EXECUTION VERSION

Exhibit 10.24

 

LOGO [g648751g35d72.jpg]

$450,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of January 14, 2014

among

PETROLEUM HEAT AND POWER CO., INC.,

as Borrower

THE OTHER LOAN PARTIES PARTY HERETO,

The Lenders from Time to Time Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and an LC Issuer

BANK OF AMERICA, N.A.,

as Co-Syndication Agent and an LC Issuer

and

RBS CITIZENS, N.A.,

as Co-Syndication Agent

and

KEY BANK NATIONAL ASSOCIATION, REGIONS BANK, WELLS FARGO

CAPITAL FINANCE, LLC and BMO HARRIS BANK, N.A.,

as Co-Documentation Agents

and

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and

RBS CITIZENS, N.A.,

as Joint Lead Arrangers and Joint Book Runners

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     2   

1.1.

 

Defined Terms

     2   

1.2.

 

Accounting Terms; GAAP

     38   

ARTICLE II THE FACILITY

     39   

2.1.

 

The Facility

     39     

2.1.1.      Revolving Loans

     39     

2.1.2.      Facility LCs

     40     

2.1.3.      Non-Ratable Loans

     45     

2.1.4.      Protective Advances, Swingline Loans and Overadvances

     45   

2.2.

 

Ratable Loans; Risk Participation

     47   

2.3.

 

Payment of the Obligations

     48   

2.4.

 

Minimum Amount of Each Advance

     48   

2.5.

 

Funding Account

     48   

2.6.

 

Reliance Upon Authority; No Liability

     48   

2.7.

 

Conversion and Continuation of Outstanding Advances

     48   

2.8.

 

Telephonic Notices

     49   

2.9.

 

Notification of Advances, Interest Rates and Repayments

     49   

2.10.

 

Fees

     49   

2.11.

 

Interest Rates

     49   

2.12.

 

Eurodollar Advances Post Default; Default Rates

     50   

2.13.

 

Interest Payment Dates; Interest and Fee Basis

     50   

2.14.

 

Voluntary Prepayments

     51   

2.15.

 

Mandatory Prepayments

     51   

2.16.

 

Termination of the Commitments; Increase in Aggregate Commitment

     53   

2.17.

 

Method of Payment

     54   

2.18.

 

Apportionment, Application, and Reversal of Payments

     54   

2.19.

 

Settlement

     55   

2.20.

 

Indemnity for Returned Payments

     56   

2.21.

 

Noteless Agreement; Evidence of Indebtedness

     56   

2.22.

 

Lending Installations

     57   

2.23.

 

Non-Receipt of Funds by the Agent; Defaulting Lenders

     57   

2.24.

 

Limitation of Interest

     60   

2.25.

 

Applicable Mortgage Minimum Amount

     60   

ARTICLE III YIELD PROTECTION; TAXES

     60   

3.1.

 

Yield Protection

     60   

3.2.

 

Changes in Capital Adequacy Regulations

     62   

3.3.

 

Availability of Types of Advances

     63   

3.4.

 

Funding Indemnification

     63   

3.5.

 

Taxes

     63   

3.6.

 

Lender Statements; Survival of Indemnity

     66   

3.7.

 

Replacement of Lender

     66   

ARTICLE IV CONDITIONS PRECEDENT

     67   

4.1.

 

Effectiveness

     67   

 

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4.2.

 

Each Credit Extension

     69   

ARTICLE V REPRESENTATIONS AND WARRANTIES

     70   

5.1.

 

Existence and Standing

     70   

5.2.

 

Authorization and Validity

     70   

5.3.

 

No Conflict; Government Consent

     70   

5.4.

 

Security Interest in Collateral

     71   

5.5.

 

Financial Statements

     71   

5.6.

 

Material Adverse Change

     71   

5.7.

 

Taxes

     71   

5.8.

 

Litigation and Contingent Obligations

     72   

5.9.

 

Capitalization and Subsidiaries

     72   

5.10.

 

ERISA

     72   

5.11.

 

Accuracy of Information

     72   

5.12.

 

Names; Prior Transactions

     72   

5.13.

 

Regulation U

     72   

5.14.

 

Material Agreements

     73   

5.15.

 

Compliance With Laws

     73   

5.16.

 

Ownership of Properties

     73   

5.17.

 

Plan Assets; Prohibited Transactions

     73   

5.18.

 

Environmental Matters

     73   

5.19.

 

Investment and Holding Company Status

     75   

5.20.

 

Bank Accounts

     75   

5.21.

 

Indebtedness

     75   

5.22.

 

Affiliate Transactions

     75   

5.23.

 

Real Property; Leases

     75   

5.24.

 

Intellectual Property Rights

     75   

5.25.

 

Insurance

     76   

5.26.

 

Solvency

     76   

5.27.

 

Subordinated Indebtedness

     76   

5.28.

 

Post-Retirement Benefits

     76   

5.29.

 

Common Enterprise

     76   

5.30.

 

Reportable Transaction

     77   

5.31.

 

Labor Disputes

     77   

5.32.

 

Fixed Price Supply Contracts

     77   

5.33.

 

Trading and Inventory Policies

     77   

5.34.

 

Use of Proceeds

     77   

ARTICLE VI COVENANTS

     77   

6.1.

 

Financial and Collateral Reporting

     77   

6.2.

 

Use of Proceeds

     81   

6.3.

 

Notices

     82   

6.4.

 

Conduct of Business

     83   

6.5.

 

Taxes

     84   

6.6.

 

Payment of Indebtedness and Other Liabilities

     84   

6.7.

 

Insurance; Weather Hedging

     84   

6.8.

 

Compliance with Laws

     86   

6.9.

 

Maintenance of Properties and Intellectual Property Rights

     86   

6.10.

 

Inspection

     86   

6.11.

 

Appraisals

     87   

6.12.

 

Communications with Accountants

     87   

 

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6.13.

 

Post-Closing Obligations with respect to Real Property; Mortgage Amendments,
Collateral Access Agreements, etc.

     87   

6.14.

 

Deposit Account Control Agreements

     89   

6.15.

 

Additional Collateral; Further Assurances

     89   

6.16.

 

Dividends

     89   

6.17.

 

Indebtedness

     90   

6.18.

 

Merger

     92   

6.19.

 

Sale of Assets

     92   

6.20.

 

Investments and Acquisitions

     93   

6.21.

 

Liens

     94   

6.22.

 

Change of Name or Location; Change of Fiscal Year

     96   

6.23.

 

Affiliate Transactions

     96   

6.24.

 

Amendments to Agreements

     96   

6.25.

 

Prepayment of Indebtedness; Subordinated Indebtedness

     96   

6.26.

 

Financial Contracts

     97   

6.27.

 

Capital Expenditures

     97   

6.28.

 

Financial Covenant

     98   

6.29.

 

Depository Banks

     98   

6.30.

 

Real Property Purchases

     98   

6.31

 

Parent

     98   

6.32

 

Fixed Price Supply Contracts; Certain Policies

     98   

ARTICLE VII DEFAULTS

     99   

ARTICLE VIII REMEDIES; WAIVERS AND AMENDMENTS

     101   

8.1.

 

Remedies

     101   

8.2.

 

Waivers by Loan Parties

     103   

8.3.

 

Amendments

     103   

8.4.

 

Preservation of Rights

     105   

ARTICLE IX GENERAL PROVISIONS

     105   

9.1.

 

Survival of Representations

     105   

9.2.

 

Governmental Regulation

     105   

9.3.

 

Headings

     106   

9.4.

 

Entire Agreement

     106   

9.5.

 

Several Obligations; Benefits of this Agreement

     106   

9.6.

 

Expenses; Indemnification

     106   

9.7.

 

Numbers of Documents

     108   

9.8.

 

Accounting

     108   

9.9.

 

Severability of Provisions

     108   

9.10.

 

Nonliability of Lenders

     108   

9.11.

 

Confidentiality

     108   

9.12.

 

Nonreliance

     109   

9.13.

 

Disclosure

     109   

9.14.

 

USA PATRIOT ACT

     109   

ARTICLE X THE AGENT

     109   

10.1.

 

Appointment; Nature of Relationship

     109   

10.2.

 

Powers

     110   

10.3.

 

General Immunity

     110   

10.4.

 

No Responsibility for Credit Extensions, Recitals, etc.

     110   

 

iv

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10.5.

 

Action on Instructions of the Lenders

     110   

10.6.

 

Employment of Agents and Counsel

     111   

10.7.

 

Reliance on Documents; Counsel

     111   

10.8.

 

Agent’s Reimbursement and Indemnification

     111   

10.9.

 

Notice of Default

     111   

10.10.

 

Rights as a Lender

     112   

10.11.

 

Lender Credit Decision

     112   

10.12.

 

Successor Agent

     112   

10.13.

 

Delegation to Affiliates

     113   

10.14.

 

Execution of Loan Documents

     113   

10.15.

 

Collateral Matters

     113   

10.16.

 

Co-Agents, Co-Syndication Agents, Co-Documentation Agents, etc.

     115   

ARTICLE XI SETOFF; RATABLE PAYMENTS

     115   

11.1.

 

Setoff

     115   

11.2.

 

Ratable Payments

     116   

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     116   

12.1.

 

Successors and Assigns

     116   

12.2.

 

Participations

     117   

12.3.

 

Assignments

     118   

12.4.

 

Dissemination of Information

     119   

12.5.

 

Tax Treatment

     119   

12.6.

 

Assignment by LC Issuer

     120   

ARTICLE XIII NOTICES

     120   

13.1.

 

Notices; Effectiveness; Electronic Communications

     120   

13.2.

 

Change of Address, Etc.

     121   

ARTICLE XIV COUNTERPARTS

     121   

ARTICLE XV GUARANTY

     121   

15.1.

 

Guaranty

     121   

15.2.

 

Guaranty of Payment

     122   

15.3.

 

No Discharge or Diminishment of Guaranty

     122   

15.4.

 

Defenses Waived

     123   

15.5.

 

Rights of Subrogation

     124   

15.6.

 

Reinstatement; Stay of Acceleration

     124   

15.7.

 

Information

     124   

15.8.

 

Taxes

     124   

15.9.

 

Severability

     124   

15.10.

 

Contribution

     125   

15.11.

 

Lending Installations

     125   

15.12.

 

Liability Cumulative

     125   

15.14.

 

Keepwell

     126   

ARTICLE XVI CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     126   

16.1.

 

CHOICE OF LAW

     126   

16.2.

 

CONSENT TO JURISDICTION

     126   

16.3.

 

WAIVER OF JURY TRIAL

     127   

 

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ARTICLE XVII THE BORROWER REPRESENTATIVE

     127   

17.1.

 

Appointment; Nature of Relationship

     127   

17.2.

 

Powers

     127   

17.3.

 

Employment of Agents

     127   

17.4.

 

Notices

     128   

17.5.

 

Successor Borrower Representative

     128   

17.6.

 

Execution of Loan Documents; Borrowing Base Certificate

     128   

17.7.

 

Reporting

     128   

ARTICLE XVIII

     128   

Effect of Amendment and Restatement of Existing Credit Agreement

     128   

EXHIBITS:

 

EXHIBIT A    FORM OF BORROWING NOTICE EXHIBIT B    FORM OF
CONVERSION/CONTINUATION NOTICE EXHIBIT C    NOTE EXHIBIT D    FORM OF OPINION
EXHIBIT E    COMPLIANCE CERTIFICATE EXHIBIT F    JOINDER AGREEMENT EXHIBIT G   
ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT H    BORROWING BASE CERTIFICATE
SCHEDULES:    SCHEDULE I    COMMITMENTS SCHEDULE 1.1A    EXISTING LETTERS OF
CREDIT SCHEDULE 1.1B    ELIGIBLE CARRIERS SCHEDULE 5.8    LITIGATION AND
CONTINGENT OBLIGATIONS SCHEDULE 5.9    CAPITALIZATION AND SUBSIDIARIES SCHEDULE
5.12    NAMES; PRIOR TRANSACTIONS SCHEDULE 5.14    MATERIAL AGREEMENTS SCHEDULE
5.16    OWNERSHIP OF PROPERTIES SCHEDULE 5.18    ENVIRONMENTAL MATTERS SCHEDULE
5.21    INDEBTEDNESS SCHEDULE 5.22    AFFILIATE TRANSACTIONS SCHEDULE 5.23   
REAL PROPERTY; LEASES SCHEDULE 5.24    INTELLECTUAL PROPERTY RIGHTS SCHEDULE
5.25    INSURANCE SCHEDULE 5.31    LABOR MATTERS SCHEDULE 5.32    FIXED PRICE
SUPPLY CONTRACTS SCHEDULE 6.20    OTHER INVESTMENTS SCHEDULE 6.21    LIENS

 

vi

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AMENDED AND RESTATED CREDIT AGREEMENT

This Second Amended and Restated Credit Agreement, dated as of January 14, 2014,
is among Petroleum Heat and Power Co., Inc., a Minnesota corporation (“Petro” or
the “Borrower”), the other Loan Parties, the Lenders from time to time party
hereto, JPMorgan Chase Bank, N.A., a national banking association, as an LC
Issuer and as the Agent, Bank of America, N.A., as co-syndication agent and as
an LC Issuer (“Bank of America”), RBS Citizens, N.A., as co-syndication agent
(together with Bank of America, the “Co-Syndication Agents”) and Key Bank
National Association, Regions Bank, Wells Fargo Capital Finance, LLC and BMO
Harris Bank, N.A., as co-documentation agents (each, a “Co-Documentation Agent”
and collectively, the “Co-Documentation Agents”).

RECITALS

WHEREAS, pursuant to that certain Amended and Restated Credit Agreement, dated
as of July 3, 2011 (as amended prior to the date hereof, the “Existing Credit
Agreement”), among Petro, the lenders party thereto (the “Existing Lenders”),
the other Loan Parties, JPMorgan Chase Bank, N.A., a national banking
association, as an issuer of certain letters of credit and as the administrative
agent, Bank of America, N.A., as syndication agent and an issuer of certain
letters of credit, RBS Citizens, N.A., as documentation agent, and Key Bank
National Association, PNC Bank, National Association, Regions Bank, TD Bank,
N.A. and Wells Fargo Capital Finance, LLC as senior managing agents, the
Existing Lenders made available to the Borrower loans and other extensions of
credit in an aggregate amount not to exceed $300,000,000 (as increased to
$350,000,000 pursuant to the First Amendment to the Existing Credit Agreement,
dated as of November 22, 2011);

WHEREAS, the Borrower has requested that the Existing Credit Agreement be
amended and restated in order to provide for extensions of credit in an
aggregate amount not to exceed $450,000,000 (subject to the Borrower’s right
pursuant to Section 2.16 hereof to request an increase in the Aggregate
Commitment by up to $100,000,000 (not to exceed a total of up to $550,000,000)),
which extensions of credit will be used by the Borrower for the purposes set
forth in Section 6.2;

WHEREAS, the Obligations of the Borrower under the Loan Documents to the Agent
and the Lenders will continue to be guaranteed by the Guarantors as set forth in
the Guaranty; and

WHEREAS, the Borrower and the other Loan Parties will continue to secure all of
their Obligations under the Loan Documents pursuant to the security interests in
and liens upon the Collateral as set forth in the Collateral Documents;

NOW THEREFORE, in consideration of these premises and the terms and conditions
set forth in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree that
the Existing Credit Agreement is hereby amended and restated as of the Effective
Date to read in its entirety as follows:

 

1

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ARTICLE I

DEFINITIONS

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

“2010 Parent Indenture” means the Indenture, among the Parent, Star Gas Finance
Company and Union Bank, N.A., as trustee, dated as of November 16, 2010, as
amended, supplemented or otherwise modified from time to time.

“2010 Parent Notes” means the 8.875% Senior Notes due 2017 issued pursuant to
the 2010 Parent Indenture.

“Account” shall have the meaning given to such term in the Security Agreement.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions,
consummated after the Effective Date, by which any Loan Party (a) acquires any
going business or all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the Capital Stock of a
Person which has ordinary voting power for the election of directors or other
similar management personnel of a Person (other than Capital Stock having such
power only by reason of the happening of a contingency) or a majority of the
outstanding Capital Stock of a Person.

“Advance” means a borrowing hereunder, (a) made by some or all of the Lenders on
the same Borrowing Date, or (b) converted or continued by the Lenders on the
same date of conversion or continuation, and consisting, in either case, of the
aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period. The term Advance shall include
Non-Ratable Loans, Swingline Loans, Overadvances and Protective Advances unless
otherwise expressly provided.

“Affected Lender” is defined in Section 3.7.

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of the voting Capital Stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Capital Stock, by contract or otherwise.

“Agent” means Chase in its capacity as contractual representative of the Lenders
pursuant to Article X, and not in its individual capacity as a Lender, and any
successor Agent appointed pursuant to Article X.

 

2

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“Aggregate Commitment” means the aggregate of the Commitments of all of the
Lenders, as reduced from time to time pursuant to the terms hereof, which
Aggregate Commitment shall be in the amount of $450,000,000; provided that, for
all purposes of this Agreement (other than the definition of Available
Commitment) (i) the Aggregate Commitment shall be deemed to be the Non-Seasonal
Availability Amount for each day other than any day during a Seasonal
Availability Period and (ii) during a Seasonal Availability Period the Aggregate
Commitment shall be equal to $300,000,000 plus the aggregate amount of increases
in the Aggregate Commitment requested by the Borrower during such Seasonal
Availability Period subject to the limitations on such requests described in the
proviso of the definition of “Seasonal Availability Notice” (it being understood
that the Aggregate Commitment shall not exceed $450,000,000 (or if the Aggregate
Commitment is increased pursuant to Section 2.16 hereof, $550,000,000) at any
time).

“Aggregate Credit Exposure” means, at any time, the aggregate of the Credit
Exposure of all the Lenders.

“Agreement” means this Amended and Restated Credit Agreement, as it may be
amended or modified and in effect from time to time.

“Alternate Base Rate” or “ABR” means, for any day, a rate of interest per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the
Eurodollar Rate (excluding the Applicable Margin) for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the
Eurodollar Rate for any day shall be based on the rate appearing on the Reuters
Screen LIBOR01 Page (or on any successor or substitute page) at approximately
11:00 a.m. London time on such day (without any rounding). Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Eurodollar Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Eurodollar Rate, respectively.

“Applicable Fee Rate” means 0.30% per annum; provided that the Applicable Fee
Rate on the amount by which the Aggregate Commitment exceeds the Non-Seasonal
Availability Amount shall be, solely with respect to each day other than any day
during a Seasonal Availability Period, 0.20% per annum.

“Applicable Margin” means, (i) with respect to Floating Rate Advances, 0.75% per
annum and (ii) with respect to Eurodollar Advances, 1.75% per annum; provided
that from and after the date of delivery by the Borrower of the financial
statements described in Section 6.1(b) for the Fiscal Quarter ending as of
March 31, 2014 and thereafter, the Applicable Margin will be determined as of
the end of each Fiscal Quarter of the Borrower based upon the Applicable Margin
Availability for such Fiscal Quarter as set forth in the pricing grid below:

 

3

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Applicable Margin

Availability

   Eurodollar Advances     Floating Rate Advances  

³ $150,000,000

     1.75 %      0.75 % 

> $75,000,000 but < 150,000,000

     2.00 %      1.00 % 

£ $75,000,000

     2.25 %      1.25 % 

Changes in the Applicable Margin resulting from changes in Applicable Margin
Availability shall become effective on the first day of the next succeeding
quarter and shall remain in effect until the next change to be effected pursuant
to this paragraph. In the event that the Borrower shall fail to deliver the
Borrowing Base Certificate with respect to any fiscal quarter, the Applicable
Margin shall, from the date such Borrowing Base Certificate was required to be
delivered until the date on which it is delivered, be determined by reference to
the lowest Applicable Margin Availability in the foregoing grid.

“Applicable Margin Availability” means, at any date, (a) the sum of the
Availability (which shall be deemed to include Suppressed Availability for the
purpose of calculating Availability pursuant to this definition) on the last day
of each of the twelve preceding Fiscal Months (or if fewer than twelve Fiscal
Months have elapsed since the Effective Date, the number of Fiscal Months that
have actually elapsed since the Effective Date) ending on such date divided by
(b) twelve (or such lesser number of Fiscal Months that have actually elapsed
since the Effective Date).

“Applicable Mortgages” means any Mortgage with respect to which mortgage
recording taxes, documentary stamp taxes, intangible taxes and other similar
taxes are payable in connection with each Credit Extension (assuming that no
Credit Extensions were then outstanding).

“Applicable Mortgage Minimum Amount” means, at any time, the sum of the limits
on the maximum amount of the Obligations secured under all Applicable Mortgages
at such time.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Arrangers” means (i) J.P. Morgan Securities LLC and its successors,
(ii) Merrill Lynch, Pierce, Fenner & Smith Incorporated and its successors and
(iii) RBS Citizens, N.A., each in their capacity as Joint Lead Arrangers and
Joint Book Runners.

“Article” means an article of this Agreement unless another document is
specifically referenced.

“Assignment Agreement” is defined in Section 12.3(a).

“Authorized Officer” means any of the chief executive officer, chief financial
officer, vice president—controller or treasurer of a Loan Party, acting singly.

 

4

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“Availability” means, at any time, an amount equal to (x) the lesser of (a) the
Aggregate Commitment and (b) the Borrowing Base minus (y) the Aggregate Credit
Exposure; provided that the Aggregate Credit Exposure shall not exceed, until
the 2010 Parent Notes are discharged or defeased in accordance with Section 8.1
of the 2010 Parent Indenture, the amount permitted under and calculated in
accordance with the definition of “Borrowing Base” in the 2010 Parent Indenture.

“Available Commitment” means, at any time, the Aggregate Commitment then in
effect minus the Aggregate Credit Exposure at such time; provided that, for
purposes of Section 2.10(a), the aggregate amount of Swingline Loans outstanding
shall be deemed to be zero.

“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) commercial credit
cards, (b) stored value cards and (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).

“Bankruptcy Code” means Title 11 of the U.S. Code (11 U.S.C. § 101 et seq.) as
amended, reformed, or otherwise modified from time to time, and any rule or
regulation issued thereunder.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” has the meaning specified in the preamble hereto.

“Borrower Representative” means PHI, in its capacity as contractual
representative of the Borrower pursuant to Article XVII.

“Borrowing Base” means, at any time, the sum, without duplication, of:

(a) (i) for the months of May through November in each Fiscal Year, 85% of
Eligible Accounts Receivable or (ii) for the months of December through April in
each Fiscal Year subject to trailing dilution of not more than 3%, 90% of
Eligible Accounts Receivable, plus

(b) (i) for the months of May through November in each Fiscal Year, 80% of
Eligible Heating Oil and Other Fuel Inventory or (ii) for the months of December
through April in each Fiscal Year, 85% of Eligible Heating Oil and Other Fuel
Inventory, plus

(c) the lesser of (i) $7,500,000 and (ii) 40% of Eligible Other Inventory, plus

(d) the lesser of

(i) $80,000,000 and

(ii) the sum of

 

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(A) 75% of the Mortgage Value of Eligible Real Property, which amount shall be
reduced by estimated environmental liabilities determined by the Agent in its
Permitted

Discretion on a property-by-property basis (it being understood that the value
calculated in this clause (A) for any individual property shall never be less
than zero),

(B) 75% of the Net Orderly Liquidation Value of Eligible Vehicles,

(C) 75% of the Net Orderly Liquidation Value of Eligible Machinery and
Equipment, and

(D) 50% of the aggregate of the Customer Lists Value,

plus

(e) 100% of cash and Cash Equivalent Investments held in deposit accounts
located at, and subject to control agreements in favor of, the Agent, minus

(f) Reserves;

provided that (I) the amount described in clause (d)(i) above shall be
automatically reduced on a dollar-for-dollar basis by the Borrowing Base
Reduction Amount, (II) Customer Lists shall be reappraised on an annual basis in
accordance with Section 6.11and (III) except for (x) assets acquired in a
Permitted Acquisition consummated pursuant to Sections 2.15(b)(ii) or (d),
(y) Inventory and (z) Accounts, any assets acquired in connection with any
Permitted Acquisition shall not be included in the determination of the
Borrowing Base; provided further that with respect to Griffith Assets, the
components described in clauses (a), (b) and (c) above shall be limited to 65%
until the Administrative Agent shall have conducted and completed satisfactory
diligence on such assets (it being understood that if such diligence has not
been completed by the date which is 150 days following the acquisition of the
Griffith Assets, such components shall not be included in the calculation of the
Borrowing Base until the completion of diligence satisfactory to the
Administrative Agent). The Borrowing Base shall be determined based on the most
recent Borrowing Base Certificate delivered by the Borrower.

“Borrowing Base Certificate” means a certificate, signed by an Authorized
Officer of the Borrower Representative, in the form of Exhibit H or another form
which is acceptable to the Agent in its Permitted Discretion. Each Borrowing
Base Certificate shall set forth, among other things, a calculation of (a) the
Borrowing Base and (b) the “Borrowing Base” as defined in the 2010 Parent
Indenture.

“Borrowing Base Reduction Amount” means an amount equal to the sum of (a) all
Net Cash Proceeds of asset dispositions received by any Loan Party plus (b) all
insurance or condemnation proceeds received by any Loan Party; provided that
(x) such Net Cash Proceeds or insurance or condemnation proceeds shall be
disregarded in determining the Borrowing Base Reduction Amount to the extent
they are deposited in a deposit account located at, and subject to control
agreements in favor of, the Agent pursuant to Section 2.15(b) or (d), as
applicable, (y) such Net Cash Proceeds or insurance or condemnation proceeds
shall be disregarded in

 

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determining the Borrowing Base Reduction Amount to the extent that within twelve
months of the receipt thereof they are reinvested pursuant to Section 2.15(b) or
(d), as applicable, in replacement assets of like value (as determined in a
manner satisfactory to the Agent in its Permitted Discretion), and (z) in
determining the Borrowing Base Reduction Amount, the amount allocated to any
asset that is disposed of or that is the subject of any insurance or
condemnation proceeds so received shall be equal to the amount originally
allocated to such asset for purposes of determining the Borrowing Base (as
determined by the Agent in its Permitted Discretion).

“Borrowing Date” means a date on which an Advance or a Loan is made hereunder.

“Borrowing Notice” is defined in Section 2.1.1(b).

“Business Day” means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in U.S. dollars are
carried on in the London interbank market and (b) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in Chicago
for the conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.

“Capital Expenditures” means, for any period, without duplication, any
expenditure or commitment to expend money for any purchase or other acquisition
of any asset (other than pursuant to an Acquisition) which would be classified
as a fixed or capital asset on a consolidated balance sheet of the Parent and
its Subsidiaries prepared in accordance with GAAP.

“Capital Stock” means any and all corporate stock, units, shares, partnership
interests, membership interests, equity interests, rights, securities, or other
equivalent evidences of ownership (howsoever designated) issued by any Person.

“Capitalized Lease” of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

“Capitalized Lease Obligations” of a Person means the aggregate amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

“Carry Over Amount” is defined in Section 6.27.

“Cash Equivalent Investments” means (a) short-term obligations of, or fully
guaranteed by, the U.S., (b) commercial paper rated A-1 or better by S&P or P-1
or better by Moody’s, (c) demand deposit accounts maintained in the ordinary
course of business with any domestic office of any commercial bank organized
under the laws of the U.S. or any State thereof that has a combined capital and
surplus and undivided profits of not less than $500,000,000, and
(d) certificates of deposit issued by and time deposits with any domestic office
of any commercial bank organized under the laws of the U.S. or any State thereof
that has a combined capital and

 

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surplus and undivided profits of not less than $500,000,000; provided that, in
each case, the same provides for payment of both principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest.

“Change” is defined in Section 3.2.

“Change in Control” means the occurrence of any of the following events: (i) the
partners or shareholders, as the case may be, of the Borrower shall approve any
plan or proposal for the liquidation or dissolution of the Borrower; (ii) the
General Partner shall cease for any reason to be the sole general partner of the
Parent; (iii) the Parent ceases for any reason to beneficially own, directly or
indirectly, 100% of all classes of Capital Stock of the Borrower; (iv) the
Kestrel Group collectively shall cease for any reason to beneficially own
Capital Stock having the voting power to elect all of the directors or other
governing board of the General Partner; or (v) a “Change of Control” (or any
other defined term having a similar purpose) as defined in the 2010 Parent
Indenture shall occur.

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.

“Co-Documentation Agents” has the meaning specified in the recitals hereto.

“Co-Syndication Agents” has the meaning specified in the recitals hereto.

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.

“Collateral” means any and all Property covered by the Collateral Documents and
any and all other Property of any Loan Party, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of the Agent, on behalf of itself and the Lenders, to secure the
Secured Obligations.

“Collateral Access Agreement” means any landlord waiver or other agreement, in
form and substance reasonably satisfactory to the Agent, between the Agent and
any third party (including any bailee, consignee, customs broker, or other
similar Person) in possession of any Collateral or any landlord of any Loan
Party for any real Property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, or otherwise modified from
time to time.

“Collateral Documents” means, collectively, the Security Agreement, the
Mortgages and any other documents granting a Lien upon the Collateral as
security for payment of the Secured Obligations.

“Collateral Shortfall Amount” is defined in Section 2.1.2(l).

“Commitment” means, for each Lender, the obligation of such Lender to make Loans
to the Borrower, and participate in Facility LCs issued upon the application of
the Borrower, in an aggregate amount not exceeding the amount set forth in
Schedule I or as set forth in any

 

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Assignment Agreement that has become effective pursuant to Section 12.3(c), as
such amount may be modified from time to time pursuant to the terms hereof.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Commodity Hedging Agreement” means any agreement or arrangement designed solely
to protect any Loan Party against fluctuations in the price of petroleum
derivative products with respect to quantities of such products that such Loan
Party reasonably expects to purchase from suppliers, sell to their customers or
need for their inventory during the period covered by such agreement or
arrangement.

“Commodities Inventory” means all inventory consisting of petroleum derivative
products of, and held for sale by, the Loan Parties.

“Compliance Certificate” is defined in Section 6.1(e).

“Confidential Information Memorandum” means the Confidential Information
Memorandum dated December 2013 and furnished to certain Lenders.

“Consolidated Capital Expenditures” means, with reference to any period, the
Capital Expenditures of the Parent and its Subsidiaries calculated on a
consolidated basis for such period.

“Consolidated EBITDA” means Consolidated Net Income plus, to the extent deducted
from revenues in determining Consolidated Net Income, (a) Consolidated Interest
Expense, (b) expense for taxes paid or accrued, (c) depreciation,
(d) amortization and other non-cash charges (including any non-cash impact of
Financial Standards Accounting Board Statements 87 and 133), (e) cash
contributions to any Plan and (f) extraordinary non-cash losses (as determined
in accordance with GAAP) incurred other than in the ordinary course of business,
minus, to the extent included in Consolidated Net Income, extraordinary gains
(as determined in accordance with GAAP) realized other than in the ordinary
course of business, all calculated for the Parent and its Subsidiaries on a
consolidated basis. For the purposes of calculating Consolidated EBITDA for any
period (each, a “Reference Period”), (i) if at any time during such Reference
Period, the Parent or any Subsidiaries shall have made any Material Disposition,
Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property that
is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such Reference
Period, the Parent or any Subsidiaries shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Acquisition occurred on the first
day of such Reference Period. As used in this definition: “Material Acquisition”
means any Permitted Acquisition that involves the payment of consideration by
the Parent and its Subsidiaries in excess of $500,000; “Material Disposition”
means any sale, transfer or other disposition of property or series of related
sales, transfers or other dispositions of property that yields gross proceeds to
the Parent and the Subsidiaries in excess of $500,000.

 

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“Consolidated Fixed Charges” means, with reference to any period, without
duplication, cash Consolidated Interest Expense, plus scheduled principal
payments on Indebtedness made during such period, plus dividends or
distributions paid or made during such Period by the Parent, plus Capitalized
Lease payments, plus cash contributions to any Plan, all calculated for the
Parent and its Subsidiaries on a consolidated basis. For the purposes of
calculating Consolidated Fixed Charges for any Reference Period, (i) if at any
time during such Reference Period, the Parent or any Subsidiaries shall have
made any Material Disposition, Consolidated Fixed Charges for such Reference
Period shall be calculated after giving pro forma effect thereto as if such
Material Disposition occurred on the first day of such Reference Period and
(ii) if during such Reference Period, the Parent or any Subsidiaries shall have
made a Material Acquisition, Consolidated Fixed Charges for such Reference
Period shall be calculated after giving pro forma effect thereto as if such
Material Acquisition occurred on the first day of such Reference Period. As used
in this definition: “Material Acquisition” means any Permitted Acquisition that
involves the payment of consideration by the Parent and its Subsidiaries in
excess of $500,000; and “Material Disposition” means any sale, transfer or other
disposition of property or series of related sales, transfers or other
dispositions of property that yields gross proceeds to the Parent and the
Subsidiaries in excess of $500,000.

“Consolidated Interest Expense” means, with reference to any period, the
interest expense of the Parent and its Subsidiaries calculated on a consolidated
basis for such period.

“Consolidated Net Income” means, with reference to any period, the net income
(or loss) of the Parent and its Subsidiaries calculated on a consolidated basis
for such period.

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.

“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Parent or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.

“Conversion/Continuation Notice” is defined in Section 2.7.

“Copyrights” shall have the meaning given to such term in the Security
Agreement.

“Credit Exposure” means, as to any Lender at any time, the sum of (a) the
aggregate principal amount of its Revolving Loans outstanding at such time, plus
(b) an amount equal to all accrued interest, fees and other charges under this
Agreement then owing to it, plus (c) an amount equal to its Pro Rata Share of
the LC Obligations at such time, plus (d) an amount equal

 

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to its Pro Rata Share of the aggregate principal amount of Non-Ratable Loans,
Swingline Loans, Overadvances and Protective Advances outstanding at such time.

“Credit Extension” means the making of an Advance or the issuance of a Facility
LC hereunder.

“Credit Extension Date” means the Borrowing Date for an Advance or the issuance
date for a Facility LC.

“Customer Lists” means a list of the Borrower’s customers, specifying each
customer’s name, mailing address and phone number.

“Customer Lists Value” means, at the election of the Agent exercising its
Permitted Discretion, either (a) the value of the Customer Lists as determined
in a manner acceptable to the Agent (in its Permitted Discretion) by an
appraiser reasonably acceptable to the Agent or (b) the value of (i) the
distressed net orderly enterprise valuation (as determined by the Agent in its
Permitted Discretion) of the non-working capital assets of the Loan Parties less
(ii) the fair market value of Eligible Real Property less (iii) the Orderly
Liquidation Value of Eligible Vehicles less (iv) the Orderly Liquidation Value
of Eligible Machinery and Equipment.

“Default” means an event described in Article VII.

“Defaulting Lender” means any Lender that has (a) failed to fund any portion of
its Loans or participations in Letters of Credit within three Business Days of
the date required to be funded by it hereunder, unless such funding obligations
are subject to a good faith dispute between the Borrower and such Lender,
(b) notified the Borrower, the Agent, the LC Issuer or any Lender in writing
that it does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it does not intend
to comply with its funding obligations under this Agreement or under other
agreements in which it commits to extend credit (it being understood that a
Lender shall not be deemed a Defaulting Lender hereunder if its stated intention
not to fund is based upon another party’s failure to fulfill its obligations
under the applicable agreement), in each case unless such funding obligations
are subject to a good faith dispute between the Borrower and such Lender,
(c) failed, within three Business Days after request by the Agent, to confirm
that it will comply with the terms of this Agreement relating to its obligations
to fund prospective Loans and participations in then outstanding Letters of
Credit, unless such funding obligations are subject to a good faith dispute
between the Borrower and such Lender, (d) otherwise failed to pay over to the
Agent or any other Lender any other amount required to be paid by it hereunder
within three Business Days of the date when due, unless the subject of a good
faith dispute, or (e) (i) become or is insolvent or has a parent company that
has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment or
has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment.

 

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“Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to the Agent (in its Permitted Discretion), among any Loan Party, a
banking institution holding such Loan Party’s funds, and the Agent with respect
to collection and control of all deposits and balances held in a deposit account
maintained by any Loan Party with such banking institution, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

“Document” shall have the meaning given to such term in the Security Agreement.

“Domestic Subsidiary” means any Subsidiary which is organized under the laws of
the U.S. or any state of the U.S.

“Effective Date” means the date that the conditions precedent set forth in
Article IV are satisfied.

