Borrowers will not,
and will not permit any of their Subsidiaries to, issue or sell or enter into
any agreement or arrangement for the issuance or sale of any of their Equity
Interests to any Person other than a Loan Party.

 

6.14         Inventory with Bailees.  Borrower will not, and will not permit any
of their Subsidiaries to, store their Inventory at any time with a bailee,
warehouseman, or similar party other than the bailees listed on Schedule 6.14
(as such Schedule may be updated from time to time with prior written consent of
Agent) hereof.

 

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6.15         Parent as Holding Company.  Borrowers will not, and will not permit
any of their Subsidiaries to, permit Parent to incur any liabilities (other than
(a) liabilities arising under the Loan Documents and the Term Loan Documents,
(b) de minimis liabilities, and (c) liabilities arising out of agreements listed
on Schedule 4.17 to which Parent is a party), own or acquire any assets (other
than de minimis assets and the Equity Interests of the other Borrowers and their
Subsidiaries) or engage itself in any operations or business, except in
connection with its ownership of the other Borrowers and its rights and
obligations under the Loan Documents and the Term Loan Documents.

 

7.             FINANCIAL COVENANTS.

 

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, such Borrower will:

 

7.1           Minimum Liquidity.  Maintain (a) at all times from and including
the date of this Agreement until and including December 31, 2011, (i) Excess
Availability of at least $7,500,000 plus (ii) Excess Availability plus Qualified
Cash of at least $7,500,000, (b) at all times from and including January 1, 2012
until December 31, 2012, (i) Excess Availability of at least $7,500,000 plus
(ii) Excess Availability plus Qualified Cash of at least $7,500,000, and (c) at
all times from and including January 1, 2013 until the Maturity Date, (i) Excess
Availability of at least $7,500,000 plus (ii) Excess Availability plus Qualified
Cash of at least $17,500,000 (such applicable threshold amounts in clauses (a),
(b) and (c), the “Liquidity Requirement”); provided, that if the minimum amount
of Liquidity (as such term is defined in the Term Loan Agreement, “Liquidity”)
in Section 7.08(a) of the Term Loan Agreement is increased or decreased by
amendment or otherwise, then the Liquidity Requirement shall automatically be
amended to be the amount set forth as the minimum amount of Liquidity in
Section 7.08(a) of the Term Loan Agreement after giving effect to such increase
or decrease, unless such amount of minimum Liquidity either (A) does not include
a requirement for Excess Availability to be greater than or equal to $7,500,000
or (B) is less than an amount equal to (y) Excess Availability of at least
$7,500,000 plus (z) Excess Availability plus Qualified Cash of at least
$7,500,000, which in such case, the Liquidity Requirement shall automatically be
amended to be (I) Excess Availability of at least $7,500,000 plus (II) Excess
Availability plus Qualified Cash of at least $7,500,000.

 

7.2           Ethanol Production at Pekin Plant.  If any one or more ethanol
production plants of Borrowers has discontinued operations for any period of
time, the Borrowers will provide evidence satisfactory to Agent that the Pekin
Plant produced, for the trailing twelve month period ended as of the last day of
the immediately preceding month, at least 140,000,000 gallons of ethanol, such
evidence to be provided to Agent within 30 days after the end of each month.

 

8.             EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

 

8.1           Payments.  If Borrowers fail to pay when due and payable, or when
declared due and payable, (a) all or any portion of the Obligations consisting
of interest, fees, or charges due the Lender Group, reimbursement of Lender
Group Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of 3 Business Days, (b) all
or any portion of the principal of the Loans, or (c) any amount payable to
Issuing Lender in reimbursement of any drawing under a Letter of Credit;

 

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8.2           Covenants.  If any Loan Party or any of its Subsidiaries:

 

(a)           fails to perform or observe any covenant or other agreement
contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is
not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if
any Borrower refuses to allow Agent or its representatives or agents to visit
such Borrower’s properties, inspect its assets or books or records, examine and
make copies of its books and records, or discuss such Borrower’s affairs,
finances, and accounts with officers and employees of such Borrower), 5.10,
5.11, 5.12, 5.13, 5.14, 5.15, 5.16, or 5.17 of this Agreement, (ii) Sections 6.1
through 6.15 of this Agreement, (iii) Section 7 of this Agreement, or
(iv) Section 6 of the Guaranty and Security Agreement;

 

(b)           fails to perform or observe any covenant or other agreement
contained in any of Sections 5.3 (other than if any Borrower is not in good
standing in its jurisdiction of organization), 5.4, 5.5, and 5.8 of this
Agreement and such failure continues for a period of 10 days after the earlier
of (i) the date on which such failure shall first become known to any officer of
any Borrower or (ii) the date on which written notice thereof is given to
Administrative Borrower by Agent; or

 

(c)           fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 8 (in which event such other provision of this
Section 8 shall govern), and such failure continues for a period of 30 days
after the earlier of (i) the date on which such failure shall first become known
to a Responsible Officer of any Borrower or (ii) the date on which written
notice thereof is given to Administrative Borrower by Agent;

 

8.3           Judgments.  If one or more judgments, orders, or awards for the
payment of money involving an aggregate amount of $2,500,000, or more (except to
the extent fully covered (other than to the extent of customary deductibles) by
insurance pursuant to which the insurer has not denied coverage) is entered or
filed against a Loan Party or any of its Subsidiaries, or with respect to any of
their respective assets, and either (a) there is a period of 30 consecutive days
at any time after the entry of any such judgment, order, or award during which
(1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(2) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;

 

8.4           Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is
commenced by a Loan Party or any of its Subsidiaries;

 

8.5           Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is
commenced against a Loan Party or any of its Subsidiaries and any of the
following events occur: (a) such Loan Party or such Subsidiary consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
such Loan Party or its Subsidiary, or (e) an order for relief shall have been
issued or entered therein;

 

8.6           Default Under Other Agreements.  If there is (a) a default in one
or more agreements to which a Loan Party or any of its Subsidiaries is a party
with one or more third Persons relative to a Loan Party’s or any of its
Subsidiaries’ Indebtedness involving an aggregate amount of $2,500,000 or more,
and such default (i) occurs at the final maturity of the obligations thereunder,
or (ii) results in a right by such third Person, irrespective of whether
exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s
obligations thereunder; (b)  an acceleration of the Term Loan Indebtedness under
any of the Term Loan Documents; (c) there is a Default or Event of Default (as
such terms are defined in the Term Loan Agreement) under any of the Term Loan
Documents; (d) a default in or an involuntary early termination of one or more
Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party; or
(e) a default or breach under the Indiana Port Lease Agreement;

 

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8.7           Representations, etc.  If any warranty, representation,
certificate, statement, or Record made herein or in any other Loan Document or
delivered in writing to Agent or any Lender in connection with this Agreement or
any other Loan Document proves to be untrue in any material respect (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of the date of issuance or making or deemed making thereof;

 

8.8           Guaranty.  If the obligation of any Guarantor under the guaranty
contained in the Guaranty and Security Agreement is limited or terminated by
operation of law or by such Guarantor (other than in accordance with the terms
of this Agreement);

 

8.9           Security Documents.  If the Guaranty and Security Agreement or any
other Loan Document that purports to create a Lien, shall, for any reason, fail
or cease to create a valid and perfected and, except to the extent of
(y) Permitted Liens which are non-consensual Permitted Liens, permitted purchase
money Liens or the interests of lessors under Capital Leases and (z) Liens
granted under the Term Loan Documents that are expressly permitted under the
terms of the Intercreditor Agreement to be first priority Liens, first priority
Lien on the Collateral covered thereby, except (a) as a result of a disposition
of the applicable Collateral in a transaction permitted under such Loan
Document, or (b) as the result of an action or failure to act on the part of
Agent;

 

8.10         Loan Documents.  The validity or enforceability of any Loan
Document shall at any time for any reason (other than solely as the result of an
action or failure to act on the part of Agent) be declared to be null and void,
or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by
any Governmental Authority having jurisdiction over a Loan Party or its
Subsidiaries, seeking to establish the invalidity or unenforceability thereof,
or a Loan Party or its Subsidiaries shall deny that such Loan Party or its
Subsidiaries has any liability or obligation purported to be created under any
Loan Document;

 

8.11         Change in Control.  A Change in Control shall occur, whether
directly or indirectly;

 

8.12         Employee Benefits.  The occurrence of any of the following events
with respect to any Loan Party or any of its ERISA Affiliates: (i) any Loan
Party or any ERISA Affiliate fails to make full payment when due of all amounts
which, under the provisions of any Pension Plan or Section 412 or 430 of the
IRC, any of them are required to pay as contributions to such Pension Plan, and
such failure could reasonably be expected to result in liability in excess of
$2,500,000, (ii) an accumulated funding deficiency or funding shortfall in
excess of $2,500,000 occurs or exists, whether or not waived, with respect to
any Pension Plan, individually or in the aggregate, (iii) a Termination Event
which could reasonably be expected to result in liability in excess of
$2,500,000, either individually or in the aggregate, or (iv) any Loan Party or
any ERISA Affiliate as employers under one or more Multiemployer Plans makes a
complete or partial withdrawal from any such Multiemployer Plan and incurs a
withdrawal liability requiring payments in an amount exceeding $2,500,000; or

 

8.13         Restraining Orders.  If a Loan Party or any of its Subsidiaries is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of the business affairs of Parent and its
Subsidiaries, taken as a whole.

 

9.             RIGHTS AND REMEDIES.

 

9.1           Rights and Remedies.  Upon the occurrence and during the
continuation of an Event of Default, Agent may, and, at the instruction of the
Required Lenders, shall (in each case under clauses (a) or (b) by written notice
to Administrative Borrower), in addition to any other rights or remedies
provided for hereunder or under any other Loan Document or by applicable law, do
any one or more of the following:

 

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(a)           declare the Obligations (other than the Bank Product Obligations),
whether evidenced by this Agreement or by any of the other Loan Documents
immediately due and payable, whereupon the same shall become and be immediately
due and payable and Borrowers shall be obligated to repay all of such
Obligations in full, without presentment, demand, protest, or further notice or
other requirements of any kind, all of which are hereby expressly waived by each
Borrower;

 

(b)           declare the Commitments terminated, whereupon the Commitments
shall immediately be terminated together with (i) any obligation of any Lender
to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing
Loans, and (iii) the obligation of Issuing Lender to issue Letters of Credit;
and

 

(c)           exercise all other rights and remedies available to Agent or the
other members of the Lender Group under the Loan Documents or applicable law.

 

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to any Borrower or any other Person or any
act by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of all accrued
and unpaid interest thereon and all fees and all other amounts owing under this
Agreement or under any of the other Loan Documents, shall automatically and
immediately become due and payable and Borrowers shall be obligated to repay all
of such Obligations in full, without presentment, demand, protest, or notice of
any kind, all of which are expressly waived by each Borrower.

 

9.2           Remedies Cumulative.  The rights and remedies of the Lender Group
and the Bank Product Providers under this Agreement, the other Loan Documents,
and all other agreements shall be cumulative.  The Lender Group shall have all
other rights and remedies not inconsistent herewith as provided under the Code,
by law, or in equity.  No exercise by the Lender Group of one right or remedy
shall be deemed an election, and no waiver by the Lender Group of any Event of
Default shall be deemed a continuing waiver.  No delay by the Lender Group shall
constitute a waiver, election, or acquiescence by it.

 

10.           WAIVERS; INDEMNIFICATION.

 

10.1         Demand; Protest; etc.  Each Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which such Borrower may in any way be liable.

 

10.2         The Lender Group’s Liability for Collateral.  Each Borrower hereby
agrees that:  (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3         Indemnification.  Borrowers shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an “Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution and delivery (provided that no Borrower
shall be liable for costs and expenses (including attorneys fees) of any Lender
(other than WFCF) incurred in advising, structuring, drafting, reviewing,
administering or syndicating the Loan Documents),

 

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enforcement, performance, or administration (including any restructuring or
workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of Parent’s
and its Subsidiaries’ compliance with the terms of the Loan Documents (provided,
that the indemnification in this clause (a) shall not extend to (i) disputes
solely between or among the Lenders, (ii) disputes solely between or among the
Lenders and their respective Affiliates; it being understood and agreed that the
indemnification in this clause (a) shall extend to Agent (but not the Lenders)
relative to disputes between or among Agent on the one hand, and one or more
Lenders, or one or more of their Affiliates, on the other hand, or (iii) any
Taxes or any costs attributable to Taxes, which shall be governed by
Section 16), (b) with respect to any investigation, litigation, or proceeding
related to this Agreement, any other Loan Document, or the use of the proceeds
of the credit provided hereunder (irrespective of whether any Indemnified Person
is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto, and (c) in connection with or arising out of either any
presence or Release of Hazardous Materials at, on, under, to or from any assets
or properties owned, leased or operated by Parent or any of its Subsidiaries, or
any Environmental Actions, Environmental Liabilities or Remedial Actions related
in any way to any such assets or properties of Parent or any of its Subsidiaries
(each and all of the foregoing, the “Indemnified Liabilities”).  The foregoing
to the contrary notwithstanding, no Borrower shall have any obligation to any
Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or its officers, directors, employees, attorneys, or agents.  This
provision shall survive the termination of this Agreement and the repayment of
the Obligations.  If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which any
Borrower was required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.

 

11.           NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid or delivered electronically as set forth
pursuant to the terms of Section 5.1) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile.  In the case of notices or
demands to Borrowers or Agent, as the case may be, they shall be sent to the
respective address set forth below:

 

If to Borrowers:

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

 

One Lincoln Centre

 

5400 LBJ Freeway, Suite 450

 

Dallas, Texas 75240

 

Attn: Corporate Controller and Corporate Counsel

 

Fax No.: (214) 451-6799

 

 

with copies to:

AKIN GUMP STRAUSS HAUER & FELD LLP

 

One Bryant Park

 

New York, NY 10036-6745

 

Attn: Ackneil M. Muldrow III, Esq.

 

Fax No.: 212.872.1002

 

 

If to Agent:

WELLS FARGO CAPITAL FINANCE, LLC

 

2450 Colorado Avenue

 

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Suite 3000 West

 

Santa Monica, CA 90404

 

Attn: Business Finance Division Manager

 

Fax No.: (310) 453-7413

 

 

with copies to:

PAUL, HASTINGS, JANOFSKY & WALKER LLP

 

515 South Flower Street, 25th Floor

 

Los Angeles, CA 90071

 

Attn: John Francis Hilson, Esq.

 

Fax No.: (213) 996-3300

 

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt, the date of
electronic delivery pursuant to Section 5.1 or 3 Business Days after the deposit
thereof in the mail; provided, that (a) notices sent by overnight courier
service shall be deemed to have been given when received, (b) notices by
facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient) and (c) notices by electronic mail shall be deemed received upon the
sender’s receipt of an acknowledgment from the intended recipient (such as by
the “return receipt requested” function, as available, return email or other
written acknowledgment).

 

12.           CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)           THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND
ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA;
PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND.  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER
AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF
ANY, TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY

 

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CLAIMS.  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

(d)           EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

 

(e)           NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, THE SWING
LENDER, ANY OTHER LENDER, ISSUING LENDER, OR ANY UNDERLYING ISSUER, OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR
ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES,
AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED
AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

13.           ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1         Assignments and Participations.

 

(a)           (i)  Subject to the conditions set forth in clause (a)(ii) below,
any Lender may assign and delegate to one or more assignees (each, an
“Assignee”) with the prior written consent (such consent not be unreasonably
withheld or delayed; it being understood that, without limitation,
Administrative Borrower shall have the right to withhold its consent to any
assignment if, in order for such assignment to comply with applicable law,
Administrative Borrower would be required to obtain the consent of, or make any
filing or registration with, any Governmental Authority) of:

 

(A)          Administrative Borrower; provided, that no consent of
Administrative Borrower shall be required (1) if an Event of Default has
occurred and is continuing, or (2) in connection with an assignment to a Person
that is a Lender, an Affiliate (other than natural persons) of a Lender, or a
Related Fund of such Lender; provided further, that Administrative Borrower
shall be deemed to have consented to a proposed assignment unless it objects
thereto by written notice to Agent within 5 Business Days after having received
notice thereof; and

 

(B)           Agent, Swing Lender, and Issuing Lender.

 

(ii)           Assignments shall be subject to the following additional
conditions:

 

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(A)          no assignment may be made to an Ineligible Institution, a
Competitor, or a natural person,

 

(B)           no assignment may be made to a Loan Party or any Affiliate of a
Loan Party,

 

(C)           the amount of the Commitments and the other rights and obligations
of the assigning Lender hereunder and under the other Loan Documents subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to Agent) shall be in a minimum
amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall
not apply to (I) an assignment or delegation by any Lender to any other Lender,
an Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of
new Lenders, each of which is an Affiliate of each other or a Related Fund of
such new Lender to the extent that the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000);

 

(D)          each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;

 

(E)           the parties to each assignment shall execute and deliver to Agent
an Assignment and Acceptance; provided, that Borrowers and Agent may continue to
deal solely and directly with the assigning Lender in connection with the
interest so assigned to an Assignee until written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee.