“Eligibility Definition” means any of the following terms, as defined herein:
“Eligible Accounts Receivable”, “Eligible Heating Oil and Other Fuel Inventory”,
“Eligible Machinery and Equipment”, “Eligible Other Inventory”, “Eligible Real
Property” and “Eligible Vehicles”.

“Eligible Accounts Receivable” means, at any time, the Accounts of a Loan Party
which the Agent determines in its Permitted Discretion are eligible as the basis
for Credit Extensions hereunder. Without limiting the Agent’s discretion
provided herein, Eligible Accounts Receivable shall not include any Account:

(a) which is not subject to a first priority perfected security interest in
favor of the Agent;

(b) which is subject to any Lien other than (i) a Lien in favor of the Agent and
(ii) a Permitted Lien which does not have priority over the Lien in favor of the
Agent;

(c) with respect to which more than 90 days have elapsed since the date of the
original invoice therefor or which is more than 60 days past the due date for
payment; provided that an installment Account that does not otherwise meet the
terms of this clause (c) shall nevertheless constitute an Eligible Account
Receivable so long as (i) with respect to any particular payment installment of
such installment Account, not more than 90 days have elapsed since the date on
which the original bill for such particular payment installment was mailed,
(ii) no particular payment installment of such installment Account is more than
60 days past the due date for payment and (iii) the aggregate of all such
installment Accounts does not exceed $25,000,000;

(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible hereunder;

(e) which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to all Loan Parties
exceeds 2% of the aggregate amount of Eligible Accounts Receivable of all Loan
Parties;

 

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(f) with respect to which any covenant, representation, or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;

(g) which (i) does not arise from the sale of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Agent (in its Permitted Discretion) which has
been sent or otherwise delivered to the Account Debtor, (iii) represents a
progress billing, (iv) is contingent upon such Loan Party’s completion of any
further performance, or (v) represents a sale on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis;

(h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by such Loan Party;

(i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;

(j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) has had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws,
(iv) has admitted in writing its inability, or is generally unable to, pay its
debts as they become due, (v) become insolvent, or (vi) ceased operation of its
business;

(k) which is owed by any Account Debtor which has sold all or a substantially
all of its assets;

(l) which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or Canada (other than the Province of Newfoundland)
or (ii) is not organized under applicable law of the U.S., any state of the
U.S., Canada, or any province of Canada (other than the Province of
Newfoundland) unless, in either case, such Account is backed by a Letter of
Credit acceptable to the Agent in its Permitted Discretion which is in the
possession of the Agent;

(m) which is owed in any currency other than U.S. dollars;

(n) which is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S.
unless such Account is backed by a Letter of Credit acceptable to the Agent (in
its Permitted Discretion) which is in the possession of the Agent, or (ii) the
government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other
steps necessary to perfect the Lien of the Agent in such Account have been
complied with to the Agent’s satisfaction in its Permitted Discretion;

 

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(o) which is owed by any Affiliate, director or executive officer of any Loan
Party;

(p) which, when added to all other Accounts owing to the Loan Parties by the
applicable Account Debtor or any of its Affiliates, does not exceed in face
amount (i) in the case of commercial Account Debtors, 2.0% of the total Eligible
Accounts Receivable and (ii) in the case of residential Account Debtors, 1.0% of
the total Eligible Accounts Receivable;

(q) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such
indebtedness;

(r) which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent of any such counterclaim, deduction, defense, setoff or
dispute;

(s) which is evidenced by any promissory note, chattel paper, or instrument;

(t) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit such Loan Party to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Loan Party has filed such
report or qualified to do business in such jurisdiction;

(u) with respect to which such Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in the ordinary course of business; or

(v) which the Agent determines (in its Permitted Discretion) may not be paid by
reason of the Account Debtor’s inability to pay or which the Agent otherwise
determines (in its Permitted Discretion) is unacceptable for any reason
whatsoever.

“Eligible Carrier” means each of the carriers and pipeline companies listed on
Schedule 1.1B or otherwise approved from time to time by the Agent in its
Permitted Discretion.

“Eligible Heating Oil and Other Fuel Inventory” means, at any time, the
Inventory of a Loan Party consisting of propane, home heating oil, diesel fuel
and other petroleum derivative products, but excluding natural gas, which the
Agent determines in its Permitted Discretion is eligible as the basis for Credit
Extensions hereunder and as to which all of the following requirements have been
fulfilled to the reasonable satisfaction of the Agent:

(a) such Inventory is owned by such Loan Party, is subject to a first priority
perfected Lien in favor of the Agent, and is subject to no other Lien whatsoever
other than a Permitted Lien which does not have priority over the Lien in favor
of the Agent;

(b) such Inventory is not held on consignment;

 

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(c) such Inventory is of customary quality and meets all standards applicable to
such Inventory, its use or sale imposed by any Governmental Authority having
regulatory authority over such matters;

(d) such Inventory is of a type sold in the ordinary course of the business of
such Loan Party;

(e) such Inventory is located within the United States (i) in the Buckeye or
Colonial pipeline systems, (ii) in commercial storage facilities; (iii) at one
of the locations listed in Exhibit A to the Security Agreement; or (iv) in
transit to a location described in the foregoing clause (i), (ii) or (iii) with
an Eligible Carrier;

(f) such Inventory does not constitute goods in transit unless it is in transit
with an Eligible Carrier;

(g) such Inventory is stored in storage facilities of such Loan Party or in
commercial storage facilities and if located in a warehouse or other facility
leased by such Loan Party, the lessor has delivered to the Agent a waiver,
consent and agreement in form and substance satisfactory to the Agent (in its
Permitted Discretion) or a Reserve for rent, charges, and other amounts due or
to become due with respect to such warehouse or facility has been established by
the Agent in its Permitted Discretion; provided that any such Inventory stored
in any particular commercial storage facility or warehouse does not in the
aggregate exceed 15% of the total Eligible Heating Oil and Other Fuel Inventory;

(h) such Inventory has not been delivered to a customer of such Loan Party
(regardless of whether such delivery is on a consignment basis) and has not been
returned by any customer; and

(i) in the case of any Inventory consisting of any petroleum derivative products
other than home heating oil, such Inventory does not exceed 10% of the total
Eligible Heating Oil and Other Fuel Inventory.

“Eligible Machinery and Equipment” means, at any time, the Machinery and
Equipment (other than Vehicles and items included in the definition of Eligible
Other Inventory) of a Loan Party then used or useful in such Loan Party’s
business, which the Agent determines in its Permitted Discretion is eligible as
the basis for Credit Extensions hereunder and as to which all of the following
requirements have been fulfilled to the reasonable satisfaction of the Agent:

(a) such Machinery and Equipment (i) is owned by such Loan Party, (ii) is
subject to a first priority perfected Lien in favor of the Agent and (iii) is
subject to no other Lien whatsoever other than a Permitted Lien which does not
have priority over the Lien in favor of the Agent;

(b) the full purchase price for such Machinery and Equipment has been paid by
such Loan Party;

(c) such Machinery and Equipment is located on premises (i) owned by such Loan
Party, which premises are subject to a first priority perfected Lien in favor of
the

 

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Agent and to no other Lien whatsoever other than a Permitted Lien which does not
have priority over the Lien in favor of the Agent or (ii) leased by such Loan
Party with respect to which the Agent has received waiver, consent and agreement
in form and substance satisfactory to the Agent;

(d) such Machinery and Equipment is in reasonable repair and working order and
is used or held for use by such Loan Party in the ordinary course of business of
such Loan Party;

(e) such Machinery and Equipment is not subject to any agreement which
materially restricts the ability of the Loan Parties to use, sell, transport or
dispose of such Machinery and Equipment or which materially restricts the
Agent’s ability to take possession of, sell or otherwise dispose of such
Machinery and Equipment; and

(f) such Machinery and Equipment does not constitute “fixtures” under the
applicable laws of the jurisdiction in which such Machinery and Equipment is
located;

provided, however, that with respect to any item of Machinery or Equipment which
is subject to a Permitted Lien and which satisfies each of the eligibility
criteria set forth above, only that portion of such item which is in excess of
the amount secured by such Permitted Lien shall be deemed to constitute Eligible
Machinery and Equipment.

“Eligible Other Inventory” means, at any time, the Inventory of a Loan Party
consisting of furnaces, boilers and other heating components and replacement
parts, air conditioner and air conditioning components, water purifying
equipment and parts, and other related equipment and parts held for resale in
the ordinary course of business, but excluding Eligible Heating Oil and Other
Fuel Inventory, which the Agent determines in its Permitted Discretion is
eligible as the basis for Credit Extensions hereunder. Without limiting the
Agent’s discretion provided herein, Eligible Other Inventory shall not include
any Inventory:

(a) which is not subject to a first priority perfected Lien in favor of the
Agent;

(b) which is subject to any Lien other than (i) a Lien in favor of the Agent and
(ii) a Permitted Lien which does not have priority over the Lien in favor of the
Agent;

(c) which is, in the Agent’s Permitted Discretion, slow moving, obsolete,
unmerchantable, defective, unfit for sale, not salable at prices approximating
at least the cost of such Inventory in the ordinary course of business or
unacceptable due to age, type, category and/or quantity;

(d) with respect to which any covenant, representation, or warranty contained in
this Agreement or the Security Agreement has been breached or is not true;

(e) which does not conform to all standards imposed by any Governmental
Authority;

 

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(f) which is not located in the U.S. or is in transit with a common carrier from
vendors and suppliers;

(g) which is located in any location leased by such Loan Party unless (i) the
lessor has delivered to the Agent a Collateral Access Agreement or (ii) a
Reserve for rent, charges, and other amounts due or to become due with respect
to such facility has been established by the Agent in its Permitted Discretion;

(h) which is located in any third party warehouse or is in the possession of a
bailee and is not evidenced by a Document, unless (i) such warehouseman or
bailee has delivered to the Agent a Collateral Access Agreement and such other
documentation as the Agent may require or (ii) an appropriate Reserve has been
established by the Agent in its Permitted Discretion;

(i) which is the subject of a consignment by such Loan Party as consignor;

(j) which is perishable;

(k) which contains or bears any Intellectual Property Rights licensed to such
Loan Party unless the Agent is satisfied in its Permitted Discretion that it may
sell or otherwise dispose of such Inventory without (i) infringing the rights of
such licensor, (ii) violating any contract with such licensor, or
(iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current
licensing agreement;

(l) which is not reflected in a current inventory report of such Loan Party; or

(m) which the Agent otherwise determines in its Permitted Discretion is
unacceptable for any reason whatsoever.

provided, however, that with respect to any item of Equipment which is subject
to a Permitted Lien and which satisfies each of the eligibility criteria set
forth above, only that portion of such item which is in excess of the amount
secured by such Permitted Lien shall be deemed to constitute Eligible Other
Inventory.

“Eligible Real Property” means, at any time, any parcel of Material Real
Property of any Loan Party as to which each of the following conditions has been
satisfied at such time:

(a) (i) a Lien on such parcel of Material Real Property shall have been granted
by a Loan Party in favor of the Agent pursuant to a Mortgage, (ii) such Mortgage
shall be in full force and effect in favor of the Agent at such time, (iii) such
Mortgage shall have been recorded in the appropriate jurisdiction or
jurisdictions to perfect the Lien granted pursuant to such Mortgage and (iv) all
applicable mortgage recording taxes shall have been paid, provided that such
Mortgage need not have been so recorded (and any such mortgage recording taxes
need not have been so paid) if an effective title insurance policy (naming the
Agent as the insured thereunder) shall have been issued that otherwise complies
with the requirements of clause (c) (i) or (ii) of this definition and that
provides

 

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“gap” coverage insuring against any exceptions that may arise prior to the
actual recording of such Mortgage (and the payment of any such recording taxes);

(b) the Agent and the title insurance company issuing the policy referred to in
clause (c) of this definition shall have received maps or plats of an as-built
survey of the sites of the Material Real Property covered by such Mortgage
certified to the Agent and such title insurance company in a manner reasonably
satisfactory to them, dated a date reasonably satisfactory to the Agent and such
title insurance company, by an independent professional licensed land surveyor
reasonably satisfactory to the Agent and such title insurance company, which
maps or plats and the surveys on which they are based shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such maps,
plats or surveys the following: (A) the locations on such sites of all the
buildings, structures and other improvements and the established building
setback lines (where setback information is readily obtainable); (B) the lines
of streets abutting such sites and the width thereof; (C) all access and other
easements appurtenant to such sites or necessary to use such sites; (D) all
roadways, paths, driveways, easements, encroachments and overhanging projections
and similar encumbrances affecting such sites, whether recorded, apparent from a
physical inspection of such sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on such sites; and (F) if such sites are described as being on a
filed map, a legend or other information relating the survey to said map;

(c) the Agent shall have received in respect of such parcel of Material Real
Property (i) a mortgagee’s title policy (or policies) or marked-up unconditional
binder (or binders) for such insurance dated a date reasonably satisfactory to
the Agent. Each such policy shall (A) be in an amount not less than the Mortgage
Value (as of the date such parcel of Material Real Property becomes a parcel of
Eligible Real Property) of such parcel of Material Real Property, (B) be issued
at ordinary rates, (C) insure that the Mortgage insured thereby creates a valid
first Lien on such parcel of Material Real Property free and clear of all
defects and encumbrances, except such as may be approved by the Agent (in its
Permitted Discretion) and Permitted Mortgage Liens, (D) name the Agent for the
benefit of the Lenders as the insured thereunder, (E) be in the form of ALTA
Loan Policy—1992 (or such local equivalent thereof as is reasonably satisfactory
to the Agent), (F) contain a comprehensive lender’s endorsement and such other
endorsements as may be reasonably requested by the Agent and (G) be issued by
Chicago Title Insurance Company, First American Title Insurance Company, Lawyers
Title Insurance Corporation or any other title company reasonably satisfactory
to the Agent (including any such title companies acting as co-insurers or
reinsurers) or (ii) in the case of any such parcel of Material Real Property
subject to a Mortgage pursuant to the Existing Credit Agreement as of the
Effective Date, a date-down endorsement to the mortgagee’s title policy issued
by the title company that issued the title policy covering such Existing
Mortgage in connection with the Existing Credit Agreement, which endorsement
shall update the effective date of such existing title insurance policy and
amend the description of the insured Existing Mortgage to include the amendment
to

 

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such Existing Mortgage. The Agent shall have received (x) evidence satisfactory
to it (in its Permitted Discretion) that all premiums in respect of each such
policy or endorsement, as the case may be, have been paid and (y) a copy of all
documents referred to, or listed as exceptions to title, in such title policy
(or policies);

(d) the Agent shall have received a Final Appraisal with respect to such parcel
of Material Real Property;

(e) with respect to any such parcel of Material Real Property upon which a
Mortgage is granted, a summary Phase I environmental report with respect to such
parcel of Material Real Property, dated a date satisfactory to the Agent in its
Permitted Discretion and in form and substance reasonably satisfactory to the
Agent shall have been delivered to the Agent, accompanied by a reliance letter
in favor of the Agent and the Lenders in form and substance reasonably
satisfactory to the Agent; and

(f) if such parcel of Material Real Property is subject to a ground lease in
favor of any Loan Party as lessee, no consent shall be required under such
ground lease to mortgage or foreclose upon such parcel of Material Real Property
(or such consent shall have been obtained).

“Eligible Vehicles” means, at any time, the Equipment of a Loan Party consisting
of trucks, vans and other vehicles used to transport home heating oil, diesel
fuel and other petroleum derivative products and other Inventory (other than
propane and natural gas), or are used primarily in connection with the
provisions of service to customers, which the Agent determines in its Permitted
Discretion is eligible as the basis for Credit Extensions hereunder and as to
which all of the following requirements have been fulfilled to the reasonable
satisfaction of the Agent:

(a) such Equipment (i) is owned by such Loan Party, (ii) is subject to a first
priority perfected Lien in favor of the Agent and (iii) is subject to no other
Lien whatsoever other than a Permitted Lien which does not have priority over
the Lien in favor of the Agent;

(b) the full purchase price for such Equipment has been paid by such Loan Party;

(c) such Equipment is located on premises (i) owned by such Loan Party, which
premises are subject to a first priority perfected Lien in favor of the Agent
and to no other Lien whatsoever other than a Permitted Lien which does not have
priority over the Lien in favor of the Agent, (ii) leased by such Loan Party
with respect to which the Agent has received waiver, consent and agreement in
form and substance satisfactory to the Agent, or (iii) is both (A) currently
being tracked by the Borrower pursuant to a GPS or other similar system and
(B) “at or in transit to” a Borrower location, the home of the driver of such
Equipment or other location pursuant to a legitimate business purpose;

(d) such Equipment is in reasonable repair and working order and is used or held
for use by such Loan Party in the ordinary course of business of such Loan
Party;

 

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(e) such Equipment is not subject to any agreement which materially restricts
the ability of the Loan Parties to use, sell, transport or dispose of such
Equipment or which materially restricts the Agent’s ability to take possession
of, sell or otherwise dispose of such Equipment; and

(f) such Equipment does not constitute “fixtures” under the applicable laws of
the jurisdiction in which such Equipment is located;

provided, however, that with respect to any item of Equipment which is subject
to a Permitted Lien and which satisfies each of the eligibility criteria set
forth above, only that portion of such item which is in excess of the amount
secured by such Permitted Lien shall be deemed to constitute Eligible Vehicles.

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, including without limitation common laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to (a) the protection of the environment,
(b) the effect of the environment on human health, (c) emissions, discharges or
releases of Materials of Environmental Concern into the environment, or (d) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern or the clean-up or
other remediation thereof.

“Equipment” has the meaning specified in the Security Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

“ERISA Event” means (a) a Reportable Event with respect to any Plan, (b) a
determination that any Plan is, or is expected to be, in “at risk” status
(within the meaning of Section 430 of the Code or Title IV of ERISA), (c) the
taking of any steps to terminate any Plan, (d) the withdrawal by any Loan Party
or any Controlled Group member from any Multiemployer Plan or the initiation of
steps to do so, (e) receipt by any Loan Party or any Controlled Group member of
a notice that any Multiemployer Plan is, or is expected to be, Insolvent, in
Reorganization, or in “endangered” or “critical status” (within the meaning of
Section 432 of the Code or Section 305 or Title IV of ERISA), (f) any Loan Party
or any Controlled Group member has incurred or is reasonably expected to incur,
any Withdrawal Liability to one or more Multiemployer Plans, or (g) any failure
by any Single Employer Plan to satisfy the minimum funding standards (within the
meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable
to such Single Employer Plan, whether or not waived.

“Eurodollar Advance” means an Advance which, except as otherwise provided in
Section 2.12, bears interest at the Eurodollar Rate.

“Eurodollar Base Rate” means, with respect to any Eurodollar Advance for any
Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any
successor or substitute

 

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page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of
such Service, as determined by the Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the “Eurodollar
Base Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

“Eurodollar Loan” means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Eurodollar Rate.

“Eurodollar Rate” means, with respect to any Eurodollar Advance for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the sum of (a) the product of (i) the Eurodollar Base Rate
for such Interest Period multiplied by (ii) the Statutory Reserve Rate plus
(b) the Applicable Margin.

“Excluded Swap Obligation” means, with respect to any Guarantor, (a) any Swap
Obligation if, and to the extent that, and only for so long as, all or a portion
of the guarantee of such Guarantor of, or the grant by such Guarantor of a
security interest to secure, as applicable, such Swap Obligation (or any
guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any
rule, regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Guarantor’s failure to constitute an “eligible contract participant,” as defined
in the Commodity Exchange Act and the regulations thereunder, at the time the
guarantee of (or grant of such security interest by, as applicable) such
Guarantor becomes or would become effective with respect to such Swap Obligation
or (b) any other Swap Obligation designated as an “Excluded Swap Obligation” of
such Guarantor as specified in any agreement between the relevant Loan Parties
and counterparty applicable to such Swap Obligations, and agreed by the
Administrative Agent. If a Swap Obligation arises under a master agreement
governing more than one Swap, such exclusion shall apply only to the portion of
such Swap Obligation that is attributable to Swaps for which such guarantee or
security interest is or becomes illegal.

“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Agent, (i) taxes imposed on its overall revenue or net
income, and franchise taxes (imposed in lieu of net income taxes) imposed on it,
by (a) the jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized or (b) the jurisdiction in which the Agent’s or such
Lender’s principal executive office or such Lender’s applicable Lending
Installation is located and (ii) any U.S. federal withholding Taxes imposed
under FATCA.

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

“Existing Credit Agreement” has the meaning specified in the Recitals hereto.

 

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“Existing Lenders” has the meaning specified in the Recitals hereto.

“Existing Letters of Credit” means the letters of credit set forth on Schedule
1.1A that have been issued prior to the Effective Date by the LC Issuers
identified on Schedule 1.1A.

“Existing Mortgages” means each of the mortgages, deeds of trust or other
agreements made pursuant to the Existing Credit Agreement by any Loan Party in
favor of the Agent for the benefit of the Agent and the Lenders.

“Facility” means the credit facility described in Section 2.1 hereof to be
provided to the Borrower on the terms and conditions set forth in this
Agreement.

“Facility LC” is defined in Section 2.1.2(a).

“Facility LC Application” is defined in Section 2.1.2(c).

“Facility LC Collateral Account” is defined in Section 2.1.2(j).

“Facility Termination Date” means January 14, 2019 or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to
the terms hereof; provided that Facility Termination Date shall mean June 1,
2017 unless as of such date (i) the Borrower has repaid, prepaid or otherwise
defeased at least $100,000,000 of 2010 Parent Notes and (ii) Availability is
equal to or greater than the aggregate amount required to repay the remaining
outstanding 2010 Parent Notes (the “Payoff Amount”); provided further that in
the event that Availability is less than the Payoff Amount on any date after
June 1, 2017, the Extended Termination Date shall mean the date which is three
Business Days following such date.

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

“Federal Funds Effective Rate” means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its Permitted
Discretion.

“Fee Letter” is defined in Section 2.10(c).

“Final Appraisal” means, with respect to any parcel of Material Real Property, a
final complete appraisal of the value of such parcel of Material Real Property,
as the case may be, commissioned in connection with this Agreement and delivered
after the Effective Date and

 

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valued on an “alternative use” basis which in the Permitted Discretion of the
Agent satisfies all applicable requirements of FIRREA and the Uniform Standards
of Professional Appraisal Practice.

“Financial Contract” of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.

“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended.

“Fiscal Month” means the calendar month.

“Fiscal Quarter” means any of the quarterly accounting periods of the Parent,
ending on December 31, March 31, June 30 and September 30 of each year.

“Fiscal Year” means any of the annual accounting periods of the Parent ending on
September 30 of each year.

“Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each
Fiscal Month of the Parent for the then most-recently ended 12 Fiscal Months, of
(a) Consolidated EBITDA minus the unfinanced portion of Consolidated Capital
Expenditures (excluding, for each such period, actual Capital Expenditures in
respect of propane tanks in an amount not to exceed $4,500,000) minus taxes paid
in cash to (b) Consolidated Fixed Charges, all calculated for the Parent and its
Subsidiaries on a consolidated basis.

“Fixtures” has the meaning specified in the Security Agreement.

“Floating Rate” means, for any day, a rate per annum equal to (a) the Alternate
Base Rate for such day plus (b) the Applicable Margin, in each case changing
when and as the Alternate Base Rate changes.

“Floating Rate Advance” means an Advance which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.

“Floating Rate Loan” means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funding Account” is defined in Section 2.5.

 

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“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.5.

“General Partner” means Kestrel Heat LLC, a Delaware limited liability company.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, taxing, regulatory or administrative functions of or pertaining to
government.

“Griffith Acquisition” means, the acquisition of Griffith Energy Services, Inc.,
a New York corporation, by the Borrower, PHI or any of their respective
Affiliates.

“Griffith Assets” means, the assets acquired in the Griffith Acquisition.

“Guaranteed Obligations” is defined in Section 15.1.

“Guarantor” means the Parent, the Borrower and each of the Parent’s other direct
or indirect Domestic Subsidiaries, including any Person who becomes a Loan Party
pursuant to a Joinder Agreement and their successors and assigns.

“Guaranty” means Article XV of this Agreement.

“Indebtedness” of a Person means such Person’s (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person,
(d) obligations which are evidenced by notes, acceptances, or other instruments,
(e) obligations of such Person to purchase securities or other Property arising
out of or in connection with the sale of the same or substantially similar
securities or Property or any other Off-Balance Sheet Liabilities,
(f) Capitalized Lease Obligations, (g) Contingent Obligations for which the
underlying transaction constitutes Indebtedness under this definition, (h) the
maximum available stated amount of all letters of credit or bankers’ acceptances
created for the account of such Person and, without duplication, all
reimbursement obligations with respect to letters of credit, (i) Net
Mark-to-Market Exposure under all Rate Management Transactions, (j) obligations
of such Person under any Sale and Leaseback Transaction, (k) obligations under
any liquidated earn-out and (l) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person.

“Indemnified Taxes” means any and all Taxes, but excluding Excluded Taxes and
Other Taxes.

“Insolvent” with respect to any Multiemployer Plan means the condition that such
Multiemployer Plan is insolvent within the meaning of Section 4245 of ERISA.

 

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“Intellectual Property Rights” means, with respect to any Person, all of such
Person’s Patents, Copyrights, Trademarks, and Licenses, all other rights under
any of the foregoing, all extensions, renewals, reissues, divisions,
continuations and continuations-in-part of any of the foregoing, and all rights
to sue for past, present, and future infringement of any of the foregoing.

“Intercompany Notes” is defined in Section 6.17(e).

“Interest Period” means, with respect to a Eurodollar Advance, a period of one,
two, three or six months commencing on a Business Day selected by the Borrower
Representative pursuant to this Agreement. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided however, that if said next succeeding Business
Day falls in a new calendar month, such Interest Period shall end on the
immediately preceding Business Day.

“Inventory” has the meaning specified in the Security Agreement.

“Investment” of a Person means any (a) loan, advance, extension of credit (other
than accounts receivable arising in the ordinary course of business on terms
customary in the trade) or contribution of capital by such Person, (b) stocks,
bonds, mutual funds, partnership interests, notes, debentures, securities or
other Capital Stock owned by such Person, (c) any deposit accounts and
certificate of deposit owned by such Person, and (d) structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person; provided that any Rate Management Transaction entered into
in compliance with Section 6.17(i) shall not constitute an “Investment.”

“Joinder Agreement” is defined in Section 6.15(a).

“Kestrel Group” means Kestrel Energy Partners, LLC and any officers, directors
or employees of the General Partner owning equity interests in the General
Partner.

“LC Exposure” is defined in Section 2.23(c).

“LC Fee” is defined in Section 2.10(b).

“LC Issuer” means each of (a) Chase (or any subsidiary or Affiliate of Chase
designated by Chase) and (b) Bank of America, N.A.

“LC Obligations” means, at any time, the sum, without duplication, of (a) the
aggregate undrawn stated amount under all Facility LCs outstanding at such time
plus (b) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

“LC Payment Date” is defined in Section 2.1.2(d).

 

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“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

“Lending Installation” means, with respect to a Lender, the LC Issuer or the
Agent, the office, branch, subsidiary or Affiliate of such Lender, LC Issuer or
the Agent listed on the signature pages hereof or on a Schedule or otherwise
selected by such Lender, the LC Issuer or the Agent pursuant to Section 2.22.

“Letter of Credit” of a Person means a letter of credit or similar instrument
which is issued upon the application of such Person or upon which such Person is
an account party or for which such Person is in any way liable.

“Licenses” shall have the meaning given to such term in the Security Agreement.

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).

“Loan Documents” means this Agreement, any Notes, the Facility LC Applications,
the Collateral Documents, the Guaranty and all other agreements, instruments,
documents and certificates identified in Section 4.1 executed and delivered to,
or in favor of, the Agent or any Lenders and including all other pledges, powers
of attorney, consents, assignments, contracts, notices, letter of credit
agreements and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Loan Party, or any employee of any Loan Party,
and delivered to the Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby, but shall not include agreements in
connection with Rate Management Transactions. Any reference in the Agreement or
any other Loan Document to a Loan Document shall include all appendices,
exhibits or schedules thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to the Agreement or such Loan
Document as the same may be in effect at any and all times such reference
becomes operative.

“Loan Parties” means the Parent, the Borrower and each other Guarantor.

“Loans” means, with respect to a Lender, such Lender’s loans made pursuant to
Article II (or any conversion or continuation thereof), including Non-Ratable
Loans, Swingline Loans, Overadvances and Protective Advances.

“Machinery” has the meaning specified in the Security Agreement.

“Margin Stock” is defined in Section 5.13.

“Management Fees and Expenses” means any amounts paid by a Loan Party in respect
of any management, consulting or other similar arrangement with an equity holder
or Affiliate of a Loan Party (other than another Loan Party).

 

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“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, Property, condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries taken as a whole or (b) the validity or
enforceability of any of the Loan Documents or the rights and remedies of the
Agent, the LC Issuer and the Lenders thereunder.

“Material Indebtedness” means Indebtedness in an outstanding principal amount of
$1,000,000 or more in the aggregate (or the equivalent thereof in any currency
other than U.S. dollars).

“Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or which provides for the incurrence of
Indebtedness in an amount which would constitute Material Indebtedness (whether
or not an amount of Indebtedness constituting Material Indebtedness is
outstanding thereunder).

“Material Real Property” means real property not subject to a mortgage, deed of
trust or other similar instrument (other than pursuant hereto) that (i) is owned
in fee by any Loan Party and is not subject to a ground lease in favor of any
other Person as lessee, (ii) is located in the United States and (iii) (A) has
been developed with a facility used of useful in the business of the Loan
Parties with respect to which a certificate of occupancy or temporary
certificate of occupancy or the local equivalent thereof (or any other similar
proof of completion) shall have been issued by the relevant Governmental
Authority or (B) is undeveloped and has a book value (excluding soft costs) of
at least $100,000.

“Materials of Environmental Concern” means (a) any and all hazardous substances,
hazardous materials or toxic substances as defined in the Clean Air Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, and the
Hazardous Materials Transportation Act and the regulations promulgated
thereunder, (b) any substance or materials listed as hazardous or toxic in the
United States Department of Transportation Table, by the Environmental
Protection Agency or any successor agency or under any applicable Federal,
state, local or foreign laws or regulations, (c) any asbestos, poly-chlorinated
biphenyls, urea formaldehyde foam, explosives or radioactive waste, (d) any
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products, or (e) any other chemical, material or substance which is not
classified as hazardous or toxic but exposure to which is prohibited, limited or
regulated by any applicable Federal, state, local or foreign authority or other
governmental authority having jurisdiction over the Mortgaged Property,
including, without limitation, propane and any related petroleum products or
by-products.

“Maximum Liability” is defined in Section 15.9.

“Modify” and “Modification” are defined in Section 2.1.2(a).

“Monthly Reports” is defined in Section 4.1(m).

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage Value” means, with respect to any parcel of Eligible Real Property,
the lesser of (a) the maximum stated amount secured by the Lien on such parcel
of Eligible Real Property

 

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granted in favor of the applicable secured mortgagee pursuant to the relevant
Mortgage and (b) the value of such parcel of Eligible Real Property set forth in
the Final Appraisal delivered with respect thereto.

“Mortgages” means any mortgage, deed of trust or other agreement which conveys
or evidences a Lien in favor of the Agent, for the benefit of the Agent and the
Lenders, on real Property of a Loan Party, including the Existing Mortgages and
any amendments, modifications or supplements thereto.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Parent or any member of the Controlled Group is obligated
to make contributions.

“Net Cash Proceeds” means, if in connection with (a) an asset disposition, cash
proceeds net of (i) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable
by such Loan Party in connection therewith (in each case, paid to
non-Affiliates), (ii) transfer taxes, (iii) amounts payable to holders of senior
Liens on such asset (to the extent such Liens constitute Permitted Liens
hereunder), if any, and (iv) an appropriate reserve for income taxes in
accordance with GAAP established in connection therewith, (b) the issuance or
incurrence of Indebtedness, cash proceeds net of attorneys’ fees, investment
banking fees, accountants’ fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in connection therewith or,
(c) an equity issuance, cash proceeds net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith.

“Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. As used in
this definition, “unrealized losses” means the fair market value of the cost to
such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as
of that date), and “unrealized profits” means the fair market value of the gain
to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming such Rate Management Transaction were to be terminated
as of that date). For the avoidance of doubt, “Net Mark-to-Market Exposure”
shall not include the upfront cost of purchasing call or put options.

“Net Orderly Liquidation Value” means, with respect to Inventory, Equipment or
Machinery of any Person, the net orderly liquidation value thereof as determined
after the Effective Date in a manner acceptable to the Agent (in its Permitted
Discretion) by an appraiser reasonably acceptable to the Agent.

“Non-Consenting Lender” is defined in Section 8.3(d).

“Non-Paying Guarantor” is defined in Section 15.10.

“Non-Ratable Loan” and “Non-Ratable Loans” are defined in Section 2.1.3.

 

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“Non-Seasonal Availability Amount” means $300,000,000; provided that, if the
Aggregate Commitment is increased pursuant to Section 2.16 hereof, the
Non-Seasonal Availability Amount shall (if the Borrower so elects on the
effective date of any such increase) be deemed to be an amount equal to the
Non-Seasonal Availability Amount in effect immediately prior to such increase
plus an amount equal to up to the aggregate amount of such increase and all
prior increases in Commitments (to the extent such increased Commitments have
not since been terminated or reduced in accordance with this Agreement) made
pursuant to Section 2.16.

“Non-U.S. Lender” is defined in Section 3.5(d).

“Note” is defined in Section 2.21(d).

“Obligations” means, collectively, all unpaid principal of and accrued and
unpaid interest on (including interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans,
all LC Obligations, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party
arising under the Loan Documents; provided, that for purposes of determining any
Guarantor Obligations of any Guarantor under this Agreement, the definition of
“Obligations” shall not create any guarantee of (or grant of security interest
by any Guarantor to support, if applicable) any Excluded Swap Obligations of
such Guarantor.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any Sale and
Leaseback Transaction which is not a Capitalized Lease, (c) any indebtedness,
liability or obligation under any so-called “synthetic lease” transaction
entered into by such Person, or (d) any indebtedness, liability or obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheets of such Person, but excluding from this clause (d) Operating
Leases.

“Operating Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

“Operating Lease Obligations” means, as at any date of determination, the amount
obtained by aggregating the present values, determined in the case of each
particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Parent and its
Subsidiaries.

“Other Taxes” is defined in Section 3.5(b).

“Overadvances” has the meaning specified in Section 2.1.4(c).

 

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“Parent” means Star Gas Partners, L.P., a Delaware limited partnership.

“Parent Subordinated Debt” is defined in Section 6.31.

“Participants” is defined in Section 12.2(a).

“Participant Register” is defined in Section 12.2(c).

“Patents” shall have the meaning given to such term in the Security Agreement.

“Paying Guarantor” is defined in Section 15.10.

“Payment Date” means (a) with respect to interest payments due on any Floating
Rate Loan, the first day of each calendar month and the Facility Termination
Date, (b) with respect to interest payments due on any Eurodollar Loan, (i) the
last day of the applicable Interest Period, (ii) in the case of any Interest
Period in excess of three months, the day which is three months after the first
day of such Interest Period and (iii) the date on which such Eurodollar Loan is
prepaid, whether by acceleration or otherwise, and the Facility Termination
Date, and (c) with respect to any payment of LC Fees, Unused Commitment Fees or
fronting fees in respect of Letters of Credit, the first day of each calendar
month and the Facility Termination Date.

“Payoff Amount” is defined in the definition of “Facility Termination Date”.

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

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction
that satisfies each of the following requirements:

(a) such Acquisition is not a hostile or contested acquisition;

(b) the business acquired in connection with such Acquisition is (i) located in
the U.S., (ii) organized under U.S. and applicable state laws, and (iii) except
for assets not constituting more than 5% of the assets acquired in such
Acquisition, not engaged, directly or indirectly, in any line of business other
than the businesses in which the Loan Parties are engaged on the Effective Date
and any business activities that are substantially similar, related, or
incidental thereto;

(c) both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to
the extent the Agent and the Lenders have been notified in writing by the Loan
Parties that any representation or warranty is not correct and the Required
Lenders have explicitly waived in writing compliance with such representation or
warranty) and no Default or Unmatured Default exists, will exist, or would
result therefrom;

(d) if the consideration for such Acquisition is greater than $5,000,000, as
soon as available, but not less than ten days prior to such Acquisition, the
Borrower

 

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Representative has provided the Lenders (i) notice of such Acquisition and
(ii) a copy of all business and financial information reasonably requested by
the Agent, including pro forma historical and projected financial information
and cash flow and Availability calculations provided in a manner reasonably
acceptable to the Agent;

(e) if the Accounts and Inventory acquired in connection with such Acquisition
are proposed to be included in the determination of the Borrowing Base, the
Agent shall have conducted an audit and field examination of such Accounts and
Inventory to its reasonable satisfaction;

(f) the purchase price of such Acquisition (other than the Griffith Acquisition
with respect to which this clause (f) shall not apply) does not exceed
$25,000,000;

(g) if such Acquisition is an acquisition of the Capital Stock of a Person, the
Acquisition is structured so that the acquired Person shall become a
Wholly-Owned Subsidiary of the Borrower and, to the extent required by
Section 6.15(a), a Loan Party pursuant to the terms of this Agreement;

(h) if such Acquisition is an acquisition of assets, the Acquisition is
structured so that the Borrower or a Guarantor shall acquire such assets;

(i) if such Acquisition is an acquisition of Capital Stock, such Acquisition
will not result in any violation of Regulation U;

(j) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could have a
Material Adverse Effect;

(k) in connection with an Acquisition of the Capital Stock of any Person, all
Liens on property of such Person shall be terminated unless the Agent in its
Permitted Discretion consents otherwise, and in connection with an Acquisition
of the assets of any Person, all Liens on such assets shall be terminated;

(l) the Borrower Representative shall certify (and provide the Agent with a pro
forma calculation in form and substance reasonably satisfactory to the Agent),
on its behalf and on behalf of the Borrower, to the Agent and the Lenders that,
after giving effect to the completion of such Acquisition, Availability (with
any Suppressed Availability being included in each calculation of Availability
pursuant to this clause (l)) was not less than $40,000,000 for any period of
three consecutive days during the six-month period ending on the date on which
such Acquisition was consummated and is not projected to be less than
$40,000,000 during the six-month period immediately after consummation of such
Acquisition (with such projected Availability to be determined by reference to
the average projected Availability on the last day of each of the relevant six
months), in each case on a pro forma basis which includes all consideration
given in connection with such Acquisition, other than Capital Stock of the
Borrower delivered to the seller(s) in such Acquisition, as having been paid in
cash at the time of making such Acquisition; and

 

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(m) no Default exists or would result therefrom.

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

“Permitted Liens” is defined in Section 6.21.

“Permitted Mortgage Liens” means the collective reference to Liens described in
Section 6.21(iii) and (v).

“Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

“Petro” has the meaning specified in the preamble hereto.

“PHI” means Petro Holdings, Inc., a Minnesota corporation.

“Plan” means any employee pension benefit plan (as defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, subject to the provisions of Title IV
of ERISA or Section 412 of the Code or Section 302 of ERISA and in respect of
which any Loan Party or any member of the Controlled Group is (or, if such Plan
were terminated, would under Section 4062 or Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Chase or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.

“Projections” is defined in Section 6.1(d).

“Proposed Change” is defined in Section 8.3(d).

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

“Pro Rata Share” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Obligations, Non-Ratable Loans, Swingline loans or
Overadvances, a portion equal to a fraction the numerator of which is such
Lender’s Commitment and the denominator of which is the Aggregate Commitment,
(b) with respect to Protective Advances or with respect to all Credit Extensions
in the aggregate prior to the Facility Termination Date, a portion equal to a
fraction the numerator of which is such Lender’s Commitment and the denominator
of which is the Aggregate Commitment, and (c) with respect to Protective
Advances or with respect to all Credit Extensions in the aggregate after the
Facility Termination Date, a portion equal to a fraction the numerator of which
is such Lender’s Credit Exposure and the denominator of which is the Aggregate
Credit Exposure; provided that, in the case of Section 2.23 when a Defaulting
Lender shall exist, any Defaulting Lender’s Commitment hereunder shall be
disregarded for purposes of calculating a Lender’s Pro Rata Share.

 

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“Protective Advances” is defined in Section 2.1.4(a).

“Purchasers” is defined in Section 12.3(a).

“Qualified Keepwell Provider” means, in respect of any Swap Obligation, each
Loan Party that, at the time the relevant guarantee (or grant of the relevant
security interest, as applicable) becomes effective with respect to such Swap
Obligation, has total assets exceeding $10,000,000 or otherwise constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” with respect to such Swap Obligation at such
time by entering into a keepwell pursuant to section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

“Rate Management Obligations” of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

“Rate Management Transaction” means any transaction (including any Commodity
Hedging Agreement and any other agreement with respect thereto) now existing or
hereafter entered by any Loan Party which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

“RCRA” is defined in Section 5.18(b).

“Reference Period” is defined in the definition of “Consolidated EBITDA”.

“Register” is defined in Section 12.3(d).

“Regulation D” means Regulation D of the Board as from time to time in effect
and any successor thereto or other regulation or official interpretation of said
Board relating to reserve requirements applicable to member banks of the Federal
Reserve System.

“Regulation U” means Regulation U of the Board as from time to time in effect
and any successor or other regulation or official interpretation of said Board
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve System.

“Reimbursement Obligations” means, at any time, the aggregate of all obligations
of the Borrower then outstanding under Section 2.1.2 to reimburse the LC Issuer
for amounts paid by the LC Issuer in respect of any one or more drawings under
Facility LCs.

 

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“Reinvestment Deferred Amount” means with respect to any asset disposition, the
aggregate Net Cash Proceeds received in connection therewith that are not
applied to prepay the Obligations pursuant to Section 2.15(b)(i) as a result of
the delivery of a Reinvestment Notice.

“Reinvestment Notice” means a written notice executed by the Borrower
Representative stating that no Default or Unmatured Default has occurred and is
continuing and that a Loan Party intends and expects to use all or a specified
portion of the Net Cash Proceeds of an asset disposition to consummate a
Permitted Acquisition and/or acquire assets useful in its business (other than
current assets).

“Reinvestment Prepayment Amount” means with respect to any asset disposition,
the Reinvestment Deferred Amount relating thereto less any amount expended prior
to the relevant Reinvestment Prepayment Date to consummate Permitted
Acquisitions and/or acquire assets useful in the Borrower’s business (other than
current assets).

“Reinvestment Prepayment Date” means with respect to any asset disposition, the
earlier of (a) the date occurring twelve months after such asset disposition and
(b) the date on which a Loan Party shall have determined not to, or shall have
otherwise ceased to, consummate Permitted Acquisitions and/or acquire assets
useful in its business with all or any portion of the relevant Reinvestment
Deferred Amount.

“Rentals” of a Person means the aggregate fixed amounts payable by such Person
under any Operating Lease.

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

“Reportable Event” means a “reportable event” as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
days of the occurrence of such event, provided, however, that a failure to meet
the minimum funding standards of Sections 412 and 430 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.

“Reports” means reports prepared by Chase or another Person showing the results
of appraisals, field examinations or audits pertaining to the Borrower’s assets
from information furnished by or on behalf of the Borrower, after Chase has
exercised its rights of inspection pursuant to this Agreement, which Reports may
be distributed to the Lenders by Chase.

“Required Lenders” means Lenders in the aggregate having at least a majority of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least a majority of the Aggregate Credit
Exposure.

“Reserves” means any and all reserves which the Agent deems necessary, in its
Permitted Discretion, to maintain (including, without limitation, reserves for
accrued and unpaid interest on the Secured Obligations, volatility reserves
(including reserves for amounts owing with respect

 

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to obligations of the Loan Parties in respect of any Commodity Hedging
Agreements that are secured by the Collateral), reserves for rent and usage fees
at storage depots and other locations leased by any Loan Party and for
consignee’s, warehousemen’s and bailee’s charges, reserves for dilution of
Accounts, reserves for Inventory shrinkage, reserves for customs charges and
shipping charges related to any Inventory in transit, reserves for contingent
liabilities of any Loan Party, reserves for uninsured losses of any Loan Party,
reserves for through-put fees and reserves for taxes, fees, assessments, and
other governmental charges) with respect to the Collateral or any Loan Party.

“Revolving Loans” means the revolving loans extended by the Lenders to the
Borrower pursuant to Section 2.1.1 hereof.

“Risk-Based Capital Guidelines” is defined in Section 3.2.

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

“Sale and Leaseback Transaction” means any sale or other transfer of Property by
any Person with the intent to lease such Property as lessee.

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

“Seasonal Availability Notice” means a written notice requesting an increase in
the Aggregate Commitments during a Seasonal Availability Period given by the
Borrower at least three Business Days prior to the proposed effective date of
such increase specifying (i) the first day and length of such period and
(ii) the amount of the requested increase in the Aggregate Commitments during
such period, provided that (i) the Borrower may not deliver any Seasonal
Availability Notice if a Default or Event of Default shall have then occurred
and be continuing, (ii) the Borrower may not make more than three (3) such
increase requests during each Seasonal Availability Period, (iii) each such
increase shall be in increments of no less than $25,000,000 and (iv) in the
event that the Aggregate Commitments are reduced during a Seasonal Availability
Period pursuant to the terms hereof, the Aggregate Commitments may not be
increased further pursuant to a Seasonal Availability Notice during such
Seasonal Availability Period.

“Seasonal Availability Period” means, until the Facility Termination Date, any
period of up to five consecutive months during the period from December 1 of
each year through April 30 of the following year, which period may be initiated
by a Seasonal Availability Notice. The Seasonal Availability Period may be
terminated early by written notice to such effect by the Borrower to the Agent
at least three Business Days prior to the effective date of such termination.

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

“Secured Obligations” means, collectively, (a) the Obligations and (b) all
obligations of the Loan Parties in respect of any Commodity Hedging Agreements
owing to any Person that is a Lender or an Affiliate of a Lender at the time
such agreement is entered into and (c) to the extent

 

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permitted under applicable debt agreements, Banking Services and Rate Management
Transactions (other than Commodity Hedging Agreements) owing to any Person that
is a Lender or an Affiliate of a Lender at the time such agreement is entered
into.

“Security Agreement” means that certain Amended and Restated Pledge and Security
Agreement, dated as of the date hereof, between the Loan Parties and the Agent,
for the benefit of the Agent and the Lenders, and any other pledge or security
agreement entered into after the Effective Date by any other Loan Party (as
required by this Agreement or any other Loan Document), or any other Person, as
the same may be amended, restated or otherwise modified from time to time.

“Settlement” is defined in Section 2.19.

“Settlement Date” is defined in Section 2.19.

“Single Employer Plan” means a Plan maintained by the Parent or any member of
the Controlled Group for employees of the Parent or any member of the Controlled
Group.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject with respect to the
Eurodollar Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Agent in its Permitted Discretion.

“Subsidiary” of a Person means, subject to the following sentence, any
corporation, partnership, limited liability company, association, joint venture
or similar business organization more than 50% of the outstanding Capital Stock
having ordinary voting power of which shall at the time be owned or controlled
by such Person. Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a subsidiary of the Borrower other than an Unrestricted
Subsidiary (provided that all references to a “Subsidiary” in Sections 6.1(a),
(b) and (c) shall mean each subsidiary of the Borrower).

“Substantial Portion” means Property which represents more than 10% of the
consolidated assets of the Parent and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
Consolidated EBITDA of the Parent and its Subsidiaries, in each case, as would
be shown in the consolidated financial statements of the Parent and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month

 

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in which such determination is made (or if financial statements have not been
delivered hereunder for that month which begins the twelve-month period, then
the financial statements delivered hereunder for the quarter ending immediately
prior to that month).

“Supporting Letter of Credit” is defined in Section 2.1.2(l).

“Suppressed Availability” means the amount of excess, if any, of the amount of
the Borrowing Base over the Aggregate Commitment.

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

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

“Swingline Exposure” is defined in Section 2.23(c).

“Swingline Loan” means a Loan made pursuant to Section 2.1.4(b).

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges, assessments, fees or withholdings (including backup
withholding), now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all liabilities with respect to the
foregoing (including any interest, additions to tax or penalties applicable
thereto).

“Trademarks” shall have the meaning given to such term in the Security
Agreement.

“Transferee” is defined in Section 12.4.

“Type” means, with respect to any Advance, its nature as a Floating Rate Advance
or a Eurodollar Advance and with respect to any Loan, its nature as a Floating
Rate Loan or a Eurodollar Loan.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

“Unliquidated Secured Obligations” means, at any time, any Secured Obligations
(or portion thereof) that is contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

“Unmatured Default” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.

 

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“Unrestricted Subsidiary” means any subsidiary of the Borrower that is
designated as such by the board of directors of the Borrower; provided that
(i) the board of directors of the Borrower shall only be permitted to so
designate a subsidiary acquired or organized after April 6, 2012 as an
Unrestricted Subsidiary, (ii) any such designation shall be made substantially
concurrently with the acquisition or organization of such subsidiary and any
Investments made in such subsidiary by the Borrower and its Subsidiaries shall
be treated as Investments in an Unrestricted Subsidiary and (iii) immediately
after giving effect to any such designation there exists no Default or Event of
Default. Subject to the foregoing, the board of directors of the Borrower may
designate an Unrestricted Subsidiary to be a Subsidiary; provided that no
Unrestricted Subsidiary that has been designated as a Subsidiary may again be
designated as an Unrestricted Subsidiary.

“Unused Commitment Fee” is defined in Section 2.10(a).

“U.S.” means the United States of America.

“Wholly-Owned Subsidiary” of a Person means, any Subsidiary all of the
outstanding Capital Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

1.2. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that if the Borrower notifies the
Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the Agent
notifies the 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 change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Statement of Financial Accounting Standards
159 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of any Loan Party at
“fair value”, as defined therein.

 

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ARTICLE II

THE FACILITY

2.1. The Facility. Each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to (a) make Loans to the Borrower as set forth below
and (b) participate in Facility LCs issued upon the request of the Borrower,
provided that, after giving effect to the making of each such Loan and the
issuance of each such Facility LC, such Lender’s Credit Exposure shall not
exceed its Commitment; provided further, that the Aggregate Credit Exposure
shall not exceed the Aggregate Commitment. The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.1.2. The Facility
shall be composed of Revolving Loans, Non-Ratable Loans, Protective Advances,
Swingline Loans, Overadvances and Facility LCs as set forth below:

2.1.1. Revolving Loans.

(a) Amount. From and including the Effective Date and prior to the Facility
Termination Date, each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make revolving loans (the “Revolving Loans”) to the
Borrower Representative on behalf of the applicable Borrower and participate in
Facility LCs issued for the account of the Borrower as set forth in
Section 2.1.2 below, in aggregate amounts that will not result in (i) such
Lender’s Credit Exposure exceeding its Commitment or (ii) the Aggregate Credit
Exposure exceeding the lesser of (x) the Aggregate Commitment or (y) the
Borrowing Base, subject to the Agent’s authority, in its sole discretion, to
make Protective Advances and Overadvances pursuant to the terms of
Section 2.1.4. The Revolving Loans may consist of Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower
Representative in accordance with Sections 2.1.1(b) and 2.7. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow Revolving
Loans at any time prior to the Facility Termination Date. The Commitments to
extend credit under this Section 2.1.1(a) shall expire on the Facility
Termination Date.

(b) Borrowing Procedures. The Borrower Representative shall select the Type of
Advance and, in the case of each Eurodollar Advance, the Interest Period
applicable thereto, from time to time. The Borrower Representative shall give
the Agent irrevocable notice in the form of Exhibit A (a “Borrowing Notice”) not
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate
Advance and three Business Days before the Borrowing Date for each Eurodollar
Advance, specifying: (1) the name of the applicable Borrower, (2) the Borrowing
Date, which shall be a Business Day, of such Advance, (3) the aggregate amount
of such Advance, (4) the Type of Advance selected; provided that, if the
Borrower Representative fails to specify the Type of Advance requested, such
request shall be deemed a request for a Floating Rate Advance; and (5) the
duration of the Interest Period if the Type of Advance requested is a Eurodollar
Advance; provided that, if the Borrower Representative fails to select the
duration of the Interest Period for the requested Eurodollar Advance, the
Borrower Representative shall be deemed to have requested on behalf of the
applicable Borrower that such Eurodollar Advance be made with an Interest Period
of one month.

 

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(c) The Agent’s Election. Promptly after receipt of a Borrowing Notice (or
telephonic notice in lieu thereof) of a requested Floating Rate Advance, the
Agent shall elect in its discretion to have the terms of Section 2.1.1(d) (pro
rata advance by all Lenders), Section 2.1.3 (advance by the Agent, in the form
of a Non-Ratable Loan, on behalf of the Lenders) or Section 2.1.4(b) (Swingline
Loans) apply to such requested Advance.

(d) Pro Rata Advance. Unless the Agent elects to have the terms of Section 2.1.3
or Section 2.1.4(b) apply to a requested Floating Rate Advance or if a requested
Advance is for a Eurodollar Advance, then promptly after receipt of a Borrowing
Notice or telephonic notice in lieu thereof as permitted by Section 2.8, the
Agent shall notify the Lenders by telecopy, telephone, or e-mail of the
requested Advance. Not later than noon (Chicago time) on each Borrowing Date,
each Lender shall make available its Revolving Loan in funds immediately
available in Chicago to the Agent and the Agent will make the funds so received
from the Lenders available to the Borrower Representative at the Funding Account
as set forth in Section 2.5.

2.1.2. Facility LCs.

(a) Issuance. The LC Issuer hereby agrees, on the terms and conditions set forth
in this Agreement, to issue to the Borrower standby and commercial Letters of
Credit (each, and each Existing Letter of Credit, a “Facility LC”) and to renew,
extend, increase, decrease or otherwise modify each Facility LC (“Modify,” and
each such action a “Modification”), from time to time from and including the
Effective Date and prior to the Facility Termination Date upon the request of
the Borrower Representative for the account of the applicable Borrower; provided
that, the maximum face amount of the Facility LC to be issued or Modified does
not exceed the lesser of (i) an amount equal to $100,000,000 minus the sum of
(1) the aggregate undrawn amount of all outstanding Facility LCs at such time
plus, without duplication, (2) the aggregate unpaid Reimbursement Obligations
with respect to all Facility LCs outstanding at such time and (ii) Availability.
On the Effective Date, each Existing Letter of Credit shall be deemed to be a
Facility LC issued hereunder for the account of the applicable Borrower. No
Facility LC (or any renewal thereof) shall have an expiry date later than the
earlier of (x) the fifth (5th) Business Day prior to the Facility Termination
Date and (y) one year after its issuance; provided that any Letter of Credit
with a one-year tenor may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in
clause (x) above).

(b) Participations. Upon the issuance or Modification by the LC Issuer of a
Facility LC in accordance with this Section 2.1.2, the LC Issuer shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably
purchased from the LC Issuer, a participation in such Facility LC (and each
Modification thereof) and the related LC Obligations in proportion to its Pro
Rata Share.

 

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(c) Notice. Subject to Section 2.1.2(a), the Borrower Representative, on behalf
of the applicable Borrower, shall give the LC Issuer notice prior to 10:00 a.m.
(Chicago time) at least three Business Days prior to the proposed date of
issuance or Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such Facility
LC, and describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such notice, the
LC Issuer shall promptly notify the Agent, and the Agent shall promptly notify
each Lender, of the contents thereof and of the amount of such Lender’s
participation in such proposed Facility LC. The issuance or Modification by the
LC Issuer of any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have no duty
to ascertain), be subject to the conditions precedent that such Facility LC
shall be reasonably satisfactory to the LC Issuer and that the applicable
Borrower shall have executed and delivered such application agreement and/or
such other instruments and agreements relating to such Facility LC as the LC
Issuer shall have reasonably requested (each, a “Facility LC Application”). In
the event of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.

(d) Administration; Reimbursement by Lenders. Upon receipt from the beneficiary
of any Facility LC of any demand for payment under such Facility LC, the LC
Issuer shall notify the Agent and the Agent shall promptly notify the Borrower
Representative and each other Lender as to the amount to be paid by the LC
Issuer as a result of such demand and the proposed payment date (the “LC Payment
Date”). The responsibility of the LC Issuer to the Borrower Representative, the
Borrower and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material respects
with such Facility LC. The LC Issuer shall endeavor to exercise the same care in
the issuance and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by the LC
Issuer, each Lender shall be unconditionally and irrevocably liable without
regard to the occurrence of any Default or any condition precedent whatsoever,
to reimburse the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the
amount of each payment made by the LC Issuer under each Facility LC to the
extent such amount is not reimbursed by the Borrower pursuant to
Section 2.1.2(e) below, plus (ii) interest on the foregoing amount to be
reimbursed by such Lender, for each day from the date of the LC Issuer’s demand
for such reimbursement (or, if such demand is made after 11:00 a.m. (Chicago
time) on such date, from the next succeeding Business Day) to the date on which
such Lender pays the amount to be reimbursed by it, at a rate of interest per
annum equal to the Federal Funds Effective Rate for the first three days and,
thereafter, at a rate of interest equal to the rate applicable to Floating Rate
Advances.

(e) Reimbursement by Borrower. The Borrower shall be irrevocably and
unconditionally obligated to reimburse the LC Issuer on or before the applicable
LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing
under any Facility LC, without presentment, demand, protest or other formalities
of any kind; provided that, neither the Borrower nor any Lender shall hereby be
precluded from

 

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asserting any claim for direct (but not consequential) damages suffered by the
Borrower or such Lender to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the LC Issuer in determining whether a
request presented under any Facility LC issued by it complied with the terms of
such Facility LC or (ii) the LC Issuer’s failure to pay under any Facility LC
issued by it after the presentation to it of a request strictly complying with
the terms and conditions of such Facility LC. All such amounts paid by the LC
Issuer and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the rate
applicable to Floating Rate Advances for such day if such day falls on or before
the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to
Floating Rate Advances for such day if such day falls after such LC Payment
Date. The LC Issuer will pay to each Lender ratably in accordance with its Pro
Rata Share all amounts received by it from the Borrower for application in
payment, in whole or in part, of the Reimbursement Obligation in respect of any
Facility LC issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.1.2(d). Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in compliance
with Section 2.1.1(b) and the satisfaction of the applicable conditions
precedent set forth in Article IV), the Borrower Representative may request an
Advance hereunder on behalf of the applicable Borrower for the purpose of
satisfying any Reimbursement Obligation.

(f) Obligations Absolute. The Borrower’s obligations under this Section 2.1.2
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC. The Borrower further agrees with the LC Issuer and
the Lenders that the LC Issuer and the Lenders shall not be responsible for, and
the Borrower’s Reimbursement Obligation in respect of any Facility LC shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any of
its Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Facility LC. The Borrower
agrees that any action taken or omitted by the LC Issuer or any Lender under or
in connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon the
Borrower and shall not put the LC Issuer or any Lender under any liability to
the Borrower. Nothing in this Section 2.1.2(f) is intended to limit the right of
the Borrower to make a claim against the LC Issuer for damages as contemplated
by the proviso to the first sentence of Section 2.1.2(e).

(g) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and shall be
fully protected in relying, upon any Facility LC, draft, writing, resolution,
notice,

 

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consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it (in its
Permitted Discretion) 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, independent accountants and other experts selected by the LC Issuer.
The LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section 2.1.2, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.

(h) Indemnification. The Borrower hereby agrees to indemnify and hold harmless
each Lender, the LC Issuer and the Agent, and their respective directors,
officers, agents and employees from and against any and all claims and damages,
losses, liabilities, costs or expenses which such Lender, the LC Issuer or the
Agent may incur (or which may be claimed against such Lender, the LC Issuer or
the Agent by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which the LC Issuer may incur by reason of or in connection with
(i) the failure of any other Lender to fulfill or comply with its obligations to
the LC Issuer hereunder (but nothing herein contained shall affect any rights
the Borrower may have against any Defaulting Lender) or (ii) by reason of or on
account of the LC Issuer issuing any Facility LC which specifies that the term
“Beneficiary” included therein includes any successor by operation of law of the
named Beneficiary, but which Facility LC does not require that any drawing by
any such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer (in its Permitted Discretion), evidencing the
appointment of such successor Beneficiary; provided that, the Borrower shall not
be required to indemnify any Lender, the LC Issuer or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC complied
with the terms of such Facility LC or (y) the LC Issuer’s failure to pay under
any Facility LC after the presentation to it of a request strictly complying
with the terms and conditions of such Facility LC. Nothing in this
Section 2.1.2(h) is intended to limit the obligations of the Borrower under any
other provision of this Agreement.

(i) Lenders’ Indemnification. Each Lender shall, ratably in accordance with its
Pro Rata Share, indemnify the LC Issuer, its Affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees’ gross negligence or willful misconduct or the LC Issuer’s
failure to pay under any Facility LC after the

 

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presentation to it of a request strictly complying with the terms and conditions
of the Facility LC) that such indemnitees may suffer or incur in connection with
this Section 2.1.2 or any action taken or omitted by such indemnitees hereunder.

(j) Facility LC Collateral Account. The Borrower agrees that it will, upon the
request of the Agent or the Required Lenders and until the final expiration date
of any Facility LC and thereafter as long as any amount is payable to the LC
Issuer or the Lenders in respect of any Facility LC, maintain a special
collateral account pursuant to arrangements satisfactory to the Agent in its
Permitted Discretion (the “Facility LC Collateral Account”) at the Agent’s
office at the address specified pursuant to Article XIII, in the name of the
Borrower but under the sole dominion and control of the Agent, for the benefit
of the Lenders and in which the Borrower shall have no interest other than as
set forth in Section 8.1. Nothing in this Section 2.1.2(j) shall either obligate
the Agent to require the Borrower to deposit any funds in the Facility LC
Collateral Account or limit the right of the Agent to release any funds held in
the Facility LC Collateral Account in each case other than as required by
Section 8.1. The Borrower hereby pledges, assigns and grants to the Agent, on
behalf of and for the ratable benefit of the Lenders and the LC Issuer, a
security interest in all of the Borrower’s right, title and interest in and to
all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and performance of
the Secured Obligations. The Agent will invest any funds on deposit from time to
time in the Facility LC Collateral Account in certificates of deposit of Chase
having a maturity not exceeding thirty days.

(k) Rights as a Lender. In its capacity as a Lender, the LC Issuer shall have
the same rights and obligations as any other Lender.

(l) Termination of the Facility. If, notwithstanding the provisions of this
Section 2.1.2, any Facility LC is outstanding upon the earlier of (x) the
termination of this Agreement and (y) the Facility Termination Date, then upon
such termination the Borrower shall deposit with the Agent, for the benefit of
the Agent and the Lenders, with respect to all LC Obligations, as the Agent in
its discretion shall specify, either (i) a standby letter of credit (a
“Supporting Letter of Credit”), in form and substance satisfactory to the Agent
(in its Permitted Discretion), issued by an issuer satisfactory to the Agent (in
its Permitted Discretion), in a stated amount equal to 105% of the difference of
(x) the amount of LC Obligations at such time, less (y) the amount on deposit in
the Facility LC Collateral Account at such time which is free and clear of all
rights and claims of third parties and has not been applied against the
Obligations (such difference, the “Collateral Shortfall Amount”), under which
Supporting Letter of Credit the Agent is entitled to draw amounts necessary to
reimburse the Agent, the LC Issuer and the Lenders for payments to be made by
the Agent, the LC Issuer and the Lenders under any such Facility LC and any fees
and expenses associated with such Facility LC, or (ii) cash, in immediately
available funds, in an amount equal to 105% of the Collateral Shortfall Amount
to be held in the Facility LC Collateral Account. Such Supporting Letter of
Credit or deposit of cash shall be held by the Agent, for the benefit of the
Agent and the Lenders, as security for, and to provide for the payment of, the
aggregate undrawn amount of such Facility LC remaining outstanding.

 

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2.1.3. Non-Ratable Loans. Subject to the restrictions set forth in
Section 2.1.1(a), the Agent may elect to have the terms of this Section 2.1.3
apply to any requested Floating Rate Advance and Chase shall thereafter make an
Advance, on behalf of the Lenders and in the amount requested, available to the
Borrower on the applicable Borrowing Date by transferring same day funds to the
Funding Account. Each Advance made solely by the Agent pursuant to this
Section 2.1.3 is referred to in this Agreement as a “Non-Ratable Loan,” and such
Advances are referred to as the “Non-Ratable Loans.” Each Non-Ratable Loan shall
be subject to all the terms and conditions applicable to other Advances funded
by the Lenders, except that all payments thereon shall be payable to Chase
solely for its own account. The aggregate amount of Non-Ratable Loans
outstanding at any time shall not exceed $20,000,000. The Agent shall not make
any Non-Ratable Loan if the requested Non-Ratable Loan exceeds Availability
(before giving effect to such Non-Ratable Loan). Non-Ratable Loans may be made
even if a Default or Unmatured Default exists, but may not be made if the
conditions precedent set forth in Section 4.2 (other than Section 4.2(a)) have
not been satisfied. The Non-Ratable Loans shall be secured by the Liens granted
to the Agent in and to the Collateral and shall constitute Obligations
hereunder. All Non-Ratable Loans shall be Floating Rate Advances and are subject
to the settlement provisions set forth in Section 2.19.

2.1.4. Protective Advances, Swingline Loans and Overadvances.

(a) Protective Advances. Subject to the limitations set forth below, the Agent
is authorized by the Borrower and the Lenders, from time to time in the Agent’s
sole discretion (but shall have absolutely no obligation to), to make Advances,
on behalf of all Lenders, in an aggregate amount outstanding at any time that,
when added to the aggregate amount of Overadvances outstanding at such time,
does not exceed 5% of the Aggregate Commitment at such time, which the Agent, in
its Permitted Discretion, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion thereof, (ii) to enhance the likelihood
of, or maximize the amount of, repayment of the Loans and other Obligations, or
(iii) to pay any other amount chargeable to or required to be paid by the
Borrower pursuant to the terms of this Agreement, including costs, fees, and
expenses as described in Section 9.6 (any of such Advances are herein referred
to as “Protective Advances”); provided that, no Protective Advance shall cause
the Aggregate Credit Exposure to exceed the Aggregate Commitment. Protective
Advances may be made even if the conditions precedent set forth in Section 4.2
have not been satisfied. The Protective Advances shall be secured by the Liens
in favor of the Agent in and to the Collateral and shall constitute Obligations
hereunder. All Protective Advances shall be Floating Rate Advances, shall bear
interest at the default rate set forth in Section 2.12 and shall be payable on
the earlier of demand or the Facility Termination Date. The Required Lenders may
at any time revoke the Agent’s authorization to make Protective Advances. Any
such revocation must be in writing and shall become effective prospectively upon
the Agent’s receipt thereof. At any time that there is sufficient Availability
and the conditions precedent set forth in Section 4.2 have been satisfied, the
Agent may request the Lenders to make a Revolving Loan to repay a Protective
Advance. At any other time the Agent may require the Lenders to fund their risk
participations described in Section 2.2.

 

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(b) Swingline Loans. Subject to the terms and conditions set forth herein, the
Agent is authorized by the Borrower and the Lenders, from time to time in the
Agent’s sole discretion (but shall have absolutely no obligation to), to make
Swingline Loans, on behalf of all Lenders, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal amount
of outstanding Swingline Loans exceeding $30,000,000 or (ii) the Aggregate
Credit Exposure exceeding the lesser of the (x) Aggregate Commitment and (y) the
Borrowing Base; provided that the Agent shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans. To request a Swingline Loan,
the Borrower shall notify the Agent of such request by telephone (confirmed by
facsimile), not later than 11:00 a.m., Chicago time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Agent shall make each Swingline Loan available to the
Borrower by means of a credit to the Funding Account (or, in the case of a
Swingline Loan made to finance the reimbursement of a Facility LC as provided in
Section 2.1.2(e), by remittance to the LC Issuer, and in the case of repayment
of another Loan or fees or expenses as provided herein, by remittance to the
Agent to be distributed to the Lenders) by 2:00 p.m., Chicago time, on the
requested date of such Swingline Loan. All Swingline loans shall be Floating
Rate Advances, shall bear interest at the default rate set forth in Section 2.12
and shall be payable on the earlier of demand or the Facility Termination Date.

The Agent may require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. In such event, the Agent
shall give the Lenders notice, specifying the aggregate amount of Swingline
Loans in which Lenders will participate, as well as each Lender’s Pro Rata Share
of such Swingline Loan or Loans. Each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Agent such Lender’s Pro Rata Share of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by transfer of immediately available funds, in the same manner as
provided in Section 2.1.1(d) (and Section 2.1.1(d) shall apply, mutatis
mutandis, to the payment obligations of the Lenders). Any amounts received by
the Agent from the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Agent of the proceeds of a sale
of participations therein shall be promptly remitted by the Agent to the Lenders
that shall have made their payments pursuant to this paragraph or retained by
the Agent, as their interests may appear; provided that any such payment so
remitted shall be repaid to the Agent if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

 

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(c) Overadvances. Any provision of this Agreement to the contrary
notwithstanding, at the request of the Borrower Representative on behalf of the
Borrower, the Agent may in its sole discretion (but shall have absolutely no
obligation to), make Advances to the Borrower Representative (for the account of
the Borrower), on behalf of the Lenders, in amounts that exceed Availability
(any such excess Advances are herein referred to collectively as
“Overadvances”); provided that, (i) no such event or occurrence shall cause or
constitute a waiver of the Agent’s or Lenders’ right to refuse to make any
further Swingline Loans, Overadvances, Revolving Loans or Non-Ratable Loans, or
issue Facility LCs, as the case may be, at any time that an Overadvance exists,
(ii) no Overadvance shall result in a Default or Unmatured Default due to the
Borrower’s failure to comply with Section 2.1.1(a) for so long as the Agent
permits such Overadvance to remain outstanding, but solely with respect to the
amount of such Overadvance and (iii) the aggregate amount of Overadvances
outstanding at any time, when added to the aggregate amount of Protective
Advances outstanding at such time, shall not exceed 5% of the Aggregate
Commitment at such time. In addition, Overadvances may be made even if a Default
or Unmatured Default exists, but may not be made if the conditions precedent set
forth in Section 4.2 have not been satisfied (other than the condition regarding
Availability and other than Section 4.2(a)). All Overadvances shall constitute
Floating Rate Advances, shall bear interest at the default rate set forth in
Section 2.12, shall be payable on the earlier of demand or the Facility
Termination Date and are subject to the settlement provisions set forth in
Section 2.19. The authority of the Agent to make Overadvances is limited to an
aggregate amount not to exceed 5% of the Borrowing Base at any time, no
Overadvance may remain outstanding for more than thirty days and no Overadvance
shall cause any Lender’s Credit Exposure to exceed its Commitment or the
Aggregate Credit Exposure to exceed the Aggregate Commitment; provided that, the
Required Lenders may at any time revoke the Agent’s authorization to make
Overadvances. Any such revocation must be in writing and shall become effective
prospectively upon the Agent’s receipt thereof.

2.2. Ratable Loans; Risk Participation. Except as otherwise provided below, each
Advance made in connection with a Revolving Loan shall consist of Loans made by
each Lender in an amount equal to such Lender’s Pro Rata Share. Upon the making
of an Advance by the Agent in connection with a Non-Ratable Loan, a Swingline
Loan, an Overadvance or a Protective Advance (whether before or after the
occurrence of a Default or an Unmatured Default and regardless of whether the
Agent has requested a Settlement with respect to such Non-Ratable Loan,
Swingline Loan, Overadvance or Protective Advance), the Agent shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender and each Lender shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from the Agent, without recourse or warranty, an undivided interest and
participation in such Non-Ratable Loan, Swingline Loan, Overadvance or
Protective Advance in proportion to its Pro Rata Share of the Aggregate
Commitment. From and after the date, if any, on which any Lender is required to
fund its participation in any Non-Ratable Loan, Swingline Loan, Overadvance or
Protective Advance purchased hereunder, the Agent shall promptly distribute to
such Lender, such Lender’s Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent in respect of such
Loan.

 

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2.3. Payment of the Obligations. The Borrower shall repay the outstanding
principal balance of the Loans, together with all other Obligations, including
all accrued and unpaid interest thereon, on the Facility Termination Date.

2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the
minimum amount of $5,000,000 and in multiples of $1,000,000 if in excess
thereof. Floating Rate Advances may be in any amount.

2.5. Funding Account. The Borrower Representative shall deliver to the Agent, on
the Effective Date, a notice setting forth the deposit account of the Borrower
Representative (the “Funding Account”) to which the Agent is authorized by the
Borrower to transfer the proceeds of any Advances requested pursuant to this
Agreement. The Borrower Representative may designate a replacement Funding
Account from time to time by written notice to the Agent. Any designation by the
Borrower Representative of the Funding Account must be reasonably acceptable to
the Agent.