 

(F)           unless waived by Agent, the assigning Lender or Assignee has paid
to Agent, for Agent’s separate account, a processing fee in the amount of
$3,500; and

 

(G)           the assignee, if it is not a Lender, shall deliver to Agent an
Administrative Questionnaire in a form approved by Agent (the “Administrative
Questionnaire”).

 

(b)           From and after the date that Agent receives the executed
Assignment and Acceptance and, if applicable, payment of the required processing
fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall be a “Lender” and shall have the rights and
obligations of a Lender under the Loan Documents, and (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 10.3) and be
released from any future 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 and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto); provided,
that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 17.9(a).

 

(c)           By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows:  (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such

 

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Assignment and Acceptance, (iv) such Assignee will, independently and without
reliance upon Agent, such assigning Lender 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
this Agreement, (v) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent, by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, and (vi) such Assignee
agrees that it will perform all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

 

(d)           Immediately upon Agent’s receipt of the required processing fee,
if applicable, and Agent’s receipt of the executed Assignment and Acceptance
pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom.  The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.

 

(e)           Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a “Participant”) participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the “Originating Lender”) hereunder
and under the other Loan Documents; provided, that (i) the Originating Lender
shall remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, (v) no participation shall be sold to an
Ineligible Institution, a Competitor, or a natural person, (vi) no participation
shall be sold to a Loan Party or any Affiliate of a Loan Party, and (vii) all
amounts payable by Borrowers hereunder shall be determined as if such Lender had
not sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off 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.  The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collateral, or otherwise in respect of the Obligations.  No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.

 

(f)            In connection with any such assignment or participation or
proposed assignment or participation or any grant of a security interest in, or
pledge of, its rights under and interest in this Agreement, a Lender may,
subject to the provisions of Section 17.9,  disclose all documents and
information which it now or hereafter may have relating to Parent and its
Subsidiaries and their respective businesses.

 

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(g)           Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

 

13.2         Successors.  This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, that no
Borrower may assign this Agreement or any rights or duties hereunder without the
Lenders’ prior written consent and any prohibited assignment shall be absolutely
void ab initio.  No consent to assignment by the Lenders shall release any
Borrower from its Obligations.  A Lender may assign this Agreement and the other
Loan Documents and its rights and duties hereunder and thereunder pursuant to
Section 13.1 and, except as expressly required pursuant to Section 13.1, no
consent or approval by any Borrower is required in connection with any such
assignment.

 

14.           AMENDMENTS; WAIVERS.

 

14.1         Amendments and Waivers.

 

(a)           No amendment, waiver or other modification of any provision of
this Agreement or any other Loan Document (other than Bank Product Agreements or
the Fee Letter), and no consent with respect to any departure by any Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and the Loan Parties that are party thereto and then any such waiver or
consent shall be effective, but only in the specific instance and for the
specific purpose for which given; provided, that no such waiver, amendment, or
consent shall, unless in writing and signed by all of the Lenders directly
affected thereby and all of the Loan Parties that are party thereto, do any of
the following:

 

(i)         increase the amount of or extend the expiration date of any
Commitment of any Lender or amend, modify, or eliminate the last sentence of
Section 2.4(c),

 

(ii)        postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

 

(iii)       reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except in connection with the waiver
of applicability of Section 2.6(c) (which waiver shall be effective with the
written consent of the Required Lenders),

 

(iv)       amend, modify, or eliminate this Section or any provision of this
Agreement providing for consent or other action by all Lenders,

 

(v)        amend, modify, or eliminate Section 15.11,

 

(vi)       other than as permitted by Section 15.11, release Agent’s Lien in and
to any of the Collateral,

 

(vii)      amend, modify, or eliminate the definitions of “Required Lenders”, or
“Pro Rata Share”,

 

(viii)     contractually subordinate any of Agent’s Liens,

 

(ix)       other than in connection with a merger, liquidation, dissolution or
sale of such Person expressly permitted by the terms hereof or the other Loan
Documents, release any Borrower or

 

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any Guarantor from any obligation for the payment of money or consent to the
assignment or transfer by any Borrower or any Guarantor of any of its rights or
duties under this Agreement or the other Loan Documents,

 

(x)        amend, modify, or eliminate any of the provisions of
Section 2.4(b)(i) or (ii) or Section 2.4(e) or (f),

 

(xi)       amend, modify, or eliminate any of the provisions of Section 13.1
with respect to assignments to, or participations with, Persons who are a Loan
Party or an Affiliate of a Loan Party, or

 

(xii)      the definition of Borrowing Base or any of the defined terms
(including the definitions of Eligible Accounts, Eligible Finished Goods
Inventory, Eligible Inventory, Eligible Raw Materials Inventory, and Eligible
Work-in-Process Inventory) that are used in such definition to the extent that
any such change results in more credit being made available to Borrowers based
upon the Borrowing Base, but not otherwise, or the definition of Maximum
Revolver Amount, or change Section 2.1(c).

 

(b)           No amendment, waiver, modification, or consent shall amend,
modify, waive, or eliminate,

 

(i)         the definition of, or any of the terms or provisions of, the Fee
Letter, without the written consent of Agent and Borrowers (and shall not
require the written consent of any of the Lenders),

 

(ii)        the terms or provisions of the Intercreditor Agreement, without the
written consent of Agent and the Required Lenders, and

 

(iii)       any provision of Section 15 pertaining to Agent, or any other rights
or duties of Agent under this Agreement or the other Loan Documents, without the
written consent of Agent, Borrowers, and the Required Lenders.

 

(c)           No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Issuing Lender, or any other rights or duties of Issuing
Lender or Underlying Issuer under this Agreement or the other Loan Documents,
without the written consent of Issuing Lender, Agent, Borrowers, and the
Required Lenders.

 

(d)           No amendment, waiver, modification, elimination, or consent shall
amend, modify, or waive any provision of this Agreement or the other Loan
Documents pertaining to Swing Lender, or any other rights or duties of Swing
Lender under this Agreement or the other Loan Documents, without the written
consent of Swing Lender, Agent, Borrowers, and the Required Lenders.

 

(e)           Anything in this Section 14.1 to the contrary notwithstanding,
(i) any amendment, modification, elimination, waiver, consent, termination, or
release of, or with respect to, any provision of this Agreement or any other
Loan Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Borrower,
shall not require consent by or the agreement of any Loan Party, and (ii) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender other
than any of the matters governed by Section 14.1(a)(i) through (iii) that affect
such Lender..

 

14.2         Replacement of Certain Lenders.

 

(a)           If (i) any action to be taken by the Lender Group or Agent
hereunder requires the consent, authorization, or agreement of all Lenders or
all Lenders affected thereby and if such action has received the consent,
authorization, or agreement of the Required Lenders but not of all Lenders or
all Lenders affected thereby, (ii) any Lender makes a claim for compensation
under Section 16, or (iii) any Lender is at

 

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such time a Defaulting Lender, then Borrowers or Agent, upon at least 5 Business
Days prior irrevocable notice, may permanently replace such Defaulting Lender,
any Lender that failed to give its consent, authorization, or agreement (a
“Non-Consenting Lender”) or any Lender that made a claim for compensation (a
“Tax Lender”) with one or more Replacement Lenders, and the Non-Consenting
Lender or Tax Lender, as applicable, shall have no right to refuse to be
replaced hereunder.  Such notice to replace the Defaulting Lender,
Non-Consenting Lender or Tax Lender, as applicable, shall specify an effective
date for such replacement, which date shall not be later than 15 Business Days
after the date such notice is given.

 

(b)           Prior to the effective date of such replacement, the Defaulting
Lender, Non-Consenting Lender or Tax Lender, as applicable, and each Replacement
Lender shall execute and deliver an Assignment and Acceptance, subject only to
the Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, being
repaid in full its share of the outstanding Obligations (without any premium or
penalty of any kind whatsoever, but including (i) all interest, fees and other
amounts that may be due in payable in respect thereof, and (ii) an assumption of
its Pro Rata Share of participations in the Letters of Credit).  If the
Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall
refuse or fail to execute and deliver any such Assignment and Acceptance prior
to the effective date of such replacement, Agent may, but shall not be required
to, execute and deliver such Assignment and Acceptance in the name or and on
behalf of the Defaulting Lender, Non-Consenting Lender or Tax Lender, as
applicable, and irrespective of whether Agent executes and delivers such
Assignment and Acceptance, the Defaulting Lender, Non-Consenting Lender or Tax
Lender, as applicable, shall be deemed to have executed and delivered such
Assignment and Acceptance.  The replacement of any Defaulting Lender,
Non-Consenting Lender or Tax Lender, as applicable, shall be made in accordance
with the terms of Section 13.1.  Until such time as one or more Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Defaulting Lender, Non-Consenting Lender or
Tax Lender, as applicable, hereunder and under the other Loan Documents, the
Defaulting Lender, Non-Consenting Lender or Tax Lender, as applicable, shall
remain obligated to make the Defaulting Lender’s, Non-Consenting Lender’s or Tax
Lender’s, as applicable, Pro Rata Share of Revolving Loans and to purchase a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of participations in such Letters of Credit.

 

14.3         No Waivers; Cumulative Remedies.  No failure by Agent or any Lender
to exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof.  No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated.  No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by each Borrower of any
provision of this Agreement.  Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

 

15.           AGENT; THE LENDER GROUP.

 

15.1         Appointment and Authorization of Agent.  Each Lender hereby
designates and appoints WFCF as its agent under this Agreement and the other
Loan Documents and each Lender hereby irrevocably authorizes (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
designate, appoint, and authorize) Agent to execute and deliver each of the
other Loan Documents on its behalf and to take such other action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to Agent
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto.  Agent agrees to act as agent for
and on behalf of the Lenders (and the Bank Product Providers) on the conditions
contained in this Section 15.  Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Loan Documents, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender (or Bank Product Provider), 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 Agent.  Without limiting the generality of the
foregoing, the

 

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use of the term “agent” in this Agreement or the other Loan Documents with
reference to Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law. 
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only a representative relationship between independent
contracting parties.  Each Lender hereby further authorizes (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
authorize) Agent to act as the secured party under each of the Loan Documents
that create a Lien on any item of Collateral.  Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other
Loan Documents.  Without limiting the generality of the foregoing, or of any
other provision of the Loan Documents that provides rights or powers to Agent,
Lenders agree that Agent shall have the right to exercise the following powers
as long as this Agreement remains in effect:  (a) maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Obligations, the Collateral, payments and proceeds of Collateral, and
related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the
Loan Documents, (d) exclusively receive, apply, and distribute payments and
proceeds of the Collateral as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes, (f) perform, exercise, and enforce any and all other rights
and remedies of the Lender Group with respect to Parent or its Subsidiaries, the
Obligations, the Collateral, or otherwise related to any of same as provided in
the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent
may deem necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to the Loan Documents.

 

15.2         Delegation of Duties.  Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

 

15.3         Liability of Agent.  None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own bad faith, gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank
Product Providers) for any recital, statement, representation or warranty made
by Parent or any of its Subsidiaries or Affiliates, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Parent or its Subsidiaries or any other party to any Loan Document to perform
its obligations hereunder or thereunder.  No Agent-Related Person shall be under
any obligation to any Lenders (or Bank Product Providers) 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 books and records or properties of Parent or its Subsidiaries.

 

15.4         Reliance by Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement 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 any Lender), independent
accountants and other experts selected by Agent.  Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless Agent shall first receive such advice or concurrence of the
Lenders as it deems appropriate and until such instructions are received,

 

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Agent shall act, or refrain from acting, as it deems advisable.  If Agent so
requests, it shall first be indemnified to its reasonable satisfaction by the
Lenders (and, if it so elects, the Bank Product Providers) against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.  Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Required Lenders and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders (and Bank Product Providers).

 

15.5       Notice of Default or Event of Default.  Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or any Borrower referring
to this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.”  Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge.  If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default.  Each Lender shall be solely responsible for giving any
notices to its Participants, if any.  Subject to Section 15.4, Agent shall take
such action with respect to such Default or Event of Default as may be requested
by the Required Lenders in accordance with Section 9; provided, that unless and
until Agent has received any such request, 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.

 

15.6       Credit Decision.  Each Lender (and Bank Product Provider)
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by Agent hereinafter taken, including any
review of the affairs of Parent and its Subsidiaries or Affiliates, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender (or Bank Product Provider).  Each Lender represents (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to represent) to Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such due diligence, documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of any Borrower or any other Person party
to a Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrowers.  Each Lender also represents (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it 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 investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of any Borrower or any other Person
party to a Loan Document.  Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons.  Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the
extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into Agent’s
or its Affiliates’ or representatives’ possession before or after the date on
which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).

 

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15.7         Costs and Expenses; Indemnification.  Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not Borrowers are obligated to
reimburse Agent or Lenders for such expenses pursuant to this Agreement or
otherwise.  Agent is authorized and directed to deduct and retain sufficient
amounts from payments or proceeds of the Collateral received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders (or Bank Product Providers).  In the
event Agent is not reimbursed for such costs and expenses by Parent or its
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay
to Agent such Lender’s ratable thereof.  Whether or not the transactions
contemplated hereby are consummated, each of the Lenders, on a ratable basis,
shall indemnify and defend the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrowers and without limiting the obligation of
Borrowers to do so) from and against any and all Indemnified Liabilities;
provided, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person’s bad faith, gross negligence or willful misconduct nor shall any Lender
be liable for the obligations of any Defaulting Lender in failing to make a
Revolving Loan or other extension of credit hereunder.  Without limitation of
the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s
ratable share of any costs or out of pocket expenses (including attorneys,
accountants, advisors, and consultants fees and expenses) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any other Loan Document to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. 
The undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.

 

15.8         Agent in Individual Capacity.  WFCF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
provide Bank Products to, acquire Equity Interests in, and generally engage in
any kind of banking, trust, financial advisory, underwriting, or other business
with Parent and its Subsidiaries and Affiliates and any other Person party to
any Loan Document as though WFCF were not Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group.  The
other members of the Lender Group acknowledge (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to acknowledge)
that, pursuant to such activities, WFCF or its Affiliates may receive
information regarding Parent or its Affiliates or any other Person party to any
Loan Documents that is subject to confidentiality obligations in favor of Parent
or its Affiliates or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them.  The terms “Lender” and
“Lenders” include WFCF in its individual capacity.

 

15.9       Successor Agent.  Agent may resign as Agent upon 30 days (10 days if
an Event of Default has occurred and is continuing) prior written notice to the
Lenders (unless such notice is waived by the Required Lenders) and
Administrative Borrower (unless such notice is waived by Borrowers) and without
any notice to the Bank Product Providers.  If Agent resigns under this
Agreement, the Required Lenders shall be entitled, with (so long as no Event of
Default has occurred and is continuing) the consent of Administrative Borrower
(such consent not to be unreasonably withheld, delayed, or conditioned), appoint
a successor Agent for the Lenders (and the Bank Product Providers).  If, at the
time that Agent’s resignation is effective, it is acting as Issuing Lender or
the Swing Lender, such resignation shall also operate to effectuate its
resignation as Issuing Lender or the Swing Lender, as applicable, and it shall
automatically be relieved of any further obligation to issue Letters of Credit,
to cause the Underlying Issuer to issue Letters of Credit, or to make Swing
Loans.  If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may

 

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appoint, after consulting with the Lenders and Administrative Borrower, a
successor Agent.  If Agent has materially breached or failed to perform any
material provision of this Agreement or of applicable law, the Required Lenders
may agree in writing to remove and replace Agent with a successor Agent from
among the Lenders with (so long as no Event of Default has occurred and is
continuing) the consent of Administrative Borrower (such consent not to be
unreasonably withheld, delayed, or conditioned).  In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated.  After any
retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 15 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.  If no successor Agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.

 

15.10     Lender in Individual Capacity.  Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, provide Bank Products to, acquire Equity Interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Parent and its Subsidiaries and Affiliates
and any other Person party to any Loan Documents as though such Lender were not
a Lender hereunder without notice to or consent of the other members of the
Lender Group (or the Bank Product Providers).  The other members of the Lender
Group acknowledge (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Parent or its Affiliates or any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Parent or
its Affiliates or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.