2.6. Reliance Upon Authority; No Liability. The Agent is entitled to rely
conclusively on any individual’s request for Advances hereunder, so long as the
proceeds thereof are to be transferred to the Funding Account. The Agent shall
have no duty to verify the identity of any individual representing himself or
herself as a person authorized by the Borrower to make such requests on their
behalf. The Agent shall not incur any liability to the Borrower as a result of
acting upon any notice referred to in Section 2.1 which the Agent reasonably
believes to have been given by an officer or other person duly authorized by the
Borrower to request Advances on their behalf or for otherwise acting under this
Agreement. The crediting of Advances to the Funding Account shall conclusively
establish the obligation of the Borrower to repay such Advances as provided
herein.

2.7. Conversion and Continuation of Outstanding Advances. Floating Rate Advances
shall continue as Floating Rate Advances unless and until such Floating Rate
Advances are converted into Eurodollar Advances pursuant to this Section 2.7 or
are repaid in accordance with this Agreement. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with this Agreement or (y) the Borrower Representative
shall have given the Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period.
Subject to the terms of Section 2.4, the Borrower Representative may elect from
time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance on behalf of the applicable Borrower. The Borrower
Representative shall give the Agent irrevocable notice in the form of Exhibit B
(a “Conversion/Continuation Notice”) of each conversion of a Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not
later than 10:00 a.m. (Chicago time) at least three Business Days prior to the
date of the requested conversion or continuation, specifying (i) the requested
date, which shall be a Business Day, of such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be converted or
continued, and (iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.

 

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2.8. Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower Representative, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower
Representative agrees to deliver promptly to the Agent a written confirmation,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice signed by an Authorized Officer of the Borrower Representative. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.

2.9. Notification of Advances, Interest Rates and Repayments. Promptly after
receipt thereof, the Agent will notify each Lender of the contents of each
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. Promptly after notice from the LC Issuer, the Agent will notify
each Lender of the contents of each request for issuance of a Facility LC
hereunder or any Modification. The Agent will notify each Lender of the interest
rate applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.

2.10. Fees.

(a) Unused Commitment Fee. The Borrower agrees to pay to the Agent, for the
account of each Lender in accordance with such Lender’s Pro Rata Share, an
unused commitment fee at a per annum rate equal to the Applicable Fee Rate on
the average daily Available Commitment, such fee to be payable in arrears on
each Payment Date hereafter and on the Facility Termination Date (the “Unused
Commitment Fee”).

(b) LC Fees. The Borrower shall pay to the Agent, for the account of the Lenders
ratably in accordance with their respective Pro Rata Shares, a letter of credit
fee at a per annum rate equal to the Applicable Margin for Eurodollar Loans in
effect from time to time on the average daily undrawn stated amount under each
Facility LC, such fee to be payable in arrears on each Payment Date (the “LC
Fee”). The Borrower shall also pay to the LC Issuer for its own account (x) a
fronting fee of 0.125% per annum of the face amount of the Facility LC, based on
average daily undrawn amounts under each Facility LC and payable in arrears on
each Payment Date, and (y) documentary and processing charges in connection with
the issuance or Modification of and draws under Facility LCs in accordance with
the LC Issuer’s standard schedule for such charges as in effect from time to
time.

(c) Agent and Arranger Fees. The Borrower agrees to pay all fees and expenses
payable to the Agent, Arrangers and Lenders.

2.11. Interest Rates. Each Floating Rate Advance shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Advance is made or is automatically converted from a Eurodollar Advance
into a Floating Rate Advance pursuant to Section 2.7, to but excluding the date
it is paid or is converted into a Eurodollar Advance

 

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pursuant to Section 2.7 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest
on the outstanding principal amount thereof from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined by the Agent as applicable
to such Eurodollar Advance based upon the Borrower Representative’s selections
under Sections 2.1.1 and 2.7 and otherwise in accordance with the terms hereof.
No Interest Period may end after the Facility Termination Date. If at any time
Loans are outstanding with respect to which the Borrower Representative has not
delivered a notice to the Agent specifying the basis for determining the
interest rate applicable thereto, those Loans shall bear interest at the
Floating Rate.

2.12. Eurodollar Advances Post Default; Default Rates. Notwithstanding anything
to the contrary contained hereunder, during the continuance of a Default or
Unmatured Default the Agent or the Required Lenders may, at their option, by
notice to the Borrower Representative (which notice may be revoked at the option
of the Required Lenders notwithstanding any provision of Section 8.3 requiring
unanimous consent of the Lenders to reductions in interest rates), declare that
no Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a default in the payment of the principal, interest or
any other amount due hereunder or under another Loan Document, the Agent or the
Required Lenders may, at their option, by notice to the Borrower Representative
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.3 requiring unanimous consent of the
Lenders to reductions in interest rates), declare that (i) each Eurodollar
Advance shall bear interest for the remainder of the applicable Interest Period
at the rate otherwise applicable to such Interest Period plus 2% per annum,
(ii) each Floating Rate Advance shall bear interest at a rate per annum equal to
the Floating Rate in effect from time to time plus 2% per annum and (iii) the LC
Fee shall be increased by 2% per annum, provided that, during the continuance of
a Default under subsection (f) or (g) of Article VII, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.

2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on each
Floating Rate Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof and at maturity. Interest accrued
on each Eurodollar Advance shall be payable on each Payment Date. Interest on
all Advances, Unused Commitment Fees and LC Fees shall be calculated for actual
days elapsed on the basis of a 360-day year (or 365/366 days, in the case of
Loans the interest rate payable on which is based on the Prime Rate). Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment. After giving effect to any Loan, Advance,
continuation, or conversion of any Eurodollar Rate Loan, there may not be more
than six different Interest Periods in effect hereunder.

 

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2.14. Voluntary Prepayments. Subject to Section 2.25, the Borrower may from time
to time prepay, but without penalty or premium, all or any portion of the
outstanding Floating Rate Advances. The Borrower may also from time to time
prepay, subject to the payment of any funding indemnification amounts required
by Section 3.4 but without penalty or premium, all outstanding Eurodollar
Advances, or, in a minimum aggregate amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days’ prior notice to the Agent.

2.15. Mandatory Prepayments

(a) Borrowing Base Compliance. Except for Overadvances permitted pursuant to
Section 2.1.4(c), the applicable Borrower shall immediately repay the Revolving
Loans, Swingline Loans, Reimbursement Obligations and/or Non-Ratable Loans (and,
if required, cash collateralize any undrawn Facility LC in the manner
contemplated in Section 2.1.2(j)) if at any time the Aggregate Credit Exposure
exceeds the lesser of (i) the Aggregate Commitment and (ii) the Borrowing Base
(or, until the 2010 Parent Notes are discharged or defeased in accordance with
Section 8.1 of the 2010 Parent Indenture, the amount permitted under and
calculated in accordance with the definition of “Borrowing Base” in the 2010
Parent Indenture) to the extent required to eliminate such excess.

(b) Sale of Assets. (i) Except as set forth in Section 2.15(b)(ii), immediately
upon receipt by the General Partner, the Borrower or any of its Subsidiaries of
the Net Cash Proceeds of any asset disposition (other than (A) sales of
inventory in the ordinary course of business and (B) up to $10,000,000 per
Fiscal Year of Net Cash Proceeds from sales of obsolete or worn-out property in
the ordinary course of business), the General Partner or applicable Borrower
shall prepay the Obligations, or shall cause the applicable Subsidiary to
deliver funds to the Agent for application to the Obligations, in an amount
equal to all such Net Cash Proceeds. Any such prepayment shall be applied first,
to pay the principal of the Overadvances and Protective Advances, second, to pay
the principal of the Non-Ratable Loans and third, to pay the principal of the
Revolving Loans (including the Swingline Loans) without a concomitant reduction
in the Aggregate Commitment.

(ii) So long as the 2010 Parent Indenture is in effect, notwithstanding
Section 2.15(b)(i), if (x) the Borrower Representative delivers to the Agent a
Reinvestment Notice with respect to an asset disposition and (y) the
Reinvestment Deferred Amount related thereto is deposited in a deposit account
located at, and subject to control agreements in favor of, the Agent, then such
Reinvestment Deferred Amount may be (i) used to consummate Permitted
Acquisitions and/or (ii) reinvested to acquire assets useful in the Borrower’s
business (other than current assets); provided that on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant asset disposition shall be applied toward the prepayment
of the Obligations as set forth in Section 2.15(b)(i).

(c) Issuance of Debt or Equity. If any Loan Party or any of its respective
Subsidiaries issues Capital Stock or Indebtedness (other than Indebtedness
permitted by Sections 6.17(a),(c), (d), (e), (f), (g), (h), (j) and (k)), no
later than the Business Day following the date of receipt of any Net Cash
Proceeds of such issuance or receipt of such

 

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dividend, distribution, loan or advance, the Borrower, or applicable Loan Party,
shall prepay the Obligations in an amount equal to all such Net Cash Proceeds.
Any such prepayment shall be applied first, to pay the principal of the
Overadvances and Protective Advances, second, to pay the principal of the
Non-Ratable Loans and third, to pay the principal of the Revolving Loans
(including the Swingline Loans) without a concomitant reduction in the Aggregate
Commitment. Notwithstanding the foregoing, so long as the 2010 Parent Indenture
is in effect, all or any portion of any Net Cash Proceeds of any such issuance
that is deposited in a deposit account located at, and subject to control
agreements in favor of, the Agent may be (i) used to consummate Permitted
Acquisitions and/or (2) reinvested to repair, rebuild or purchase replacement
property, in each case within 12 months after the receipt of such Net Cash
Proceeds, and if not so used or reinvested within such period, shall be applied
as set forth in the first sentence of this Section 2.15(c).

(d) Insurance/Condemnation Proceeds. Any insurance or condemnation proceeds to
be applied to the Obligations in accordance with Section 6.7(d) shall be applied
as follows: (i) insurance proceeds from casualties or losses to cash or
Inventory shall be applied, first, to the Overadvances and Protective Advances,
pro rata, second, to the Non-Ratable Loans, third, to the Revolving Loans
(including the Swingline Loans), and fourth, to cash collateralize outstanding
Facility LCs; and (ii) insurance or condemnation proceeds from casualties or
losses to Equipment, Fixtures and real Property shall be applied first, to pay
the principal of the Overadvances and Protective Advances, second, to pay the
principal of the Non-Ratable Loans and third, to pay the principal of the
Revolving Loans (including Swingline Loans). The Aggregate Commitment shall not
be permanently reduced by the amount of any such prepayments. If the precise
amount of insurance or condemnation proceeds allocable to Inventory as compared
to Equipment, Fixtures and real Property is not otherwise determined, the
allocation and application of those proceeds shall be determined by the Agent,
in its Permitted Discretion. Notwithstanding the foregoing, so long as the 2010
Parent Indenture is in effect, all or any portion of such insurance or
condemnation proceeds that is deposited in a deposit account located at, and
subject to control agreements in favor of, the Agent may be (i) used to
consummate Permitted Acquisitions and/or (2) reinvested to repair, rebuild or
purchase replacement property, in each case within 12 months after the receipt
of such proceeds, and if not so used or reinvested within such period, shall be
applied as set forth in the first sentence of this Section 2.15(d).

(e) General. Without in any way limiting the foregoing, immediately upon receipt
by any Loan Party of proceeds of any sale of any Collateral, the Borrower shall
cause such Loan Party to deliver such proceeds to the Agent, or deposit such
proceeds in a deposit account subject to a Deposit Account Control Agreement.
All of such proceeds shall be applied as set forth above or otherwise as
provided in Section 2.18. Nothing in this Section 2.15 shall be construed to
constitute Agent’s or any Lender’s consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.

 

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2.16. Termination of the Commitments; Increase in Aggregate Commitment

(a) Without limiting Section 2.3 or Section 8.1, (a) the Aggregate Commitment
shall expire on the Facility Termination Date and (b) the Aggregate Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.

(b) The Borrower may terminate this Agreement with at least five Business Days’
prior written notice thereof to the Agent and the Lenders, upon (i) the payment
in full of all outstanding Loans, together with accrued and unpaid interest
thereon, (ii) the cancellation and return of all outstanding Facility LCs (or
alternatively, with respect to each such Facility LC, the furnishing to the
Agent of a cash deposit or Supporting Letter of Credit as required by
Section 2.1.2(l)), (iii) the payment in full of all reimbursable expenses and
other Obligations together with accrued and unpaid interest thereon, and
(iv) the payment in full of any amount due under Section 3.4.

(c) The Borrower shall have the right to increase the Aggregate Commitment by
obtaining additional Commitments, either from one or more of the Lenders or
another lending institution provided that (i) any such request for an increase
shall be in a minimum amount of $25,000,000, (ii) the Aggregate Commitment does
not exceed $550,000,000, (iii) the Borrower may make a maximum of two such
requests, (iv) the Agent has approved the identity of any such new Lender, such
approval not to be unreasonably withheld, (v) any such new Lender assumes all of
the rights and obligations of a “Lender” hereunder, and (vi) the procedures
described in Section 2.16(d) have been satisfied.

(d) Any amendment hereto to effect such an increase or addition shall be in form
and substance satisfactory to the Agent and shall only require the written
signatures of the Agent, the Borrower and the Lender(s) being added or
increasing their Commitment. As a condition precedent to such an increase,
Borrower shall deliver to the Agent a certificate of each Loan Party (in
sufficient copies for each Lender) signed by an authorized officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and (B) no Default or Unmatured
Default exists. Promptly following the effectiveness of any such amendment, the
Agent will provide a copy thereof to the Lenders.

(e) Within a reasonable time after the effective date of any increase, the Agent
shall, and is hereby authorized and directed to, revise the Commitments set
forth on Schedule I hereto to reflect such increase and shall distribute such
revised schedule to each of the Lenders and the Borrower, whereupon such revised
schedule shall replace the old schedule and become part of this Agreement. On
the Business Day on which any such increase becomes effective, all outstanding
Floating Rate Advances and Eurodollar Advances shall be reallocated among the
Lenders (including any newly added Lenders)

 

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in accordance with the Lenders’ respective revised Pro Rata Shares (and shall be
deemed repaid in connection with any such reallocation).

2.17. Method of Payment

(a) All payments of the Obligations hereunder shall be made, without setoff,
deduction, or counterclaim, in immediately available funds to the Agent at the
Agent’s address specified pursuant to Article XIII, or at any other Lending
Installation of the Agent specified in writing by the Agent to the Borrower
Representative, by noon (local time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Any payment received by the Agent after
such time shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue. Solely for purposes
of determining the amount of Loans available for borrowing purposes, checks and
cash or other immediately available funds from collections of items of payment
and proceeds of any Collateral shall be applied in whole or in part against the
Obligations, on the day of receipt, subject to actual collection. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender.

(b) At the election of the Agent, all payments of principal, interest,
reimbursement obligations in connection with Facility LCs, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 9.6), and other sums payable under the Loan
Documents, may be paid from the proceeds of Advances made hereunder whether made
following a request by the Borrower Representative pursuant to Section 2.1 or a
deemed request as provided in this Section 2.17 or may be deducted from the
Funding Account or any other deposit account of the Borrower maintained with the
Agent. The Borrower hereby irrevocably authorizes (i) the Agent to make an
Advance for the purpose of paying each payment of principal, interest and fees
as it becomes due hereunder or any other amount due under the Loan Documents and
agrees that all such amounts charged shall constitute Loans (including
Non-Ratable Loans, Swingline Loans, Overadvances and Protective Advances) and
that all such Advances shall be deemed to have been requested pursuant to
Section 2.1 and (ii) the Agent to charge the Funding Account or any other
deposit account of the Borrower maintained with Chase for each payment of
principal, interest and fees as it becomes due hereunder or any other amount due
under the Loan Documents.

2.18. Apportionment, Application, and Reversal of Payments. Except as otherwise
required pursuant to Section 2.19, principal and interest payments shall be
apportioned ratably among the Lenders as set forth in this Article II and
payments of the fees shall, as applicable, be apportioned ratably among the
Lenders, except for fees payable solely to the Agent or the LC Issuer and except
as provided in Section 2.10(c). All payments shall be remitted to the Agent and
all such payments not relating to principal or interest of specific Loans or not
constituting payment of specific fees as specified by the Borrower
Representative, and all proceeds of any Collateral received by the Agent, shall
be applied, ratably, subject to the provisions of this Agreement, first, to pay
any fees, indemnities, or expense reimbursements including amounts

 

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then due to the Agent from the Borrower (other than in connection with Rate
Management Transactions and Banking Services), second, to pay any fees or
expense reimbursements then due to the Lenders from the Borrower (other than in
connection with Rate Management Transactions and Bank Services), third, to pay
interest due in respect of the Overadvances and Protective Advances, fourth, to
pay the principal of the Overadvances and Protective Advances, fifth, to pay
interest due in respect of the Non-Ratable Loans, sixth, to pay interest due in
respect of the Revolving Loans and Swingline Loans (other than Non-Ratable
Loans, Overadvances and Protective Advances), seventh, to pay or prepay
principal of the Non-Ratable Loans, eighth, to pay or prepay principal of the
Revolving Loans and Swingline Loans (other than Non-Ratable Loans, Overadvances
and Protective Advances) and unpaid reimbursement obligations in respect of
Facility LCs, ninth, to pay an amount to the Agent equal to one hundred five
percent (105%) of the aggregate undrawn face amount of all outstanding Facility
LCs and the aggregate amount of any unpaid reimbursement obligations in respect
of Facility LCs, to be held as cash collateral for such Obligations, tenth, to
payment of any amounts owing with respect to obligations of the Loan Parties in
respect of any Rate Management Transactions (including Commodity Hedging
Agreements) and Banking Services that are secured by the Collateral, and
eleventh, to the payment of any other Secured Obligation due to the Agent or any
Lender by the Borrower. Notwithstanding anything to the contrary contained in
this Agreement, unless so directed by the Borrower Representative, or unless a
Default is in existence, neither the Agent nor any Lender shall apply any
payment which it receives to any Eurodollar Loan, except (a) on the expiration
date of the Interest Period applicable to any such Eurodollar Loan or (b) in the
event, and only to the extent, that there are no outstanding Floating Rate Loans
and, in any event, the Borrower shall pay the Eurodollar breakage losses in
accordance with Section 3.4. The Agent and the Lenders shall have the continuing
and exclusive right to apply and reverse and reapply any and all such proceeds
and payments to any portion of the Secured Obligations.

2.19. Settlement. Each Lender’s funded portion of the Loans is intended by the
Lenders to be equal at all times to such Lender’s Pro Rata Share of the
outstanding Loans. Notwithstanding such agreement, the Agent, Chase, and the
Lenders agree (which agreement shall not be for the benefit of or enforceable by
the Loan Parties) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the Loans,
including the Non-Ratable Loans, Swingline Loans and Overadvances shall take
place on a periodic basis as follows. The Agent shall request settlement (a
“Settlement”) with the Lenders on at least a weekly basis, or on a more frequent
basis at the Agent’s election, by notifying the Lenders of such requested
Settlement by telecopy, telephone, or e-mail no later than 12:00 noon (Chicago
time) on the date of such requested Settlement (the “Settlement Date”). Each
Lender (other than the Agent, in the case of the Non-Ratable Loans, Swingline
Loans and Overadvances) shall transfer the amount of such Lender’s Pro Rata
Share of the outstanding principal amount of the applicable Loan with respect to
which Settlement is requested to the Agent, to such account of the Agent as the
Agent may designate, not later than 2:00 p.m. (Chicago time), on the Settlement
Date applicable thereto. Settlements may occur during the existence of a Default
or an Unmatured Default and whether or not the applicable conditions precedent
set forth in Section 4.2 have then been satisfied. Such amounts transferred to
the Agent shall be applied against the amounts of the applicable Loan and,
together with Chase’s Pro Rata Share of such Non-Ratable Loan, Swingline Loan or
Overadvance, shall constitute Revolving Loans of such Lenders, respectively. If
any such amount is not transferred to the Agent by any Lender on the Settlement
Date applicable thereto, the Agent shall be entitled

 

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to recover such amount on demand from such Lender together with interest thereon
as specified in Section 2.23.

2.20. Indemnity for Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Obligations, the Agent or any
Lender is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by the Agent or such Lender and the Borrower
shall be liable to pay to the Agent and the Lenders, and the Borrower hereby
indemnifies the Agent and the Lenders and holds the Agent and the Lenders
harmless for the amount of such payment or proceeds surrendered. The provisions
of this Section 2.20 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Agent or any Lender in reliance upon
such payment or application of proceeds, and any such contrary action so taken
shall be without prejudice to the Agent’s and the Lenders’ rights under this
Agreement and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The provisions of
this Section 2.20 shall survive the termination of this Agreement.

2.21. Noteless Agreement; Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

(b) The Agent shall also maintain accounts in which it will record (i) the
amount of each Loan extended hereunder, the Type thereof, the name of the
Borrower who requested such Loan and the Interest Period with respect thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder, (iii) the original
stated amount of each Facility LC and the amount of LC Obligations outstanding
at any time, and (iv) the amount of any sum received by the Agent hereunder from
the Borrower and each Lender’s share thereof.

(c) The entries maintained in the accounts maintained pursuant to paragraphs
(a) and (b) above shall, absent manifest error, be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided however,
that the failure of the Agent or any Lender to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Obligations in accordance with their terms. The Agent shall, in
accordance with its regular practice, deliver to the Borrower periodic
statements with respect to the accounts maintained pursuant to paragraphs
(a) and (b) above.

(d) Any Lender may request that its Revolving Loans be evidenced by a promissory
note in substantially the form of Exhibit C (a “Note”). In such event, the
Borrower shall prepare, execute and deliver to such Lender such Note payable to
the

 

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order of such Lender. Thereafter, the Revolving Loans evidenced by such Note and
interest thereon shall at all times (prior to any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein, except to the extent that any such Lender subsequently
returns any such Note for cancellation and requests that such Revolving Loans
once again be evidenced as described in paragraphs (a) and (b) above.

2.22. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time;
provided, however, such selection shall not increase, if otherwise reasonably
avoidable, the Borrower’s costs under Article III. All terms of this Agreement
shall apply to any such Lending Installation and the Loans, Facility LCs,
Reimbursement Obligations and any Notes issued hereunder shall be deemed held by
each Lender or the LC Issuer, as the case may be, for the benefit of any such
Lending Installation. Each Lender and the LC Issuer may, by written notice to
the Agent and the Borrower Representative in accordance with Article XIII,
designate replacement or additional Lending Installations through which Loans
will be made by it or Facility LCs will be issued by it and for whose account
Loan payments or payments with respect to Facility LCs are to be made.

2.23. Non-Receipt of Funds by the Agent; Defaulting Lenders.

(a) Unless the Borrower Representative or a Lender, as the case may be, notifies
the Agent prior to the date on which it is scheduled to make payment to the
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Agent for the
account of the Lenders, that it does not intend to make such payment, the Agent
may assume that such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or the Borrower, as
the case may be, has not in fact made such payment to the Agent, the recipient
of such payment shall, on demand by the Agent, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to
(x) in the case of payment by a Lender, the Federal Funds Effective Rate for
such day for the first three days and, thereafter, the interest rate applicable
to the relevant Loan or (y) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan.

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

(i) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.10(a);

(ii) the Commitment and Credit Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders

 

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have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to Section 8.3), provided that any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender which affects such Defaulting Lender differently than other affected
Lenders shall require the consent of such Defaulting Lender;

(c) If any exposure in respect of Swingline Loans or Letters of Credit
(“Swingline Exposure” and “LC Exposure”, respectively) exists at the time a
Lender becomes a Defaulting Lender then:

(i) all or any part of such exposure shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Pro Rata Share but
only to the extent (x) the sum of all non-Defaulting Lenders’ Credit Exposures
plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed
the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set
forth in Section 4.2 are satisfied at such time;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Agent (x) first, prepay such Swingline Exposure and (y) second,
cash collateralize such Defaulting Lender’s LC Exposure (after giving effect to
any partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 2.1.2(j) for so long as such LC Exposure is
outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 2.23(c)(ii), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.10(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
Section 2.23(c)(i), then the fees payable to the Lenders pursuant to
Section 2.10(a) and Section 2.10(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Pro Rata Share; and

(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.23(c)(i), then, without prejudice to any
rights or remedies of the LC Issuer or any Lender hereunder, all Unused
Commitment Fees that otherwise would have been payable to such Defaulting Lender
(solely with respect to the portion of such Defaulting Lender’s Commitment that
was utilized by such LC Exposure) and Letter of Credit fees payable under
Section 2.10(b) with respect to such Defaulting Lender’s LC Exposure shall be
payable to the LC Issuer until such LC Exposure is cash collateralized and/or
reallocated.

 

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(d) So long as any Lender is a Defaulting Lender, the Agent shall not be
required to fund any Swingline Loan and the LC Issuer shall not be required to
issue, amend or increase any Letter of Credit, unless it is satisfied that the
related exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 2.23(c)(ii), and participating interests in any such newly issued
or increased Letter of Credit or newly made Swingline Loan shall be allocated
among non-Defaulting Lenders in a manner consistent with Section 2.23(c)(i) (and
Defaulting Lenders shall not participate therein).

(e) Any amount payable to such Defaulting Lender hereunder (whether on account
of principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.18) shall,
in lieu of being distributed to such Defaulting Lender, be retained by the Agent
in a segregated account and, subject to any applicable requirements of law, be
applied at such time or times as may be determined by the Agent (i) first, to
the payment of any amounts owing by such Defaulting Lender to the Agent
hereunder, (ii) second, pro rata, to the payment of any amounts owing by such
Defaulting Lender to the LC Issuer hereunder, (iii) third, if so determined by
the Agent or requested by an LC Issuer, held in such account as cash collateral
for future funding obligations of the Defaulting Lender in respect of any
existing or future participating interest in any Swingline Loan or Letter of
Credit, (iv) fourth, to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Agent, (v) fifth, if so determined by the Agent
and the Borrower, held in such account as cash collateral for future funding
obligations of the Defaulting Lender in respect of any Loans under this
Agreement, (vi) sixth, to the payment of any amounts owing to the Agent, the
Lenders or an LC Issuer as a result of any judgment of a court of competent
jurisdiction obtained by the Agent, any Lender or such LC Issuer against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement, (vii) seventh, to the payment of any amounts
owing to the Borrower as a result of any judgment of a court of competent
jurisdiction obtained by the Borrower against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement, and
(viii) eighth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that, with respect to this clause (viii), that
if such payment is (x) a prepayment of the principal amount of any Loans or
reimbursement obligations in respect of Letters of Credit which a Defaulting
Lender has funded its participation obligations and (y) made at a time when the
conditions set forth in Section 4.2 are satisfied, such payment shall be applied
solely to prepay the Loans of, and reimbursement obligations owed to, all
non-Defaulting Lenders pro rata prior to being applied to the prepayment of any
Loans, or reimbursement obligations owed to, any Defaulting Lender.

In the event that the Agent, the Borrower and the LC Issuer each agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the
Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment
and on such date such Lender shall purchase at par such of the Loans of the
other Lenders (other than Swingline Loans) as the Agent shall determine may be
necessary in order for such Lender to hold

 

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such Loans in accordance with its Pro Rata Share. The operation of this
Section 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.

2.24. Limitation of Interest. The Borrower, the Agent and the Lenders intend to
strictly comply with all applicable laws, including applicable usury laws.
Accordingly, the provisions of this Section 2.24 shall govern and control over
every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section 2.24, even if such provision
declares that it controls. As used in this Section 2.24, the term “interest”
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the maximum
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the use,
forbearance or detention of money and not as interest, and (b) all interest at
any time contracted for, reserved, charged or received shall be amortized,
prorated, allocated and spread, in equal parts during the full term of the
Obligations. In no event shall the Borrower or any other Person be obligated to
pay, or any Lender have any right or privilege to reserve, receive or retain,
(a) any interest in excess of the maximum amount of nonusurious interest
permitted under the laws of the State of New York or the applicable laws (if
any) of the U.S. or of any other applicable state, or (b) total interest in
excess of the amount which such Lender could lawfully have contracted for,
reserved, received, retained or charged.

2.25. Applicable Mortgage Minimum Amount. Notwithstanding anything to the
contrary in this Agreement, (a) the Borrower shall not optionally prepay or
reduce the Aggregate Credit Exposure pursuant to Section 2.14 to the extent
that, after giving effect thereto, the Aggregate Credit Exposure would be less
than the Applicable Mortgage Minimum Amount and (b) to the extent that the
Aggregate Credit Exposure exceeds the Applicable Mortgage Minimum Amount at the
time of any Credit Extension under this Agreement as a result of the
requirements of Section 2.15, the Borrower shall, as a condition to each such
Credit Extension, pay all mortgages recording taxes, documentary stamp taxes,
intangible taxes and other similar taxes payable under the Applicable Mortgages
in connection such Credit Extension.

ARTICLE III

YIELD PROTECTION; TAXES

3.1. Yield Protection. If, on or after the Effective Date, the adoption of any
law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or and any group or body charged with
setting financial accounting or regulatory capital rules or standards
(including, without limitation, the Financial Accounting Standards Board, the
Bank for International Settlements or the Basel Committee on Banking Supervision
or any successor or similar authority to any of the foregoing) or compliance by
any Lender or applicable Lending Installation or the LC Issuer with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency or and any group or body charged with setting
financial accounting or

 

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regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing) made after the Effective Date:

(a) subjects any Lender or any applicable Lending Installation or the LC Issuer
to any Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its
Eurodollar Loans, Facility LCs or participations therein, or

(b) imposes or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender or any applicable
Lending Installation or the LC Issuer (other than reserves and assessments taken
into account in determining the interest rate applicable to Eurodollar
Advances), or

(c) imposes any other condition the result of which is to increase the cost to
any Lender or any applicable Lending Installation or the LC Issuer of making,
funding, converting to, continuing or maintaining its Eurodollar Loans, or of
issuing or participating in Facility LCs, or reduces any amount receivable by
any Lender or any applicable Lending Installation or the LC Issuer in connection
with its Eurodollar Loans, Facility LCs or participations therein, or requires
any Lender or any applicable Lending Installation or the LC Issuer to make any
payment calculated by reference to the amount of Eurodollar Loans, Facility LCs
or participations therein held or interest or LC Fees received by it, by an
amount deemed material by such Lender or the LC Issuer as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making,
converting to, continuing or maintaining its Eurodollar Loans or Commitment or
of issuing or participating in Facility LCs or to reduce the return received by
such Lender or applicable Lending Installation or the LC Issuer, as the case may
be, in connection with such Eurodollar Loans, Commitment, Facility LCs or
participations therein, then, within fifteen days of demand by such Lender or
the LC Issuer, as the case may be, the Borrower shall pay such Lender or the LC
Issuer, as the case may be, such additional amount or amounts as will compensate
such Lender or the LC Issuer, as the case may be, for such increased cost or
reduction in amount received. Notwithstanding anything to the contrary in this
Section 3.1, the Borrower shall not be required to compensate a Lender pursuant
to this Section 3.1 for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender’s intention to claim
compensation therefore; and provided that, if the circumstances giving rise to
such claim have a retroactive effect, then such six-month period shall be
extended to include the period of such retroactive effect. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 3.1, it shall
promptly notify the Borrower (with a copy to the Agent) of the event by reason
of which it has become so entitled and shall include in such notice a
calculation of such additional amounts in reasonable detail. Notwithstanding
anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform

 

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and Consumer Protection Act and all requests, rules, guidelines, requirements or
directives thereunder or issued in connection therewith (whether or not having
the force of law) or in implementation thereof, and (ii) all requests, rules,
regulations, guidelines, interpretations, requirements, interpretations and
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities (whether or not having the force
of law), in each case pursuant to Basel III, shall, in each case, be deemed to
be Change, regardless of the date enacted, adopted, issued or implemented.

3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within fifteen days of demand by such Lender or
the LC Issuer, the Borrower shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs or Swingline loans, as the case
may be, hereunder (after taking into account such Lender’s or the LC Issuer’s
policies as to capital adequacy); provided that notwithstanding anything herein
to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, regulations, guidelines, interpretations or
directives thereunder or issued in connection therewith (whether or not having
the force of law) and (y) all requests, rules, regulations, guidelines,
interpretations or directives promulgated by the Bank of International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities
(whether or not having the force of law), in each case pursuant to Basel III,
shall in each case be deemed to be a Change regardless of the date enacted,
adopted, issued, promulgated or implemented. “Change” means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines (as defined
below) or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or the LC Issuer or any Lending Installation or any
corporation controlling any Lender or the LC Issuer. “Risk-Based Capital
Guidelines” means (i) the risk-based capital guidelines in effect in the U.S. on
the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the U.S. implementing the June 2006 document of the Basel Committee on Banking
Regulation and Supervisory Practices entitled “Basel II: International
Convergence of Capital Measurements and Capital Standards: A Revised Framework –
Comprehensive Version,” including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement. Notwithstanding
anything herein or otherwise to the contrary, the Dodd-Frank Wall Street Reform
and Consumer Protection Act and all requests, rules, guidelines, requirements
and directives thereunder or issued in connection therewith or in implementation
thereof, shall in each case be deemed to be a “Change”, regardless of the date
enacted, adopted, issued or implemented.

 

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3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.

3.4. Funding Indemnification. If any payment of a Eurodollar Advance occurs on a
date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made on the date specified by the Borrower Representative for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.

3.5. Taxes.

(a) All payments by the Borrower to or for the account of any Lender, the LC
Issuer or the Agent hereunder or under any Note or Facility LC Application shall
be made free and clear of and without deduction or withholding for or on account
of any and all Taxes. If the Borrower or the Agent shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender,
the LC Issuer or the Agent, (a) if such Tax is an Indemnified Tax or Other Tax,
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.5) such Lender, the LC Issuer or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Borrower or the Agent shall make such deductions,
(c) the Borrower or the Agent shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Agent a certified copy of all official receipts evidencing payment
thereof as promptly as possible but in any case within thirty days after such
payment is made.

(b) In addition, the Borrower hereby agrees to pay any present or future stamp,
court, documentary, intangible, recording, filing or similar Taxes and any other
excise or property taxes, charges or similar levies which arise from any payment
made hereunder or under any Note or Facility LC Application or from the
execution, delivery, perfrocmance or enforcement of, or otherwise with respect
to, this Agreement or any Note or Facility LC Application (“Other Taxes”). The
Borrower shall furnish to the Agent a certified copy of all official receipts
evidencing payment thereof as promptly as possible but in any case within thirty
days after such payment is made.

(c) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and each
Lender for (i) the full amount of Indemnified Taxes or Other Taxes (including,
without limitation, any Indemnified Taxes or Other Taxes imposed on amounts
payable under this

 

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Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its
Commitment, any Loans made by it hereunder, any Facility LC issued hereunder or
otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted and (ii) for any
incremental taxes, interest or penalties arising from Borrower’s failure to pay
any Indemnified Taxes or Other Taxes when due or failure to remit to the Agent
the required receipts or other required documentary evidence, except to the
extent that they are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. Payments due under this
indemnification shall be made within thirty days of the date the Agent, the LC
Issuer or such Lender makes demand therefor pursuant to Section 3.6.

(d) Each Lender and LC Issuer shall indemnify the Agent within 10 days after
demand therefor, for (i) the full amount of any Indemnified Taxes attributable
to such Lender that are payable or paid by the Agent, (but only to the extent
that any Loan Party has not already indemnified that Agent for such Indemnified
Taxes and without limiting the obligation of the Loan Parties to do so) and
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.2(c) relating to the maintenance of a Participant
Register, in either case, that are payable or paid by the Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the Agent to set
off and apply any and all amounts at any time owing to such Lender under any
Loan Document or otherwise payable by the Agent to the Lender from any other
source against any amount due to the Agent under this paragraph (d).

(e) Each Lender that is not incorporated under the laws of the U.S. or a state
thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten
Business Days after the date of this Agreement, (i) deliver to the Borrower
Representative and the Agent either (x) two duly completed copies of U.S.
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any, or is subject to a reduced rate of withholding
of, U.S. federal income taxes, or (y) if claiming an exemption from U.S.
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code, a
duly completed copy of the U.S. Internal Revenue Service Form W-8BEN and a
properly executed certificate representing that such Non-U.S. Lender is not a
“bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not
a “ten percent (10%) shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Internal Revenue Code, is not a “controlled foreign
corporation” related to the Borrower within the meaning of Section 881(c)(3)(C)
of the Internal Revenue Code, or (z) if not the beneficial owner, a duly
completed copy of the U.S. Internal Revenue Service Form W-8IMY, accompanied by
U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN, Form W-9 and/or other
certification documents from each beneficial owner, as

 

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applicable, and (ii) deliver to the Borrower Representative and the Agent a U.S.
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled to an exemption from U.S. backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower Representative and the
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower Representative or the Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any, or is subject to a reduced rate of withholding of, U.S. federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form or
amendment with respect to it and such Lender advises the Borrower Representative
and the Agent that it is not capable of receiving payments without any deduction
or withholding, or at the reduced rate of withholding, of U.S. federal income
tax. Notwithstanding any other provision of this paragraph, a Non-U.S. Lender
shall not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.

(f) For any period during which a Non-U.S. Lender has failed to provide the
Borrower Representative with an appropriate form pursuant to clause (d), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
U.S.; provided that, should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to Taxes because of
its failure to deliver a form required under clause (d), above, the Borrower
shall, at the expense of such Non-U.S. Lender, take such steps as such Non-U.S.
Lender shall reasonably request to assist such Non-U.S. Lender to recover such
Taxes.

(g) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments under this Agreement or any Note pursuant to the
law of any relevant jurisdiction or any treaty shall deliver to the Borrower
Representative (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.

(h) If a payment made to a Lender under any Loan Document would be subject to
U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA, such Lender shall
deliver to the Borrower and Agent at the time or times prescribed by law and at
such time or times reasonably requested by the Borrower or Agent, such
documentation prescribed by applicable law and such additional documentation
reasonably requested by the Borrower

 

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or Agent as may be necessary for the Borrower or Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (h), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, (subject to overall policy considerations
of such Lender); provided, that such designation is made on terms that, in the
sole judgment of such Lender, cause such Lender and its lending office(s) to
suffer no economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section shall affect or postpone any of the obligations of
the Borrower or the rights of any Lender pursuant to Section 3.1, 3.2, 3.4 or
3.5. Each Lender shall deliver a written statement of such Lender to the
Borrower Representative (with a copy to the Agent) as to the amount due, if any,
under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by the Borrower
Representative of such written statement. The obligations of the Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.

3.7. Replacement of Lender. If the Borrower is required pursuant to Section 3.1,
3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s
obligation to make or continue, or to convert Floating Rate Advances into,
Eurodollar Advances shall be suspended pursuant to Section 3.3 or if any Lender
is a Defaulting Lender (any such Lender, an “Affected Lender”), the Borrower may
elect, if such amounts continue to be charged or such suspension is still
effective, to replace such Affected Lender as a Lender party to this Agreement,
provided that, no Default or Unmatured Default shall have occurred and be
continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an Assignment Agreement (and a Defaulting Lender
shall be deemed to have executed and delivered such Assignment Agreement if it
fails to do so) and to become a Lender for all purposes under this Agreement and
to assume all obligations of the Affected Lender to be terminated as of such
date and to comply with the requirements of Section 12.3 applicable to
assignments, and (ii) the Borrower shall pay to such Affected Lender in same day
funds on the day of such replacement (A) all interest, fees and other amounts
then accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the

 

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day of such replacement under Section 3.4 had the Loans of such Affected Lender
been prepaid on such date rather than sold to the replacement Lender.

ARTICLE IV

CONDITIONS PRECEDENT

4.1. Effectiveness. This Agreement will not become effective unless the Loan
Parties have satisfied each of the following conditions in a manner satisfactory
to the Agent and the Lenders, and with respect to any condition requiring
delivery of any agreement, certificate, document, or instrument, the Loan
Parties shall have furnished to the Agent sufficient copies of any such
agreement, certificate, document, or instrument for distribution to the Lenders.

(a) This Agreement or counterparts hereof shall have been duly executed by each
Loan Party and the Agent, and the Agent shall have received duly executed copies
of the Loan Documents and such other documents, instruments, agreements and
legal opinions as the Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents, each
in form and substance reasonably satisfactory to the Agent.

(b) Each Loan Party shall have delivered copies of its articles or certificate
of incorporation or organization, together with all amendments, and a
certificate of good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation or organization.

(c) Each Loan Party shall have delivered copies, certified by its Secretary or
Assistant Secretary, of its by-laws or operating, management or partnership
agreement and of its Board of Directors’ resolutions or the resolutions of its
members and of resolutions or actions of any other body authorizing the
execution, delivery and performance of the Loan Documents to which such Loan
Party is a party.

(d) Each Loan Party shall have delivered an incumbency certificate, executed by
its Secretary or Assistant Secretary, which shall identify by name and title and
bear the signatures of the Authorized Officers and any other officers such Loan
Party authorized to sign the Loan Documents to which such Loan Party is a party,
upon which certificate the Agent and the Lenders shall be entitled to rely until
informed of any change in writing by such Loan Party.

(e) The Borrower shall have delivered a certificate, signed by the chief
financial officer of the Borrower, on the initial Credit Extension Date
(i) stating that no Default or Unmatured Default has occurred and is continuing,
(ii) stating that the representations and warranties contained in Article V are
true and correct as of such Credit Extension Date, (iii) specifying the deposit
account at Chase which shall be used as the Funding Account, (iv) certifying
that the condition set forth in clause (t) below has been met, and
(v) certifying any other factual matters as may be reasonably requested by the
Agent or any Lender.

 

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(f) The Loan Parties shall have delivered a written legal opinion of the Loan
Parties’ counsel, addressed to the Agent, the LC Issuer and the Lenders in
substantially the form of Exhibit D and the legal opinion of such other special
and local counsel as may be required by the Agent.

(g) The Borrower shall have delivered any Notes requested by a Lender pursuant
to Section 2.21 payable to the order of each such requesting Lender.

(h) The Borrower shall have delivered money transfer authorizations as the Agent
may have reasonably requested.

(i) The Agent shall have received the results of a recent Lien and other
searches that the Agent deems necessary and such searches shall reveal no Liens
on any of the assets of the Loan Parties except for Permitted Liens or Liens
discharged on or prior to the Effective Date pursuant to documentation
satisfactory to the Agent, the Loan Parties shall have delivered UCC termination
statements or amendments to existing UCC financing statements with respect to
any filings against the Collateral as may be requested by the Agent and shall
have authorized the filing of such termination statements or amendments, the
Agent shall have been authorized to file any UCC financing statements that the
Agent deems necessary to perfect its Liens in the Collateral and Liens creating
a first priority security interest in the Collateral in favor of the Agent shall
be in proper form for filing, registration or recordation.

(j) The Borrower Representative shall have delivered a Borrowing Base
Certificate which calculates the Borrowing Base and the “Borrowing Base” as
defined in the 2010 Parent Indenture, in each case as of the end of the Business
Day immediately preceding the Effective Date.

(k) The Borrower shall have delivered to the Agent the Borrower’s most recent
projected income statement, balance sheet and cash flows for the period through
the end of the 2018 Fiscal Year (which shall have been prepared on a monthly
basis through the first year after the Effective Date and yearly thereafter).

(l) All legal (including tax implications) and regulatory matters, including,
but not limited to compliance with applicable requirements of Regulations U, T
and X of the Board, shall be satisfactory to the Agent and the Lenders.

(m) The Agent or its designee shall have conducted a satisfactory field
examination of the accounts receivable, Inventory and related working capital
matters and financial information of the Loan Parties and of the related data
processing and other systems, the results of which shall be satisfactory to the
Arrangers and the Agent (it being acknowledged by the Arrangers and the Agent
that the appraisal dated as of March 31, 2013 shall satisfy the requirement
described in this Section 4.1(m)).

(n) The Borrower shall have delivered evidence of insurance coverage in form,
scope, and substance reasonably satisfactory to the Agent and otherwise in
compliance with the terms of Section 6.7.

 

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(o) The Borrower shall have paid all of the fees and expenses owing to the
Agent, the Arrangers, the LC Issuer and the Lenders pursuant to Section 2.10,
and Section 9.6(a).

(p) The Borrower shall have delivered to the Agent true and complete Customer
Lists for the Borrower, together with a recent satisfactory appraisal with
respect thereto (it being understood that the Agent and the Lenders shall treat
such Customer Lists as confidential information subject to Section 9.11), it
being acknowledged by the Agent that the appraisal dated as of March 31, 2013
shall satisfy the requirement described in this Section 4.1(p).

(q) The Loan Parties shall have delivered to the Agent a certified actuarial
valuation report for each Single Employer Plan for the Plan year beginning
January 1, 2013.

(r) The Loan Parties shall have delivered to the Agent a statement by an actuary
enrolled under ERISA certifying that each Single Employer Plan is not, and is
not expected to be, in “at risk” status (within the meaning of Section 430 of
the Code or Title IV of ERISA).

(s) The Agent shall have received a satisfactory solvency certificate from the
chief financial officer of the Parent that shall document the solvency of the
Parent and its Subsidiaries as of the Effective Date.

(t) The Agent shall have received a copy of each hedging and inventory policy
contemplated by Section 5.33, and the Agent shall be satisfied with each such
policy.

(u) The Agent shall have received written consents from the “Required Lenders”
under and as defined in the Existing Credit Agreement to the execution and
delivery of this Agreement (it being agreed that the entering into of this
Agreement by any such Existing Lender shall constitute such written consent).

(v) The Effective Date shall occur on or before February 28, 2014.

4.2. Each Credit Extension. Except as otherwise expressly provided herein, the
Lenders shall not be required to make any Credit Extension if on the applicable
Credit Extension Date:

(a) There exists any Default or Unmatured Default or any Default or Unmatured
Default shall result from any such Credit Extension.

(b) Any representation or warranty contained in Article V is untrue or incorrect
in any material respect as of such Credit Extension Date except to the extent
any such representation or warranty is stated to relate solely to an earlier
date.

(c) After giving effect to any Credit Extension, Availability would be less than
zero.

 

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(d) Any legal matter incident to the making of such Credit Extension shall not
be satisfactory to the Agent and its counsel or such Credit Extension shall
conflict with, or not be permitted by, the terms of the 2010 Parent Indenture.

(e) The Borrower is not in compliance with Section 2.25.

Each Borrowing Notice or request for issuance of Facility LC with respect to
each such Credit Extension shall constitute a representation and warranty by the
Borrower that the conditions contained in Section 4.1 have been satisfied and
that none of the conditions set forth in Section 4.2 exist as of the applicable
Credit Extension Date. Any Lender may require a duly completed Compliance
Certificate as a condition to making a Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Lenders as follows:

5.1. Existence and Standing. Each Loan Party is a corporation, partnership or
limited liability company duly and properly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

5.2. Authorization and Validity. Each Loan Party has the power and authority and
legal right to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution and delivery by each Loan
Party of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and the
Loan Documents to which such Loan Party is a party constitute legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.

5.3. No Conflict; Government Consent. Neither the execution and delivery by any
Loan Party of the Loan Documents to which it is a party, nor the consummation of
the transactions therein contemplated, nor compliance with the provisions
thereof will violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on such Loan Party or (ii) any Loan Party’s
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture (including, without limitation, the 2010 Parent Indenture), instrument
or agreement to which any Loan Party is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default thereunder,
or result in, or require, the creation or imposition of any Lien in, of or on
the Property of such Loan Party pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any Governmental Authority which has
not been obtained by a Loan Party, is required to be obtained

 

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by any Loan Party in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Loan Parties of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents, except for (i) filing of amendments
to Mortgages and UCC financing statements to be filed on or immediately after
the Effective Date and (ii) routine approvals required in connection with the
performance by the Loan Parties of their businesses.

5.4. Security Interest in Collateral. The provisions of this Agreement and the
other Loan Documents create legal and valid Liens on all the Collateral in favor
of the Agent, for the benefit of the Agent and the Lenders, and such Liens (upon
any required filing and recordation) constitute perfected and continuing Liens
on the Collateral, securing the Obligations, enforceable against the applicable
Loan Party and all third parties, and having priority over all other Liens on
the Collateral except in the case of (a) Permitted Liens, to the extent any such
Permitted Liens would have priority over the Liens in favor of the Agent
pursuant to any applicable law or agreement and (b) Liens perfected only by
possession (including possession of any certificate of title) to the extent the
Agent has not obtained or does not maintain possession of such Collateral.

5.5. Financial Statements.

(a) The audited consolidated financial statements of the Parent and its
Subsidiaries for the period ended September 30, 2013 heretofore delivered to the
Lenders (A) were prepared in accordance with GAAP (as in effect on the date such
statements were prepared) and fairly present the consolidated financial
condition and operations of the Parent and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended and (B) with
respect to the financial statements referred to in clause (i) hereof, are
accompanied by an unqualified audit report certified by independent certified
public accountants.

(b) The most recent Projections delivered to the Agent and the Lenders pursuant
to Section 6.1(d) represent the Borrower’s good faith estimate of the future
financial performance of the Borrower for the period set forth therein.

5.6. Material Adverse Change. Since September 30, 2013, after giving effect to
the consummation of the transactions contemplated hereby on the Effective Date,
there has been no change in the business, operations, Property, condition
(financial or otherwise) or prospects of the Loan Parties which could reasonably
be expected to have a Material Adverse Effect.

5.7. Taxes. The Loan Parties have filed all U.S. federal tax returns and all
other Tax returns which are required to be filed, all such returns are complete
and correct and the Loan Parties have paid all Taxes due pursuant to said
returns or pursuant to any assessment received by any Loan Party, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with GAAP and as to which no Lien
exists. No tax liens have been filed and no claims are being asserted with
respect to any such Taxes. The charges, accruals and reserves on the books of
the Loan Parties in respect of any taxes or other governmental charges are
adequate. If any Loan Party is a limited liability company, each such limited
liability company qualifies for partnership tax treatment under U.S. federal tax
law.

 

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5.8. Litigation and Contingent Obligations. Except as set forth on Schedule 5.8,
there is no litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers, threatened
against or affecting any Loan Party which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which (i) could not reasonably be expected to have a
Material Adverse Effect or (ii) is set forth on Schedule 5.8, no Loan Party has
any material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.5.

5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a correct and
complete list of the name of each and all of the Parent’s Subsidiaries, (b) the
location of the chief executive office of each Loan Party and each of its
Subsidiaries and each other location where any of them have maintained their
chief executive office in the past five years, (c) a true and complete listing
of each class of each Loan Party’s authorized Capital Stock, of which all of
such issued shares are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified
on Schedule 5.9, and (d) the type of entity of each Loan Party. With respect to
each Loan Party, Schedule 5.9 also sets forth the employer or taxpayer
identification number of each Loan Party and the organizational identification
number issued by each Loan Party’s jurisdiction of organization or a statement
that no such number has been issued. All of the issued and outstanding Capital
Stock owned by any Loan Party has been (to the extent such concepts are relevant
with respect to such ownership interests) duly authorized and issued and is
fully paid and non-assessable.

5.10. ERISA. Except as would not, individually or in the aggregate, be
reasonably expected to result in a Material Adverse Effect, (i) each Plan
complies with all applicable requirements of law and regulations and (ii) no
ERISA Event has occurred.

5.11. Accuracy of Information. No information, exhibit or report furnished by
any Loan Party to the Agent or to any Lender in connection with the negotiation
of, or compliance with, the Loan Documents contained any material misstatement
of fact or omitted to state a material fact or any fact necessary to make the
statements contained therein not misleading.

5.12. Names; Prior Transactions. Except as set forth on Schedule 5.12, the Loan
Parties have not, during the past five years, been known by or used any other
corporate or fictitious name, or been a party to any merger or consolidation, or
been a party to any Acquisition.

5.13. Regulation U. No Loan Party is engaged, nor will it engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of “purchasing” or “carrying” any “margin stock” as such terms are
defined in Regulation U of the Board as now and from time to time hereafter in
effect (such securities being referred to herein as “Margin Stock”). No Loan
Party owns any Margin Stock, and none of the proceeds of the Loans or other
extensions of credit under this Agreement will be used, directly or indirectly,
for the purpose of purchasing or carrying any Margin Stock, for the purpose of
reducing or retiring any Indebtedness that was originally incurred to purchase
or carry any Margin Stock or for any other purpose that might cause any of the
Loans or other extensions of credit under this Agreement to be considered a
“purpose credit” within the meaning of Regulations T, U or X of the Board. No

 

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Loan Party will take or permit to be taken any action that might cause any Loan
Document to violate any regulation of the Board.

5.14. Material Agreements. Schedule 5.14 hereto sets forth as of the Effective
Date all material agreements and contracts to which any Loan Party is a party or
is bound as of the date hereof. No Loan Party is subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. No Loan Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(i) any material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing Indebtedness.

5.15. Compliance With Laws. The Loan Parties have complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
Property except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect.

5.16. Ownership of Properties. Except as set forth on Schedule 5.16, on the date
of this Agreement, the Loan Parties will have good title, free of all Liens
other than those permitted by Section 6.21, to all of the Property and assets
reflected in the Loan Parties’ most recent consolidated financial statements
provided to the Agent as owned by the Loan Parties.

5.17. Plan Assets; Prohibited Transactions. No Loan Party is an entity deemed to
hold “plan assets” (within the meaning of 29 C.F.R. § 2510.3-101) of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any plan (within the meaning of Section 4975 of the Code), and
neither the execution of this Agreement nor the making of Credit Extensions
hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code. The Borrower is not an
“operating company” as defined in 29 C.F.R 2510-101 (c).

5.18. Environmental Matters.

(a) Each of the Loan Parties is in compliance with all Environmental Laws
applicable to it or to the Collateral except where such noncompliance would not
have a Material Adverse Effect. Each Loan Party holds all environmental permits
and licenses that are necessary for the conduct of the business and operations
of such Loan Party as now conducted and as proposed to be conducted, and has
timely and properly applied for renewal of all environmental permits or licenses
that have expired or are about to expire, except where the failure to hold, or
to timely and properly reapply for, such environmental permits or licenses would
not have a Material Adverse Effect. Schedule 5.18 lists (i) all notices from
Federal, state or local environmental agencies to any Loan Party citing
environmental violations or other conditions that could be the subject of
investigation, remediation or other action under Environmental Law affecting the
business and operations of any Loan Party or the Collateral that have not been
finally resolved and disposed of, and no such violation or condition, whether or
not notice regarding such violation or condition is listed on Schedule 5.18, if
ultimately resolved against such party, would have a Material Adverse Effect and
(ii) all material reports

 

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filed by each of the Loan Parties during the past twelve months with respect to
its business and operations or the Collateral with any Federal, state or local
environmental agency having jurisdiction over any of the Loan Parties or the
Collateral, true and complete copies of which reports have been made available
to the Lenders. Notwithstanding any such notice, except for matters the
consequences of which will not have a Material Adverse Effect, the business and
operations of each Loan Party and the Collateral are currently being operated in
all respects within the limits set forth in such environmental permits or
licenses and any current noncompliance with such permits or licenses will not
result in any liability or penalty to any of the Loan Parties or in the
revocation, loss or termination of any such environmental permits or licenses.

(b) All facilities located on the real property owned or leased by the Loan
Parties, including without limitation the Collateral, which are subject to
regulation by the Resource Conservation and Recovery Act (“RCRA”) are and have
been operated in compliance with RCRA, except where such noncompliance would not
have a Material Adverse Effect and none of the Loan Parties has received, or, to
the knowledge of any Loan Party, been threatened with, a notice of violation of
RCRA regarding such facilities.

(c) No Materials of Environmental Concern are or, to the knowledge of any Loan
Party, have been located or present at any of the real property owned or leased
by the Loan Parties, including without limitation the Collateral, or any
previously owned properties, in violation of any Environmental Law, which
violation will have a Material Adverse Effect, or in such circumstances as to
give rise to liability, which liability will have a Material Adverse Effect, and
with respect to such real property there has not occurred, to the knowledge of
any Loan Party (i) any release or threatened release of any Materials of
Environmental Concern, (ii) any discharge or threatened discharge of any
Materials of Environmental Concern into the environment which violates any
Environmental Law or (iii) any assertion of any lien pursuant to Environmental
Laws resulting from any use, spill, discharge or clean-up of any Materials of
Environmental Concern, which occurrence referred to in clause (i), (ii) or
(iii) above will have a Material Adverse Effect.

(d) Except as set forth on Schedule 5.18(d), none of the Loan Parties has
received notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation, and Liability Act
or any comparable state, local or foreign law nor has any Loan Party received
any notification that any Materials of Environmental Concern that it has used,
generated, stored, treated, handled, transported or disposed of or arranged for
transport for disposal or treatment of, or arranged for disposal or treatment
of, has been found at any site at which any Governmental Authority or private
party is conducting or plans to conduct a remedial investigation or other action
pursuant to any Environmental Law.

(e) None of the matters disclosed in Schedule 5.18 or Schedule 5.18(d), either
individually or in the aggregate, involves a violation of or a liability under
any Environmental Law, the consequences of which will have a Material Adverse
Effect.

 

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5.19. Investment and Holding Company Status. No Loan Party is (a) an “investment
company” or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.

5.20. Bank Accounts. As of the Effective Date, Exhibit B to the Security
Agreement contains a complete and accurate list of all bank accounts maintained
by each Loan Party with any bank or other financial institution.

5.21. Indebtedness. As of the Effective Date and after giving effect to the
Credit Extensions to be made on the Effective Date (if any), the Loan Parties
have no Indebtedness, except for (a) the Obligations, and (b) any Indebtedness
described on Schedule 5.21.

5.22. Affiliate Transactions. Except as set forth on Schedule 5.22, as of the
Effective Date, there are no existing or proposed agreements, arrangements,
understandings, or transactions between any Loan Party and any of the officers,
members, managers, directors, stockholders, parents, other interest holders,
employees, or Affiliates (other than Subsidiaries) of any Loan Party or any
members of their respective immediate families (other than employment agreements
and arrangements and transactions entered into in the ordinary course of
business on terms that are arms-length), and none of the foregoing Persons are
directly or indirectly indebted to or have any direct or indirect ownership,
partnership, or voting interest in any Affiliate of any Loan Party or any Person
with which any Loan Party has a business relationship or which competes with any
Loan Party.

5.23. Real Property; Leases. As of the Effective Date, Schedule 5.23 sets forth
a correct and complete list of all real Property owned by each Loan Party, all
leases and subleases of real Property by each Loan Party as lessee or sublessee,
and all leases and subleases of real Property by each Loan Party as lessor or
sublessor. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists. Each Loan Party has good and
indefeasible title in fee simple to the real Property identified on Schedule
5.23 as owned by such Loan Party, or valid leasehold interests in all real
Property designated therein as “leased” by such Loan Party.

5.24. Intellectual Property Rights. As of the Effective Date: (a) Schedule 5.24
sets forth a correct and complete list of all Intellectual Property Rights of
each Loan Party; (b) none of the Intellectual Property Rights listed in Schedule
5.24 is subject to any licensing agreement or similar arrangement except as set
forth in Schedule 5.24; (c) the Intellectual Property Rights described in
Schedule 5.24 constitute all of the property of such type necessary to the
current and anticipated future conduct of the Loan Parties’ business; (d) to the
best of each Loan Party’s knowledge, no slogan or other advertising device,
product, process, method, substance, part, or other material now employed, or
now contemplated to be employed, by any Loan Party infringes in any material
respect upon any rights held by any other Person; and (e) no claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard, or code is pending or, to the knowledge of any Loan Party, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.

 

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5.25. Insurance. Schedule 5.25 lists all insurance policies of any nature
maintained, as of the Effective Date, by each Loan Party, as well as a summary
of the terms of each such policy.

5.26. Solvency.

(a) Immediately after the consummation of the transactions to occur on the date
hereof and immediately following the making of each Credit Extension, if any,
made on the date hereof and after giving effect to the application of the
proceeds of such Credit Extensions, (a) the fair value of the assets of each
Loan Party, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of each Loan Party; (b) the present fair
saleable value of the Property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of each Loan Party on
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and
(d) each Loan Party will not have unreasonably small capital with which to
conduct the businesses in which it is engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.

(b) The Borrower does not intend to, nor will the Borrower permit any of its
Subsidiaries to, and the Borrower does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

5.27. Subordinated Indebtedness. The Secured Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness. In addition, (a) no “Event of
Default” or “Default” under and as defined in the 2010 Parent Indenture exists,
nor will any such Event of Default or Default exist immediately after the
granting or continuation of any Loan, under the 2010 Parent Indenture or any
agreement executed by the Parent or any of its Subsidiaries in connection
therewith; and (b) all of the Obligations constitute Permitted Indebtedness as
defined in the 2010 Parent Indenture.

5.28. Post-Retirement Benefits. The present value of the expected cost of
post-retirement medical and insurance benefits payable by the Loan Parties to
their employees and former employees, as estimated by such Loan Parties in
accordance with procedures and assumptions deemed reasonable by the Required
Lenders, does not exceed $10,000,000 in the aggregate.

5.29. Common Enterprise. The successful operation and condition of each of the
Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations

 

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of each of the other Loan Parties and (ii) the credit extended by the Lenders to
the Borrower hereunder, both in their separate capacities and as members of the
group of companies. Each Loan Party has determined that execution, delivery, and
performance of this Agreement and any other Loan Documents to be executed by
such Loan Party is within its purpose, will be of direct and indirect benefit to
such Loan Party, and is in its best interest.

5.30. Reportable Transaction. The Borrower does not intend to treat the Advances
and related transactions as being a “reportable transaction” (within the meaning
of Treasury Regulation Section 1.6011-4). In the event the Borrower determines
to take any action inconsistent with such intention, it will promptly notify the
Agent thereof.

5.31. Labor Disputes. Except as set forth on Schedule 5.31, as of the Effective
Date (a) there is no collective bargaining agreement or other labor contract
covering employees of the Borrower or any of its Subsidiaries, (b) no such
collective bargaining agreement or other labor contract is scheduled to expire
during the term of this Agreement, (c) no union or other labor organization is
seeking to organize, or to be recognized as, a collective bargaining unit of
employees of the Borrower or any of its Subsidiaries or for any similar purpose,
and (d) there is no pending or (to the best of the Borrower’s knowledge)
threatened, strike, work stoppage, material unfair labor practice claim, or
other material labor dispute against or affecting the Borrower or its
Subsidiaries or their employees.

5.32. Fixed Price Supply Contracts. None of the Loan Parties is a party to any
contract for the purchase or supply by such parties of any product except where
(a) the purchase price is set with reference to a spot index or indices
substantially contemporaneously with the delivery of such product or
(b) delivery of such product is to be made no more than 18 months after the
purchase price is agreed to. All such contracts for the delivery of product to
any Loan Party referred to in the foregoing clause (b) which are in effect on
the Effective Date are set forth in Schedule 5.32.

5.33. Trading and Inventory Policies. Each Loan Party maintains a hedging policy
to the effect that it will not trade any commodities. Each Loan Party maintains
a supply inventory position policy to the effect that it will not hold on hand,
as of any date, more Commodities Inventory than will be sold in the normal
course of business during the following 90 days. Each Loan Party is in
compliance with such policies.

5.34. Use of Proceeds. The Borrower will use the proceeds of the Loans solely as
set forth in Section 6.2.

ARTICLE VI

COVENANTS

Each Loan Party executing this Agreement jointly and severally agrees as to all
Loan Parties that from and after the date hereof and until the Facility
Termination Date:

6.1. Financial and Collateral Reporting. Each Loan Party will maintain, for
itself and each Subsidiary, a system of accounting established and administered
in accordance with GAAP, and will furnish to the Lenders:

 

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(a) within ninety days after the close of each Fiscal Year of the Parent and its
Subsidiaries (starting with the Fiscal Year ending September 30, 2013), an
unqualified audit report certified by independent certified public accountants
reasonably acceptable to the Required Lenders, prepared in accordance with GAAP
on a consolidated and consolidating basis (consolidating statements need not be
certified by such accountants), including balance sheets as of the end of such
Fiscal Year, related profit and loss and reconciliations of statements of
retained earnings, and a statement of cash flows, accompanied by (i) any
management letter prepared by said accountants and (ii) a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any Default
or Unmatured Default, or if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status thereof;

(b) within forty-five days after the close of the first three quarterly periods
of each Fiscal Year of the Parent and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such Fiscal
Quarter and consolidated and consolidating profit and loss and reconciliations
of statements of retained earnings and a statement of cash flows for the period
from the beginning of the applicable Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the figures for the
applicable period, all certified by its chief financial officer and prepared in
accordance with GAAP (except for exclusion of footnotes and subject to normal
year-end audit adjustments);

(c) within thirty days after the close of each Fiscal Month, consolidated and
consolidating unaudited balance sheets of the Parent and its Subsidiaries at the
close of each such Fiscal Month and consolidated and consolidating profit and
loss and reconciliations of statements of retained earnings and a statement of
cash flows for the period from the beginning of the applicable Fiscal Year to
the end of such Fiscal Month, setting forth in each case in comparative form the
figures for the prior 12-month period, all prepared in accordance with GAAP
(except for exclusion of footnotes and subject to normal year-end audit
adjustments) and certified by its chief financial officer or vice
president—controller;

(d) as soon as available, but not less than 10 days prior to the end of such
Fiscal Year, a copy of the plan and forecast (including a projected consolidated
and consolidating balance sheet, income statement and funds flow statement) of
the Parent for each month of such Fiscal Year (the “Projections”) in form
reasonably satisfactory to the Agent;

(e) together with each of the financial statements required under Sections
6.1(a), (b) and (c), a compliance certificate in substantially the form of
Exhibit E (a “Compliance Certificate”) signed by the chief financial officer,
vice president—controller or treasurer of the Borrower Representative showing
the calculations necessary to determine compliance with this Agreement
(including calculation of Availability for purposes of Sections 6.16 and 6.25)
and the Applicable Margin and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the nature and
status thereof;

 

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(f) as soon as available but in any event within 20 days of the end of each
Fiscal Month (or, during the Seasonal Availability Period or to the extent
Availability is less than 15.0% of the Aggregate Commitment, within 3 days of
the end of each week), and at such other times as may be requested by the Agent
(in its Permitted Discretion), as of the period then ended, a Borrowing Base
Certificate, which will include information relating to the Borrowing Base as
calculated and defined in the 2010 Parent Indenture and supporting information
in connection therewith;

(g) as soon as available but in any event within 20 days of the end of each
Fiscal Month (or, during the Seasonal Availability Period or to the extent
Availability is less than 15.0% of the Aggregate Commitment, within 3 days of
the end of each week) and at such other times as may be requested by the Agent
(in its Permitted Discretion), as of the period then ended:

(i) (1) a summary aging of the Accounts of Petro and each of its Subsidiaries,
including an aged accounts receivable total for each Account Debtor, supported
by a total page from the system summary aging for each branch, and
(2) reconciled to the Borrowing Base Certificate delivered as of such date
prepared in a manner reasonably acceptable to the Agent, together with such
transaction analysis or roll-forward information as the Agent requests, in its
Permitted Discretion;

(ii) a schedule detailing the Borrower’s Inventory, in form reasonably
satisfactory to the Agent, (1) by location (showing Inventory in transit, any
Inventory located with a third party under any consignment, bailee arrangement,
or warehouse agreement), by product type, and by volume on hand, which Inventory
shall be valued at the lower of cost (determined on a weighted average basis) or
market and adjusted for Reserves as the Agent has previously indicated to the
Borrower are deemed by the Agent to be appropriate, (2) including a report of
any variances or other results of Inventory counts performed by the Borrower
since the last Inventory schedule (including information regarding sales or
other reductions, additions, returns, credits issued by the Borrower and
complaints and claims made against the Borrower), and (3) reconciled to the
Borrowing Base Certificate delivered as of such date;

(iii) a worksheet of calculations prepared by the Borrower to determine Eligible
Accounts Receivable, Eligible Heating Oil and Other Fuel Inventory and Eligible
Other Inventory, such worksheets detailing the Accounts and Inventory excluded
from Eligible Accounts Receivable, Eligible Heating Oil and Other Fuel Inventory
and Eligible Other Inventory and the reason for such exclusion;

(iv) a reconciliation of the Borrower’s Accounts and Inventory between the
amounts shown in the Borrower’s general ledger and financial statements and the
reports delivered pursuant to clauses (i) and (ii) above; and

 

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(v) a reconciliation of the loan balance per the Borrower’s general ledger to
the loan balance set forth in statements given to the Borrower under this
Agreement;

(h) as soon as available but in any event within 20 days of the end of each
Fiscal Month (or, during the Seasonal Availability Period or to the extent
Availability is less than 15.0% of the Aggregate Commitment, within 3 days of
the end of each week) and at such other times as may be requested by the Agent
(in its Permitted Discretion), as of the month then ended, a schedule and aging
of the Borrower’s accounts payable;

(i) promptly upon the Agent’s request (in its Permitted Discretion):

(i) copies of invoices in connection with the invoices issued by the Borrower in
connection with any Accounts, credit memos, shipping and delivery documents, and
other information related thereto;

(ii) copies of purchase orders, invoices, and shipping and delivery documents in
connection with any Inventory, Machinery or Equipment purchased by any Loan
Party; and

(iii) a schedule detailing the balance of all intercompany accounts of the Loan
Parties;

(j) as soon as possible and in any event within 20 days of filing thereof,
copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue
Service;

(k) as soon as possible and in any event within 300 days after the close of the
Fiscal Year of each Single Employer Plan, a certified financial statement of
such Single Employer Plan;

(l) as soon as possible and in any event within 10 days after the Borrower
(i) knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of the Borrower, describing
said Reportable Event and the action which the Borrower proposes to take with
respect thereto; (ii) receives a determination that any Plan is, or is expected
to be in “at risk” status (within the meaning of Section 430 of the Code or
Title IV of ERISA), a statement describing such status determination and the
action which the Borrower proposes to take with respect thereto; or
(iii) receives any determination that a Multiemployer Plan is expected in
endangered or critical status (within the meaning of Section 432 of the Code or
Section 305 or Title IV of ERISA), a copy of such determination;

(m) as soon as possible and in any event within 10 days (i) of filing therewith
with the PBGC, the U.S. Internal Revenue Service or any other governmental
entity, a copy of each annual report or other filing with respect to any Single
Employer Plan;

(n) as soon as possible and in any event with 10 days following receipt thereof,
copies of any documents described in Sections 101(k) or 101(l) of ERISA that
Borrower or any member of its Controlled Group may request with respect to any
Multiemployer

 

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Plan to which it is a party; provided, that if the Borrower or any member of its
Controlled Group has not requested such documents or notices from the
administrator or sponsor of the applicable Multiemployer Plan, then, upon
reasonable request of the Agent, the Borrower and/or the Controlled Group
members shall promptly make a request for such documents and notices from such
administrator or sponsor and the Borrower shall provide copies of such documents
and notices to the Agent (on behalf of each requesting Lender) promptly after
receipt thereof, and further provided, that the rights granted to the Agent in
this section shall not be exercised more than once during a 12-month period;

(o) as soon as possible and in any event within 10 days after receipt by any
Loan Party and to the extent pertaining to a matter that could have a material
impact on any Loan Party, a copy of (i) any notice or claim to the effect that
any Loan Party is or may be liable to any Person as a result of the release by
any Loan Party, or any other Person of any toxic or hazardous waste or substance
into the environment, and (ii) any notice alleging any violation of any
Environmental Laws or any federal, state or local environmental, health or
safety law or regulation by the any Loan Party;

(p) concurrently with the delivery of annual audited financial statements
pursuant to Section 6.1(a), an updated Customer List for the Borrower, certified
as true and correct by an Authorized Officer of the Borrower (it being
understood that the Agent and the Lenders shall treat such Customer Lists as
confidential information subject to Section 9.11);

(q) concurrently with the furnishing thereof to the unitholders of the Parent,
copies of all financial statements, reports and proxy statements so furnished;

(r) promptly upon the filing thereof, copies of all registration statements and
annual, quarterly, monthly or other regular reports which any Loan Party files
with the Securities and Exchange Commission; and

(s) such other information (including, without limitation, non-financial
information as more fully described on Schedule 6.1(s)) as the Agent or any
Lender may from time to time reasonably request.

6.2. Use of Proceeds.

(a) The Borrower will use the proceeds of the Credit Extensions solely to
finance the working capital needs of the Borrower and its Subsidiaries in the
ordinary course of business; provided that Facility LCs may also be used to
support (i) obligations under workers’ compensation laws, (ii) obligations to
suppliers of petroleum derivative products or energy commodity derivative
providers in the ordinary course of business consistent with past practices and
(iii) other ordinary course obligations of the Loan Parties.