 

15.11       Collateral Matters.

 

(a)           The Lenders hereby irrevocably authorize (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrowers certify to
Agent that the sale or disposition is permitted under Section 6.4 (and Agent may
rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which Parent or its Subsidiaries owned no
interest at the time Agent’s Lien was granted nor at any time thereafter, or
(iv) constituting property leased to Parent or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this
Agreement.  The Loan Parties and the Lenders hereby irrevocably authorize (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent, based upon the instruction of the Required Lenders,
to (a) consent to, credit bid or purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted under the provisions of the Bankruptcy Code, including under
Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly
or through one or more acquisition vehicles) all or any portion of the
Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral at any other sale or
foreclosure conducted by Agent (whether by judicial action or otherwise) in
accordance with applicable law.  In connection with any such credit bid or
purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or unliquidated claims being estimated
for such purpose if the fixing or liquidation thereof would

 

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not unduly delay the ability of Agent to credit bid or purchase at such sale or
other disposition of the Collateral and, if such claims cannot be estimated
without unduly delaying the ability of Agent to credit bid, then such claims
shall be disregarded, not credit bid, and not entitled to any interest in the
asset or assets purchased by means of such credit bid) and the Lenders and the
Bank Product Providers whose Obligations are credit bid shall be entitled to
receive interests (ratably based upon the proportion of their Obligations credit
bid in relation to the aggregate amount of Obligations so credit bid) in the
asset or assets so purchased (or in the Equity Interests of the acquisition
vehicle or vehicles that are used to consummate such purchase), and (ii) Agent,
based upon the instruction of the Required Lenders, may accept non-cash
consideration, including debt and equity securities issued by such acquisition
vehicle or vehicles and in connection therewith Agent may reduce the Obligations
owed to the Lenders and the Bank Product Providers (ratably based upon the
proportion of their Obligations credit bid in relation to the aggregate amount
of Obligations so credit bid) based upon the value of such non-cash
consideration.  Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers).  Upon request by Agent or any Borrower at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, that (1) Agent shall not
be required to execute any document necessary to evidence such release on terms
that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of any Borrower in respect
of) all interests retained by any Borrower, including, the proceeds of any sale,
all of which shall continue to constitute part of the Collateral.  The Lenders
further hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to authorize) Agent, at
its option and in its sole discretion, to subordinate any Lien granted to or
held by Agent under any Loan Document to the holder of any Permitted Lien on
such property if such Permitted Lien secures Permitted Purchase Money
Indebtedness.

 

(b)           Agent shall have no obligation whatsoever to any of the Lenders
(or the Bank Product Providers) to assure that the Collateral exists or is owned
by Parent or its Subsidiaries or is cared for, protected, or insured or has been
encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any particular
priority, or that any particular items of Collateral meet the eligibility
criteria applicable in respect thereof or whether to impose, maintain, reduce,
or eliminate any particular reserve hereunder or whether the amount of any such
reserve is appropriate or not, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to Agent pursuant
to any of the Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission, or event related thereto, subject to the
terms and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender (or Bank Product Provider) as to any of the
foregoing, except as otherwise provided herein.

 

15.12       Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)           Each of the Lenders agrees that it shall not, without the express
written consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of Agent, set off against the
Obligations, any amounts owing by such Lender to Parent or its Subsidiaries or
any deposit accounts of Parent or its Subsidiaries now or hereafter maintained
with such Lender.  Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against any Borrower or any Guarantor or to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.

 

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(b)           If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided, that to
the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

 

15.13     Agency for Perfection.  Agent hereby appoints each other Lender (and
each Bank Product Provider) as its agent (and each Lender hereby accepts (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens
in assets which, in accordance with Article 8 or Article 9, as applicable, of
the Code can be perfected by possession or control.  Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent’s request therefor shall deliver possession or
control of such Collateral to Agent or in accordance with Agent’s instructions.

 

15.14     Payments by Agent to the Lenders.  All payments to be made by Agent to
the Lenders (or Bank Product Providers) shall be made by bank wire transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent.  Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, fees, or interest of the Obligations.

 

15.15     Concerning the Collateral and Related Loan Documents.  Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents.  Each member of the Lender Group agrees (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to agree) that any action taken by Agent in accordance with the terms of
this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).

 

15.16     Field Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information.  By becoming a party to this Agreement, each
Lender:

 

(a)           is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field examination report
respecting Parent or its Subsidiaries (each, a “Report”) prepared by or at the
request of Agent, and Agent shall so furnish each Lender with such Reports,

 

(b)           expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

 

(c)           expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
field examination will inspect only specific information regarding Parent and
its Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’
books and records, as well as on representations of each Borrower’s personnel,

 

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(d)                                 agrees to keep all Reports and other
material, non-public information regarding Parent and its Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.9, and

 

(e)                                  without limiting the generality of any
other indemnification provision contained in this Agreement, agrees:  (i) to
hold Agent and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrowers, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect,
and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys fees and costs)
incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.

 

(f)                                    In addition to the foregoing, (x) any
Lender may from time to time request of Agent in writing that Agent provide to
such Lender a copy of any report or document provided by Parent or its
Subsidiaries to Agent that has not been contemporaneously provided by Parent or
such Subsidiary to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Parent or its Subsidiaries, any Lender
may, from time to time, reasonably request Agent to exercise such right as
specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Parent or such Subsidiary the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from Parent or
such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to Borrowers a statement regarding the Loan
Account, Agent shall send a copy of such statement to each Lender.

 

15.17                     Several Obligations; No Liability.  Notwithstanding
that certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of Agent in its capacity as such, and not by or in
favor of the Lenders, any and all obligations on the part of Agent (if any) to
make any credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group.  No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender (or Bank Product Provider) to fulfill its obligations to
make credit available hereunder, nor to advance for such Lender (or Bank Product
Provider) or on its behalf, nor to take any other action on behalf of such
Lender (or Bank Product Provider) hereunder or in connection with the financing
contemplated herein.

 

16.                                 WITHHOLDING TAXES.

 

16.1                           Payments.  All payments made by any Borrower
hereunder or under any note or other Loan Document will be made without setoff,
counterclaim, or other defense.  In addition, all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future Taxes, and in the event any deduction or withholding of Taxes is
required, Borrowers shall comply with the next sentence of this Section 16.  If
any Taxes are so levied or imposed, Borrowers agree to pay the full amount of
such Taxes and such additional amounts as may be necessary so that every payment
of all amounts due under this Agreement, any note, or Loan Document, including
any amount paid pursuant to this Section 16 after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for

 

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herein; provided, that Borrowers shall not be required to increase any such
amounts if the increase in such amount payable results from Agent’s or such
Lender’s own willful misconduct or gross negligence (as finally determined by a
court of competent jurisdiction).  Borrowers will furnish to Agent as promptly
as possible after the date the payment of any Tax is due pursuant to applicable
law, certified copies of tax receipts evidencing such payment by Borrowers. 
Borrowers agree to pay any present or future stamp, value added or documentary
taxes or any other excise or property taxes, charges, or similar levies that
arise from any payment made hereunder or from the execution, delivery,
performance, recordation, or filing of, or otherwise with respect to this
Agreement or any other Loan Document.

 

16.2                           Exemptions.

 

(a)                                  Each Lender or Participant agrees with and
in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the
Lender granting the participation only) one of the following before receiving
its first payment under this Agreement:

 

(i)                           if such Lender or Participant is entitled to claim
an exemption from United States withholding tax pursuant to the portfolio
interest exception, (A) a statement of the Lender or Participant, signed under
penalty of perjury, that it is not a (I) a “bank” as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within the
meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign
corporation related to any Borrower within the meaning of Section 864(d)(4) of
the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form
W-8IMY (with proper attachments);

 

(ii)                        if such Lender or Participant is entitled to claim
an exemption from, or a reduction of, withholding tax under a United States tax
treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii)                     if such Lender or Participant is entitled to claim
that interest paid under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States trade or business
of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

 

(iv)                    if such Lender or Participant is entitled to claim that
interest paid under this Agreement is exempt from United States withholding tax
because such Lender or Participant serves as an intermediary, a properly
completed and executed copy of IRS Form W-8IMY (with proper attachments); or

 

(v)                       a properly completed and executed copy of any other
form or forms, including IRS Form W-9, as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding or backup withholding tax.

 

(b)                                 Each Lender or Participant shall provide new
forms (or successor forms) upon the expiration or obsolescence of any previously
delivered forms and to promptly notify Agent (or, in the case of a Participant,
to the Lender granting the participation only) of any change in circumstances
(including the designation of a new lending office) which would modify or render
invalid any claimed exemption or reduction.

 

(c)                                  If a Lender or Participant claims an
exemption from withholding tax in a jurisdiction other than the United States,
such Lender or such Participant agrees with and in favor of Agent, to deliver to
Agent (or, in the case of a Participant, to the Lender granting the
participation only) any such form or forms, as may be required under the laws of
such jurisdiction as a condition to exemption from, or reduction of, foreign
withholding or backup withholding tax before receiving its first payment under
this Agreement, but only if such Lender or such Participant is legally able to
deliver such forms, provided, that nothing in this Section 16(c) shall require a
Lender or Participant to disclose any information that it deems to be
confidential (including without limitation, its tax returns).  Each Lender and
each Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify

 

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Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

 

(d)                                 If a Lender or Participant claims exemption
from, or reduction of, withholding tax and such Lender or Participant sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers to such Lender or Participant, such Lender or
Participant agrees to notify Agent (or, in the case of a sale of a participation
interest, to the Lender granting the participation only) of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrowers
to such Lender or Participant.  To the extent of such percentage amount, Agent
will treat such Lender’s or such Participant’s documentation provided pursuant
to Section 16.2(a) or 16.2(c) as no longer valid.  With respect to such
percentage amount, such Participant or Assignee may provide new documentation,
pursuant to Section 16.2(a) or 16.2(c), if applicable.  Borrowers agree that
each Participant shall be entitled to the benefits of this Section 16 with
respect to its participation in any portion of the Commitments and the
Obligations so long as such Participant complies with the obligations set forth
in this Section 16 with respect thereto.

 

16.3                           Reductions.

 

(a)                                  If a Lender or a Participant is entitled to
a reduction in the applicable withholding tax, Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any
interest payment to such Lender or such Participant an amount equivalent to the
applicable withholding tax after taking into account such reduction.  If the
forms or other documentation required by Section 16.2(a) or 16.2(c) are not
delivered to Agent (or, in the case of a Participant, to the Lender granting the
participation), then Agent (or, in the case of a Participant, to the Lender
granting the participation) may withhold from any interest payment to such
Lender or such Participant not providing such forms or other documentation an
amount equivalent to the applicable withholding tax.

 

(b)                                 If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
(or, in the case of a Participant, to the Lender granting the participation) did
not properly withhold tax from amounts paid to or for the account of any Lender
or any Participant due to a failure on the part of the Lender or any Participant
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent (or such Participant failed to notify
the Lender granting the participation) of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify and hold Agent harmless (or,
in the case of a Participant, such Participant shall indemnify and hold the
Lender granting the participation harmless) for all amounts paid, directly or
indirectly, by Agent (or, in the case of a Participant, to the Lender granting
the participation), as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation
only) under this Section 16, together with all costs and expenses (including
attorneys fees and expenses).  The obligation of the Lenders and the
Participants under this subsection shall survive the payment of all Obligations
and the resignation or replacement of Agent.

 

16.4                            Refunds.  If Agent or a Lender determines, in
its sole discretion, that it has received a refund of any Taxes as to which it
has been indemnified by Borrowers or with respect to which Borrowers have paid
additional amounts pursuant to this Section 16, so long as no Default or Event
of Default has occurred and is continuing, it shall pay over such refund to
Borrowers (but only to the extent of payments made, or additional amounts paid,
by Borrowers under this Section 16 with respect to Taxes giving rise to such a
refund), net of all reasonable out-of-pocket expenses of Agent or such Lender
and without interest (other than any interest paid by the applicable
Governmental Authority with respect to such a refund); provided, that Borrowers,
upon the request of Agent or such Lender, agree to repay the amount paid over to
Borrowers (plus any penalties, interest or other charges, imposed by the
applicable Governmental Authority, other than such penalties, interest or other
charges imposed as a result of the willful misconduct or gross negligence of
Agent hereunder) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority.  Notwithstanding
anything in this Agreement to the contrary, this Section 16 shall

 

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not be construed to require Agent or any Lender to make available its tax
returns (or any other information which it deems confidential) to any Borrower
or any other Person.

 

17.                                 GENERAL PROVISIONS.

 

17.1                           Effectiveness.  This Agreement shall be binding
and deemed effective when executed by each Borrower, Agent, and each Lender
whose signature is provided for on the signature pages hereof.

 

17.2                           Section Headings.  Headings and numbers have been
set forth herein for convenience only.  Unless the contrary is compelled by the
context, everything contained in each Section applies equally to this entire
Agreement.

 

17.3                           Interpretation.  Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed against any member of the
Lender Group or any Borrower, whether under any rule of construction or
otherwise.  On the contrary, this Agreement has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to accomplish fairly the purposes and intentions of all parties
hereto.

 

17.4                           Severability of Provisions.  Each provision of
this Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific
provision.

 

17.5                            Bank Product Providers.  Each Bank Product
Provider shall be deemed a third party beneficiary hereof and of the provisions
of the other Loan Documents for purposes of any reference in a Loan Document to
the parties for whom Agent is acting.  Agent hereby agrees to act as agent for
such Bank Product Providers and, by virtue of entering into a Bank Product
Agreement, the applicable Bank Product Provider shall be automatically deemed to
have appointed Agent as its agent and to have accepted the benefits of the Loan
Documents; it being understood and agreed that the rights and benefits of each
Bank Product Provider under the Loan Documents consist exclusively of such Bank
Product Provider’s being a beneficiary of the Liens and security interests (and,
if applicable, guarantees) granted to Agent and the right to share in payments
and collections out of the Collateral as more fully set forth herein. In
addition, each Bank Product Provider, by virtue of entering into a Bank Product
Agreement, shall be automatically deemed to have agreed that Agent shall have
the right, but shall have no obligation, to establish, maintain, relax, or
release reserves in respect of the Bank Product Obligations and that if reserves
are established there is no obligation on the part of Agent to determine or
insure whether the amount of any such reserve is appropriate or not.  In
connection with any such distribution of payments or proceeds of Collateral,
Agent shall be entitled to assume no amounts are due or owing to any Bank
Product Provider unless such Bank Product Provider has provided a written
certification (setting forth a reasonably detailed calculation) to Agent as to
the amounts that are due and owing to it and such written certification is
received by Agent a reasonable period of time prior to the making of such
distribution.  Agent shall have no obligation to calculate the amount due and
payable with respect to any Bank Products, but may rely upon the written
certification of the amount due and payable from the applicable Bank Product
Provider.  In the absence of an updated certification, Agent shall be entitled
to assume that the amount due and payable to the applicable Bank Product
Provider is the amount last certified to Agent by such Bank Product Provider as
being due and payable (less any distributions made to such Bank Product Provider
on account thereof).  Any Borrower may obtain Bank Products from any Bank
Product Provider, although no Borrower is required to do so.  Each Borrower
acknowledges and agrees that no Bank Product Provider has committed to provide
any Bank Products and that the providing of Bank Products by any Bank Product
Provider is in the sole and absolute discretion of such Bank Product Provider. 
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status
as the provider or holder of such agreements or products or the Obligations
owing thereunder, nor shall the consent of any such provider or holder be
required (other than in their capacities as Lenders, to the extent applicable)
for any matter

 

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hereunder or under any of the other Loan Documents, including as to any matter
relating to the Collateral or the release of Collateral or any Guarantors.

 

17.6                           Debtor-Creditor Relationship.  The relationship
between the Lenders and Agent, on the one hand, and the Loan Parties, on the
other hand, is solely that of creditor and debtor.  No member of the Lender
Group has (or shall be deemed to have) any fiduciary relationship or duty to any
Loan Party arising out of or in connection with the Loan Documents or the
transactions contemplated thereby, and there is no agency or joint venture
relationship between the members of the Lender Group, on the one hand, and the
Loan Parties, on the other hand, by virtue of any Loan Document or any
transaction contemplated therein.

 

17.7                           Counterparts; Electronic Execution.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement.  Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.

 

17.8                           Revival and Reinstatement of Obligations; Certain
Waivers.

 

(a)                                  If the incurrence or payment of the
Obligations by any Borrower or any Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be asserted, or declared, to
be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (each, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the advice of counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrowers or any
Guarantors automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.

 

(b)                                 Anything to the contrary contained herein
notwithstanding, if Agent or any Lender accepts a guaranty of only a portion of
the Obligations pursuant to any guaranty, each Borrower hereby waives its right
under Section 2822(a) of the California Civil Code or any similar laws of any
other applicable jurisdiction to designate the portion of the Obligations
satisfied by the applicable guarantor’s partial payment.