(b) No Loan Party will use any of the proceeds of the Credit Extensions to
(i) purchase or carry any Margin Stock in violation of Regulation U, (ii) repay
or refinance any Indebtedness of any Person incurred to buy or carry any Margin
Stock, (iii) acquire any security in any transaction that is subject to
Section 13 or Section 14 of the Securities

 

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Exchange Act of 1934 (and the regulations promulgated thereunder), or (iv) so
long as the 2010 Parent Indenture is in effect, make any Acquisition.

6.3. Notices. Each Loan Party will give prompt notice in writing to the Agent
and the Lenders of:

(a) the occurrence of any Default or Unmatured Default;

(b) any other development, financial or otherwise, which could reasonably be
expected to have a Material Adverse Effect;

(c) the assertion by the holder of any Capital Stock of any Loan Party or the
holder of any Indebtedness of any Loan Party in excess of $1,000,000 that any
default exists with respect thereto or that any Loan Party is not in compliance
therewith;

(d) receipt of any written notice that any Loan Party is subject to any
investigation by any governmental entity with respect to any potential or
alleged violation of any applicable Environmental Law or of imposition of any
Lien against any Property of any Loan Party for any liability with respect to
damages arising from, or costs resulting from, any violation of any
Environmental Laws, in each case, that could reasonably be expected to result in
a material impact on any Loan Party;

(e) receipt of any notice of litigation commenced or threatened against any Loan
Party that (i) seeks damages in excess of (A) $500,000 above insurance coverage
limits or (B) $5,000,000 regardless of insurance coverage limits, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party,
(v) alleges the violation of any law regarding, or seeks remedies in connection
with, any Environmental Laws; or (vi) involves any product recall;

(f) any Lien (other than Permitted Liens) or claim made or asserted against any
of the Collateral;

(g) its decision to change, (i) such Loan Party’s name or type of entity,
(ii) such Loan Party’s articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating or other management agreement, and (iii) the location
where any Collateral is held or maintained; provided that, in no event shall the
Agent receive notice of such change less than thirty days prior thereto;

(h) commencement of any proceedings contesting any tax, fee, assessment, or
other governmental charge in excess of $250,000;

(i) the opening of any new deposit account by any Loan Party with any bank or
other financial institution;

(j) any loss, damage, or destruction to the Collateral in the amount of $500,000
or more, whether or not covered by insurance;

 

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(k) any and all default notices received under or with respect to any leased
location or public warehouse where Collateral is located (which shall be
delivered within two Business Days after receipt thereof);

(l) all material amendments to real estate leases, together with a copy of each
such amendment;

(m) immediately after becoming aware of any pending or threatened strike, work
stoppage, unfair labor practice claim, or other labor dispute affecting the
Borrower or any of its Subsidiaries in a manner which could reasonably be
expected to have a Material Adverse Effect;

(n) concurrently with the delivery of each Borrowing Base Certificate, a listing
of each Rate Management Transaction or amendment to a Rate Management
Transaction that such Loan Party has entered into since the date on which a
Borrowing Base Certificate was last delivered pursuant to Section 6.1(f),
together with copies of all agreements evidencing such Rate Management
Transactions or amendments thereto;

(o) [Intentionally omitted];

(p) any circumstances that it reasonably believes may result in an assertion
that a withdrawal under Title IV of ERISA has occurred by any Loan Party or any
member of its Controlled Group with respect to any Multiemployer Plan; and

(q) any other matter as the Agent may reasonably request.

6.4. Conduct of Business. Each Loan Party will:

(a) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted;

(b) do all things necessary to remain duly incorporated or organized, validly
existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted; provided that nothing in this Section 6.4 shall
prohibit any transaction permitted by Section 6.18.

(c) keep adequate books and records with respect to its business activities in
which proper entries, reflecting all financial transactions, are made in
accordance with GAAP and on a basis consistent with the financial statements
delivered to the Agent pursuant to Section 4.1(m);

(d) at all times maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and

 

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(e) transact business only in such corporate and trade names as are set forth in
Schedule 5.12 (as such schedule may be amended or supplemented from time to time
with prompt notification to the Agent of such amendment or supplement).

6.5. Taxes. Each Loan Party will timely file complete and correct U.S. federal
and applicable foreign, state and local Tax returns required by law and pay when
due all Taxes upon it or its income, profits, Property or Collateral, except
those which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside in accordance with
GAAP. At any time that any Loan Party is organized as a limited liability
company, each such limited liability company will qualify for partnership tax
treatment under U.S. federal tax law.

6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party will pay or
discharge when due all Material Indebtedness permitted by Section 6.17 owed by
such Loan Party and all other liabilities and obligations due to materialmen,
mechanics, carriers, warehousemen, and landlords, except that the Loan Parties
may in good faith contest, by appropriate proceedings diligently pursued, any
such obligations; provided that, (a) adequate reserves have been set aside for
such liabilities in accordance with GAAP, (b) no Lien shall be imposed to secure
payment of such liabilities that is superior to the Agent’s Liens securing the
Secured Obligations, (c) none of the Collateral becomes subject to forfeiture or
loss as a result of the contest and (d) such Loan Party shall promptly pay or
discharge such contested liabilities, if any, and shall deliver to the Agent
evidence reasonably acceptable to the Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such Loan
Party or the conditions set forth in this proviso are no longer met.

6.7. Insurance; Weather Hedging.

(a) Each Loan Party shall at all times maintain, with financially sound and
reputable carriers having a Financial Strength rating of at least A- by A.M.
Best Company, insurance against: (i) loss or damage by fire and loss in transit;
(ii) theft, burglary, pilferage, larceny, embezzlement, and other criminal
activities; (iii) general liability and (iv) and such other hazards, as is
customary in the business of such Loan Party. All such insurance shall be in
amounts, cover such assets and be under policies acceptable to the Agent in its
Permitted Discretion. If any portion of any Mortgaged Property is at any time
located in an area identified by the Federal Emergency Management Agency (or any
successor agency) as a “Special Flood Hazard Area” with respect to which flood
insurance has been made available under the National Flood Insurance Act of 1968
(now or as hereafter in effect or any successor act thereto), then the Borrower
shall, or shall cause the applicable Loan Party to (A) maintain, or cause to be
maintained, with a financially sound and reputable insurer, flood insurance in
an amount and otherwise sufficient to comply with all applicable rules and
regulations promulgated pursuant to (i) the National Flood Insurance Act of 1968
as now or hereafter in effect or any successor statute thereto, (ii) the Flood
Disaster Protection Act of 1973 as now or hereafter in effect or any successor
statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or
hereafter in effect or any successor statute thereto and (iv) the Flood
Insurance Reform Act of 2004 as now or hereafter in effect or any successor
statute thereto and (B) deliver to the Agent evidence of such compliance in

 

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form and substance reasonably acceptable to the Agent. All premiums on such
insurance shall be paid when due by the applicable Loan Party, and copies of the
policies delivered to the Agent. If any Loan Party fails to obtain any insurance
as required by this Section, the Agent at the direction of the Required Lenders
may obtain such insurance at the Borrower’s expense. By purchasing such
insurance, the Agent shall not be deemed to have waived any Default or Unmatured
Default arising from any Loan Party’s failure to maintain such insurance or pay
any premiums therefor. No Loan Party will use or permit any Property to be used
in violation of applicable law or in any manner which might render inapplicable
any insurance coverage.

(b) All insurance policies required under Section 6.7(a) shall name the Agent
(for the benefit of the Agent and the Lenders) as an additional insured or as
loss payee, as applicable, and shall provide that, or contain loss payable
clauses or mortgagee clauses, in form and substance reasonably satisfactory to
the Agent, which provide that:

(i) all proceeds thereunder with respect to any Collateral shall be payable to
the Agent;

(ii) no such insurance shall be affected by any act or neglect of the insured or
owner of the Property described in such policy; and

(iii) such policy and loss payable clauses may be canceled, amended, or
terminated only upon at least thirty days prior written notice given to the
Agent.

(c) The Borrower must give the Agent prior written notice of any change in
insurance carriers and any new insurance policy shall comply with the provisions
of this Section 6.7 and otherwise be reasonably acceptable to the Agent. Without
in any way limiting the foregoing, in no event shall the Borrower change their
insurance carrier without first obtaining a loss payable endorsement in form and
substance reasonably satisfactory to the Agent.

(d) Notwithstanding the foregoing, any insurance or condemnation proceeds
received by the Loan Parties shall be immediately forwarded to the Agent and the
Agent may, at its option, apply any such proceeds to the reduction of the
Obligations in accordance with Section 2.15(d), provided that in the case of
insurance proceeds pertaining to any Loan Party other than the Borrower, such
insurance proceeds shall be applied to the Loans owing by the Borrower. The
Agent may permit or require any Loan Party to use such money, or any part
thereof, to replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds could not
reasonably be expected to have a Material Adverse Effect and such insurance
proceeds do not exceed $500,000 in the aggregate, upon the applicable Loan
Party’s request, the Agent shall permit such Loan Party to replace, restore,
repair or rebuild the property; provided that, if such Loan Party has not
completed or entered into binding agreements to complete such replacement,
restoration, repair or rebuilding within ninety days of such casualty, the Agent
may apply such insurance proceeds to the Obligations in

 

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accordance with Section 2.15. All insurance proceeds that are to be made
available to the Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by the Agent to reduce the outstanding principal balance of the
Revolving Loans (which application shall not result in a permanent reduction of
the Aggregate Commitment) and upon such application, the Agent shall establish a
Reserve against the Borrowing Base in an amount equal to the amount of such
proceeds so applied. All insurance proceeds made available to any Loan Party
that is not the Borrower to replace, repair, restore or rebuild Collateral shall
be deposited in a cash collateral account. In either case, thereafter, such
funds shall be made available to the applicable Loan Party to provide funds to
replace, repair, restore or rebuild the Collateral as follows:

(i) the Borrower Representative, on behalf of the applicable Borrower, shall
request a Revolving Loan or the Borrower Representative, on behalf of the
applicable Loan Party, shall request a release from the cash collateral account
be made in the amount needed;

(ii) so long as the conditions set forth in Section 4.2 have been met, the
Lenders shall make such Revolving Loan or the Agent shall release funds from the
cash collateral account; and

(iii) in the case of insurance proceeds applied against the Revolving Loan, the
Reserve established with respect to such insurance proceeds shall be reduced by
the amount of such Revolving Loan.

(e) Each Loan Party shall maintain a program to hedge against business risks
associated with weather as deemed appropriate by its board of directors.

6.8. Compliance with Laws. Each Loan Party will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental Laws. This
covenant shall be deemed not breached by a noncompliance with the foregoing if,
upon learning of such noncompliance, the affected Loan Parties promptly
undertake reasonable efforts to eliminate such noncompliance, and such
noncompliance and the elimination thereof, in the aggregate with any other
noncompliance with any of the foregoing and the elimination thereof, could not
reasonably be expected to have a Material Adverse Effect.

6.9. Maintenance of Properties and Intellectual Property Rights. Each Loan Party
will do all things necessary to (i) maintain, preserve, protect and keep its
Property in good repair, working order and condition, and make all necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times and (ii) obtain and
maintain in effect at all times all material franchises, governmental
authorizations, Intellectual Property Rights, licenses and permits, which are
necessary for it to own its Property or conduct its business as conducted on the
Effective Date.

6.10. Inspection. Each Loan Party will permit the Agent and, at the expense of
such Lender, any Lender, by their respective employees, representatives and
agents, from time to time upon two Business Days’ prior notice as frequently as
the Agent reasonably determines (in its

 

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Permitted Discretion) to be appropriate, to (a) inspect any of the Property, the
Collateral, and the books and financial records of such Loan Party, (b) examine,
audit and make extracts or copies of the books of accounts and other financial
records of such Loan Party, (c) have access to its properties, facilities, the
Collateral and its advisors, officers, directors and employees to discuss the
affairs, finances and accounts of such Loan Party and (d) review, evaluate and
make test verifications and counts of the Accounts, Inventory and other
Collateral of such Loan Party (it being understood that it is anticipated that
the examinations referred to in clauses (a) through (d) of this Section 6.10
will be conducted once per year, with up to two such examinations per year to be
permitted at the Agent’s sole discretion). If a Default or an Unmatured Default
has occurred and is continuing or if Availability is less than 15.0% of the
Aggregate Commitment, each Loan Party shall provide such access to the Agent and
to each Lender at all times and without advance notice. Furthermore, so long as
any Default has occurred and is continuing, each Loan Party shall provide the
Agent and each Lender with access to its suppliers. Each Loan Party shall
promptly make available to the Agent and its counsel originals or copies of all
books and records that the Agent may reasonably request. The Loan Parties
acknowledge that from time to time the Agent may prepare and may distribute to
the Lenders certain audit reports pertaining to the Loan Parties’ assets for
internal use by the Agent and the Lenders from information furnished to it by or
on behalf of the Loan Parties, after the Agent has exercised its rights of
inspection pursuant to this Agreement.

6.11. Appraisals. Whenever a Default or Unmatured Default exists or Availability
is less than 15.0% of the Aggregate Commitment, and at such other times as the
Agent requests, the Loan Parties shall, at their sole expense, provide the Agent
with appraisals or updates thereof of their Inventory, Equipment, Customer Lists
and real Property from an appraiser selected and engaged by the Agent, and
prepared on a basis, satisfactory to the Agent, such appraisals and updates to
include, without limitation, information required by applicable law and
regulations and by the internal policies of the Lenders (it being understood and
agreed that appraisals with respect to Customer Lists shall be required on an
annual basis).

6.12. Communications with Accountants. Each Loan Party executing this Agreement
authorizes (a) the Agent and (b) so long as a Default has occurred and is
continuing, each Lender, to communicate directly with its independent certified
public accountants and authorizes and shall instruct those accountants and
advisors to communicate to the Agent and each Lender information relating to any
Loan Party with respect to the business, results of operations and financial
condition of any Loan Party.

6.13. Post-Closing Obligations with respect to Real Property; Mortgage
Amendments, Collateral Access Agreements, etc.. (a) The Loan Parties shall
deliver to the Agent by no later than the date that is 60 days after the
Effective Date (or by such other date to which the Agent may agree in its sole
discretion), with respect to each parcel of owned real Property set forth on
Schedule 5.23, each of the following (to the extent customary or reasonably
requested), in form and substance reasonably satisfactory to the Agent:

(i) an amendment to the Existing Mortgage covering such parcel of real Property;

(ii) a “date-down” endorsement to the existing title insurance policy for such
parcel of real Property issued by the title company that issued such

 

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existing title insurance policy, which endorsement shall update the effective
date of such existing title insurance policy and amend the description of the
insured Existing Mortgage to include the amendment to such Existing Mortgage;

(iii) evidence that the Borrower has paid all premiums in respect of the
endorsement to the existing title policy for such parcel of real Property, as
well as all charges for mortgage recording taxes and mortgage filing fees
payable in connection with the recording of the amendment to the Existing
Mortgage or new Mortgage, as the case may be, covering such parcel of real
Property, and all related expenses, if any;

(iv) (A) a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination with respect to each Mortgaged Property (together with a
notice about special flood hazard area status and flood disaster assistance duly
executed by the Borrower or the applicable Loan Party in the event any such
Mortgaged Property is located in a special flood hazard area) and (B) a copy of,
or a certificate as to coverage under, the flood insurance policies required by
Section 6.7(a); and

(v) such other information, documentation, and certifications as may be
reasonably required by the Agent.

(b) If requested by the Agent, each Loan Party shall use commercially reasonable
efforts to obtain a Collateral Access Agreement from the lessor of each leased
property, mortgagee of owned property or bailee or consignee with respect to any
warehouse, processor or converter facility or other location where Collateral is
stored or located, which agreement or letter shall provide access rights,
contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee or bailee or consignee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to the Agent. With respect to such locations or warehouse space leased or owned
as of the Effective Date and thereafter, if the Agent has not received a
Collateral Access Agreement as of the Effective Date (or, if later, as of the
date such location is acquired or leased), the Borrower’s Eligible Inventory at
that location shall be subject to such Reserves as may be established by the
Agent (in its Permitted Discretion). After the Effective Date, no real property
or warehouse space shall be leased by any Loan Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Effective Date, unless and until, if requested by the Agent, a Collateral Access
Agreement reasonably satisfactory to the Agent shall first have been obtained
with respect to such location (it being understood that the Borrower shall
provide the Agent with written notice prior to taking any such actions) and if
it has not been obtained, the Borrower’s Eligible Inventory at that location
shall be subject to the establishment of Reserves reasonably acceptable to the
Agent. Each Loan Party shall timely and fully pay and perform its obligations
under all leases and other agreements with respect to each leased location or
third party warehouse where any Collateral is or may be located. To the extent
permitted hereunder, if any Loan Party proposes to acquire a fee ownership
interest in real Property after the Effective Date, it shall first provide to
the Agent a mortgage or deed of trust granting the Agent a first priority Lien
on such real Property, together with environmental audits, mortgage title
insurance commitment, real

 

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property survey, local counsel opinion(s), and, if required by the Agent,
supplemental casualty insurance and flood insurance, and such other documents,
instruments or agreements reasonably requested by the Agent, in each case, in
form and substance reasonably satisfactory to the Agent.

6.14. Deposit Account Control Agreements. No later than the date that is 60 days
after the Effective Date (or by such other date to which the Agent may agree in
its sole discretion), the Loan Parties will provide to the Agent a Deposit
Account Control Agreement duly executed on behalf of each financial institution
holding a deposit account of a Loan Party as set forth in the Security
Agreement.

6.15. Additional Collateral; Further Assurances.

(a) Subject to applicable law, each Loan Party shall, unless the Required
Lenders otherwise consent, (i) cause each Subsidiary of the Parent (excluding
any Foreign Subsidiary) to become or remain a Loan Party and a Guarantor and
(ii) cause each Subsidiary of the Parent (excluding any Foreign Subsidiary)
formed or acquired after the Effective Date in accordance with the terms of this
Agreement to (1) become a party to this Agreement by executing the Joinder
Agreement set forth as Exhibit F hereto (the “Joinder Agreement”), and
(2) guarantee payment and performance of the Guaranteed Obligations pursuant to
the Guaranty.

(b) Upon the request of the Agent, each Loan Party shall (i) grant Liens to the
Agent, for the benefit of the Agent and the Lenders, pursuant to such documents
as the Agent may reasonably deem necessary and deliver such property, documents,
and instruments as the Agent may request to perfect the Liens of the Agent in
any Property of such Loan Party which constitutes Collateral, including any
parcel of real Property located in the U.S. owned by any Loan Party, and (ii) in
connection with the foregoing requirements, or either of them, deliver to the
Agent all items of the type required by Section 4.1 (as applicable). Upon
execution and delivery of such Loan Documents and other instruments,
certificates, and agreements, each such Person shall automatically become a
Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents.

(c) Without limiting the foregoing, each Loan Party shall, and shall cause each
of the Parent’s Subsidiaries which is required to become a Loan Party pursuant
to the terms of this Agreement to, execute and deliver, or cause to be executed
and delivered, to the Agent such documents and agreements, and shall take or
cause to be taken such actions as the Agent may, from time to time, reasonably
request to carry out the terms and conditions of this Agreement and the other
Loan Documents.

6.16. Dividends.

(a) No Loan Party will declare or pay any dividends or make any distributions on
its Capital Stock (other than dividends or distributions payable in its own
common stock) or redeem, repurchase or otherwise acquire or retire any of its
Capital Stock at any time

 

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outstanding, except that (x) any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower, (y) so long as no Default or Unmatured Default then exists or would
result therefrom, if the Parent qualifies as a partnership for U.S. federal
income tax purposes, it may pay dividends or make distributions to its
shareholders in an aggregate amount not greater than the amount necessary for
such shareholders to pay their actual state and U.S. federal income tax
liabilities in respect of income allocated to such shareholders by the Parent
and (z) so long as no Default or Unmatured Default then exists or would result
therefrom, the Borrower may pay dividends or make distributions to the Parent in
an aggregate amount not to exceed $10,000,000 per Fiscal Year solely to enable
the Parent to pay, as the same becomes due and payable, its overhead expenses
and any legal, accounting and other professional fees and expenses it may incur.
Notwithstanding the foregoing, any Loan Party may make any dividends or
distributions to its respective parent company (and the Parent may make any
dividends or distributions to its equity owners) or redeem, repurchase or
otherwise acquire or retire any of its Capital Stock so long as (x) after giving
pro forma effect thereto, Availability (with any Suppressed Availability being
included in each calculation of Availability pursuant to this clause (x)) was
not less than 15.0% of the Aggregate Commitment for any period of three
consecutive days during the six-month period ending on the date on which such
dividends, distributions, redemptions, repurchases or other acquisitions or
retirements of its Capital Stock were made and is not projected to be less than
15.0% of the Aggregate Commitment during the six-month period immediately after
the date on which such dividends, distributions, redemptions, repurchases or
other acquisitions or retirements of its Capital Stock are made (with such
projected Availability to be determined by reference to the average projected
Availability on the last day of each of the relevant six months) and (y) the
Fixed Charge Coverage Ratio is not less than 1.15 to 1.00 after giving pro forma
effect to such distributions as if such distributions were paid on the first day
of the relevant period; provided, however, that (1) no Default or Unmatured
Default then exists or would result therefrom and (2) the Borrower
Representative has delivered a certificate of an Authorized Officer attesting to
the matters set forth in clauses (x) and (y) above and showing in reasonable
detail all calculations with respect thereto.

(b) No Loan Party shall directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement
and the other Loan Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment of
dividends or distributions or the making or repayment of intercompany loans by a
Subsidiary of the Borrower to the Borrower.

6.17. Indebtedness. No Loan Party will create, incur or suffer to exist any
Indebtedness, except:

(a) the Obligations;

(b) Indebtedness existing on the date hereof and described in Schedule 5.21;

 

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(c) purchase money Indebtedness incurred in connection with the purchase of any
Equipment; provided that, the amount of such purchase money Indebtedness shall
be limited to an amount not in excess of the purchase price of such Equipment
and the aggregate of all such purchase money Indebtedness incurred in any Fiscal
Year shall not exceed $10,000,000 at any time outstanding;

(d) Indebtedness which represents an extension, refinancing, or renewal of any
of the Indebtedness described in clauses (b), (c), (g), (h) and (m) hereof;
provided that, (i) other than with respect to any extension, refinancing or
renewal of the Indebtedness described in clause (m), the principal amount or
interest rate of such Indebtedness is not increased (except to the extent of the
capitalization of transaction fees and expenses), (ii) any Liens securing such
Indebtedness are not extended to any additional Property of any Loan Party,
(iii) no Loan Party or other Subsidiary that is not originally obligated with
respect to repayment of such Indebtedness is required to become obligated with
respect thereto, (iv) such extension, refinancing or renewal does not result in
a shortening of the average weighted maturity of the Indebtedness so extended,
refinanced, or renewed (and, with respect to the Indebtedness described in
clause (m), such extension, refinancing or renewal has a maturity no earlier
than six months after the Facility Termination Date), (v) the terms of any such
extension, refinancing, or renewal are not more onerous to the obligor
thereunder than the original terms of such Indebtedness and (iv) 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 Indebtedness must include subordination terms and
conditions that are at least as favorable to the Agent and the Lenders as those
that were applicable to the refinanced, renewed, or extended Indebtedness;

(e) Indebtedness owing by any Loan Party, other than the Parent, to any other
Loan Party with respect to intercompany loans, provided further, that:

(i) the applicable Loan Parties shall have executed and delivered to the other
Loan Party, on the Effective Date, a demand note (collectively, the
“Intercompany Notes”) to evidence any such intercompany Indebtedness owing at
any time by any Loan Party to another Loan Party, which Intercompany Notes shall
be in form and substance reasonably satisfactory to the Agent and shall be
pledged and delivered to the Agent pursuant to the Security Agreement as
additional collateral security for the Secured Obligations;

(ii) the Loan Parties shall record all intercompany transactions on their books
and records in accordance with GAAP consistently applied;

(iii) the obligations of the Loan Parties under any such Intercompany Notes
shall be subordinated to the Obligations of the Loan Parties hereunder in a
manner reasonably satisfactory to the Agent;

(iv) at the time any such intercompany loan or advance is made by a Loan Party
and after giving effect thereto, such Loan Party shall be Solvent; and

 

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(v) no Default or Unmatured Default would occur and be continuing after giving
effect to any such proposed intercompany loan;

(f) (i) Contingent Obligations (A) by endorsement of instruments for deposit or
collection in the ordinary course of business, (B) consisting of the
Reimbursements Obligations and (C) consisting of the Guaranty and guarantees of
Indebtedness incurred for the benefit of any other Loan Party (other than the
Parent) if the primary obligation is not prohibited elsewhere in this Agreement
and (ii) Indebtedness consisting of the excess of the benefit obligations of
each Single Employer Plan over the fair market value of the assets of each such
Plan, so long as the amount of such Indebtedness for all such Single Employer
Plans, determined as of the most recent valuation date for each Plan using PBGC
actuarial assumptions for single employer plan termination, does not,
individually or in the aggregate, create a Material Adverse Effect;

(g) Capitalized Lease Obligations which in the aggregate do not exceed
$2,500,000 in any Fiscal Year;

(h) Indebtedness assumed in connection with any Permitted Acquisition; provided
that, the aggregate amount of Indebtedness assumed under this clause (h) shall
not exceed $1,000,000 and provided further that, such Indebtedness is not
incurred in connection with, or in contemplation or anticipation of, such
Permitted Acquisition and does not attach to any asset of the Borrower or any of
its Subsidiaries;

(i) Indebtedness arising under Rate Management Transactions, so long as such
Rate Management Transactions (i) are entered into to hedge or mitigate risks to
which a Loan Party has actual exposure and (ii) are not entered into for
investment or speculative purposes;

(j) [Intentionally omitted];

(k) Parent Subordinated Debt;

(l) other unsecured Indebtedness in an amount not in excess of $25,000,000; and

(m) Indebtedness arising under the 2010 Parent Indenture.

6.18. Merger. No Loan Party will merge or consolidate with or into any other
Person, except that (a) any Subsidiary of the Borrower may merge into the
Borrower or a Wholly-Owned Subsidiary of the Borrower and (b) any Loan Party
(other than the Borrower) may merge with any other Loan Party.

6.19. Sale of Assets. No Loan Party will lease, sell or otherwise dispose of its
Property (including any Capital Stock owned by it) to any other Person, except:

(a) sales of Inventory in the ordinary course of business;

 

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(b) the sale or other disposition of Equipment and the sale and/or leasing of
real property that is obsolete or no longer useful in such Loan Party’s business
and having a book value not exceeding $10,000,000 in the aggregate in any Fiscal
Year; and

(c) the sale or disposition of other assets having a book value not exceeding a
Substantial Portion in the aggregate in any Fiscal Year.

The Net Cash Proceeds of any sale or disposition permitted pursuant to this
Section (other than pursuant to Section 6.19(a)) shall be delivered to the Agent
as required by Section 2.15 and applied to the Obligations as set forth therein.

6.20. Investments and Acquisitions. No Loan Party will (i) make or suffer to
exist any Investments (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, (ii) create any
Subsidiary, (iii) become or remain a partner in any partnership or joint
venture, or (iv) make any Acquisition, except:

(a) Cash Equivalent Investments, subject to control agreements in favor of the
Agent for the benefit of the Lenders or otherwise subject to a perfected
security interest in favor of the Agent for the benefit of the Lenders;

(b) Investments in Subsidiaries existing as of the Effective Date;

(c) other Investments in existence on the Effective Date and described in
Schedule 6.20;

(d) Investments consisting of loans or advances made to employees of such Loan
Party on an arms-length basis in the ordinary course of business consistent with
past practices for travel and entertainment expenses, relocation costs and
similar purposes up to a maximum of $250,000 to any employee and up to a maximum
of $1,000,000 in the aggregate at any one time outstanding;

(e) subject to Sections 4.2(a) and 4.4 of the Security Agreement, Investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to such Loan Party pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of business,
consistent with past practices, or acquired as a result of the bankruptcy or
reorganization of such Account Debtor;

(f) additional Investments in Wholly-Owned Subsidiaries which are Loan Parties;

(g) Permitted Acquisitions and the formation of Wholly-Owned Subsidiaries of the
Borrower in connection with a Permitted Acquisition;

(h) other Investments not to exceed (i) $3,000,000 in the aggregate during the
12 month period after the Effective Date and (ii) $10,000,000 in the aggregate
during the term of this Agreement;

 

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(i) Investments in any existing or future, direct or indirect, Subsidiary which
exists for the sole purpose of obtaining and holding a license which the
Borrower deems necessary or advisable for its business; provided that (i) the
total Investment in such Subsidiary does not exceed $100,000 in the aggregate
for any one such Subsidiary or $200,000 in the aggregate for all such
Subsidiaries and (ii) if the failure to have such license could reasonably be
expected to have a Material Adverse Effect, the Subsidiary holding such license
shall be a Guarantor; and

(j) Investments in Unrestricted Subsidiaries not to exceed $20,000,000 in the
aggregate during the term of this Agreement.

6.21. Liens.

(a) No Loan Party will create, incur, or suffer to exist any Lien in, of, or on
the Property of such Loan Party, except the following (collectively, “Permitted
Liens”):

(i) Liens for taxes, fees, assessments, or other governmental charges or levies
on the Property of such Loan Party if such Liens (1) shall not at the time be
delinquent or (2) subject to the provisions of Section 6.6, do not secure
obligations in excess of $1,000,000, are being contested in good faith and by
appropriate proceedings diligently pursued, adequate reserves in accordance with
GAAP have been set aside on the books of such Loan Party, and a stay of
enforcement of such Lien is in effect;

(ii) Liens imposed by law, such as carrier’s, warehousemen’s, and mechanic’s
Liens and other similar Liens arising in the ordinary course of business which
secure payment of obligations not more than ten days past due or which are being
contested in good faith by appropriate proceedings diligently pursued and for
which adequate reserves shall have been set aside on such Loan Party’s books;

(iii) statutory Liens in favor of landlords of real Property leased by such Loan
Party; provided that, such Loan Party is current with respect to payment of all
rent and other amounts due to such landlord under any lease of such real
Property;

(iv) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation or to secure the performance of bids, tenders,
or contracts (other than for the repayment of Indebtedness) or to secure
indemnity, performance, or other similar bonds for the performance of bids,
tenders, or contracts (other than for the repayment of Indebtedness) or to
secure statutory obligations (other than liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;

 

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(v) Leases or subleases granted to others in the ordinary course of business,
utility easements, building restrictions, and such other encumbrances or charges
against real Property as are of a nature generally existing with respect to
properties of a similar character, which do not in any material way affect the
marketability or impair the value of such real Property, which do not interfere
with the use thereof in the business of such Loan Party and which do not impair
the ability of the Agent or the Lenders to realize upon the Collateral;

(vi) Liens existing on the Effective Date and described in Schedule 6.21;

(vii) Liens resulting from any extension, refinancing, or renewal of the related
Indebtedness as permitted pursuant to Section 6.17(d); provided that, the Liens
evidenced thereby are not increased to cover any additional Property not
originally covered thereby;

(viii) Liens securing purchase money Indebtedness of such Loan Party permitted
pursuant to Section 6.17(c); provided that, such Liens attach only to the
Property which was purchased with the proceeds of such purchase money
Indebtedness;

(ix) Liens on property or assets (other than Accounts and Inventory) acquired
pursuant to a Permitted Acquisition, or on property or assets (other than
Accounts and Inventory) of a Loan Party in existence at the time such Loan Party
is acquired pursuant to a Permitted Acquisition, provided that (1) any
Indebtedness that is secured by such Liens is permitted under Section 6.17, and
(2) such Liens are not incurred in connection with, or in contemplation or
anticipation of, such Permitted Acquisition and do not attach to any asset of
any other Loan Party;

(x) Liens in favor of the Agent granted pursuant to any Loan Document and Liens
in respect of other Secured Obligations;

(xi) [Intentionally omitted]; and

(xii) any attachment or judgment Lien, unless the judgment it secures shall not,
within 30 days after notice of the entry thereof, have been discharged or
execution thereof stayed pending appeal or review, or shall not have been
discharged within 30 days after expiration of any such stay.

(b) Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.21, other than (1) clauses (i), (x) and (xi) above, may at any time
attach to any Accounts of any Loan Party and (2) clauses (i) through (iii),
(x) and (xi) above, may at any time attach to any Inventory of any Loan Party.

(c) Other than as provided in the Loan Documents, the 2010 Parent Indenture or
in connection with the creation or incurrence of any Indebtedness under
Section 6.17(c), no Loan Party will enter into or become subject to any negative
pledge or other

 

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restriction on the right of such Loan Party to grant Liens to the Agent and the
Lenders on any of its Property; provided that, any such negative pledge or other
restriction entered into in connection with the creation of Indebtedness under
Section 6.17(c) shall be limited to the Property securing such purchase money
Indebtedness.

6.22. Change of Name or Location; Change of Fiscal Year. No Loan Party shall
(a) change its name as it appears in official filings in the state of its
incorporation or organization, (b) change its chief executive office, principal
place of business, mailing address, corporate offices or warehouses or locations
at which Collateral is held or stored, or the location of its records concerning
the Collateral as set forth in the Security Agreement, (c) change the type of
entity that it is for state law or income tax purposes, (d) change its
organization identification number, if any, issued by its state of incorporation
or other organization or (e) change its state of incorporation or organization,
in each case, unless (1) the Agent shall have received at least thirty days
prior written notice of such change and (2) the Agent shall have acknowledged in
writing that, either (i) such change will not adversely affect the validity,
perfection or priority of the Agent’s security interest in the Collateral, or
(ii) any reasonable action requested by the Agent in connection therewith has
been completed or taken (including any action to continue the perfection of any
Liens in favor of the Agent, on behalf of Lenders, in any Collateral), provided
that, any new location shall be in the continental U.S. No Loan Party shall
change its Fiscal Year. Notwithstanding the foregoing, the Parent may make an
election to be treated as a corporation or association for income tax purposes
only without meeting the requirements of (1) and (2) of this Section 6.22
provided that the Agent shall receive written notice of the election within 10
days of the date such election was made and that the election will not
materially increase the combined income tax liability of the Loan Parties.

6.23. Affiliate Transactions. No Loan Party will enter into any transaction
(including, without limitation, the purchase or sale of any Property or service)
with, or make any payment or transfer (including, without limitation, any
payment or transfer with respect to any fees or expenses for management
services) to, any Affiliate which is not a Loan Party except in the ordinary
course of business and pursuant to the reasonable requirements of such Loan
Party’s business and upon fair and reasonable terms no less favorable to such
Loan Party than such Loan Party would obtain in a comparable arms-length
transaction. No Loan Party shall pay any amount in respect of Management Fees
and Expenses; provided that, so long as no Default or Unmatured Default then
exists or would result therefrom (after giving pro forma effect thereto), the
Parent may pay Management Fees and Expenses to the General Partner pursuant to
the Second Amended and Restated Agreement of Limited Partnership, as in effect
on the date hereof.

6.24. Amendments to Agreements . No Loan Party will, nor will any Loan Party
permit any of its Subsidiaries to, amend, modify, terminate or waive any of its
rights under its articles of incorporation, charter, certificate of formation,
by-laws, operating, management or partnership agreement or other organizational
document or the 2010 Parent Indenture to the extent any such amendment,
modification, termination or waiver would be materially adverse to the Lenders.

6.25. Prepayment of Indebtedness; Subordinated Indebtedness.

.

 

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(a) No Loan Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness prior to its scheduled maturity, other
than (i) the Obligations; (ii) Indebtedness secured by a Permitted Lien if the
asset securing such Indebtedness has been sold or otherwise disposed of;
(iii) Indebtedness permitted by Section 6.17(d) upon any refinancing thereof in
accordance therewith; (iv) Indebtedness permitted by Section 6.17 (c), (e) and
(g); and (v) other Indebtedness in respect of the 2010 Parent Notes so long as,
with respect to this clause (v), (A) after giving pro forma effect to such
voluntary purchase, redemption, defeasance or prepayment, Availability (with any
Suppressed Availability being included in each calculation of Availability
pursuant to this clause (x)) was not less than 15.0% of the Aggregate Commitment
for any period of three consecutive days during the six-month period ending on
the date on which such voluntary purchase, redemption, defeasance or prepayment
was made and is not projected to be less than 15.0% of the Aggregate Commitment
during the six-month period immediately after the date on which such voluntary
purchase, redemption, defeasance or prepayment is made (with such projected
Availability to be determined by reference to the average projected Availability
on the last day of each of the relevant six months), (B) the Fixed Charge
Coverage Ratio is at least 1.15 to 1.0 on a pro forma basis for such voluntary
purchase, redemption, defeasance or prepayment, and (C) the Borrower
Representative has delivered a certificate of an Authorized Officer attesting to
the matters set forth in clauses (v)(A) and (B) above and showing in reasonable
detail all calculations with respect thereto; provided that, notwithstanding the
foregoing, in no event shall any voluntary purchase, redemption, defeasance or
prepayment in respect of the 2010 Parent Notes be permitted on any day during
any Seasonal Availability Period or the Business Day immediately following any
Seasonal Availability Period.

(b) No Loan Party shall make any amendment or modification that is in any way
adverse to the interests of the Lenders, to the indenture, note or other
agreement evidencing or governing any Subordinated Indebtedness, or directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Subordinated Indebtedness.

6.26. Financial Contracts. No Loan Party shall enter into or remain liable upon
any Financial Contract, except for Rate Management Transactions permitted by
Section 6.17 and Section 6.33.

6.27. Capital Expenditures. The Loan Parties shall not expend, or be committed
to expend, (a) in excess of $7,500,000 for Capital Expenditures (other than
Capital Expenditures in respect of propane tanks, which shall be governed by
clause (b) of this Section 6.27) during any Fiscal Year in the aggregate for the
Parent and its Subsidiaries or (b) in excess of $4,500,000 for Capital
Expenditures in respect of propane tanks during any Fiscal Year in the aggregate
for the Parent and its Subsidiaries; provided, however, that the amount of
permitted Capital Expenditures under clause (a) only will be increased in any
Fiscal Year by the amount, if positive, equal to 50% of the difference between
the Capital Expenditures limit specified in clause (a) above minus the actual
amount of any Capital Expenditures expended pursuant to clause (a) during the
prior Fiscal Year (the “Carry Over Amount”). Any Carry Over Amount may only be
carried over to the next succeeding year.

 

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6.28. Financial Covenant. To the extent Availability is at any time less than
12.5% of the Aggregate Commitment, the Borrower will not permit the Fixed Charge
Coverage Ratio at any such time to be less than 1.1 to 1.0.

6.29. Depository Banks. Each Loan Party shall maintain either (a) the Agent or
(b) any other financial institution reasonably acceptable to the Agent that has
executed and delivered to the Agent satisfactory control agreements, as such
Loan Party’s principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.

6.30. Real Property Purchases. Except as otherwise permitted in connection with
a Permitted Acquisition, no Loan Party shall purchase a fee simple ownership
interest in real Property with an aggregate purchase price in excess of
$2,000,000.

6.31. Sale of Accounts. No Loan Party will, nor will any Loan Party permit its
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse.

6.31 Parent. The Parent shall not engage in any trade or business, or own any
assets (other than the Capital Stock of its Subsidiaries) or incur any
Indebtedness (other than the Secured Obligations, its existing Indebtedness
(including the 2010 Parent Notes permitted under Section 6.17(m) and
Guaranties); provided that the Parent may also (x) incur Indebtedness to the
extent incurred to refinance the 2010 Parent Notes pursuant to Section 6.17(d),
(y) incur Indebtedness that is subordinated to the Obligations on terms
satisfactory to the Agent in its Permitted Discretion (“Parent Subordinated
Debt”) and (z) incur Indebtedness pursuant to Section 6.17(l) to the extent no
principal payments are payable with respect thereto prior to the date which is
six months after the Facility Termination Date; provided further that, in the
case of clauses (y) and (z) above, (i) the Net Cash Proceeds of such Parent
Subordinated Debt or other unsecured Indebtedness, as the case may be, are
contributed to Petro as a common equity contribution, or as an intercompany loan
in accordance with Section 6.17(e), and (ii) the Parent has provided the Agent
with all documents evidencing such Parent Subordinated Debt or such other
unsecured Indebtedness, as the case may be, at least 5 Business Days prior to
the issuance or incurrence thereof.

6.32 Fixed Price Supply Contracts; Certain Policies.

(a) No Loan Party will at any time be a party or subject to any contract for the
purchase or supply by such parties of any product except where (i) the purchase
price is set with reference to a spot index or indices substantially
contemporaneously with the delivery of such product or (ii) delivery of such
product is to be made no more than 18 months after the purchase price is agreed
to (subject to appropriate hedging with respect to the delivery of such products
in accordance with the hedging policies of the relevant Loan Parties).

(b) No Loan Party will amend, modify or waive the hedging policy or supply
inventory position policy referred to in Section 5.33, except that any Loan
Party may enter into Commodity Hedging Agreements as permitted under the other
provisions

 

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hereof. Such Loan Party will provide the Agent and the Lenders with prompt
written notice of any such new Commodity Hedging Agreement. Subject to the
foregoing exception, each Loan Party will comply in all material respects with
such policies at all times.

ARTICLE VII

DEFAULTS

The occurrence of any one or more of the following events shall constitute a
“Default” hereunder:

(a) any representation or warranty made or deemed made by or on behalf of any
Loan Party to any Lender or the Agent under or in connection with this
Agreement, any other Loan Document, any Credit Extension, or any certificate or
information delivered in connection with any of the foregoing shall be
materially false on the date as of which made;

(b) (i) nonpayment, when due (whether upon demand or otherwise), of any
principal owing under any of the Loan Documents and (ii) nonpayment, within 2
days after it is due, of any interest, fee, Reimbursement Obligation or any
other obligation owing under any of the Loan Documents;

(c) the breach by any Loan Party of any of the terms or provisions of
Section 6.1, 6.2, 6.3(a), 6.13, 6.14, 6.16 through 6.34;

(d) the breach by any Loan Party (other than a breach which constitutes a
Default under another Section of this Article VII) of any of the terms or
provisions of (i) Section 6.3 (other than Section 6.3(a)) or 6.4 through 6.15 of
this Agreement which is not remedied within 10 days after the earlier of such
breach or written notice from the Agent or any Lender or (ii) any other Section
of this Agreement which is not remedied within 20 days after the earlier of such
breach or written notice from the Agent or any Lender;

(e) failure of any Loan Party to pay when due any Material Indebtedness or a
default, breach or other event occurs under any term, provision or condition
contained in any Material Indebtedness Agreement of any Loan Party, the effect
of which default, event or condition is to cause, or to permit the holder(s) of
such Material Indebtedness or the lender(s) under any Material Indebtedness
Agreement to cause, such Material Indebtedness to become due prior to its stated
maturity or any commitment to lend under any Material Indebtedness Agreement to
be terminated prior to its stated expiration date; any Material Indebtedness of
any Loan Party shall be declared to be due and payable or required to be prepaid
or repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or any Loan Party shall not pay, or admit in writing its
inability to pay, its debts generally as they become due;

(f) any Loan Party shall (i) have an order for relief entered with respect to it
under the Bankruptcy Code as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce
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receiver, custodian, trustee, examiner, liquidator or similar official for it or
any portion of its Property which constitutes a Substantial Portion,
(iv) institute any proceeding seeking an order for relief under the Bankruptcy
Code as now or hereafter in effect or seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate or partnership action to
authorize or effect any of the foregoing actions set forth in this subsection
(f) or (vi) fail to contest in good faith any appointment or proceeding
described in subsection (g) below;

(g) a receiver, trustee, examiner, liquidator or similar official shall be
appointed for any Loan Party or any portion of its Property which constitutes a
Substantial Portion, or a proceeding described in subsection (f)(iv) of Article
VII shall be instituted against any Loan Party and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty consecutive days;

(h) any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of any Loan Party which, when taken together with all other Property of
any Loan Party so condemned, seized, appropriated, or taken custody or control
of, during the twelve-month period ending with the month in which any such
action occurs, constitutes a Substantial Portion;

(i) any loss, theft, damage or destruction of any item or items of Collateral or
other property of any Loan Party occurs which could reasonably be expected to
cause a Material Adverse Effect and is not adequately covered by insurance;

(j) any Loan Party shall fail within thirty days to pay, bond or otherwise
discharge one or more (i) judgments or orders for the payment of money in excess
of $500,000 (or the equivalent thereof in currencies other than U.S. Dollars) in
the aggregate, or (ii) nonmonetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;

(k) any Change in Control shall occur;

(l) an ERISA Event shall have occurred which, together with all such other ERISA
Events that have occurred, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;

(m) any Loan Party shall (i) be the subject of any proceeding or investigation
pertaining to the release by any Loan Party or any other Person of any toxic or
hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect;

 

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(n) the occurrence of any “default”, as defined in any Loan Document (other than
this Agreement) or the breach of any of the terms or provisions of any Loan
Document (other than this Agreement), which default or breach continues beyond
any period of grace therein provided;

(o) the Guaranty or the partnership agreement of the Parent shall fail to remain
in full force or effect or any action shall be taken to discontinue or to assert
the invalidity or unenforceability of the Guaranty or the partnership agreement
of the Parent, or any Guarantor shall fail to comply with any of the terms or
provisions of the Guaranty to which it is a party, or any Guarantor shall deny
that it has any further liability under the Guaranty to which it is a party, or
shall give notice to such effect;

(p) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Loan Party shall fail to
comply with any of the terms or provisions of any Collateral Document;

(q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);

(r) the representations and warranties set forth in Section 5.17 (Plan Assets;
Prohibited Transactions) shall at any time not be true and correct; or

(s) the Borrower or any of its Subsidiaries shall fail to pay when due any
Operating Lease Obligation in excess of $750,000.

ARTICLE VIII

REMEDIES; WAIVERS AND AMENDMENTS

8.1. Remedies.

(a) If any Default occurs, the Agent may in its discretion (and at the written
request of the Required Lenders, shall) (i) reduce or terminate the Aggregate
Commitment or the Commitment, (ii) reduce the advance rates set forth in the
definition of the Borrowing Base or reduce one or more of the other elements
used in computing the Borrowing Base, (iii) terminate or suspend the obligations
of the Lenders to make Loans hereunder and the obligation and power of the LC
Issuer to issue Facility LCs, (iv) declare all or any portion of the Obligations
to be due and payable, whereupon such Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, (v) upon notice to the Borrower
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demand payment of all amounts payable under this Agreement, the Agent may either
(1) make demand on the Borrower to pay, and the Borrower will, forthwith upon
such demand and without any further notice or act, pay to the Agent an amount,
in immediately available funds (which funds shall be held in the Facility LC
Collateral Account), equal to 105% of the Collateral Shortfall Amount or
(2) deliver a Supporting Letter of Credit as required by Section 2.1.2(l),
whichever the Agent may specify in its sole discretion, (vi) increase the rate
of interest applicable to the Loans and the LC Fees as set forth in this
Agreement and (vii) exercise any rights and remedies provided to the Agent under
the Loan Documents or at law or equity, including all remedies provided under
the UCC.

(b) If any Default described in subsections (f) or (g) of Article VII occurs
with respect to any Loan Party, the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue Facility LCs
shall automatically terminate and all Obligations shall immediately become due
and payable without any election or action on the part of the Agent, the LC
Issuer or any Lender and the Loan Parties will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to
the Agent an amount equal to 105% of the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account.

(c) If, within thirty days after acceleration of the maturity of the Obligations
or termination of the obligations of the Lenders to make Loans and the
obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in subsections (f) or
(g) of Article VII with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower Representative, rescind and annul such
acceleration and/or termination.

(d) If at any time while any Default is continuing, the Agent determines that
the Collateral Shortfall Amount at such time is greater than zero, the Agent may
make demand on the Borrower (upon notice to the Borrower Representative) to pay,
and the Borrower will, forthwith upon such demand and without any further notice
or act, pay to the Agent an amount equal to 105% of the Collateral Shortfall
Amount, which funds shall be deposited in the Facility LC Collateral Account.
The Borrower hereby pledges, assigns, and grants to the Agent, on behalf of and
for the benefit of the Agent, the Lenders, and the LC Issuer, a security
interest in all of the Borrower’s right, title, and interest in and to all funds
which may from time to time be on deposit in the Facility LC Collateral Account
to secure the prompt and complete payment and performance of the Obligations.

(e) The Agent may at any time or from time to time after funds are deposited in
the Facility LC Collateral Account, apply such funds to the payment of the
Obligations and any other amounts as shall from time to time have become due and
payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.

 

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(f) At any time while any Default is continuing, neither the Borrower nor any
Person claiming on behalf of or through the Borrower shall have any right to
withdraw any of the funds held in the Facility LC Collateral Account. After all
of the Secured Obligations have been indefeasibly paid in full and the Aggregate
Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to the Borrower or paid to
whomever may be legally entitled thereto at such time.

8.2. Waivers by Loan Parties. Except as otherwise provided for in this Agreement
or by applicable law, each Loan Party waives: (a) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by the Agent on which any Loan Party may in any way be liable,
and hereby ratifies and confirms whatever the Agent may do in this regard,
(b) all rights to notice and a hearing prior to the Agent’s taking possession or
control of, or to the Agent’s replevy, attachment or levy upon, the Collateral
or any bond or security that might be required by any court prior to allowing
the Agent to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.

8.3. Amendments

(a) Subject to the provisions of this Section 8.3, no amendment, waiver or
modification of any provision of this Agreement or any other Loan Document, and
no consent with respect to any departure by any Loan Party therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or the Agent with the consent in writing of the Required Lenders) and the Loan
Parties and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given; provided,
however, that no such amendment, waiver or modification shall (i) include
additional categories of Collateral in the Borrowing Base if such inclusion
would increase Availability, (ii) increase the amount to be added to the
calculation of the Borrowing Base pursuant to clause (e) of the definition
thereof or (iii) modify any Eligibility Definition if such modification would
increase Availability, in each case, without the prior written consent of the
Lenders in the aggregate holding at least 75% of the Aggregate Commitment or, if
the Aggregate Commitment has been terminated, Lenders in the aggregate holding
at least 75% of the Aggregate Credit Exposure.

(b) Notwithstanding subsection (a) above, no such amendment, waiver or other
modification with respect to this Agreement shall

(i) without the consent of each Lender directly affected thereby:

(A) extend the final maturity of any Loan to a date after the Facility
Termination Date;

 

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(B) postpone any regularly scheduled payment of principal of any Loan or reduce
or forgive all or any portion of the principal amount of any Loan or any
Reimbursement Obligation or reduce the amount or extend the payment date for,
the mandatory payments required under Article II;

(C) reduce the rate or extend the time of payment of interest or fees payable to
the Lenders pursuant to any Loan Document;

(D) extend the Facility Termination Date;

(E) increase the amount of the Commitment of any Lender hereunder (other than
pursuant to Section 12.3); or

(F) amend this Section 8.3; and

(ii) without the consent of all of the Lenders:

(A) increase the percentage advances rates set forth in the definition of
Borrowing Base;

(B) change Section 2.18 hereof in any manner that would alter the sharing of
payments required thereunder;

(C) reduce the percentage or number of Lenders specified in the definition of
Required Lenders or eliminate or reduce the voting rights of any Lender under
this Section 8.3;

(D) permit any Loan Party to assign its rights under this Agreement;

(E) release all or substantially all of the Guarantors; or

(F) except as provided in any Collateral Document, release all or substantially
all of the Collateral.

(c) No amendment of any provision of this Agreement relating to the Agent or to
the Non-Ratable Loans, the Swingline Loans, the Overadvances or the Protective
Advances shall be effective without the written consent of the Agent. No
amendment of any provision relating to the LC Issuer shall be effective without
the written consent of the LC Issuer. The Agent may (i) amend Schedule I to
reflect assignments entered into pursuant to Section 12.3 and (ii) waive payment
of the fee required under Section 12.3(c) without obtaining the consent of any
other party to this Agreement.

(d) If, in connection with any proposed amendment, waiver or consent (a
“Proposed Change”) requiring the consent of all Lenders, the consent of the
Required Lenders is obtained, but the consent of other Lenders is not obtained
(any such Lender whose consent is not obtained being referred to herein as a
“Non-Consenting Lender”), then, so long as the Agent is not a Non-Consenting
Lender, the Borrower may elect to replace such Non-Consenting Lender as a Lender
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concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Non-Consenting Lender pursuant to an Assignment Agreement (provided that, if
such purchase is otherwise made in accordance with the terms hereof, the
Administrative Agent may, in its sole discretion, deem such purchase to have
been made pursuant to an Assignment Agreement without requiring the execution of
an Assignment Agreement by any party, and each party hereto hereby agrees for
all purposes hereunder and under the other Loan Documents that such purchase
shall be deemed to have been effected pursuant to an executed Assignment
Agreement in respect of such purchased amount and each Person that would have
otherwise been required to be a party thereto shall be bound by the provisions
thereof) and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of Section 12.3 applicable to
assignments, and (ii) the Borrower shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 3.1, 3.2 and 3.5, and
(2) an amount, if any, equal to the payment which would have been due to such
Lender on the day of such replacement under Section 3.4 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.

8.4. Preservation of Rights. No delay or omission of the Lenders, the LC Issuer
or the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence therein,
and the making of a Credit Extension notwithstanding the existence of a Default
or the inability of the Borrower to satisfy the conditions precedent to such
Credit Extension shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Lenders until the Obligations have been paid in full.

ARTICLE IX

GENERAL PROVISIONS

9.1. Survival of Representations. All representations and warranties of the Loan
Parties contained in this Agreement and the other Loan Documents shall survive
the execution and delivery of the Loan Documents and the making of the Credit
Extensions herein contemplated.

9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
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Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

9.3. Headings. Section headings in the Loan Documents are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Loan Parties, the Agent, the LC Issuer and the Lenders
and supersede all prior agreements and understandings among the Loan Parties,
the Agent and the Lenders relating to the subject matter thereof other than
those contained in the Fee Letter which shall survive and remain in full force
and effect during the term of this Agreement.

9.5. Several Obligations; Benefits of this Agreement. The respective obligations
of the Lenders hereunder are several and not joint and no Lender shall be the
partner or agent of any other lender (except to the extent to which the Agent is
authorized to act as administrative agent for the Lenders hereunder). The
failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns, provided however, that the parties hereto expressly agree that the
Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and
10.11 to the extent specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to the same extent
as if it were a party to this Agreement.

9.6. Expenses; Indemnification

(a) Expenses. The Borrower shall reimburse the Agent and the Arrangers for any
costs, internal charges and reasonable out-of-pocket expenses (including
attorneys’ fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent) paid or incurred by the Agent or the Arrangers in
connection with the preparation, negotiation, execution, delivery, syndication,
distribution (including, without limitation, via the internet or through a
service such as IntraLinks), review, amendment, modification, and administration
of the Loan Documents. The Borrower also agrees to reimburse the Agent, the
Arrangers, the LC Issuer and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys’ fees and time charges of attorneys
for the Agent, the Arrangers, the LC Issuer and the Lenders, which attorneys may
be employees of the Agent, the Arrangers, the LC Issuer or the Lenders) paid or
incurred by the Agent, the Arrangers, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the Borrower under this Section include, without limitation, costs
and expenses incurred in connection with:

(i) appraisals of all or any portion of the Collateral, including each parcel of
real Property or interest in real Property, Machinery or Equipment described in
any Collateral Document, which appraisals shall be in conformity with the
applicable requirements of any law or any governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any

 

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interpretation thereof, including, without limitation, the provisions of Title
XI of FIRREA, and any rules promulgated to implement such provisions (including
reasonable travel, lodging, meals and other out of pocket expenses);

(ii) field examinations and audits and the preparation of Reports at the Agent’s
then customary charge, plus reasonable travel, lodging, meals and other out of
pocket expenses;

(iii) any amendment, modification, supplement, consent, waiver or other
documents prepared with respect to any Loan Document and the transactions
contemplated thereby;

(iv) lien and title searches and title insurance;

(v) taxes, fees and other charges for recording the Mortgages, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Agent’s Liens (including costs and expenses paid or incurred by the
Agent in connection with the consummation of the Agreement);

(vi) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take;

(vii) any litigation, contest, dispute, proceeding or action (whether instituted
by Agent, the LC Issuer, any Lender, any Loan Party or any other Person and
whether as to party, witness or otherwise) in any way relating to the
Collateral, the Loan Documents or the transactions contemplated thereby; and

(viii) costs and expenses of forwarding loan proceeds, collecting checks and
other items of payment, and establishing and maintaining the Funding Account and
lock boxes, and costs and expenses of preserving and protecting the Collateral.

The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower. All of the
foregoing costs and expenses may be charged to the Borrower’s Funding Account as
Revolving Loans or to another deposit account, all as described in
Section 2.17(b).

(b) Indemnification. The Borrower hereby further agrees to indemnify the Agent,
the Arrangers, the LC Issuer, each Lender, their respective Affiliates, and each
of their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arrangers, the LC Issuer, any Lender or any Affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification.

 

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The obligations of the Borrower under this Section 9.6 shall survive the
termination of this Agreement.

9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.

9.8. Accounting. Except as provided to the contrary herein, all accounting terms
used herein shall be interpreted and all accounting determinations hereunder
shall be made in accordance with GAAP in a manner consistent with that used in
preparing the financial statements referred to in Section 5.5. If at any time
any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and the Borrower (through the
Borrower Representative), the Agent or the Required Lenders shall so request the
Agent, the Lenders and the Loan Parties shall negotiate in good faith to amend
such ratio or requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of the Required Lenders), provided
that, until so amended, such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and the Borrower shall
provide to the Agent and the Lenders reconciliation statements showing the
difference in such calculation, together with the delivery of monthly, quarterly
and annual financial statements required hereunder.

9.9. Severability of Provisions. Any provision in any Loan Document that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.

9.10. Nonliability of Lenders. The relationship between any Loan Party on the
one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be
solely that of debtor and creditor. Neither the Agent, the Arrangers, the LC
Issuer nor any Lender shall have any fiduciary responsibilities to any Loan
Party. Neither the Agent, the Arrangers, the LC Issuer nor any Lender undertakes
any responsibility to any Loan Party to review or inform such Loan Party of any
matter in connection with any phase of any Loan Party’s business or operations.
The Loan Parties agree that neither the Agent, the Arrangers, the LC Issuer nor
any Lender shall have liability to any Loan Party (whether sounding in tort,
contract or otherwise) for losses suffered by any Loan Party in connection with,
arising out of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arrangers, the LC Issuer nor any
Lender shall have any liability with respect to, and each Loan Party hereby
waives, releases and agrees not to sue for, any special, indirect, consequential
or punitive damages suffered by any Loan Party in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.

9.11. Confidentiality. The Agent and each Lender agrees to hold any confidential
information which it may receive from the Borrower in connection with this
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confidence, except for disclosure (a) to its Affiliates and to the Agent and any
other Lender and their respective Affiliates, (b) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee or proposed
Transferee, (c) to regulatory officials, (d) to any Person as requested pursuant
to or as required by law, regulation, or legal process, (e) to any Person in
connection with any legal proceeding to which it is a party, (f) to its direct
or indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties,
(g) permitted by Section 12.4, (h) to rating agencies if requested or required
by such agencies in connection with a rating relating to the Credit Extensions
hereunder and (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document. Without limiting Section 9.4, the Borrower agrees
that the terms of this Section 9.11 shall set forth the entire agreement between
the Borrower and each Lender (including the Agent) with respect to any
confidential information previously or hereafter received by such Lender in
connection with this Agreement, and this Section 9.11 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information.

9.12. Nonreliance. Each Lender hereby represents that it is not relying on or
looking to any Margin Stock for the repayment of the Credit Extensions provided
for herein.

9.13. Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees
that Chase and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with any of the Loan Parties and
their respective Affiliates. In addition, each Loan Party and each Lender hereby
acknowledges that Chase and/or its Affiliates may also purchase certain equity
interests in one or more Loan Parties, make a subordinated loan to the Borrower
and receive a warrant from the Borrower, invest in a fund that has invested debt
or equity directly or indirectly in one or more Loan Parties and/or act as a
financial or other advisor, placement or similar agent or underwriter for one or
more Loan Parties.

9.14. USA PATRIOT ACT. Each Lender that is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) hereby notifies the Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in
accordance with the Act.

ARTICLE X

THE AGENT

10.1. Appointment; Nature of Relationship. Chase is hereby appointed by each of
the Lenders as its contractual representative (referred to in this Section 10.1
in such capacity as the “Agent”) hereunder and under each other Loan Document
(including, without limitation, as “Collateral Agent” under each of the
Collateral Documents), and each of the Lenders irrevocably authorizes the Agent
to act as the contractual representative of such Lender with the rights and
duties expressly set forth herein and in the other Loan Documents. The Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
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the Agent shall not have any fiduciary responsibilities to any Lender by reason
of this Agreement or any other Loan Document and that the Agent is merely acting
as the contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders’ contractual representative, the Agent (a) does not
hereby assume any fiduciary duties to any of the Lenders, (b) is a
“representative” of the Lenders within the meaning of the term “secured party”
as defined in the New York Uniform Commercial Code and (c) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.

10.2. Powers. The Agent shall have and may exercise such powers under the Loan
Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.

10.3. General Immunity. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Borrower, the Lenders or any Lender
for any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.

10.4. No Responsibility for Credit Extensions, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of any Loan Party, any Guarantor or
any Affiliate of any Loan Party.

10.5. Action on Instructions of the Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
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against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.

10.6. Employment of Agents and Counsel. The Agent may execute any of its duties
as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by the Agent or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent’s duties hereunder
and under any other Loan Document.

10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex, electronic mail message, statement, paper or document believed by it (in
its Permitted Discretion) to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Agent, which counsel may be employees of the
Agent. For purposes of determining compliance with the conditions specified in
Sections 4.1 and 4.2, each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Agent shall have received
written notice from such Lender prior to the applicable date specifying its
objection thereto.

10.8. Agent’s Reimbursement and Indemnification. The Lenders agree to reimburse
and indemnify the Agent ratably in proportion to their respective Commitments
(or, if the Commitments have been terminated, in proportion to their Commitments
immediately prior to such termination) (a) for any amounts not reimbursed by the
Borrower for which the Agent is entitled to reimbursement by the Borrower under
the Loan Documents, (b) for any other expenses incurred by the Agent on behalf
of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (c) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that, no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.

10.9. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
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written notice from a Lender, the Borrower or the Borrower Representative
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a “notice of default.” In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders; provided, that, the Agent shall not be liable to any Lender for any
failure to do so, except to the extent that such failure is attributable to the
Agent’s gross negligence or willful misconduct.

10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document with
respect to its Commitment and its Credit Extensions as any Lender and may
exercise the same as though it were not the Agent, and the term “Lender” or
“Lenders” shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with any Loan Party
in which such Loan Party is not restricted hereby from engaging with any other
Person, all as if Chase were not the Agent and without any duty to account
therefor to Lenders. Chase and its Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders. The Agent in its
individual capacity, is not obligated to remain a Lender.

10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arrangers or any other
Lender and based on the financial statements prepared by the Loan Parties and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arrangers 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 and the other Loan Documents. Except for any notice, report, document,
credit information or other information expressly required to be furnished to
the Lenders by the Agent or Arrangers hereunder, neither the Agent nor the
Arrangers shall have any duty or responsibility (either initially or on a
continuing basis) to provide any Lender with any notice, report, document,
credit information or other information concerning the affairs, financial
condition or business of the Borrower or any of its Affiliates that may come
into the possession of the Agent or Arrangers (whether or not in their
respective capacity as Agent or Arrangers) or any of their Affiliates.

10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower Representative, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives notice
of its intention to resign. Upon any such resignation the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent’s giving notice of
its intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor

 

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Agent hereunder. If the Agent has resigned and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has accepted the appointment. Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as the Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
effectiveness of the resignation of the Agent, the resigning Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation of an Agent, the
provisions of this Article X shall continue in effect for the benefit of such
Agent in respect of any actions taken or omitted to be taken by it while it was
acting as the Agent hereunder and under the other Loan Documents. In the event
that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.

10.13. Delegation to Affiliates. The Borrower and the Lenders agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate’s directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.

10.14. Execution of Loan Documents. Each Lender agrees that any action taken by
the Agent or the Required Lenders in accordance with the terms of this Agreement
or the other Loan Documents, and the exercise by the Agent or the Required
Lenders of their respective powers set forth therein or herein, together with
such other powers that are reasonably incidental thereto, shall be binding upon
all of the Lenders. The Lenders acknowledge that all of the Obligations
hereunder constitute one debt, secured pari passu by all of the Collateral.

10.15. Collateral Matters.

(a) The Lenders hereby irrevocably authorize the Agent, at its option and in its
Permitted Discretion, to release any Liens granted to the Agent by the Loan
Parties on any Collateral (i) upon the termination of the Aggregate Commitment,
payment and satisfaction in full in cash of all Obligations (other than
Unliquidated Secured Obligations), and the cash collateralization of all
Unliquidated Secured Obligations in a manner satisfactory to each affected
Lender (in its Permitted Discretion), (ii) constituting Property being sold or
disposed of if the Loan Party disposing of such Property certifies to the Agent
that the sale or disposition is made in compliance with the terms of this
Agreement (and the Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting Property in which no Loan Party has at any
time during the term of this Agreement owned any interest, (iv) constituting
property leased to a Loan Party under a lease which has expired or been
terminated in a transaction permitted under this Agreement, (v) owned by or
leased to any Loan Party which is subject to a purchase money security interest
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entered into by such Loan Party pursuant to Section 6.17(c), (vi) as required to
effect any sale or other disposition of such Collateral in connection with any
exercise of remedies of the Agent and the Lenders pursuant to Section 8.1, or
(vii) of any Unrestricted Subsidiary upon the designation of any subsidiary as
an Unrestricted Subsidiary by the Borrower in accordance with the terms of this
Agreement. Upon request by the Agent at any time, the Lenders will promptly
confirm in writing the Agent’s authority to release any Liens upon particular
types or items of Collateral pursuant to this Section 10.15. Except as provided
in the preceding sentence, the Agent will not release any Liens on any
Substantial Portion of the Collateral without the prior written authorization of
the Required Lenders.

(b) Upon receipt by the Agent of any authorization required pursuant to
Section 10.15(a) from the Required Lenders of the Agent’s authority to release
any Liens upon particular types or items of Collateral, and upon at least 2
Business Days prior written request by the Loan Parties, the Agent shall (and is
hereby irrevocably authorized by the Lenders to), as soon thereafter as
practicable, execute such documents as may be necessary to evidence the release
of its Liens upon such Collateral; provided that, (i) the Agent shall not be
required to execute any such document on terms which, in the Agent’s opinion (in
its Permitted Discretion), would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty and (ii) 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 the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.

(c) The Agent shall have no obligation whatsoever to any of the Lenders to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected, or insured or has been encumbered, or that the Liens granted to
the Agent therein have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights,
authorities, and powers granted or available to the Agent pursuant to any of the
Loan Documents; provided that, no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Agent.

(d) Each Lender hereby appoints each other Lender as its agent for the purpose
of perfecting Liens, for the benefit of the Agent and the Lenders, in assets
which, in accordance with Article 9 of the UCC or any other applicable law can
be perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent’s request therefor shall deliver such Collateral to
the Agent or otherwise deal with such Collateral in accordance with the Agent’s
instructions.

(e) Each Lender hereby agrees as follows: (a) such Lender is deemed to have
requested that the Agent furnish such Lender, promptly after it becomes
available, a copy

 

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of each Report prepared by or on behalf of the Agent; (b) such Lender expressly
agrees and acknowledges that neither Chase nor the Agent (i) makes any
representation or warranty, express or implied, as to the completeness or
accuracy of any Report or any of the information contained therein, or
(ii) shall be liable for any information contained in any Report; (c) such
Lender expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that the Agent, Chase, or any other party performing any
audit or examination will inspect only specific information regarding the Loan
Parties and will rely significantly upon the Loan Parties’ books and records, as
well as on representations of the Loan Parties’ personnel and that Chase
undertakes no obligation to update, correct or supplement the Reports; (d) such
Lender agrees to keep all Reports confidential and strictly for its internal
use, not share the Report with any Loan Party and not to distribute any Report
to any other Person except as otherwise permitted pursuant to this Agreement;
and (e) without limiting the generality of any other indemnification provision
contained in this Agreement, such Lender agrees (i) that neither Chase nor the
Agent shall be liable to such Lender or any other Person receiving a copy of the
Report for any inaccuracy or omission contained in or relating to a Report,
(ii) to conduct its own due diligence investigation and make credit decisions
with respect to the Loan Parties based on such documents as such Lender deems
appropriate without any reliance on the Reports or on the Agent or Chase,
(iii) to hold the Agent and any such other Person preparing a Report harmless
from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any Credit
Extensions that the indemnifying Lender has made or may make to the Loan
Parties, or the indemnifying Lender’s participation in, or the indemnifying
Lender’s purchase of, any Obligations and (iv) to pay and protect, and
indemnify, defend, and hold the Agent and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorney fees) incurred
by the Agent and any such other Person 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.

10.16. Co-Agents, Co-Syndication Agents, Co-Documentation Agents, etc. Neither
any of the Lenders identified in this Agreement as a “co-agent” nor any
Co-Syndication Agent or Co-Documentation Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.

ARTICLE XI

SETOFF; RATABLE PAYMENTS

11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Loan Party becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and

 

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applied toward the payment of the Secured Obligations then due and owing to such
Lender, whether or not the Secured Obligations, or any part thereof, shall then
be due; provided, that to the extent prohibited by applicable law as described
in the definition of “Excluded Swap Obligation,” no amounts received from, or
set off with respect to, any Guarantor shall be applied to any Excluded Swap
Obligations of such Guarantor.

11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Credit Exposure (other than payments received
pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Secured Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1. Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Loan Parties and the
Lenders and their respective successors and assigns permitted hereby, except
that (a) the Loan Parties shall not have the right to assign their rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with
Section 12.3, and (c) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with
Section 12.2. The parties to this Agreement acknowledge that clause (b) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Credit Extension or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 12.3; provided
however, that the Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Credit Extension or which
holds any Note to direct payments relating to such Credit Extension or Note to
another Person. Any assignee of the rights to any Credit Extension or any Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any

 

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Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Credit Extension (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Credit Extension.

12.2. Participations

(a) Permitted Participants; Effect. Any Lender may at any time sell to one or
more banks or other entities (“Participants”) participating interests in any
Credit Exposure of such Lender, any Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan Documents. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender’s obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall remain the
owner of its Credit Exposure and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under the Loan Documents.

(b) Voting Rights. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
which would (i) require the consent of such Lender pursuant to the terms of
Section 8.3(b) or (ii) (A) modify any Eligibility Definition or (B) include
additional categories of Collateral in the Borrowing Base which, in either case,
would increase Availability, and which would require the consent of such Lender
pursuant to the terms of Section 8.3(a) or of any other Loan Document.

(c) Benefit of Certain Provisions. Each Loan Party agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that, each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender. The Borrower
further agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 12.3, provided that,
(i) a Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating interest to
such Participant would have received had it retained such interest for its own
account, unless the sale of such interest to such Participant is made with the
prior written consent of the Borrower Representative or to the extent such
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receive a greater payment results from an adoption of or any change in any law
or in the interpretation or application thereof that occurs after the
Participant acquired the applicable participation, and (ii) any Participant not
incorporated under the laws of the U.S. or any state thereof agrees to comply
with the provisions of Section 3.5 to the same extent as if it were a Lender.
Each Lender that sells a participation shall maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
obligations hereunder (the “Participant Register”); provided that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register to any person except to the extent such disclosure is necessary to
establish that such Commitment, Loan, Letter of Credit or other obligation is in
registered form under Treasury Regulation Section 5f.103-1(c). The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Agent shall have no responsibility for maintaining a Participant Register.

12.3. Assignments

(a) Permitted Assignments. Any Lender may at any time assign to one or more
banks or other entities (“Purchasers”) all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit G (an “Assignment Agreement”). Each such assignment with
respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an
Approved Fund shall either be in an amount equal to the entire applicable
Commitment and Credit Extensions of the assigning Lender or (unless each of the
Borrower Representative and the Agent otherwise consents) be in an aggregate
amount not less than $5,000,000. The amount of the assignment shall be based on
the Commitment or outstanding Credit Extensions (if the Commitment has been
terminated) subject to the assignment, determined as of the date of such
assignment or as of the “Trade Date,” if the “Trade Date” is specified in the
assignment.