 

17.9                           Confidentiality.

 

(a)                                  Agent and Lenders each individually (and
not jointly or jointly and severally) agree that material, non-public
information regarding Parent and its Subsidiaries, their operations, assets, and
existing and contemplated business plans (“Confidential Information”) shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except:  (i) to attorneys for and other advisors, accountants,
auditors, and consultants to any member of the Lender Group and to employees,
directors and officers of any member of the Lender Group (the Persons in this
clause (i), “Lender Group Representatives”) on a “need to know” basis in
connection with this Agreement and the transactions contemplated hereby and on a
confidential basis, (ii) to Subsidiaries and Affiliates of any member of the
Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Administrative Borrower with prior notice thereof, to the
extent that

 

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it is practicable to do so and to the extent that the disclosing party is
permitted to provide such prior notice to Borrowers pursuant to the terms of the
applicable statute, decision, or judicial or administrative order, rule, or
regulation and (y) any disclosure under this clause (iv) shall be limited to the
portion of the Confidential Information as may be required by such statute,
decision, or judicial or administrative order, rule, or regulation, (v) as may
be agreed to in advance in writing by Borrowers, (vi) as requested or required
by any Governmental Authority pursuant to any subpoena or other legal process,
provided, that, (x) prior to any disclosure under this clause (vi) the
disclosing party agrees to provide Administrative Borrower with prior written
notice thereof, to the extent that it is practicable to do so and to the extent
that the disclosing party is permitted to provide such prior written notice to
Borrowers pursuant to the terms of the subpoena or other legal process and (y)
any disclosure under this clause (vi) shall be limited to the portion of the
Confidential Information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders or the Lender Group
Representatives), (viii) in connection with any assignment, participation or
pledge of any Lender’s interest under this Agreement, provided that prior to
receipt of Confidential Information any such assignee, participant, or pledgee
shall have agreed in writing to receive such Confidential Information hereunder
subject to the terms of this Section, (ix) in connection with any litigation or
other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents; provided, that, prior
to any disclosure to any Person (other than any Loan Party, Agent, any Lender,
any of their respective Affiliates, or their respective counsel) under this
clause (ix) with respect to litigation involving any Person (other than any Loan
Party, Agent, any Lender, any of their respective Affiliates, or their
respective counsel), the disclosing party agrees to provide Administrative
Borrower with prior written notice thereof, and (x) in connection with, and to
the extent reasonably necessary for, the exercise of any secured creditor remedy
under this Agreement or under any other Loan Document.

 

(b)                                 Anything in this Agreement to the contrary
notwithstanding, Agent may disclose information concerning the terms and
conditions of this Agreement and the other Loan Documents to loan syndication
and pricing reporting services or in its marketing materials, with such
information to consist of deal terms and other information customarily found in
such publications or marketing materials and may otherwise use the name, logos,
and other insignia of Borrowers or the other Loan Parties and the Commitments
provided hereunder in any “tombstone” or other advertisements, on its website or
in other marketing materials of Agent.

 

(c)                                  The Loan Parties hereby acknowledge that
Agent or its Affiliates may make available to the Lenders materials or
information provided by or on behalf of any Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks, SyndTrak
or another similar electronic system (the “Platform”) and certain of the Lenders
may be “public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Loan Parties or their securities)
(each, a “Public Lender”).  The Loan Parties shall be deemed to have authorized
Agent and its Affiliates and the Lenders to treat Borrower Materials marked
“PUBLIC” or otherwise at any time filed with the SEC as not containing any
material non-public information with respect to the Loan Parties or their
securities for purposes of United States federal and state securities laws.  All
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated as “Public Investor” (or another similar
term).  Agent and its Affiliates and the Lenders shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” or that are not at any time
filed with the SEC as being suitable only for posting on a portion of the
Platform not marked as “Public Investor” (or such other similar term).

 

17.10                     Survival.  All representations and warranties made by
the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf

 

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and notwithstanding that Agent, Issuing Lender, or any Lender may have had
notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.

 

17.11                     Patriot Act.  Each Lender that is subject to the
requirements of the Patriot Act hereby notifies Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies each Borrower, which information includes the name and address
of each Borrower and other information that will allow such Lender to identify
each Borrower in accordance with the Patriot Act.  In addition, if Agent is
required by law or regulation or internal policies to do so, it shall have the
right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and
customary individual background checks for the Loan Parties and (b) OFAC/PEP
searches and customary individual background checks for the Loan Parties’ senior
management and key principals, and each Borrower agrees to cooperate in respect
of the conduct of such searches and further agrees that the reasonable costs and
charges for such searches shall constitute Lender Group Expenses hereunder and
be for the account of Borrowers.

 

17.12                     Integration.  This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.  The foregoing
to the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.

 

17.13                     Parent as Agent for Borrowers.  Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all
Borrowers (“Administrative Borrower”) which appointment shall remain in full
force and effect unless and until Agent shall have received prior written notice
signed by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower.  Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (a) to provide
Agent with all notices with respect to Revolving Loans and Letters of Credit
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement, and (b) to take such action as the Administrative Borrower
deems appropriate on its behalf to obtain Revolving Loans and Letters of Credit
and to exercise such other powers as are reasonably incidental thereto to carry
out the purposes of this Agreement.  It is understood that the handling of the
Loan Account and Collateral in a combined fashion, as more fully set forth
herein, is done solely as an accommodation to Borrowers in order to utilize the
collective borrowing powers of Borrowers in the most efficient and economical
manner and at their request, and that Lender Group and the Bank Product
Providers shall not incur liability to any Borrower as a result hereof.  Each
Borrower expects to derive benefit, directly or indirectly, from the handling of
the Loan Account and the Collateral in a combined fashion since the successful
operation of each Borrower is dependent on the continued successful performance
of the integrated group.  To induce the Lender Group and the Bank Product
Providers to do so, and in consideration thereof, each Borrower hereby jointly
and severally agrees to indemnify each member of the Lender Group and each Bank
Product Provider and hold each member of the Lender Group and each Bank Product
Provider harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group and the Bank Product Providers
by any Borrower or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of Borrowers as
herein provided, or (b) the Lender Group’s and the Bank Product Provider’s
relying on any instructions of the Administrative Borrower, except that
Borrowers will have no liability to the relevant Agent-Related Person or
Lender-Related Person under this Section 17.13 with respect to any liability
that has been finally determined by a court of competent jurisdiction to have
resulted solely from the bad faith gross negligence or willful misconduct of
such Agent-Related Person or Lender-Related Person, as the case may be.

 

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17.14                     No Novation.  This Agreement does not extinguish the
obligations for the payment of money outstanding under the Original Credit
Agreement, does not discharge the other obligations of the Borrowers under the
Original Credit Agreement, and does not discharge or release the liens granted
to PNC, as agent, which shall continue to secure the “Obligations” under the
Original Credit Agreement as renewed, amended, restated and modified hereby and
under the Guaranty and Security Agreement, or priority of any mortgage, pledge,
security agreement or any other security therefor.  Nothing herein contained
shall be construed as a substitution or novation of the obligations outstanding
under the Original Credit Agreement or instruments securing the same, which
shall remain in full force and effect, except as modified hereby or by
instruments executed concurrently herewith.  Nothing expressed or implied in
this Agreement shall be construed as a release or other discharge of any
Borrower from any of its obligations or liabilities under the Original Credit
Agreement or any of the security agreements, pledge agreements, mortgages,
guaranties or other loan documents executed in connection therewith.  Each
Borrower hereby (a) confirms and agrees that each Original Loan Document to
which it is a party that is not being amended and restated concurrently herewith
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects except that on and after the Closing Date, all
references in any such Original Loan Document to “the Loan Agreement,”
“thereto,” “thereof,” “thereunder” or words of like import referring to the
Original Credit Agreement shall mean the Original Credit Agreement as amended
and restated by this Agreement and the Guaranty and Security Agreement; and (b)
confirms and agrees that to the extent that any such Original Loan Document
purports to assign or pledge to any of the Agent or the Lender Group or the Bank
Product Providers or to grant to any of the Agent or the Lender Group or the
Bank Product Providers a security interest in or lien on, any collateral as
security for the obligations of Borrowers from time to time existing in respect
of the Original Credit Agreement or the Original Loan Document, such pledge or
assignment or grant of the security interest or lien is hereby ratified and
confirmed in all respects with respect to this Agreement and the Loan Documents.

 

17.15                     Intercreditor Legend.  Agent, for itself and on behalf
of the Lender Group and the Bank Product Providers, (a) acknowledges that it has
received a copy of the Intercreditor Agreement, (b) consents to the
subordination of Liens on the Term Loan Primary Collateral as defined, and
provided for, in the Intercreditor Agreement, (c) agrees that it will be bound
by and will take no actions contrary to the provisions of the Intercreditor
Agreement and (d) solely with respect to each member of the Lender Group and
each Bank Product Provider, authorizes and instructs Agent to enter into the
Intercreditor Agreement as agent for and representative of such member of the
Lender Group or such Bank Product Provider, as applicable.  The foregoing
provisions are intended as an inducement to the Term Loan Secured Parties (as
such term is defined in the Intercreditor Agreement) under the Term Loan
Documents (as such term is defined in the Intercreditor Agreement) to continue
to have credit extended to Borrowers and such Term Loan Secured Parties are
intended third party beneficiaries of such provisions.

 

[Signature pages to follow.]

 

102

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

BORROWERS:

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,
a Delaware corporation

 

 

 

 

 

By:

/s/ Thomas L. Manuel

 

 

Name: Thomas L. Manuel

 

 

Title: Chief Executive Officer

 

 

 

 

 

AVENTINE RENEWABLE ENERGY, INC.,
a Delaware corporation

 

 

 

NEBRASKA ENERGY, L.L.C.,
a Kansas limited liability company

 

 

 

By:

/s/ Thomas L. Manuel

 

 

Name: Thomas L. Manuel

 

 

Title: President

 

 

 

 

 

AVENTINE RENEWABLE ENERGY — AURORA WEST, LLC,
a Delaware limited liability company

 

 

 

AVENTINE RENEWABLE ENERGY — MT VERNON, LLC,
a Delaware limited liability company

 

 

 

AVENTINE RENEWABLE ENERGY — CANTON, LLC,
a Delaware limited liability company

 

 

 

AVENTINE POWER, LLC,
a Delaware limited liability company

 

 

 

By:

/s/ Thomas L. Manuel

 

 

Name: Thomas L. Manuel

 

 

Title: President

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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

 

 

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company,
as Agent and as a Lender

 

 

 

 

 

By:

/s/ Samantha Alexander

 

 

Name: Samantha Alexander

 

 

Title: Director

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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

 

EXHIBIT A-1

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered
into as of                     between
                                              (“Assignor”) and
                                                 (“Assignee”).  Reference is
made to the Agreement described in Annex I hereto (the “Credit Agreement”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement.

 

1.             In accordance with the terms and conditions of Section 13 of the
Credit Agreement, Assignor hereby sells and assigns to Assignee, and Assignee
hereby purchases and assumes from Assignor, that interest in and to Assignor’s
rights and obligations under the Loan Documents as of the date hereof with
respect to the Obligations owing to Assignor, and Assignor’s portion of the
Commitments, all to the extent specified on Annex I.

 

2.             Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby; (b)
makes no representation or warranty and assumes no responsibility with respect
to (i) any statements, representations or warranties made in or in connection
with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto, and (d) represents and
warrants that the amount set forth as the Purchase Price on Annex I represents
the amount owed by Borrowers to Assignor with respect to Assignor’s share of the
Revolving Loans assigned hereunder, as reflected on Assignor’s books and
records.

 

3.             Assignee (a) confirms that it has received copies of the Credit
Agreement and the other Loan Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement; (b) agrees that it will, independently and
without reliance upon Agent, Assignor, or any other Lender, based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under the Loan
Documents; (c) confirms that it is eligible as an “Assignee” under the terms of
the Credit Agreement, (d) appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (e) agrees that 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; and (f) attaches the tax forms
and documentation required to be delivered by it pursuant to the terms of the
Credit Agreement.

 

4.             Following the execution of this Assignment Agreement by Assignor
and Assignee, Assignor and Assignee will deliver to Agent and Administrative
Borrower this Assignment Agreement, together with payment instructions,
addresses, and related information with respect to Assignee.  The effective date
of this Assignment (the “Settlement Date”) shall be the latest to occur of (a)
the date of the execution and delivery hereof by Assignor and Assignee, (b) the
receipt by Agent for its sole and separate account a processing fee in the
amount of $3,500 (if required by the Credit Agreement), (c) the receipt of any
required consent of Agent and Administrative Borrower, and (d) the date
specified on Annex I.

 

5.             As of the Settlement Date (a) Assignee shall (i) be a party to
the Credit Agreement and (ii) to the extent that rights and obligations under
the Credit Agreement have been assigned to Assignee pursuant to this Assignment
Agreement, be a “Lender” and have the rights and obligations of a Lender under

 

Exhibit A-1-1

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

 

the Credit Agreement and the other Loan Documents, and (b) Assignor shall, to
the extent that rights and obligations under the Credit Agreement and the other
Loan Documents have been assigned by Assignor pursuant to this Assignment
Agreement, relinquish its rights (except with respect to Section 10.3 of the
Credit Agreement) and be released from any future obligations under the Credit
Agreement and the other Loan Documents (and if this Assignment Agreement covers
all or the remaining portion of Assignor’s rights and obligations under the
Credit Agreement and the other Loan Documents, Assignor shall cease to be a
party to the Credit Agreement and the other Loan Documents), provided, that
nothing contained herein shall release Assignor from obligations that survive
the termination of this Agreement, including Assignor’s obligations under
Section 15 and Section 17.9(a) of the Credit Agreement.

 

6.             Upon the Settlement Date, Assignee shall pay to Assignor the
Purchase Price (as set forth in Annex I).  From and after the Settlement Date,
Agent shall make all payments that are due and payable to the holder of the
interest assigned hereunder (including payments of principal, interest, fees and
other amounts) to Assignor for amounts which have accrued up to but excluding
the Settlement Date and to Assignee for amounts which have accrued from and
after the Settlement Date.  On the Settlement Date, Assignor shall pay to
Assignee an amount equal to the portion of any interest, fee, or any other
charge that was paid to Assignor prior to the Settlement Date on account of the
interest assigned hereunder and that are due and payable to Assignee with
respect thereto, to the extent that such interest, fee or other charge relates
to the period of time from and after the Settlement Date.

 

7.             This Assignment Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.  Delivery of an executed counterpart of this Assignment
Agreement by telefacsimile or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Agreement.

 

8.             THE VALIDITY OF THIS ASSIGNMENT AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS,
CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.

 

[signature page follows]

 

Exhibit A-1-2

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and
Annex I hereto to be executed by their respective officers, as of the first date
written above.

 

 

 

[NAME OF ASSIGNOR],

 

 

as Assignor

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

[NAME OF ASSIGNEE],

 

 

as Assignee

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

[ACCEPTED THIS            DAY OF                         

 

 

 

 

 

WELLS FARGO CAPITAL FINANCE, LLC,

 

 

a Delaware limited liability company,

 

 

as Agent, Swing Lender and Issuing Lender

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

A    Title:](1)

 

 

 

 

 

 

 

 

[ACCEPTED THIS            DAY OF                           

 

 

 

 

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,

 

 

a Delaware corporation, as Administrative Borrower

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:](2)

 

 

 

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

(1)  Include to the extent required by Section 13.1(a) of the Credit Agreement.

(2)  Include to the extent required by Section 13.1(a) of the Credit Agreement.

 

[SIGNATURE PAGE TO ASSIGNMENT AND ACCEPTANCE AGREEMENT]

 

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

 

ANNEX I TO ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

1.

Borrowers: Aventine Renewable Energy Holdings, Inc., a Delaware corporation,
Aventine Renewable Energy, Inc., a Delaware corporation, Aventine Renewable
Energy — Aurora West, LLC, a Delaware limited liability company, Aventine
Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company,
Aventine Renewable Energy — Canton, LLC, a Delaware limited liability company,
Aventine Power, LLC, a Delaware limited liability company, and Nebraska Energy,
L.L.C., a Kansas limited liability company

 

 

2.

Name and Date of Credit Agreement:

 

 

 

Amended and Restated Credit Agreement, dated as of July 20, 2011, by and among
Borrowers, the lenders identified on the signature pages thereof (such lenders,
together with their respective successors and assigns in such capacity, each,
individually, a “Lender” and, collectively, the “Lenders”), Wells Fargo Capital
Finance, LLC, a Delaware limited liability company, as agent for the Lenders

 

 

 

 

3.

Date of Assignment Agreement:

 

                   

 

 

 

 

4.

Amounts:

 

 

 

 

 

 

 

(A)

Assigned Amount of Commitment

 

$                   

 

 

 

 

 

 

b.

Assigned Amount of Revolving Loans

 

$                   

 

 

 

 

5.

Settlement Date:

 

                   

 

 

 

 

6.

Purchase Price

 

$                   

 

 

 

 

7.

Notice and Payment Instructions, etc.

 

 

 

 

 

 

 

Assignee:

Assignor:

 

 

 

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

 

Exhibit B-1

 

Borrowing Base Certificate

 

 

[g255911kg23i001.jpg]

Summary Page Borrowing Base Certificate

Date

 

 

 

 

Name

Aventine Renewable Energy

 

 

 

 

 

A/R As of: 

 

 

 

 

Inventory As of: 

 

 

 

The undersigned, Aventine Renewable Energy Holdings, Inc. (“Parent”), as
Administrative Borrower, pursuant to that certain Credit Agreement dated as of
July   , 2011 (as amended, restated, modified, supplemented, refinanced,
renewed, or extended from time to time, the “Credit Agreement”), entered into
among Parent, each other Borrower, the lenders signatory thereto from time to
time (the “Lenders”) and Wells Fargo Capital Finance, LLC, a Delaware limited
liability company, as agent for the Lenders (in such capacity, together with its
successors and assigns, if any, in such capacity, “Agent”), hereby certifies to
Agent that the following items, calculated in accordance with the terms and
definitions set forth in the Credit Agreement for such items are true and
correct, and that Borrower is in compliance with and, after giving effect to any
currently requested Advances, will be in compliance with, the terms, conditions,
and provisions of the Credit Agreement. Capitalized terms used herein have the
meanings set forth in the Credit Agrement unless specifically defined herein.

 

Accounts Receivable

 

Accounts Receivable Balance per Aging Report Assigned To Wells Fargo Capital
Finance

 

 

 

Less Ineligibles (detailed on page 2)

As of:       

 

 

Net Eligible Accounts Receivable

 

 

 

 

 

 

 

Advance rate

 

85%

 

Accounts Receivable Availability before Sublimit(s)

 

 

 

 

 

 

 

Net Available Accounts Receivable after Sublimit(s)

 

 

 

 

 

 

 

Inventory

 

Inventory Balance Assigned To Wells Fargo Capital Finance

 

 

 

Less Ineligibles (detailed on page 3)

 

 

 

Eligible Inventory

 

 

 

 

 

 

 

Inventory Availability before Sublimit(s)

 

 

 

 

 

 

 

Inventory Sublimit

 

 

 

 

 

 

 

Net Available Inventory after Sublimit(s)

 

 

 

 

 

 

 

Total Availability before Reserves

 

 

 

 

 

 

 

Reserves

 

 

 

 

Less: Rent Reserves

 

 

 

 

Less: Railcar Lease Reserve

 

 

 

 

Less: I/T Freight Rail Reserve

 

 

 

 

Less: Tax Reserves

 

 

 

 

Less: Past Due A/P (6/30/11)

 

 

 

 

Less: Closing Cost / Expenses

 

 

 

 

Less: PNC Payout

 

 

 

Total Reserves

 

 

 

 

 

 

 

Total Availability after Reserves before Loan Balance and LCs

 

 

 

 

 

 

 

Total Credit Line

                      

Suppressed Availability

 

 

 

 

 

 

Availability before Loan Balance

 

 

 

 

 

 

 

Letter of Credit Balance

As of:          

 

 

 

 

 

 

Loan Ledger Balance

As of:           

 

 

 

 

 

 

Cash in-transit

 

 

Co will show cash balance as of end of day 7/18.

Adjusted Loan Balance

 

 

 

 

 

 

 

Net Availability

 

 

 

 

Additionally, the undersigned hereby certifies and represents and warrants to
the Lender Group on behalf of Borrower that (i) as of the date hereof, each
representation or warranty contained in or pursuant to any Loan Document, any
agreement, instrument, certificate, document or other writing furnished at any
time under or in connection with any Loan Document, and as of the effective date
of any advance, continuation or conversion requested above is true and correct
in all material respects (except to the extent any representation or warranty
expressly related to an earlier date), (ii) each of the covenants and agreements
contained in any Loan Document have been performed (to the extent required to be
performed on or before the date hereof or each such effective date), (iii) no
Default or Event of Default has occurred and is continuing on the date hereof,
nor will any thereof occur after giving effect to the request above, and (iv)
all of the foregoing is true and correct as of the effective date of the
calculations set forth above and that such calculations have been made in
accordance with the requirements of the Credit Agreement.

 

Aventine Renewable Energy Holdings, Inc., as Adminstrative Borrower

 

 

 

 

List of attachments with this Borrowing Base Certificate:

 

 

Page 2 - Accounts Receivable Availability Detail

 

 

Page 2b - Accounts Receivable Concentrations

Name:

 

Page 2c - Accounts Receivable Dilution

Title:

 

Page 3 - Inventory Availability Detail

 

 

Page 3a - Inventory Availability Detail

 

 

Page 3b - Inventory Availability Summary

 

Exhibit B-1-1

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

 

EXHIBIT C-1

 

FORM OF COMPLIANCE CERTIFICATE

 

[on Borrowers’ letterhead]

 

To:

Wells Fargo Capital Finance, LLC, as Agent

 

under the below referenced Credit Agreement

 

2450 Colorado Avenue

 

Suite 3000 West

 

Santa Monica, California 90404

 

Attn: Business Finance Division Manager

 

Fax No.: (310) 453-7413

 

 

Re:

Compliance Certificate dated                              , 20

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Amended and Restated Credit Agreement,
dated as of July 20, 2011 (the “Credit Agreement”), by and among Aventine
Renewable Energy Holdings, Inc., a Delaware corporation (“Parent”), Aventine
Renewable Energy, Inc., a Delaware corporation (“AREI”), Aventine Renewable
Energy — Aurora West, LLC, a Delaware limited liability company (“ARE-AW”),
Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company
(“ARE-MT”), Aventine Renewable Energy — Canton, LLC, a Delaware limited
liability company (“ARE-C”), Aventine Power, LLC, a Delaware limited liability
company (“Power”), and Nebraska Energy, L.L.C., a Kansas limited liability
company (“Nebraska”; together with Parent, AREI, ARE-AW, ARE-MT, ARE-C and
Power, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders identified on the signature pages thereof (such lenders, together with
their respective successors and assigns in such capacity, each, individually, a
“Lender” and, collectively, the “Lenders”), and Wells Fargo Capital Finance,
LLC, a Delaware limited liability company, as agent for the Lenders (“Agent”). 
All initially capitalized terms used in this Compliance Certificate have the
meanings set forth in the Credit Agreement unless specifically defined herein.

 

Pursuant to Schedule 5.1 of the Credit Agreement, the undersigned officer of
Parent hereby certifies that:

 

1.                                       The financial information of Parent and
its Subsidiaries furnished in Schedule 1 [attached hereto] [by filing such
financial information with the Securities and Exchange Commission on
                    , 20    ], has been prepared in accordance with GAAP (except
for year-end adjustments and the lack of footnotes), and fairly presents in all
material respects the financial condition of Parent and its Subsidiaries.

 

2.                                       Such officer has reviewed the terms of
the Credit Agreement and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the transactions and conditions of
Parent and its Subsidiaries during the accounting period covered by the
financial statements delivered pursuant to Schedule 5.1 of the Credit Agreement.

 

3.                                       Such review has not disclosed the
existence on and as of the date hereof, and the undersigned does not have
knowledge of the existence as of the date hereof, of any event or condition that

 

Exhibit C-1-1

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

 

constitutes a Default or Event of Default, except for such conditions or events
listed on Schedule 2 attached hereto, specifying the nature and period of
existence thereof and what action Parent and its Subsidiaries have taken, are
taking, or propose to take with respect thereto.

 

4.                                       The representations and warranties of
Parent and its Subsidiaries set forth in the Credit Agreement and the other Loan
Documents are true, correct and complete in all material respects (except that
such materiality qualifier is not applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the date hereof (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
such representations and warranties are true, correct and complete in all
material respects (except that such materiality qualifier is not applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date), except as set forth
on Schedule 3 attached hereto.

 

5.                                       Borrowers are in compliance with the
covenant contained in Section 7 of the Credit Agreement as demonstrated on
Schedule 4 hereof.

 

6.                                   Thse following Form 8-Ks were filed over
the last period:                             

 

7.                                       The following filings, other than Form
8-Ks, were made with the SEC over the last period:                             

 

Exhibit C-1-2

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

 

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this            day of                               , 20      .

 

 

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,

 

a Delaware corporation, as Administrative Borrower

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

 

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

 

SCHEDULE 1

 

Financial Information

 

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

 

SCHEDULE 2

 

Default or Event of Default

 

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

 

SCHEDULE 3

 

Representations and Warranties

 

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

 

SCHEDULE 4

 

Financial Covenant

 

1.                                       Minimum Liquidity.

 

Borrowers’ Excess Availability is $                             and Qualified
Cash is $                            , as of                   ,
                , which amounts [are/are not] greater than or equal to the
amounts required by Section 7.1 of the Credit Agreement for the corresponding
period.

 

[2.                                   Ethanol Production at Pekin Plant.

 

For the trailing twelve month period ending                   ,
                , the Pekin Plant produced                    gallons of
ethanol, which amount [is/is not] greater than or equal to the amount set forth
in Section 7.2 of the Credit.](1)

 

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

(1)  Include to the extent required pursuant to Section 7.2 of the Credit
Agreement.

 

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

 

EXHIBIT L-1

 

FORM OF LIBOR NOTICE

 

Wells Fargo Capital Finance, LLC, as Agent
under the below referenced Credit Agreement
2450 Colorado Avenue

Suite 3000 West

Santa Monica, California  90404

Attn:  Business Finance Division Manager

Fax No.:  (310) 453-7413

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Amended and Restated Credit Agreement,
dated as of July 20, 2011 (the “Credit Agreement”), by and among Aventine
Renewable Energy Holdings, Inc., a Delaware corporation (“Parent”), Aventine
Renewable Energy, Inc., a Delaware corporation (“AREI”), Aventine Renewable
Energy — Aurora West, LLC, a Delaware limited liability company (“ARE-AW”),
Aventine Renewable Energy — Mt Vernon, LLC, a Delaware limited liability company
(“ARE-MT”), Aventine Renewable Energy — Canton, LLC, a Delaware limited
liability company (“ARE-C”), Aventine Power, LLC, a Delaware limited liability
company (“Power”), and Nebraska Energy, L.L.C., a Kansas limited liability
company (“Nebraska”; together with Parent, AREI, ARE-AW, ARE-MT, ARE-C and
Power, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as “Borrowers”), the
lenders identified on the signature pages thereof (such lenders, together with
their respective successors and assigns in such capacity, each, individually, a
“Lender” and, collectively, the “Lenders”), and Wells Fargo Capital Finance,
LLC, a Delaware limited liability company, as agent for the Lenders (“Agent”). 
All initially capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with
respect to outstanding Revolving Loans in the amount of $                 (the
“LIBOR Rate Loan”), and is a written confirmation of the telephonic notice of
such election given to Agent.

 

The LIBOR Rate Loan will have an Interest Period of 1, 2, or 3 month(s)
commencing on                                                         .

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of
determining the rate of interest based on the LIBOR Rate under the Credit
Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Each Borrower represents and warrants that (i) each representation and warranty
contained in or pursuant to any Loan Document or any agreement, instrument,
certificate, document or other writing furnished at any time under or in
connection with any Loan Document is true, correct and complete in all material
respects (except that such materiality qualifier shall not be applicable to any
representation or warranty that already is qualified or modified by materiality
in the text thereof) as of the date hereof and as of the effective date of any
Revolving Loan, continuation or conversion requested above (except to the extent
any representation or warranty expressly related to an earlier date, in which
case such representation or warranty shall be true, correct and complete in all
material respects (except that such materiality qualifier shall not be
applicable to any representation or warranty that already is qualified or
modified by materiality in the text thereof) as of such earlier date), (ii) each
of the covenants and agreements contained in any Loan Document have been
performed (to the extent required to be performed on or before the date hereof
or each such effective date), and (iii) no Default or Event of Default has
occurred and is continuing on the date hereof, nor will any thereof occur after
giving effect to the request above.

 

Exhibit L-1-1

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

 

[signature page follows]

 

Exhibit L-1-2

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

 

 

Dated:

 

 

 

 

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.,

 

a Delaware corporation, as Administrative Borrower

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Acknowledged by:

 

 

 

WELLS FARGO CAPITAL FINANCE, LLC,

 

a Delaware limited liability company, as Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO LIBOR NOTICE]

 

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

 

Schedule A-1

 

Agent’s Account

 

An account at a bank designated by Agent from time to time as the account into
which Borrowers shall make all payments to Agent for the benefit of the Lender
Group and into which the Lender Group shall make all payments to Agent under
this Agreement and the other Loan Documents; unless and until Agent notifies
Administrative Borrower and the Lender Group to the contrary, Agent’s Account
shall be that certain deposit account bearing account number 4124923707 with the
account name “Wells Fargo Capital Finance, LLC” that is maintained by Agent with
Wells Fargo Bank, N.A., 420 Montgomery Street, San Francisco, CA, ABA
#121-000-248.

 

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

 

Schedule A-2

 

Authorized Persons

 

Loan Party

 

Name of Officer

 

Title/Position of Officer

Parent

 

Thomas L. Manuel

 

Chief Executive Officer, Chief Operating Officer

Parent

 

John W. Castle

 

Chief Financial Officer and Secretary

Parent

 

Calvin Stewart

 

Chief Accounting and Compliance Officer

Parent

 

Benjamin J. Borgen

 

Senior Vice President, Commodity Risk Management

AREI

 

Thomas L. Manuel

 

President

AREI

 

John W. Castle

 

Vice President of Finance and Secretary

AREI

 

Calvin Stewart

 

Treasurer

ARE-AW, ARE-MT, Power, ARE-C

 

Thomas L. Manuel

 

President

ARE-AW, ARE-MT, Power, ARE-C

 

John W. Castle

 

Vice President and Secretary

ARE-AW, ARE-MT, Power, ARE-C

 

Calvin Stewart

 

Treasurer

Nebraska

 

Thomas L. Manuel

 

President and General Manager of Operations

Nebraska

 

John W. Castle

 

Vice President of Finance and Secretary

Nebraska

 

Calvin Stewart

 

Senior Vice President, Assistant Secretary and Treasurer

 

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

 

Schedule C-1

 

Commitments

 

Lender

 

Commitment

 

Total Commitment

 

Wells Fargo Capital Finance, LLC

 

$

50,000,000

 

$

50,000,000

 

All Lenders

 

$

50,000,000

 

$

50,000,000

 

 

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

 

Schedule D-1

 

Designated Account

 

Account number 4613273683 of Administrative Borrower or AREI maintained with
Administrative Borrower’s or AREI’s, as applicable, Designated Account Bank, or
such other deposit account of Administrative Borrower or AREI (located within
the United States) that has been designed as such, in writing, by Administrative
Borrower to Agent.

 

“Designated Account Bank” means PNC Bank, National Association, whose office is
located at 555 Cranbury Road, East Brunswick, NJ  08816-4026 and whose ABA
number is 031207607.

 

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

 

Schedule E-1

 

Eligible Inventory Locations

 

Address of Location Where Equipment, Inventory or Other
Tangible Personal Property is Maintained or Kept
(Property owner name, if different)

 

Description of Assets at Such Location

 

 

 

Kinder Morgan Liquid Terminals, L.L.C.

8500 West 68th Street

Argo, IL 60501

 

Inventory

 

 

 

Parke Warehouse

1800 E Garfield Avenue

Decatur, IL 62525

(Parke and Son, Inc.)

 

Inventory

 

 

 

Bell Enterprises

30082 Harding Road

Deer Creek, IL 61733

 

Inventory

 

 

 

J & L Dock facilities

Foot of Sanger St.

Peoria, IL 61602

 

Inventory

 

 

 

Peoria Barge Terminal

Foot of Sanger St.

Peoria, IL 61602

(Finch Family Land Trust)

 

Inventory

 

 

 

AREI

1300 S. Second Street

Pekin, IL 61554

 

Manufacturing Equipment, Inventory

 

 

 

Nebraska

1205 S. “O” Road

Aurora, NE 68818

 

Manufacturing Equipment, Inventory

 

 

 

ARE-AW

2103 Harvest Drive

Aurora, Nebraska 68818

 

Manufacturing Equipment, Inventory

 

 

 

ARE-C

23133 E County Hwy 6

Canton, IL 61520

 

Manufacturing Equipment, Inventory

 

 

 

ARE-MT

7201 Port Road

Mt. Vernon, IN 47620

 

Manufacturing Equipment, Inventory

 

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

 

Schedule E-2

 

Existing Letters of Credit

 

Applicant

 

Issuer

 

Beneficiary

 

Amount

 

Effective Date

 

Expiration Date

ARE-AW

 

PNC Bank, National Association

 

Kinder Morgan Interstate Gas Transmission LLC

 

$

4,978,000.00

 

7/21/2010

 

7/21/2011 (renewed through 7/21/12)

 

 

 

 

 

 

 

 

 

 

 

ARE-AW

 

PNC Bank, National Association

 

Southern Public Power District

 

$

500,000.00

 

8/19/2010

 

8/18/2011 (renewed through 8/19/12)

 

 

 

 

 

 

 

 

 

 

 

ARE-MT

 

PNC Bank, National Association

 

Southern Indiana Gas & Electric

 

$

5,608,488.00

 

10/1/2010

 

10/1/2011

 

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

 

Schedule P-1

 

Permitted Investments

 

Holder

 

Issuer

 

Ownership Interest /
Number of Shares or
Interests Owned

 

Class/Type of Interest

 

Certificate
No.