(b) Consents. The consent of the Borrower Representative shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund, provided that, the consent of the
Borrower Representative shall not be required if a Default has occurred and is
continuing. The consent of each of the Agent and the LC Issuer shall be required
prior to an assignment becoming effective. Any consent required under this
Section 12.3(b) shall not be unreasonably withheld or delayed.

(c) Effect; Effective Date. Upon (i) delivery to the Agent of a duly executed
Assignment Agreement, together with any consents required by Sections 12.3(a)
and 12.3(b), and (ii) payment of a $3,500 fee to the Agent for processing such
assignment (unless such fee is waived by the Agent), such Assignment Agreement
shall become effective on the effective date specified by the Agent in such
Assignment Agreement. The Assignment Agreement shall contain a representation by
the Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Credit Exposure under the applicable Assignment
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defined under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be “plan assets” under ERISA. On and after the
effective date of such Assignment Agreement, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if it
were an original party thereto, and the transferor Lender shall be released with
respect to the Commitment and Credit Exposure assigned to such Purchaser without
any further consent or action by the Borrower, the Lenders or the Agent. In the
case of an Assignment Agreement covering all of the assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits of, and subject to,
those provisions of this Agreement and the other Loan Documents which survive
payment of the Obligations and termination of the applicable agreement. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 12.3 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3(c), the transferor
Lender, the Agent and the Borrower shall, if the transferor Lender or the
Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.

(d) Register. The Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in the U.S. a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts (and stated interest) of the Credit Extensions owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

12.4. Dissemination of Information. Each Loan Party authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession
concerning the creditworthiness of the Loan Parties, including without
limitation any information contained in any Reports; provided that, each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.

12.5. Tax Treatment. If any interest in any Loan Document is transferred to any
Transferee which is not incorporated under the laws of the U.S. or any state
thereof, the transferor Lender shall cause such Transferee, concurrently with
the effectiveness of such transfer, to comply with the provisions of
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Participant, any forms will be provided directly to the transferor Lender rather
than the Borrower.

12.6. Assignment by LC Issuer. Notwithstanding anything contained herein, if at
any time an LC Issuer assigns all of its Commitment and Loans pursuant to
Section 12.3, such LC Issuer may, upon thirty days’ notice to the Borrower
Representative and the Lenders, resign as an LC Issuer. In the event of any such
resignation as an LC Issuer, the Borrower Representative shall be entitled to
appoint from among the Lenders a successor LC Issuer hereunder; provided
however, that no failure by the Borrower Representative to appoint any such
successor shall affect the resignation of such LC Issuer as an LC Issuer. If an
LC Issuer resigns as an LC Issuer, it shall retain all the rights and
obligations of an LC Issuer hereunder with respect to the Facility LCs
outstanding as of the effective date of its resignation as an LC Issuer and all
LC Obligations with respect thereto (including the right to require the Lenders
to make Revolving Loans or fund risk participations in outstanding Reimbursement
Obligations pursuant to Section 2.1.2(d)).

ARTICLE XIII

NOTICES

13.1. Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows:

(i) if to any Loan Party, at its address or telecopier number set forth on the
signature page hereof;

(ii) if to the Agent, at its address or telecopier number set forth on the
signature page hereof;

(iii) if to the LC Issuer, at its address or telecopier number set forth on the
signature page hereof;

(iv) if to a Lender, to it at its address or telecopier number set forth in its
Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

 

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(b) Electronic Communications. Notices and other communications to the Lenders
and the LC Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Agent or as otherwise determined by the Agent,
provided that, the foregoing shall not apply to notices to any Lender or the LC
Issuer pursuant to Article II if such Lender or the LC Issuer, as applicable,
has notified the Agent that it is incapable of receiving notices under such
Article by electronic communication. The Agent or any Loan Party may, in its
respective discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it or
as it otherwise determines, provided that such determination or approval may be
limited to particular notices or communications. Notwithstanding the foregoing,
in every instance, the Borrower Representative shall be required to provide
paper copies of the Compliance Certificates required by Section 6.1(e) to the
Agent.

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

13.2. Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

ARTICLE XIV

COUNTERPARTS

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Loan Parties, the Agent, the LC
Issuer and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.

ARTICLE XV

GUARANTY

15.1. Guaranty. Each Guarantor hereby agrees that it is jointly and severally
liable for, and, as primary obligor and not merely as surety, absolutely and
unconditionally guarantees to the Lenders the prompt payment when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
of the Secured Obligations and all costs and expenses

 

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including, without limitation, all court costs and attorneys’ and paralegals’
fees (including allocated costs of in-house counsel and paralegals) and expenses
paid or incurred by the Agent, the LC Issuer and the Lenders in endeavoring to
collect all or any part of the Secured Obligations from, or in prosecuting any
action against, the Borrower, any Guarantor or any other guarantor of all or any
part of the Secured Obligations (other than with respect to any Guarantor, any
Excluded Swap Obligations of such Guarantor) (such costs and expenses, together
with the Secured Obligations, collectively the “Guaranteed Obligations”). Each
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal.

15.2. Guaranty of Payment. This Guaranty is a guaranty of payment and not of
collection. Each Guarantor waives any right to require the Agent, the LC Issuer
or any Lender to sue the Borrower, any Guarantor, any other guarantor, or any
other person obligated for all or any part of the Guaranteed Obligations, or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.

15.3. No Discharge or Diminishment of Guaranty

(a) Except as otherwise provided for herein and to the extent provided for
herein, the obligations of each Guarantor hereunder are unconditional and
absolute and not subject to any reduction, limitation, impairment or termination
for any reason (other than the indefeasible payment in full in cash of the
Guaranteed Obligations), including:

(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise;

(ii) any change in the corporate existence, structure or ownership of the
Borrower or any other guarantor of or other person liable for any of the
Guaranteed Obligations;

(iii) any insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Borrower, any Guarantor, or any other guarantor of or other person
liable for any of the Guaranteed Obligations, or their assets or any resulting
release or discharge of any obligation of the Borrower, any Guarantor, or any
other guarantor of or other person liable for any of the Guaranteed Obligations;
or

(iv) the existence of any claim, setoff or other rights which any Guarantor may
have at any time against the Borrower, any Guarantor, any other guarantor of the
Guaranteed Obligations, the Agent, the LC Issuer, any Lender, or any other
person, whether in connection herewith or in any unrelated transactions.

(b) The obligations of each Guarantor hereunder are not subject to any defense
or setoff, counterclaim, recoupment, or termination whatsoever by reason of the
invalidity, illegality, or unenforceability of any of the Guaranteed Obligations
or otherwise, or any provision of applicable law or regulation purporting to
prohibit payment by the Borrower,

 

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any Guarantor or any other guarantor of or other person liable for any of the
Guaranteed Obligations, of the Guaranteed Obligations or any part thereof.

(c) Further, the obligations of any Guarantor hereunder are not discharged or
impaired or otherwise affected by:

(i) the failure of the Agent, the LC Issuer or any Lender to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations;

(ii) any waiver or modification of or supplement to any provision of any
agreement relating to the Guaranteed Obligations;

(iii) any release, non-perfection, or invalidity of any indirect or direct
security for the obligations of the Borrower for all or any part of the
Guaranteed Obligations or any obligations of any other guarantor of or other
person liable for any of the Guaranteed Obligations;

(iv) any action or failure to act by the Agent, the LC Issuer or any Lender with
respect to any collateral securing any part of the Guaranteed Obligations;

(v) any default, failure or delay, willful or otherwise, in the payment or
performance of any of the Guaranteed Obligations, or any other circumstance,
act, omission or delay that might in any manner or to any extent vary the risk
of such Guarantor or that would otherwise operate as a discharge of any
Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of the Guaranteed Obligations).

15.4. Defenses Waived. To the fullest extent permitted by applicable law, each
Guarantor hereby waives any defense based on or arising out of any defense of
the Borrower or any Guarantor or the unenforceability of all or any part of the
Guaranteed Obligations from any cause, or the cessation from any cause of the
liability of the Borrower or any Guarantor, other than the indefeasible payment
in full in cash of the Guaranteed Obligations. Without limiting the generality
of the foregoing, each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any person against the Borrower, any Guarantor, any other
guarantor of any of the Guaranteed Obligations, or any other person. The Agent
may, at its election, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in
lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with
the Borrower, any Guarantor, any other guarantor or any other person liable on
any part of the Guaranteed Obligations or exercise any other right or remedy
available to it against the Borrower, any Guarantor, any other guarantor or any
other person liable on any of the Guaranteed Obligations, without affecting or
impairing in any way the liability of such Guarantor under this Guaranty except
to the extent the Guaranteed Obligations have been fully

 

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and indefeasibly paid in cash. To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against the Borrower, any other guarantor or any other person
liable on any of the Guaranteed Obligations, as the case may be, or any
security.

15.5. Rights of Subrogation. No Guarantor will assert any right, claim or cause
of action, including, without limitation, a claim of subrogation, contribution
or indemnification that it has against the Borrower, any Guarantor, any person
liable on the Guaranteed Obligations, or any collateral, until the Loan Parties
and the Guarantors have fully performed all their obligations to the Agent, the
LC Issuer and the Lenders and the Commitments have been terminated.

15.6. Reinstatement; Stay of Acceleration. If at any time any payment of any
portion of the Guaranteed Obligations is rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, or reorganization of the Borrower
or otherwise, each Guarantor’s obligations under this Guaranty with respect to
that payment shall be reinstated at such time as though the payment had not been
made and whether or not the Agent, the LC Issuer and the Lenders are in
possession of this Guaranty. If acceleration of the time for payment of any of
the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Lender.

15.7. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that each Guarantor
assumes and incurs under this Guaranty, and agrees that neither the Agent, the
LC Issuer nor any Lender shall have any duty to advise any Guarantor of
information known to it regarding those circumstances or risks.

15.8. Taxes. All payments of the Guaranteed Obligations will be made by each
Guarantor free and clear of and without deduction for or on account of Taxes. If
any Guarantor or the Agent is required by law to deduct any Taxes from or in
respect of any sum payable to the Lenders under this Guaranty, (a) if such Tax
is an Indemnified Tax or Other Tax, the sum payable must be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this provision) the Lenders receive
an amount equal to the sum it would have received had no such deductions been
made, (b) the Guarantors or the Agent must then make such deductions, and must
pay the full amount deducted to the relevant authority in accordance with
applicable law, and (c) the Guarantors must furnish to the Agent as promptly as
possible but in any case within forty-five days after their due date certified
copies of all official receipts evidencing payment thereof.

15.9. Severability. The provisions of this Guaranty are severable, and in any
action or proceeding involving any state corporate law, or any state, federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under this Guaranty
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avoidable, invalid or unenforceable on account of the amount of such Guarantor’s
liability under this Guaranty, then, notwithstanding any other provision of this
Guaranty to the contrary, the amount of such liability shall, without any
further action by the Guarantors or the Lenders, be automatically limited and
reduced to the highest amount that is valid and enforceable as determined in
such action or proceeding (such highest amount determined hereunder being the
relevant Guarantor’s “Maximum Liability”. This Section with respect to the
Maximum Liability of each Guarantor is intended solely to preserve the rights of
the Lenders to the maximum extent not subject to avoidance under applicable law,
and no Guarantor nor any other person or entity shall have any right or claim
under this Section with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Guarantor hereunder shall not be
rendered voidable under applicable law. Each Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Liability of each Guarantor without impairing this Guaranty or affecting the
rights and remedies of the Lenders hereunder, provided that, nothing in this
sentence shall be construed to increase any Guarantor’s obligations hereunder
beyond its Maximum Liability.

15.10. Contribution. In the event any Guarantor (a “Paying Guarantor”) shall
make any payment or payments under this Guaranty or shall suffer any loss as a
result of any realization upon any collateral granted by it to secure its
obligations under this Guaranty, each other Guarantor (each a “Non-Paying
Guarantor”) shall contribute to such Paying Guarantor an amount equal to such
Non-Paying Guarantor’s “Pro Rata Share” of such payment or payments made, or
losses suffered, by such Paying Guarantor. For purposes of this Article XV, each
Non-Paying Guarantor’s “Pro Rata Share” with respect to any such payment or loss
by a Paying Guarantor shall be determined as of the date on which such payment
or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrower
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Guarantor, the
aggregate amount of all monies received by such Guarantors from the Borrower
after the date hereof (whether by loan, capital infusion or by other means).
Nothing in this provision shall affect any Guarantor’s several liability for the
entire amount of the Guaranteed Obligations (up to such Guarantor’s Maximum
Liability). Each of the Guarantors covenants and agrees that its right to
receive any contribution under this Guaranty from a Non-Paying Guarantor shall
be subordinate and junior in right of payment to the payment in full in cash of
the Guaranteed Obligations. This provision is for the benefit of both the Agent,
the LC Issuer, the Lenders and the Guarantors and may be enforced by any one, or
more, or all of them in accordance with the terms hereof.

15.11. Lending Installations. The Guaranteed Obligations may be booked at any
Lending Installation. All terms of this Guaranty apply to and may be enforced by
or on behalf of any Lending Installation.

15.12. Liability Cumulative. The liability of each Loan Party as a Guarantor
under this Article XV is in addition to and shall be cumulative with all
liabilities of each Loan Party to the

 

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Agent, the LC Issuer and the Lenders under this Agreement and the other Loan
Documents to which such Loan Party is a party or in respect of any obligations
of liabilities of the other Loan Parties, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

15.13 (Discharge of Guaranty Upon Certain Events). If a Guarantor is designated
as an Unrestricted Subsidiary in accordance with the provisions of this
Agreement or the Capital Stock of any Guarantor is sold in accordance with the
provisions of this Agreement such that the Guarantor is no longer a direct or
indirect Subsidiary of the Borrower, then in each case the Guaranty of such
Guarantor and any subsidiary of such Guarantor that is a Guarantor hereunder
shall automatically be discharged and released.

15.14. Keepwell. Each Qualified Keepwell Provider hereby jointly and severally
absolutely, unconditionally, and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations under this guarantee in respect of any Swap
Obligation (provided, however, that each Qualified Keepwell Provider shall only
be liable under this Section 15.14 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 15.14, or otherwise under this guarantee, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified Keepwell Provider under this
Section 15.14 shall remain in full force and effect until all of the Secured
Obligations have been indefeasibly paid and performed in full (or with respect
to any outstanding Facility LCs, a cash deposit or Supporting Letter of Credit
has been delivered to the Collateral Agent as required by the Credit Agreement)
and no commitments of the Collateral Agent or the Secured Parties which would
give rise to any Secured Obligations are outstanding. Each Qualified Keepwell
Provider intends that this Section 15.14 constitute, and this Section 15.14
shall be deemed to constitute, a “keepwell, support, or other agreement” or the
benefit of each other Loan Party for all purposes of section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.

ARTICLE XVI

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

16.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.

16.2. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO

 

126

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ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN
PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTION WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN THE STATE OF NEW YORK.

16.3. WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

ARTICLE XVII

THE BORROWER REPRESENTATIVE

17.1. Appointment; Nature of Relationship. PHI is hereby appointed by the
Borrower as its contractual representative (herein referred to as the “Borrower
Representative”) hereunder and under each other Loan Document, and the Borrower
irrevocably authorizes the Borrower Representative to act as the contractual
representative of the Borrower with the rights and duties expressly set forth
herein and in the other Loan Documents. The Borrower Representative agrees to
act as such contractual representative upon the express conditions contained in
this Article XVII. Additionally, the Borrower hereby appoints the Borrower
Representative as its agent to receive all of the proceeds of the Loans in the
Funding Account, at which time the Borrower Representative shall promptly
disburse such Loans to the Borrower. The Agent and the Lenders, and their
respective officers, directors, agents or employees, shall not be liable to the
Borrower Representative or the Borrower for any action taken or omitted to be
taken by the Borrower Representative or the Borrower pursuant to this
Section 17.1.

17.2. Powers. The Borrower Representative shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Borrower
Representative by the terms of each thereof, together with such powers as are
reasonably incidental thereto. The Borrower Representative shall have no implied
duties to the Borrower, or any obligation to the Lenders to take any action
thereunder except any action specifically provided by the Loan Documents to be
taken by the Borrower Representative.

17.3. Employment of Agents. The Borrower Representative may execute any of its
duties as the Borrower Representative hereunder and under any other Loan
Document by or through Authorized Officers.

 

127

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17.4. Notices. The Borrower shall immediately notify the Borrower Representative
of the occurrence of any Default or Unmatured Default hereunder referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a “notice of default.” In the event that the Borrower
Representative receives such a notice, the Borrower Representative shall give
prompt notice thereof to the Agent and the Lenders. Any notice provided to the
Borrower Representative hereunder shall constitute notice to the Borrower on the
date received by the Borrower Representative.

17.5. Successor Borrower Representative. Upon the prior written consent of the
Agent, the Borrower Representative may resign at any time, such resignation to
be effective upon the appointment of a successor Borrower Representative. The
Agent shall give prompt written notice of such resignation to the Lenders.

17.6. Execution of Loan Documents; Borrowing Base Certificate. The Borrower
hereby empowers and authorizes the Borrower Representative, on behalf of the
Borrower, to execute and deliver to the Agent and the Lenders the Loan Documents
and all related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Loan Documents, including
without limitation, the Borrowing Base Certificates and the Compliance
Certificates. The Borrower agrees that any action taken by the Borrower
Representative or the Borrower in accordance with the terms of this Agreement or
the other Loan Documents, and the exercise by the Borrower Representative 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 Borrower.

17.7. Reporting. The Borrower hereby agrees that it shall furnish promptly to
the Borrower Representative a copy of any certificate or report required
hereunder or requested by the Borrower Representative on which the Borrower
Representative shall rely to prepare the Borrowing Base Certificates and
Compliance Certificates required pursuant to the provisions of this Agreement.

ARTICLE XVIII

EFFECT OF AMENDMENT AND RESTATEMENT OF EXISTING CREDIT AGREEMENT

On the Effective Date, the Existing Credit Agreement shall be amended, restated
and superseded in its entirety. The parties hereto acknowledge and agree that
(a) this Agreement and the other Loan Documents, whether executed and delivered
in connection herewith or otherwise, do not constitute a novation, payment and
reborrowing, or termination of the “Obligations” (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement as in effect prior to the
Effective Date and (b) such “Obligations” are in all respects continuing (as
amended and restated hereby) with only the terms thereof being modified as
provided in this Agreement.

[Signature Pages Follow]

 

128

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IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.

 

BORROWER: PETROLEUM HEAT AND POWER CO., INC. By:  

 

Name:  

 

Title:  

 

OTHER LOAN PARTIES: A.P. WOODSON COMPANY C. HOFFBERGER COMPANY CHAMPION ENERGY
CORPORATION CHAMPION OIL COMPANY COLUMBIA PETROLEUM TRANSPORTATION, LLC HOFFMAN
FUEL COMPANY OF BRIDGEPORT HOFFMAN FUEL COMPANY OF DANBURY HOFFMAN FUEL COMPANY
OF STAMFORD J.J. SKELTON OIL COMPANY LEWIS OIL COMPANY MAREX CORPORATION MEENAN
HOLDINGS OF NEW YORK, INC. MEENAN OIL CO., INC. MINNWHALE LLC ORTEP OF
PENNSYLVANIA, INC. PETRO HOLDINGS, INC. PETRO PLUMBING CORPORATION PETRO, INC.
REGIONOIL PLUMBING, HEATING AND COOLING CO., INC. RICHLAND PARTNERS, LLC RYE
FUEL COMPANY STAR ACQUISITIONS, INC. STAR GAS FINANCE COMPANY TG&E SERVICE
COMPANY, INC. By:  

 

Name:  

 

[Signature Page to Amended and Restated Credit Agreement]

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

Title:  

 

STAR GAS PARTNERS, L.P. By: KESTREL HEAT, LLC, its General Partner By:  

 

Name:  

 

Title:  

 

MEENAN OIL CO., L.P. By: MEENAN OIL CO., INC., its General Partner By:  

 

Name:  

 

Title:  

 

CFS LLC By: Richland Partners, LLC, its Sole Member By:  

 

  Richard F. Ambury   Chief Financial Officer, Executive Vice President,
Treasurer and Secretary NOTICE ADDRESS FOR LOAN PARTIES: 2187 Atlantic Street
Stamford, CT 06902

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

LENDERS:

JPMORGAN CHASE BANK, N.A.,

as Agent, an LC Issuer and Lender

By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

BANK OF AMERICA, N.A., as Co-Syndication Agent, an LC Issuer and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                    ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

RBS CITIZENS, N.A., as Co-Syndication Agent and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

KEYBANK NATIONAL ASSOCIATION, as Co-Documentation Agent and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

REGIONS BANK, as Co-Documentation Agent and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

WELLS FARGO CAPITAL FINANCE, LLC, as Co-Documentation Agent and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

BMO HARRIS BANK, N.A., as Co-Documentation Agent and Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

PNC BANK, N.A., as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

TD BANK, N.A., as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

SOCIETE GENERALE, as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

SANTANDER BANK, N.A., as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

[Signature Page to Amended and Restated Credit Agreement]

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

CITIBANK, as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

ISRAEL DISCOUNT BANK OF NEW YORK, as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

WEBSTER BANK, as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

RB INTERNATIONAL FINANCE (USA) LLC, as Lender By:  

 

Name:  

 

Title:  

 

NOTICE ADDRESS: [   Attention: Telephone: Facsimile:                     ]

 

 

[Signature Page to Amended and Restated Credit Agreement]

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

EXHIBIT A

BORROWING NOTICE

Date:             , 201    

 

To: JPMorgan Chase Bank, N.A., as Agent for the Lenders

This Borrowing Notice is furnished pursuant to Section 2.1.1(b) of that certain
Second Amended and Restated Credit Agreement dated as of January 14, 2014 (as
amended, modified, renewed or extended from time to time, the “Agreement”) among
Petroleum Heat and Power Co., Inc., a Minnesota corporation (the “Borrower”),
the other Loan Parties, the Lenders from time to time party thereto, JPMorgan
Chase Bank, N.A., a national banking association, as an LC Issuer and as the
Agent for the Lenders, Bank of America, N.A., as co-syndication agent and as an
LC Issuer, RBS Citizens, N.A., as co-syndication agent, and Key Bank National
Association, Regions Bank, Wells Fargo Capital Finance, LLC and BMO Harris Bank,
N.A., as co-documentation agents. Unless otherwise defined herein, capitalized
terms used in this Borrowing Notice have the meanings ascribed thereto in the
Agreement.

The Borrower Representative hereby notifies the Agent of its request of the
following Advance:

(1) Borrowing Date of the Advance (must be a Business Day):                     

(2) Aggregate Amount of the Advance: $        

(4) Type of Advance1:                     

(5) Duration of Interest Period (for Eurodollar Advances only):

One Month             

Two Months             

Three Months             

Six Months             

The Borrower Representative hereby represents, on its behalf and on behalf of
the Borrower, that, as of the date of this Borrowing Notice:

 

  (a) There exists no Default or Unmatured Default and no Default or Unmatured
Default shall result from this Credit Extension.

 

  (b) The representations and warranties contained in Article V of the Agreement
are true and correct, except to the extent any such representation or warranty
is stated to relate solely to an earlier date.

 

  (c) After giving effect to this Credit Extension, Availability will not be
less than zero.

 

 

  , as Borrower Representative

 

By:  

 

 

Name:

 

 

 

Title:

 

 

 

1  Eurodollar Advance or Floating Rate Advance.

 

Exhibit A

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

EXHIBIT B

CONVERSION/CONTINUATION NOTICE

Date:             , 201    

 

To: JPMorgan Chase Bank, N.A., as Agent for the Lenders

This Conversion/Continuation Notice is furnished pursuant to Section 2.7 of that
certain Second Amended and Restated Credit Agreement dated as of January 14,
2014 (as amended, modified, renewed or extended from time to time, the
“Agreement”) among Petroleum Heat and Power Co., Inc., a Minnesota corporation
(“Petro” or the “Borrower”), the other Loan Parties, the Lenders from time to
time party thereto, JPMorgan Chase Bank, N.A., a national banking association,
as an LC Issuer and as the Agent for the Lenders, Bank of America, N.A., as
co-syndication agent and as an LC Issuer, RBS Citizens, N.A., as co-syndication
agent, and Key Bank National Association, Regions Bank, Wells Fargo Capital
Finance, LLC and BMO Harris Bank, N.A., as co-documentation agents. Unless
otherwise defined herein, capitalized terms used in this Conversion/Continuation
Notice have the meanings ascribed thereto in the Agreement.

The Borrower Representative hereby notifies the Agent of its request to [SELECT
ONE]:

 

  (1) convert the Floating Rate Advance in the name of the Borrower and in the
amount of $         into a Eurodollar Advance with an Interest Period duration
of:          month(s)

 

  (2) continue the Eurodollar Advance in the name of the Borrower and as
otherwise described below:

 

  (a) Date of Continuation (must be a Business Day):                     

 

  (b) Aggregate Amount of Advance: $        

 

  (c) The duration of the Interest Period applicable thereto:

         month(s)

The Borrower Representative hereby represents, on its behalf and on behalf of
the Borrower that, as of the date of this Conversion/Continuation Notice:

 

  (a) There exists no Default or Unmatured Default and no Default or Unmatured
Default shall result from this Credit Extension.

 

  (b) The representations and warranties contained in Article V of the Agreement
are true and correct, except to the extent any such representation or warranty
is stated to relate solely to an earlier date.

 

  (c) After giving effect to this Credit Extension, Availability will not be
less than zero.

 

 

  , as Borrower Representative  

 

By:  

 

 

Name:

 

 

 

Title:

 

 

Exhibit B

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

EXHIBIT C

NOTE

Date:             , 201    

The undersigned (the “Borrower”), promises to pay to the order of
                                         (the “Lender”) the aggregate unpaid
principal amount of all Revolving Loans made by the Lender to the Borrower
pursuant to Article II of the Agreement (as hereinafter defined), in immediately
available funds at the main office of JPMorgan Chase Bank, N.A., as Agent,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement. The Borrower shall pay the principal of
and accrued and unpaid interest on the Revolving Loans and Reimbursement
Obligations in full on the Facility Termination Date.

The Lender shall, and is hereby authorized to, record on the schedule attached
hereto, or to otherwise record in accordance with its usual practice, the date
and amount of each Loan and the date and amount of each principal payment
hereunder.

This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Second Amended and Restated Credit Agreement dated as of
January 14, 2014 (which, as it may be amended or modified and in effect from
time to time, is herein called the “Agreement”), among the Borrower, the other
Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A., as an LC
Issuer and as the Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is secured pursuant to the Collateral Documents and
guaranteed pursuant to the Guaranty, as more specifically described in the
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.

 

Petroleum Heat and Power Co., Inc, a Minnesota corporation By:  

 

Print Name:  

 

Title:  

 

Exhibit C

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

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE OF PETROLEUM HEAT AND POWER CO., INC.

DATED              , 201    

 

Date

   Principal
Amount of
Loan    Maturity
of Interest
Period    Principal
Amount
Paid    Unpaid
Balance                                    

 

Exhibit C

 

2

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

EXHIBIT D

FORM OF OPINION

[Signed opinion attached]

Exhibit D

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

EXHIBIT E

COMPLIANCE CERTIFICATE

 

To: The Lenders parties to the

Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Second Amended
and Restated Credit Agreement dated as of January 14, 2014 (as amended,
modified, renewed or extended from time to time, the “Agreement”) among
Petroleum Heat and Power Co., Inc., a Minnesota corporation (“Petro” or the
“Borrower”), the other Loan Parties, the Lenders from time to time party
thereto, JPMorgan Chase Bank, N.A., a national banking association, as an LC
Issuer and as the Agent for the Lenders, Bank of America, N.A., as
co-syndication agent and as an LC Issuer, RBS Citizens, N.A., as co-syndication
agent, and Key Bank National Association, Regions Bank, Wells Fargo Capital
Finance, LLC and BMO Harris Bank, N.A., as co-documentation agents. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE BORROWER,
THAT:

1. I am the duly elected1                                          of the
Borrower Representative;

2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of the Parent and its Subsidiaries during the accounting period
covered by the attached financial statements;

3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;

4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief
executive office, (iii) principal place of business, (iv) mailing address,
(v) corporate offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral as set forth in
the Security Agreement, (vi) the type of entity it is, (vii) organization
identification number, if any, issued by its state of incorporation or other
organization or (viii) its state of incorporation or organization without having
given the Agent the notice required by Section 6.22;

5. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower’s compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct;

6. Schedule II hereto sets forth the Borrower’s Applicable Margin calculation2;
and

7. Schedule III attached hereto sets forth the various reports and deliveries
which are required at this time under the Agreement and the other Loan Documents
and the status of compliance.

 

 

1  Chief Financial Officer, Vice President – Controller or Treasurer.

2  Applicable Margin calculation applicable after receipt by the Agent of the
financial statement for the fiscal quarter ended March 31, 2014.

Exhibit E

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

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

 

 

 

 

The foregoing certifications, together with the computations and information set
forth in Schedule I and Schedule II hereto and the financial statements
delivered with this Certificate in support hereof, are made and delivered this
     day of             , 201    .

 

 

  ,   as Borrower Representative    

 

By:  

 

Name:  

 

Title:  

 

 

Exhibit E

 

2

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

SCHEDULE I TO COMPLIANCE CERTIFICATE

Compliance as of             ,          with

Provisions of Sections 6.1(e), 6.16(a), 6.25(a), 6.27 and 6.28 and any other
covenants set forth in the Agreement

 

Exhibit E

 

3

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

SCHEDULE II TO COMPLIANCE CERTIFICATE

Borrower’s Applicable Margin Calculation

 

Exhibit E

 

4

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

SCHEDULE III TO COMPLIANCE CERTIFICATE

Reports and Deliveries Currently Due

 

Exhibit E

 

5

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

EXHIBIT F

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of             ,     ,
201  , is entered into between                                         , a
                     (the “New Subsidiary”) and JPMorgan Chase Bank, N.A., in
its capacity as administrative agent (the “Agent”) under that certain Second
Amended and Restated Credit Agreement, dated as of January 14, 2014, among
Petroleum Heat and Power Co., Inc., a Minnesota corporation (“Petro” or the
“Borrower”), the Loan Parties party thereto, the Lenders party thereto and the
Agent (as the same may be amended, modified, extended or restated from time to
time, the “Credit Agreement”). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.

The New Subsidiary and the Agent, for the benefit of the Lenders, hereby agree
as follows:

1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the Credit Agreement and a Guarantor for all purposes of the Credit
Agreement and shall have all of the obligations of a Loan Party and a Guarantor
thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement, including without
limitation (a) all of the representations and warranties of the Loan Parties set
forth in Article V of the Credit Agreement, (b) all of the covenants set forth
in Article VI of the Credit Agreement and (c) all of the guaranty obligations
set forth in Article XV of the Credit Agreement. Without limiting the generality
of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the
limitations set forth in Section 15.10 of the Credit Agreement, hereby
guarantees, jointly and severally with the other Guarantors, to the Agent and
the Lenders, as provided in Article XV of the Credit Agreement, the prompt
payment and performance of the Guaranteed Obligations in full when due (whether
at stated maturity, by acceleration or otherwise) strictly in accordance with
the terms thereof and agrees that if any of the Guaranteed Obligations are not
paid or performed in full when due (whether at stated maturity, by acceleration
or otherwise), the New Subsidiary will, jointly and severally together with the
other Guarantors, promptly pay and perform the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

2. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Grantor
under the Security Agreement and shall have all of the obligations of a Grantor
under the Security Agreement as if it had executed such agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Security Agreement.

3. If required, the New Subsidiary is, simultaneously with the execution of this
Agreement, executing and delivering such Collateral Documents (and such other
documents and instruments) as requested by the Agent in accordance with the
Credit Agreement.

4. The address of the New Subsidiary for purposes of Article XIII of the Credit
Agreement is as follows:

 

 

  

 

  

 

  

 

  

 

Exhibit F

 

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5. The New Subsidiary hereby waives acceptance by the Agent and the Lenders of
the guaranty by the New Subsidiary upon the execution of this Agreement by the
New Subsidiary.

6. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument.

7. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.

 

[NEW SUBSIDIARY] By:  

 

Name:  

 

Title:  

 

Acknowledged and accepted: JPMorgan Chase Bank, N.A., as Agent By:  

 

Name:  

 

Title:  

 

 

Exhibit F

 

2

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EXHIBIT G

FORM OF

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into between the Assignor
named below (the “Assignor”) and the Assignee named below (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit, guarantees, and swingline loans included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.      Assignor:

  

 

  

2.      Assignee:

  

 

      [and is an Affiliate/Approved Fund of [identify Lender]1]

3.      Borrower:

   Petroleum Heat and Power Co., Inc.

4.      Administrative Agent:

  

JPMorgan Chase Bank, N.A., as administrative agent under the Credit

Agreement

5.      Credit Agreement:

   The Credit Agreement dated as of January 14, 2014 among Petroleum Heat and
Power Co., Inc., the Lenders parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto

 

1  Select as applicaple.

 

Exhibit G

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6. Assigned Interest:

 

Facility Assigned2

   Aggregate Amount of
Commitment/Loans for
all Lenders      Amount of
Commitment/Loans
Assigned      Percentage Assigned of
Commitment/Loans3      $                    $                           %     $
        $                %     $         $                % 

Effective Date:                 , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed
administrative questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the Loan Parties and their Affiliates
or their respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

 

NAME OF ASSIGNOR By:  

 

  Title: ASSIGNEE

 

NAME OF ASSIGNEE By:  

 

  Title:

 

2  Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. “Revolving
Commitment,” “Tranche A Term Commitment,” “Tranche B Term Commitment”).

3  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders.

 

Exhibit G

 

2

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Consented to and Accepted:

 

JPMorgan Chase Bank, N.A., as Agent and an LC Issuer By:  

 

Title:   Bank of America, N.A., as an LC Issuer By:  

 

Title:   [NOTE: PLUG IN ACTUAL NAME OF ENTITY6 By:  

 

Title:]  

 

6  Pursuant to § 12.3(b) of the Credit Agreement, the consent of the Borrower
Representative is required prior to an assignment becoming effective unless the
Assignee is a Lender, an Affiliate of a Lender or an Approved Fund, provided
that, the consent of the Borrower Representative is not required if a Default
has occurred and is continuing.

 

Exhibit G

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ANNEX 1

Second Amended and Restated Credit Agreement, dated as of January 14, 2014,
among Petroleum Heat and Power Co., Inc., a Minnesota corporation (“Petro” or
the “Borrower”), the Loan Parties party thereto, the Lenders party thereto and
the Agent (as the same may be amended, modified, extended or restated from time
to time, the “Credit Agreement”).

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.1 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender and (v) if it is a Non-U.S. Lender, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

Exhibit G

 

2

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3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
email or telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be governed by, and construed in accordance with, the law of the State of
New York.

 

Exhibit G

 

3

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EXHIBIT H

BORROWING BASE CERTIFICATE

Petroleum Heat and Power Co., Inc.

Borrowing Base Certificate

 

(000’s US$)                     

A.

   Total available Accounts Receivable (from page 2 of 5)       $ 0            
  

 

 

    

B.

   Total available Inventory (from page 3 of 5)       $ 0               

 

 

    

C.

   Total available Fixed Asset collateral (from page 4 of 5)       $ 0         
     

 

 

    

D.

   Available Cash, per terms of the Credit Agreement       $ 0               

 

 

    

E.

   Borrowing Base (lines A + B + C + D)          $ 0               

 

 

 

F.

   Lower of:             Borrowing Base (line E)       $ 0               

 

 

                 $ 0               

 

 

     Revolving Credit Commitment       $ 0               

 

 

    

G.

   Revolving Credit Outstandings:             Revolving Loans    $ 0            
Letters of Credit    $ 0               

 

 

           Total Revolving Credit Outstandings    $ 0          $ 0            
  

 

 

 

H.

   Available credit (overadvance) (line F - G)          $ 0               

 

 

 

Officer’s Certification:

Pursuant to the Second Amended and Restated Credit Agreement dated as of
January 14, 2014, the undersigned Financial Officer of Petroleum Heat and Power,
Co., Inc. certifies that the information provided in this certificate to
JPMorgan Chase Bank, as Administrative Agent, is true and correct based on the
accounting records of Petroleum Heat and Power Co., Inc.

 

Exhibit H

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Petroleum Heat and Power Co., Inc.        

 

Signature & Title

   

 

Date

 

* Borrowing Base Certificate to be accompanied by the documentation outlined in
Section 6 of the Credit Agreement*

 

Exhibit H