AREI

 

Advanced Bio-Energy LLC

 

131,579

 

Membership Interest

 

852

Parent

 

Imperial Petroleum, Inc.

 

425,000

 

Common Stock

 

7206

AREI

 

Northeast Iowa Ethanol*

 

7.9%

 

Membership Interest

 

Uncertificated

AREI

 

TriStates Ethanol Company LLC*

 

15.1%

 

Membership Interest

 

Uncertificated

AREI

 

Fluid Technologies n/k/a Micap Plc*

 

1.9%

 

Membership Interest

 

254 and 407

 

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

*These investments are unlikely to be recoverable and have been written down to
$0 on Aventine’s general ledger and financial records.

 

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

 

Schedule P-2

 

Permitted Liens

 

Name of Debtor

 

Name of Current
Secured Party

 

Jurisdiction

 

Filing Date

 

File Number

 

Type of Lien

Aventine Renewable Energy Holdings, Inc.

 

Bank of the West, Trinity Division

 

Delaware

 

08/13/2007

 

2007 3064044

 

UCC-1 securing leased furniture equipment, plus all replacement parts,
substitutions, and proceeds of the foregoing

Aventine Renewable Energy Holdings, Inc.

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

03/15/2010

 

2010 0883375

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Aventine Renewable Energy Holdings, Inc. (Assignee)

 

U.S. Water Services, Inc.

 

Fulton County, IL

 

08/19/2010

 

203906

 

UCC-3 Assignment of a UCC-1 securing leased equipment

Aventine Renewable Energy, Inc. (with Aventine Renewable Energy Holdings, Inc.
listed as an additional debtor)

 

Bank of the West, Trinity Division

 

Delaware

 

08/17/2007

 

2007 3141461

 

UCC-1 securing leased furniture equipment, plus all replacement parts,
substitutions, and proceeds of the foregoing

Aventine Renewable Energy, Inc. (with Aventine Renewable Energy Holdings, Inc.
listed as an additional debtor)

 

Bank of the West, Trinity Division

 

Delaware

 

01/31/2008

 

2008 0462463

 

UCC-3 partial assignment of furniture

Aventine Renewable Energy, Inc. (with Aventine Renewable Energy Holdings, Inc.
listed as an additional debtor)

 

First American Commercial Bancorp, Inc.

 

Delaware

 

08/17/2007

 

2007 3141719

 

UCC-1 securing all equipment owned or leased under that certain lease no.
2007238 between First American Commercial Bancorp, Inc. and Aventine Renewable
Energy, Inc. plus all replacement parts, substitutions, and proceeds of the
foregoing

Aventine Renewable Energy, Inc. (with Aventine Renewable Energy Holdings, Inc.
listed as an additional debtor)

 

MB Financial Bank, N.A.

 

Delaware

 

01/24/2008

 

2008 0346211

 

UCC-3 partial assignment of furniture, audio/visual, paging/intercom and
computer equipment

 

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

 

Aventine Renewable Energy, Inc.

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

03/15/2010

 

2010 0883417

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Aventine Renewable Energy, Inc.

 

Agri-Energy, LLC

 

Tazewell County, IL

 

—

 

—

 

Aventine Renewable Energy, Inc. is Plaintiff and Counter Defendant to a lawsuit

Aventine Renewable Energy — Aurora West, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

03/15/2010

 

2010 0883243

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Aventine Renewable Energy — Mt Vernon, LLC

 

Indiana Port Commission

 

Delaware

 

11/16/2006

 

64011169

 

UCC-1 securing inventory, equipment and fixtures located on land in Posey
County, IN

Aventine Renewable Energy — Mt Vernon, LLC

 

Indiana Port Commission

 

Posey County, IN

 

11/22/2006

 

2006071

 

UCC-1 securing inventory, equipment, fixtures

Aventine Renewable Energy — Mt Vernon, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

03/15/2010

 

2010 0883276

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Nebraska Energy, L.L.C.

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Kansas

 

03/16/2010

 

6680268

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Aventine Power, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

03/15/2010

 

2010 08833110

 

UCC-1 securing goods, accounts, etc. under the Existing Revolving Facility

Aventine Renewable Energy Holdings, Inc

 

Spoon River Electric Cooperative

 

Fulton County, IL

 

09/06/2006

 

Mortgage made by Central Illinois Energy Cooperative to Spoon River Electric
Cooperative dated September 6, 2006, recorded September 7, 2006, as Document
0607109, as affected by Assignment and Assumption of Mortgage dated August 6,
2010, recorded August 19, 2010, as Document 1035196, from New CIE Energy Opco,
LLC, to Aventine Renewable Energy Holdings, Inc. (the “Spoon River Mortgage”)

Aventine Renewable Energy Holdings, Inc.

 

Aurora Cooperative Elevator Company

 

Hamilton County, NE

 

08/06/2007

 

Memorandum of Real Estate Option by and between Aventine Renewable Energy
Holdings, Inc. and Aurora Cooperative Elevator Company dated July 24, 2007,
recorded August 6, 2007, as Book 46, Page 235, as affected by the Memorandum of

 

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

 

 

 

 

 

 

 

 

 

Amended Real Estate Option dated March 15, 2010, recorded April 1, 2010, as Book
48, Page 77, by and between Aventine Renewable Energy Holdings, Inc. and Aurora
Cooperative Elevator Company

Aventine Renewable Energy, Inc.

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4551176

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Aventine Renewable Energy Holdings, Inc.

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4551317

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Aventine Renewable Energy — Aurora West, LLC

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4551036

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Aventine Renewable Energy — Mt Vernon, LLC

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4551101

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Aventine Power, LLC

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4550954

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Nebraska Energy, L.L.C.

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

6757504

 

UCC-1 securing all of Debtor’s assets, whether now owned or hereafter acquired

Aventine Renewable Energy — Canton, LLC

 

Citibank, N.A., as Collateral Agent

 

Delaware

 

12/22/2010

 

2010 4551358

 

UCC-1 securing all of debtor’s assets, whether now owned or hereafter acquired

Aventine Renewable Energy — Canton, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Delaware

 

12/23/2010

 

2010 4582510

 

UCC-1 securing all of Debtor’s assets, including accounts, inventory, etc.

Aventine Renewable Energy, Inc.

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Tazewell County, Illinois

 

04/18/2011

 

201100006947

 

Mortgage recorded to secure repayment indebtedness of $30,000,000 to PNC Bank,
National Association, as Agent (assigned to Wells Fargo Capital Finance, LLC, as
Agent)

Aventine Renewable Energy, Inc.

 

Citibank, N.A. as Agent

 

Tazewell County, Illinois

 

03/29/2011

 

201100005692

 

Mortgage recorded to secure repayment indebtedness of $225,000,000 to Citibank,
N.A., as Agent

Nebraska Energy, L.L.C.

 

Chicago Title Insurance Company, as Trustee, for the benefit of PNC Bank,
National Association, as Agent (assigned to Wells Fargo Capital Finance,

 

Hamilton County, Nebraska

 

03/29/2011

 

Page 267, Page 82

 

Deed of Trust recorded to secure repayment indebtedness of $30,000,000 to PNC
Bank, National Association, as Agent (assigned to Wells Fargo Capital Finance,
LLC, as Agent)

 

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

 

 

 

LLC, as Agent)

 

 

 

 

 

 

 

 

Nebraska Energy, L.L.C.

 

Chicago Title Insurance Company, as Trustee, for the benefit of Citibank, N.A.,
as Agent

 

Hamilton County, Nebraska

 

03/29/2011

 

Page 267, Page 81

 

Deed of Trust recorded to secure repayment indebtedness of $225,000,000 to
Citibank, N.A., as Agent

Aventine Renewable Energy — Aurora West, LLC

 

Chicago Title Insurance Company, as Trustee, for the benefit of PNC Bank,
National Association, as Agent (assigned to Wells Fargo Capital Finance, LLC, as
Agent)

 

Hamilton County, Nebraska

 

03/29/2011

 

Book 267, Page 80

 

Deed of Trust recorded to secure repayment indebtedness of $30,000,000 to PNC
Bank, National Association, as Agent (assigned to Wells Fargo Capital Finance,
LLC, as Agent)

Aventine Renewable Energy — Aurora West, LLC

 

Chicago Title Insurance Company, as Trustee, for the benefit of Citibank, N.A.,
as Agent

 

Hamilton County, Nebraska

 

03/29/2011

 

Book 267, Page 79

 

Deed of Trust recorded to secure repayment indebtedness of $225,000,000 to
Citibank, N.A., as Agent

Aventine Renewable Energy — Mt Vernon, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Posey County, Indiana

 

04/14/2011

 

201101532

 

Deed of Trust recorded to secure repayment indebtedness of $30,000,000 to PNC
Bank, National Association, as Agent (assigned to Wells Fargo Capital Finance,
LLC, as Agent)

Aventine Renewable Energy — Mt Vernon, LLC

 

Citibank, N.A., as Agent

 

Posey County, Indiana

 

03/25/11

 

201101239

 

Mortgage recorded to secure repayment indebtedness of $225,000,000 to Citibank,
N.A., as Agent

Aventine Renewable Energy — Canton, LLC

 

PNC Bank, National Association, as Agent (assigned to Wells Fargo Capital
Finance, LLC, as Agent)

 

Fulton County, Illinois

 

04/01/2011

 

1139256

 

Mortgage recorded to secure repayment indebtedness of $30,000,000 to PNC Bank,
National Association, as Agent (assigned to Wells Fargo Capital Finance, LLC, as
Agent)

Aventine Renewable Energy — Canton, LLC

 

Citibank, N.A., as Agent

 

Fulton County, Illinois

 

04/01/2011

 

1139255

 

Mortgage recorded to secure repayment indebtedness of $225,000,000 to Citibank,
N.A., as Agent

Aventine Renewable Energy — Canton, LLC

 

N/A

 

Fulton County, IL

 

10/01/2009

 

Document 0929775

 

Development Agreement by and between the County of Fulton, Illinois and
Riverland Biofuels, LLC.

Aventine Renewable Energy, Inc.

 

N/A

 

Tazewell County, IL

 

05/06/1968

 

Vol. 792, Pg. 455

 

Mineral rights reserved by Peoria Terminal Company in Warranty Deed to Corn
Products Company dated April 26, 1968.

Aventine Renewable Energy — Mt Vernon, LLC

 

N/A

 

Posey County, IL

 

12/08/1942

 

Deed Record 56, Pg. 343

 

Mineral reservation contained in Warranty Deed from Alonzo Allyn and Olive B.
Allyn, his wife, to

 

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

 

 

 

 

 

 

 

 

 

 

 

Casper Graulich and Julia Graulich, husband and wife, dated November 19, 1942.

Aventine Renewable Energy — Aurora West, LLC; Aventine Renewable Energy — Mt
Vernon, LLC

 

PNC Bank, National Association

 

Cash collateral in an amount equal to $11,640,812.40 to secure the Existing
Letters of Credit referenced on Schedule E-2 in that certain General Ledger
account of PNC Bank.

 

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

 

Schedule R-1

 

Real Property Collateral

 

Owned Real Property

 

Loan Party as Owner

 

Property

 

County

AREI

 

1300 S. Second Street
Pekin, Illinois 61554

 

Tazewell

Nebraska

 

1205 S. “O” Road
Aurora, Nebraska 68818

 

Hamilton

ARE-AW

 

2103 Harvest Drive
Aurora, Nebraska 68818

 

Hamilton

ARE-C

 

23133 E County Hwy 6
Canton, IL 61520

 

Fulton

 

Leased Real Property

 

Loan Party as Lessee

 

Loan Party as
Lessee

 

Lessor/Sublessor

 

Property Address

 

County

AREI

 

DTHC Properties Land Trust

 

120 N. Parkway Drive
Pekin, Illinois 61554

 

Tazewell

AREI

 

Hall Phoenix/Inwood, LTD. as Sublessor

 

One Lincoln Centre, 5400
LBJ Freeway, Suite 450
Dallas, Texas 75240

 

Dallas

ARE-MT

 

Ports of Indiana

 

7201 Port Road
Mt. Vernon, Indiana 47620

 

Posey

 

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

 

Loan Party as Lessor

 

Loan Party as
Lessor

 

Lessee

 

Property Address

 

County

AREI

 

Continental Carbonic Products, Inc., an Illinois corporation
3985 East Harrison Avenue
Decatur, IL 62526

 

1300 S. Second Street
Pekin, Illinois 61554

 

Tazewell

AREI

 

Linde, Inc., a Delaware corporation
575 Mountain Avenue
Murray Hill, New Jersey 07974

 

1300 S. Second Street
Pekin, Illinois 61554

 

Tazewell

AREI

 

Turner Grain Services, Inc., an Illinois corporation
P.O. Box 411
Pekin, IL 61555-0411

 

1300 S. Second Street
Pekin, Illinois 61554

 

Tazewell

 

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

 

Schedule 1.1(a)

 

Specified Account Debtors

1.               Motiva Enterprises, L.L.C.

 

2.               Cargill Incorporated

 

3.               Marathon Petroleum Corp.

 

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

 

Schedule 3.1

 

Conditions Precedent

 

The obligation of each Lender to make its initial extension of credit provided
for in the Agreement is subject to the fulfillment, to the satisfaction of each
Lender (the making of such initial extension of credit by any Lender being
conclusively deemed to be its satisfaction or waiver of the following), of each
of the following conditions precedent:

 

(a)                                  the Closing Date shall occur on or before
July 20, 2011;

 

(b)                                 Agent shall have received a letter duly
executed by each Borrower authorizing Agent to file appropriate financing
statements in such office or offices as may be necessary or, in the opinion of
Agent, desirable to perfect the security interests to be created by the Loan
Documents;

 

(c)                                  Agent shall have received evidence that
appropriate financing statements have been duly filed in such office or offices
as may be necessary or, in the opinion of Agent, desirable to perfect the
Agent’s Liens in and to the Collateral;

 

(d)                                 Agent shall have received each of the
following documents, in form and substance satisfactory to Agent, duly executed,
and each such document shall be in full force and effect:

 

(i)                                     the Deposit Account Control Agreements
with respect to those Deposit Accounts of AREI and Nebraska, as applicable, held
at PNC Bank, National Association bearing the account numbers: (i) 4613273907,
(ii) 4613273712, (iii) 1028065601, (iv) 4613273683 and (v) 8026268503;

 

(ii)                                  the Guaranty and Security Agreement,

 

(iii)                               the Disbursement Letter,

 

(iv)                              the Fee Letter,

 

(v)                                 the Intercompany Subordination Agreement,

 

(vi)                              the PNC Mortgage Assignments,

 

(vii)                           the Mortgages,

 

(viii)                        the Assignment Agreement,

 

(ix)                                the Estoppel Agreement

 

(x)                                   the Resignation and Appointment Agreement,

 

(xi)                                the Assignment of Patent and Trademark
Security Agreement,

 

(xii)                             the Intercreditor Agreement,

 

(xiii)                          an amendment to the Term Loan Credit Agreement,

 

(xiv)                         a Borrowing Base Certificate dated as of the
Closing Date,

 

(xv)                            the Financial Condition Certificate,

 

(xvi)                         the Perfection Certificate,

 

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

 

(xvii)                      the Trademark Security Agreement, and

 

(xviii)                   the Patent Security Agreement;

 

(e)                                  Agent shall have received a certificate
from an authorized officer of each Borrower (i) attesting to the resolutions of
such Borrower’s Board of Directors authorizing its execution, delivery, and
performance of this Agreement and the other Loan Documents to which such
Borrower is a party, (ii) authorizing specific officers of such Borrower to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of such Borrower;

 

(f)                                    Agent shall have received copies of each
Borrower’s Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by an authorized officer of such Borrower;

 

(g)                                 Agent shall have received a certificate of
status with respect to each Borrower, dated within 10 days of the Closing Date,
such certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;

 

(h)                                 Agent shall have received (i) certificates
of status with respect to each Borrower, each dated within 30 days of the
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions (other than the jurisdiction of organization of such Borrower) in
which its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Borrower is in good
standing in such jurisdictions, or (ii) to the extent that any Borrower is
unable to obtain such certificates of status, evidence that such Borrower is in
good standing in the applicable jurisdictions, the form and substance of which
shall be satisfactory to Agent, which evidence shall include a certificate of an
authorized officer of Parent certifying that such Borrower is in good standing
in such jurisdictions;

 

(i)                                     Agent shall have received certificates
of insurance, as are required by Section 5.6, the form and substance of which
shall be satisfactory to Agent;

 

(j)                                     Agent shall have received an executed
amendment to the limited liability company agreement of each of ARE-AW, ARE-MT,
ARE-C, Power, and Nebraska, each in form and substance satisfactory to Agent and
duly authorized and approved in accordance with such entity’s Governing
Documents and with applicable law;

 

(k)                                  Agents shall have received an opinion of
(i) Borrowers’ California counsel, (ii) New York counsel, (iii) Kansas counsel,
[(iv) Illinois counsel, (v) Indiana counsel, and (vi) Nebraska counsel, in each
case, in form and substance reasonably satisfactory to Agents;]

 

(l)                                     Borrowers shall have the Required
Availability after giving effect to the initial extensions of credit hereunder
and the payment of all fees and expenses (including Lender Group Expenses)
required to be paid by Borrowers on the Closing Date under this Agreement or the
other Loan Documents;

 

(m)                               Agent shall have completed its business,
legal, and collateral due diligence, including (i) a collateral audit and review
of each Borrower’s and its Subsidiaries’ books and records and verification of
such Borrower’s representations and warranties to Lender Group, the results of
which shall be satisfactory to Agent, and (ii) an inspection of each of the
locations where each Borrower’s and its Subsidiaries’ Inventory is located, the
results of which shall be satisfactory to Agent;

 

(n)                                 Agent shall have completed (i) Patriot Act
searches, OFAC/PEP searches and customary individual background checks for each
Borrower, and (ii) OFAC/PEP searches and customary individual background
searches for each Borrower’s senior management and key principals, in each case,
the results of which shall be satisfactory to Agent;

 

(o)                                 Agent shall have received an appraisal of
the Net Recovery Percentage applicable to each Borrower’s and its Subsidiaries’
Inventory, the results of which shall be satisfactory to Agent;

 

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

 

(p)                                 Agent shall have received a set of
Projections of Parent and its Subsidiaries for the 3 year period following the
Closing Date (on a year by year basis, and for the 1 year period following the
Closing Date, on a month by month basis), in form and substance (including as to
scope and underlying assumptions) satisfactory to Agent;

 

(q)                                 Borrowers shall have paid all Lender Group
Expenses incurred in connection with the transactions evidenced by this
Agreement;

 

(r)                                    Agent shall have received copies of each
of the Term Loan Documents (including any amendments thereto), which shall be in
form and substance satisfactory to Agent;

 

(s)                                  Parent and each of its Subsidiaries shall
have received all licenses, approvals or evidence of other actions required by
any Governmental Authority in connection with the execution and delivery by
Parent or its Subsidiaries of the Loan Documents or with the consummation of the
transactions contemplated thereby;

 

(t)                                    Agent shall have received evidence of
flood insurance acceptable to Agent for the real property owned by AREI located
at 1300 South Second Street, Pekin, Illinois 61554;

 

(u)                                 Agent shall have received a certificate
executed by an authorized officer of each Borrower certifying to, among other
things, (i) the Required Availability required pursuant to clause (m) above,
(ii) the truthfulness and correctness of the documents provided pursuant to
clause (t) above, (iii) the receipt of the items set forth in clause (u) above,
(iv) the truthfulness and correctness of the representations and warranties set
forth in Section 3.2(a) of the Agreement, (v) no Defaults or Events of Default
existing as required by Section 3.2(b) of the Agreement, and (vi) the
satisfaction of all conditions precedent set forth in this Schedule 3.1 and in
Section 3.2 of the Agreement;

 

(v)                                 all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Agent; and

 

(w)                               WFCF shall have received credit committee
approval for its Commitment.

 

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

 

Schedule 3.6

 

Conditions Subsequent

 

(a)                                  Within ten (10) Business Days after the
Closing Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received endorsements to the insurance policies of
the Loan Parties as Agent may reasonably request, in form and substance
satisfactory to Agent;

 

(b)                                 Within fourteen (14) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received endorsements to PNC’s existing policies
of title insurance with respect to the Real Property Collateral, each of which
endorsements shall (i) modify the name of the insured mortgage thereunder to
reflect the recording of the Mortgage Assignment and Mortgage applicable
thereto, (ii) modify the name of the insured party thereunder to Agent, pursuant
to the Mortgage Assignment and Mortgage applicable thereto, (iii) insured Agent
that the Mortgages on such Real Property Collateral are valid and enforceable
first priority mortgage Liens (subject only to the Liens granted under the Term
Loan Documents that are expressly set forth as first priority Liens in the
Intercreditor Agreement), (iv) modify the date thereof to the date of recording
of the Mortgage applicable thereto, and (v) otherwise be in form and substance
as required by Agent;

 

(c)                                  Within twenty (20) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received evidence that those Securities Accounts
of AREI held at Jefferies Bache, LLC bearing the account numbers (i) BTB-950791,
(ii) BTB-950791 and (iii) BTB-952751, have been closed;

 

(d)                                 Within thirty (30) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received a duly executed and delivered
countersignature of the Indiana Port Lessor to the letter from Agent to Indiana
Port Lessor with respect to the ARE-MT Mortgage Assignment and the Mortgage on
the Indiana Port Leased Premises, which letter shall notify the Indiana Port
Lessor of the execution of the ARE-MT Mortgage Assignment and the amended and
restated Mortgage with respect to the Indiana Port Leased Premises, and which
countersignature of the Indiana Port Lessor shall evidence the Indiana Port
Lessor’s acknowledgment of Agent as a “Mortgagee” under and as defined in the
Indiana Port Lease Agreement;

 

(e)                                  Within thirty (30) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received a duly executed and delivered original
counterpart of the Port of Indiana Estoppel Letter executed by Indiana Port
Lessor;

 

(f)                                    Within thirty (30) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received searches reflecting that all of the
appropriate financing statements have been duly filed in such office or offices
as may be necessary or, in the opinion of Agent, desirable to perfect the
Agent’s Liens in and to the Collateral;

 

(g)                                 Within thirty (30) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), to the extent that the pledge thereof would not raise margin stock
issues, the Borrowers shall pledge the Stock of Advanced BioEnergy, LLC and the
Stock of Imperial Petroleum, Inc. to Agent;

 

(h)                                 Within ninety (90) days after the Closing
Date (or such later date as agreed to by Agent in writing in its sole
discretion), Agent shall have received evidence that the letters of credit
described on Schedule E-2 have either (i) been assigned to Wells Fargo, or
(ii) been cancelled and replaced by letters of credit issued by Wells Fargo; and

 

(i)                                     Within one hundred twenty (120) days
after the Closing Date (or such later date as agreed to by Agent in writing in
its sole discretion), Agent shall have received (i) evidence that all of the
Deposit Accounts and Securities Accounts of the Loan Parties and their
Subsidiaries that are organized in the United States are maintained at Wells
Fargo or its Affiliates and (ii) duly executed and delivered Control

 

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

 

Agreements (which may include Controlled Account Agreements) with respect to the
Deposit Accounts and Securities Accounts of Parent and its Subsidiaries, except
to the extent excused by Section 6.10 of the Agreement, in each case, in form
and substance reasonably satisfactory to Agent.

 

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

 

Schedule 4.1(b)

 

Capitalization of Parent

 

Class

 

Authorized Number of Shares

 

Number of Shares Issued and Outstanding
as of the Closing Date

Common Stock, $0.001 Par Value

 

15,000,000

 

7,520,691

Preferred Stock

 

5,000,000

 

None

 

Subscriptions, Options, Warrants, Calls, Conversion Rights and Exchange Rights

 

Parent has issued warrants to purchase an aggregate of 450,000 shares of common
stock to holders of equity interests prior to Parent’s emergence from
bankruptcy.  As of December 31, 2010, holders of the warrants had exercised 368
of the warrants.

 

As of December 31, 2010, under Parent’s stockholder approved and non-stockholder
approved equity compensation plans, there were 539,180 shares of Common Stock to
be issued upon the exercise of the following: 325,925 stock options, 61,663
shares of unvested restricted stock and 151,592 restricted stock units.

 

There are no subscriptions, calls, conversion rights or exchange rights with
respect to Parent’s Common Stock or Preferred Stock.

 

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

 

Schedule 4.1(c)

 

Capitalization of Parent’s Subsidiaries

 

Subsidiary

 

# of Shares Owned /
Units Owned

 

# of Shares
/ Units
Outstanding

 

Percentage
Ownership

 

Ownership
Interest

 

Percentage
Owned
Directly/Indirectly
by Parent

 

AREI

 

1,000 Shares

 

1,000 Shares

 

100

%

Shares of Common Stock

 

100

%

ARE-AW

 

n/a

 

n/a

 

100

%

Membership units

 

100

%

ARE-MT

 

n/a

 

n/a

 

100

%

Membership units

 

100

%

Power

 

n/a

 

n/a

 

100

%

Membership units

 

100

%

Nebraska

 

n/a

 

n/a

 

78.414

%

Membership units

 

100

%(1)

ARE-C

 

n/a

 

n/a

 

100

%

Membership units

 

100

%

 

Subscriptions, Options, Warrants, Calls, Conversion Rights and Exchange Rights

 

None.

 

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

(1)  Parent owns 78.414% of the membership units of Nebraska and Parent’s
wholly-owned subsidiary AREI. owns 21.586% of the membership units of Nebraska.

 

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

 

Schedule 4.6(a)

 

Name and Jurisdiction of Organization

 

Loan Party

 

Jurisdiction of Organization

Aventine Renewable Energy Holdings, Inc.

 

Delaware

Aventine Renewable Energy, Inc.

 

Delaware

Aventine Renewable Energy — Aurora West, LLC

 

Delaware

Aventine Renewable Energy — Mt Vernon, LLC

 

Delaware

Aventine Power, LLC

 

Delaware

Nebraska Energy, L.L.C.

 

Kansas

Aventine Renewable Energy — Canton, LLC

 

Delaware

 

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

 

Schedule 4.6(b)

 

Chief Executive Offices

 

Loan Party

 

Address

Aventine Renewable Energy Holdings, Inc.

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Aventine Renewable Energy, Inc.

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Aventine Renewable Energy — Aurora West, LLC

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Aventine Renewable Energy — Mt Vernon, LLC

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Aventine Power, LLC

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Nebraska Energy, L.L.C.

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

Aventine Renewable Energy — Canton, LLC

 

One Lincoln Centre, 5400 LBJ Freeway, Suite 450 Dallas, Texas 75240

 

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

 

Schedule 4.6(c)

 

Tax Identification Numbers and Organizational Identification Numbers

 

Loan Party

 

Organizational Identification
Number

 

Federal Tax Identification
Number

Aventine Renewable Energy Holdings, Inc.

 

3623696

 

05-0569368

Aventine Renewable Energy, Inc.

 

2505911

 

75-3108352

Aventine Renewable Energy — Aurora West, LLC

 

4199627

 

20-5359285

Aventine Renewable Energy — Mt Vernon, LLC

 

4211292

 

20-5838144

Aventine Power, LLC

 

4199626

 

20-5359343

Nebraska Energy, L.L.C.

 

2108371

 

47-0771872

Aventine Renewable Energy — Canton, LLC

 

4848807

 

27-3127915

 

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

 

Schedule 4.6(d)

 

Commercial Tort Claims

 

1.               On November 6, 2008, AREI filed a Complaint against JPMorgan
Securities, Inc. and JPMorgan Chase Bank, N.A. in the Circuit Court for the
Tenth Judicial Circuit of Tazewell County, Illinois (Case No. 08 L 142).  AREI
seeks to recover $31.6 million lost in the investment of funds in student loan
backed auction rate securities.  AREI alleges that JPMorgan Chase Bank, through
its investment arm JPMorgan Securities, gave false assurances of the liquidity
of this type of investment.  The $31.6 million figure represents funds lost
because AREI was forced to sell the investment at a loss after the securities
became illiquid.  This case was stayed in Illinois state court and AREI filed to
submit the case for arbitration on June 10, 2011.

 

2.               On March 30, 2009, AREI filed a Complaint against e-biofuels,
LLC in the United States District Court for the Southern District of Indiana
(Case No. 09-11216 (KG)).  AREI seeks to recover the value of biodiesel product
which it purchased from e-biofuels, LLC in February and March 2009.  AREI
alleges that it took title to the biodiesel product upon payment.  e-biofuels,
LLC failed to deliver such product and instead re-sold the product to other
purchasers.  This lawsuit has been settled, and AREI has received an equity
interest in Imperial Petroleum, Inc. (held in the name of Parent) as part of the
settlement.

 

3.               AREI has filed suit in Illinois seeking damages from
Agri-Energy, LLC for breach of its agreement to sell fuel grade ethanol
production to AREI in accordance with an “Ethanol Marketing Agreement” between
AREI and the defendant.  Agri-Energy, LLC has filed claims of its own in
Minnesota, which have been stayed by AREI’s filing for bankruptcy protection in
the District of Delaware, and has contested jurisdiction in Illinois.  AREI
intends to aggressively pursue its legal remedies with respect to the
defendant’s actions, which it considers to be an illegal repudiation of the
parties’ contract.  AREI seeks to recover approximately $1.0 to $2.4 million
under this claim.  This claim may ultimately be resolved in proceedings now
pending in the Delaware bankruptcy court (Case No. 09 L 32).

 

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

 

Schedule 4.7(b)

 

Litigation

 

None.

 

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

 

Schedule 4.11

 

Employee Benefit Plans

 

Aventine Renewable Energy, Inc. maintains Aventine Renewable Energy, Inc. Hourly
Pension Plan, a defined benefit pension plan, for the benefit of certain
eligible unionized employees employed at the Pekin, Illinois facility.

 

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

 

Schedule 4.12

 

Environmental Matters

 

 

 

Environmental Issue

 

State or
Federal

 

Penalties
Sought

 

Status

 

 

 

 

 

 

 

 

 

Pekin

 

Contact to Non Contact cooling

 

State

 

No

 

NPDES Application submitted for non-contact operation.  Work in progress for
conversion.  2nd quarter status report submitted to Illinois EPA June 30.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company identified releases at the facility from 1990-92, including a diesel
release resulting in a “no further response letter.”  A release during that time
from an anhydrous ammonia aboveground storage tank that was mistakenly placed
into Illinois EPA’s Leaking Underground Storage Tank Program (LUST) is now
closed.  In 2009, two releases occurred from the dry mill.  The Company fully
resolved an anhydrous ammonia release, and has heard nothing further from
regulators.  With respect to a caustic release, the Company received (after a
bankruptcy and the passage of three years time) federal inquiry concerning the
timeliness of the initial notification.  EPA seeks a penalty of $192,000 as a
result of a failure to provide follow-up notification related to the release.
(see next item)

 

 

 

 

 

 

 

 

 

 

 

Releases, including RMP issues and an EPCRA allegation on timeliness of
reporting caustic release in 2008

 

Federal

 

Yes

 

Submitted letter identifying violation occurring prior to bankruptcy, which
could impede payment of penalty.  Received more details from USEPA on issue. 
Discovered most questions focus on the Risk Management Plan audit by USEPA in
2008.  Submitted a response back to USEPA on 7-1-11.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company budgets $6.5 million to improve emissions control equipment. 
EPA-required testing in 2004 showed the facility’s emissions to be in compliance
with all but one state VOM-emissions requirement of 8 lb/hr.  While the Company
has received no additional correspondence from EPA on the issue, it remains
possible that the State will require equipment to correct the exceedence.

 

 

 

 

 

 

 

 

 

 

 

Air emissions and SO2 Non-Attainment Designation

 

State

 

No

 

Illinois EPA has submitted the SO2 non-attainment designation for the area that
Aventine resides in to USEPA for approval.  It will take a year for the approval
process.  IEPA will begin to reach out to potential significant sources of SO2
in the non-attainment areas to work on reduction strategy.  IEPA must have a
workable plan submitted for approval by the Illinois Pollution Control Board by
mid-to-late 2012.  Aventine is a major source for SO2 and will likely be
required to share in the overall reduction of SO2 emissions to allow the area to
regain attainment status.

 

 

 

 

 

 

 

 

 

Canton

 

Pond contamination by previous owner

 

State

 

Yes

 

Consent Order has been executed with penalties paid up.  In process to request
relief on monitoring frequency and/or elimination of requirement completely.

 

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

 

Mt. Vernon

 

Delay in stack testing due to plant reduction during flooding.

 

State

 

No

 

Indiana Department of Environmental Management understands the issue, however,
due to no force majeure provision in their rules they will have to issue a
notice of violation.  The violation will require Aventine to complete stack
testing within 60 days.  As of 6-28-11 we have not received the NOV.

 

 

 

 

 

 

 

 

 

 

 

4th quarter 2010 monitoring data/operating parameters did not meet permit
requirements

 

State

 

No

 

Submitted a response on 5-4-2011.  IDEM conducted an inspection on July 8, 2011,
to follow-up on corrective measures taken by the company concerning monitoring.

 

 

 

 

 

 

 

 

 

 

 

Chemical additives not meeting IDEM approval

 

State

 

No

 

US water chemical additives for boilers and cooling towers are lacking toxicity
data to confirm they meet State requirements.  US water has acute and chronic
studies being performed on the additives to demonstrate that they will pass
state requirements.  Alternate chemicals from Chemtreat are available readily
and have been approved.  Waiting on converting over due to bioassay study on
plant effluent in progress at current time.

 

 

 

 

 

 

 

 

 

Aurora West

 

Construction of waste water treatment equipment with out first obtaining a
permit from NDEQ

 

State

 

No

 

Pinnacle Engineering hired to complete tasks required in NOV.  All information
must be signed off by a licensed PE.  Response to NOV required by July 31,2011.

 

 

 

 

 

 

 

 

 

Nebraska Energy

 

Air inspection by NDEQ identified several outstanding issues including
uncontrolled tank vents that are required by last permit revision to be
controlled

 

State

 

No

 

The Company responded to NDEQ on July 9.  Note that the Company reported all
emissions during the period in question and no level significantly exceeded the
permit limits.  Still, the Company is in the process of obtaining cost estimates
to connect the tanks to the control devices in the exact manner described in the
permit.

 

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

 

Schedule 4.13

 

Intellectual Property

 

1(a).                        Trademarks, Trademark Applications and Trademark
Licenses

 

Record
Owner

 

Title

 

Country

 

Filing Date/
Issued Date

 

Expiration
Date

 

Application/Registration No.

Parent

 

“Aventine Renewable Energy and design”

 

USA

 

 7/6/2007 / 10/5/2010

 

10/05/2020

 

3,857,196

AREI

 

“Aventine Renewable Energy, Inc. and design”

 

USA

 

12/11/2003 / 5/24/2005

 

05/24/2015

 

2,954,378

AREI

 

“Aventine”

 

USA

 

5/13/2003 / 2/22/2005

 

02/22/2015

 

2,928,195

AREI

 

“Aventine and design”

 

USA

 

12/11/2003 / 4/5/2005

 

04/05/2015

 

2,937,415

AREI

 

“Providing clean, renewable energy for the world”

 

USA

 

9/12/2006 / 5/13/2008

 

05/13/2018

 

3,428,803

Parent

 

Riverland Biofuels

 

USA

 

N/A

 

N/A

 

Unregistered

Parent

 

Riverland Biofuels logo

 

USA

 

N/A

 

N/A

 

Unregistered

 

1(b).

Trade Names

 

 

 

None.

 

 

2.

Patents, Patent Applications and Patent Licenses

 

Record
Owner

 

Title

 

Country

 

Filing Date/
Issued Date

 

Expiration
Date

 

Application/Registration No.

AREI

 

“Heat Recovery from a Biomass Heat Source”

 

USA

 

6/17/2005 / 7/28/2009

 

07/28/2019

 

7,566,383

 

3.

Copyrights, Copyright Applications and Copyright Licenses

 

 

 

None.

 

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

 

Schedule 4.14

 

Deposit Accounts and Securities Accounts

Deposit Accounts

 

Loan Party

 

Type of Account

 

Account Number

 

Name & Address of Depositary Institution

AREI

 

Lockbox

 

773721

 

PNC Bank, N.A.
301 SW Adams St Loc: 50-CP0217
Peoria, IL 61602-1500

AREI

 

Concentration Account

 

4613273683

 

PNC Bank, N.A.
301 SW Adams St Loc: 50-CP0217
Peoria, IL 61602-1500

AREI

 

Checking

 

4613273712

 

PNC Bank, N.A.
301 SW Adams St Loc: 50-CP0217
Peoria, IL 61602-1500

AREI

 

Payroll Account

 

4613273579

 

PNC Bank, N.A.
301 SW Adams St Loc: 50-CP0217
Peoria, IL 61602-1500

AREI

 

Cash Collateral Account

 

1028065601

 

PNC Bank, N.A.
555 Cranbury Road
East Brunswick, NJ 08816-4026

AREI

 

Cash Collateral Account

 

1031950855(1)

 

PNC Bank, N.A.
555 Cranbury Road
East Brunswick, NJ 08816-4026

AREI

 

Blocked Account

 

8026268503

 

PNC Bank, N.A.
555 Cranbury Road
East Brunswick, NJ 08816-4026

Nebraska

 

Payroll Account

 

314487

 

Heritage Bank
1101 12th Street
PO Box 329
Aurora, NE 68818

Nebraska

 

Checking

 

4613273907

 

PNC Bank, N.A.
301 SW Adams St Loc: 50-CP0217
Peoria, IL 61602-1500

 

Securities Accounts

 

Loan Party

 

Type of Account

 

Account Number

 

Name & Address of Depositary Institution

AREI

 

Commodities Account

 

Group Account No.:
BTB-950791

Subaccount Nos.:
BTB-950791
BTB-952751

 

Jefferies Bache, LLC
One New York Plaza, 13th Floor
New York, NY 10004

 

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

(1)  To be liquidated and closed concurrently with the Closing Date.

 

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

 

Schedule 4.17

 

Indebtedness

 

1.               Equipment Lease Contract, dated June 30, 2006, as amended, by
and between New CIE Energy Opco, LLC and Wabash Power Equipment Co., (New CIE
Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy
Holdings, Inc. on July 16, 2010), representing aggregate obligations in the
amount of approximately $322,992.

 

2.               Agreement, dated October 27, 2009, as amended, by and between
New CIE Energy Opco, LLC DBA Riverland Biofuels and U.S. Water Services (New CIE
Opco, LLC’s rights, title and interest assigned to Aventine Renewable Energy
Holdings, Inc. on July 16, 2010), representing aggregate obligations in the
amount of approximately $229,575.

 

3.               The Spoon River Mortgage (as defined in Schedule P-2) securing
indebtedness in the amount of approximately $211,000.

 

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

 

Schedule 4.27

 

Locations of Inventory

 

Address of Location Where Equipment, Inventory or
Other Tangible Personal Property is Maintained or Kept
(Property owner name, if different)

 

Description of Assets at Such Location

Kinder Morgan Liquid Terminals, L.L.C.
8500 West 68th Street
Argo, IL 60501

 

Inventory

Parke Warehouse
1800 E Garfield Avenue
Decatur, IL 62525
(Parke and Son, Inc.)

 

Inventory

Bell Enterprises, Inc.
30082 Harding Road
Deer Creek, IL 61733

 

Inventory

J & L Dock facilities
Foot of Sanger St.
Peoria, IL 61602

 

Inventory

Peoria Barge Terminal
Foot of Sanger St.
Peoria, IL 61602
(Finch Family Land Trust)

 

Inventory

AREI
1300 S. Second Street
Pekin, IL 61554

 

Manufacturing Equipment, Inventory

Nebraska
1205 S. “O” Road
Aurora, NE 68818

 

Manufacturing Equipment, Inventory

ARE-AW
2103 Harvest Drive
Aurora, Nebraska 68818

 

Manufacturing Equipment, Inventory

ARE-C
23133 E County Hwy 6
Canton, IL 61520

 

Manufacturing Equipment, Inventory

ARE-MT
Port Road
Mt. Vernon, IN 47620

 

Manufacturing Equipment, Inventory

 

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

 

Schedule 5.1

 

Financial Statements, Reports, Certificates

 

Deliver to Agent, with copies to each Lender, each of the financial statements,
reports, or other items set forth below at the following times in form
satisfactory to Agent:

 

as soon as available, but in any event within 30 days after the end of each
month during each of Parent’s fiscal years,

 

 

(a) an unaudited consolidated and consolidating balance sheet, income statement,
and statement of cash flow covering Parent’s and its Subsidiaries’ operations
during such period, and

 

(b) a Compliance Certificate, together with both (i) either (A) copies of all
Form 8-Ks that have been filed during such period or (B) written notice in such
Compliance Certificate listing the Form 8-Ks that have been filed during such
period, and (ii) either (A) any other filings made by Parent or any of its
Subsidiaries with the SEC during such period or (B) written notice in such
Compliance Certificate listing such other filings that have been made during
such period.

 

 

 

as soon as available, but in any event within 45 days after the end of each
quarter (each such date, the “Quarterly Deadline”) during each of Parent’s
fiscal years,

 

 

(c) an unaudited consolidated and consolidating balance sheet, income statement,
and statement of cash flow covering Parent’s and its Subsidiaries’ operations
during such period,

 

provided, however, that if Parent has filed any of the items listed in clause
(c) above in its Form 10-Q quarterly report with the SEC by the applicable
Quarterly Deadline, then Parent shall (i) provide Agent written notice (in the
Compliance Certificate or elsewhere) by the applicable Quarterly Deadline that
Parent has filed its Form 10-Q with the SEC and (ii) deliver to Agent by the
applicable Quarterly Deadline copies of any items listed in clause (c) above
that were not filed with the SEC,

 

provided, further, however, that if Parent has been granted an extension by the
SEC for the filing of a Form 10-Q quarterly report, Parent shall deliver to
Agent (i) by the applicable Quarterly Deadline, all of the items listed in
clause (c) above, (ii) within 2 Business Days of receiving such extension, a
copy of such extension and the document that sets forth the extension date on
which Parent is required to file the Form 10-Q, and (iii) on the date that the
Form 10-Q quarterly report is filed with the SEC, written notice describing the
Form 10-Q that was filed with the SEC, and

 

(d) a Compliance Certificate.

 

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

 

as soon as available, but in any event within 120 days after the end of each of
Parent’s fiscal years (each such date, the “Annual Deadline”),

 

(e) consolidated and consolidating financial statements of Parent and its
Subsidiaries for each such fiscal year, audited by independent certified public
accountants reasonably acceptable to Agent and certified, without any
qualifications (including any (i) “going concern” or like qualification or
exception, (ii) qualification or exception as to the scope of such audit, or
(iii) qualification which relates to the treatment or classification of any item
and which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of Section 7), by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to include a balance
sheet, income statement, and statement of cash flow and, if prepared, such
accountants’ letter to management),

 

provided, however, that if Parent has filed any of the items listed in clause
(e) above in its Form 10-K annual report with the SEC by the applicable Annual
Deadline, then Parent shall (i) provide Agent written notice (in the Compliance
Certificate or elsewhere) by the applicable Annual Deadline that Parent has
filed its Form 10-K with the SEC and (ii) deliver to Agent by the applicable
Annual Deadline copies of any items listed in clause (e) above that were not
filed with the SEC,

 

provided, further, however, that if Parent has been granted an extension by the
SEC for the filing of a Form 10-K annual report, Parent shall deliver to Agent
(i) by the applicable Annual Deadline, unaudited consolidated and consolidating
financial statements of Parent and its Subsidiaries for such fiscal year (such
unaudited financial statements to include a balance sheet, income statement, and
statement of cash flow), (ii) by the earlier of (A) the date that is 120 days
after the end of such fiscal year, and (B) the date that the Form 10-K annual
report is filed with the SEC, notice of all of the items listed in clause
(e) above that are filed with the SEC (if any) and copies of all of the items
listed in clause (e) above that were not filed with the SEC, (iii) within 2
Business Days of receiving such extension, a copy of such extension and the
document that sets forth the extension date on which Parent is required to file
the Form 10-K, and (iv) on the date that the Form 10-K annual report is filed
with the SEC, a copy of the Form 10-K that was filed with the SEC, and

 

(f) a Compliance Certificate.

 

 

 

as soon as available, but in any event within 30 days prior to the start of each
of Parent’s fiscal years,

 

(g) copies of Parent’s and its Subsidiaries’ Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to Agent, in its
Permitted Discretion, for the forthcoming 3 years, year by year, and for the
forthcoming fiscal year, month by month, certified by the chief financial
officer of Parent as being such officer’s good faith estimate of the financial
performance of Parent and its Subsidiaries during the period covered thereby.

 

 

 

if and when distributed by Parent or any of its Subsidiaries,

 

(h) any other information that is provided by Parent or any of its Subsidiaries
to its shareholders generally.

 

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promptly, but in any event within 5 days after any Borrower has knowledge of any
event or condition that constitutes a Default or an Event of Default,

 

 

(i) notice of such event or condition and a statement of the curative action
that Borrowers propose to take with respect thereto.

 

 

 

promptly after the commencement thereof, but in any event within 5 days after
the service of process with respect thereto on Parent or any of its
Subsidiaries,

 

(j) notice of all actions, suits, or proceedings brought by or against Parent or
any of its Subsidiaries before any Governmental Authority which could reasonably
be expected to result in a Material Adverse Effect.

 

 

 

upon the request of Agent,

 

 

(k) any other information reasonably requested relating to the financial
condition of Parent or its Subsidiaries.

 

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Schedule 5.2

 

Collateral Reporting

 

Provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the documents set forth below at the following times in form
satisfactory to Agent:

 

Weekly

 

(a) a detailed aging and roll-forward, by total, of Parent’s and its
Subsidiaries’ Accounts with supporting details supplied from sales journals,
collection journals, credit registers and any other records,

 

(b) a detailed calculation of those Accounts that are not eligible for the
Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(c) a detailed calculation of Inventory categories that are not eligible for the
Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(d) Inventory system/perpetual reports specifying the cost and the market value
of Parent’s and its Subsidiaries’ Inventory on a first in, first out basis, by
category, with additional detail showing additions to and deletions therefrom
(delivered electronically in an acceptable format, if Borrowers have implemented
electronic reporting),

 

(e) a list of amounts owing to corn suppliers, and

 

(f) a Borrowing Base Certificate.

 

 

 

Monthly (no later than the 10th day of each month)

 

(g) a detailed aging, by total, of Borrowers’ Accounts (delivered electronically
in an acceptable format, if Borrowers have implemented electronic reporting),

 

(h) a detailed Inventory system/perpetual report (delivered electronically in an
acceptable format, if Borrowers have implemented electronic reporting),

 

(i) a summary aging, by vendor, of Parent’s and its Subsidiaries’ accounts
payable and any book overdraft (delivered electronically in an acceptable
format, if Borrowers have implemented electronic reporting) and an aging, by
vendor, of any held checks,

 

(j) a monthly Account roll-forward, in a format acceptable to Agent in its
discretion, tied to the beginning and ending account receivable balances of
Borrowers’ general ledger, and

 

(k) a Borrowing Base Certificate.

 

 

 

Monthly (no later than the 30th day of each month)

 

(l) a reconciliation of Accounts, trade accounts payable, and Inventory of
Borrowers’ general ledger accounts to its monthly financial statements including
any book reserves related to each category,

 

(m) a reconciliation and supporting documentation for any reconciling items
noted (delivered electronically in an acceptable format, if Borrowers have
implemented electronic reporting), and

 

(n) a reconciliation to Borrowers’ general ledger accounts (delivered
electronically in an acceptable format, if Borrowers have implemented electronic
reporting).

 

 

 

Annually

 

(o) a detailed list of Parent’s and its Subsidiaries’ customers, with address
and contact information.

 

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Upon request by Agent

 

(p) such other reports as to the Collateral or the financial condition of Parent
and its Subsidiaries, as Agent may reasonably request, and

 

(q) a report regarding Parent’s and its Subsidiaries’ accrued, but unpaid, ad
valorem taxes.

 

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Schedule 5.16

 

Hedge Agreements

 

Futures Account Agreement entered into as of January 15, 2009, between AREI and
Prudential Bache Commodities, LLC.

 

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Schedule 6.6

 

Nature of Business

 

Borrowers are engaged in the production and marketing of corn-based, fuel-grade
ethanol in the United States.  Borrowers market and distribute ethanol to many
of the leading energy and trading companies in the United States.  In addition
to producing ethanol, Borrowers’ facilities also produce several by-products,
such as distillers grain, corn gluten meal and feed, corn germ and grain
distillers dried yeast, which generate revenue and offset a portion of the costs
of raw materials.

 

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Schedule 6.14

 

Inventory with Bailees

 

Bailee Name
(Property owner name, if different)

 

Description of Assets at Such Location

Kinder Morgan Liquid Terminals, L.L.C.
8500 West 68th Street
Argo, IL 60501

 

Inventory

Parke Warehouse
1800 E Garfield Avenue
Decatur, IL 62525
(Parke and Son, Inc.)

 

Inventory

Bell Enterprises
30082 Harding Road
Deer Creek, IL 61733

 

Inventory

J & L Dock facilities
Foot of Sanger St.
Peoria, IL 61602

 

Inventory

Peoria Barge Terminal
Foot of Sanger St.
Peoria, IL 61602
(Finch Family Land Trust)

 

Inventory

 

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