Exhibit 10.1

 

Execution Version

  

The Gas Company, LLC

 

$100,000,000

 

4.22% Senior Secured Notes due August 8, 2022

 

 

 

Note Purchase Agreement

 

 

 

Dated as of August 8, 2012

 

 

 

 

 

Table of Contents

 

Section Heading Page           Section 1 Authorization of Notes 1       Section
2 Sale and Purchase of Notes; Guaranty Agreement; Security 1             Section
2.1 Notes 1           Section 2.2 MHGCI Guaranty Agreement 1           Section
2.3 Security for the Notes 2           Section 3 Closing 2       Section 4
Conditions to Closing 2             Section 4.1 Representations and Warranties 2
          Section 4.2 Performance; No Default 3           Section 4.3 Compliance
Certificates 3           Section 4.4 MHGCI Guaranty Agreement 3          
Section 4.5 Security Documents 3           Section 4.6 Intercreditor Agreement 5
          Section 4.7 Opinions of Counsel 5           Section 4.8 Purchase
Permitted By Applicable Law, Etc 5           Section 4.9 Sale of Other Notes 5  
        Section 4.10 Payment of Special Counsel Fees 5           Section 4.11
Private Placement Number 6           Section 4.12 Approvals and Consents 6      
    Section 4.13 Changes in Corporate Structure 6           Section 4.14 Funding
Instructions 6           Section 4.15 Proceedings and Documents 6          
Section 5 Representations and Warranties of the Company 6             Section
5.1 Organization; Power and Authority 6           Section 5.2 Authorization, Etc
7           Section 5.3 Disclosure 7           Section 5.4 Organization and
Ownership of Shares of Subsidiaries; Affiliates 8           Section 5.5
Financial Statements; Material Liabilities 8           Section 5.6 Compliance
with Laws, Other Instruments, Etc 9

 

 

 

 

  Section 5.7 Governmental Authorizations, Etc 9           Section 5.8
Litigation; Observance of Agreements, Statutes and Orders 9           Section
5.9 Taxes 10           Section 5.10 Title to Property; Leases 10          
Section 5.11 Licenses, Permits, Etc 10           Section 5.12 Compliance with
ERISA 11           Section 5.13 Private Offering by the Company 12          
Section 5.14 Use of Proceeds; Margin Regulations 12           Section 5.15
Existing Indebtedness; Future Liens 12           Section 5.16 Foreign Assets
Control Regulations, Etc 13           Section 5.17 Status under Certain Statutes
13           Section 5.18 Environmental Matters 14           Section 5.19
Security Documents 14           Section 5.20 Notes Rank Pari Passu 14          
Section 5.21 Solvency 15           Section 6 Representations of the Purchasers
15             Section 6.1 Purchase for Investment 15           Section 6.2
Source of Funds 15           Section 7 Information as to Company 17            
Section 7.1 Financial and Business Information 17           Section 7.2
Officer’s Certificate 19           Section 7.3 Visitation 20           Section 8
Payment and Prepayment of the Notes 20             Section 8.1 Maturity 20      
    Section 8.2 Optional Prepayments with Make-Whole Amount 20           Section
8.3 Allocation of Partial Prepayments 21           Section 8.4 Maturity;
Surrender, Etc 21           Section 8.5 Purchase of Notes 21           Section
8.6 Offer to Prepay Notes in the Event of a Change of Control 21          
Section 8.7 Offer to Prepay Upon Asset Dispositions or Insurance and
Condemnation Events 23           Section 8.8 Make-Whole Amount 23

 

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Section 9 Affirmative Covenants 25           Section 9.1 Compliance with Law 25
          Section 9.2 Insurance 25           Section 9.3 Maintenance of
Properties 26           Section 9.4 Payment of Taxes and Claims 26          
Section 9.5 Corporate Existence, Etc 26           Section 9.6 Notes to Rank Pari
Passu 26           Section 9.7 Books and Records 27           Section 9.8
Subsidiary Guarantors 27           Section 9.9 Further Assurances; Collateral
Matters 27           Section 9.10 Mortgages 28           Section 10 Negative
Covenants 30             Section 10.1 Consolidated Total Indebtedness to
Consolidated Capitalization Ratio 30           Section 10.2 Consolidated
Interest Coverage Ratio 30           Section 10.3 Subsidiary Debt 30          
Section 10.4 Limitation on Liens 30           Section 10.5 Limitation on
Dividends 32           Section 10.6 Sale of Assets 33           Section 10.7
Merger, Consolidation 34           Section 10.8 Transactions with Affiliates 35
          Section 10.9 Line of Business 35           Section 10.10 Terrorism
Sanctions Regulations 35           Section 11 Events of Default 36       Section
12 Remedies on Default, Etc 38             Section 12.1 Acceleration 38        
  Section 12.2 Other Remedies 39           Section 12.3 Rescission 39          
Section 12.4 No Waivers or Election of Remedies, Expenses, Etc 39          
Section 13 Registration; Exchange; Substitution of Notes 39             Section
13.1 Registration of Notes 39           Section 13.2 Transfer and Exchange of
Notes 40           Section 13.3 Replacement of Notes 40

 

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Section 14 Payments on Notes 41           Section 14.1 Place of Payment 41      
    Section 14.2 Home Office Payment 41           Section 15 Expenses, Etc 42  
          Section 15.1 Transaction Expenses 42           Section 15.2 Survival
42           Section 16 Survival of Representations and Warranties; Entire
Agreement 42       Section 17 Amendment and Waiver 42             Section 17.1
Requirements 42           Section 17.2 Solicitation of Holders of Notes 43      
    Section 17.3 Binding Effect, Etc 43           Section 17.4 Notes Held by
Company, Etc 44           Section 18 Notices 44       Section 19 Reproduction of
Documents 44       Section 20 Confidential Information 45       Section 21
Substitution of Purchaser 46       Section 22 Miscellaneous 46            
Section 22.1 Successors and Assigns 46           Section 22.2 Payments Due on
Non-Business Days 46           Section 22.3 Accounting Terms 46          
Section 22.4 Severability 46           Section 22.5 Construction, Etc 47        
  Section 22.6 Counterparts 47           Section 22.7 Governing Law 47          
Section 22.8 Jurisdiction and Process; Waiver of Jury Trial 47

 

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Attachments to Note Purchase Agreement:

 

Schedule A — Information Related to Purchasers       Schedule B — Defined Terms
      Exhibit 1 — Form of 4.22% Senior Secured Note due August 8, 2022      
Exhibit 2 — Form of MHGCI Guaranty Agreement       Exhibit 3 — Form of
Intercreditor Agreement       Exhibit 4 — Form of Security Agreement

 

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The Gas Company, LLC
745 Fort Street, Suite 1800

Honolulu, HI 96813

 

4.22% Senior Secured Notes due August 8, 2022

 

Dated as of August 8, 2012

 

To the Purchasers Listed in

   the Attached Schedule A:

 

Ladies and Gentlemen:

 

The Gas Company, LLC, a Hawaii limited liability company (the “Company”), agrees
with each Purchaser as follows:

 

Section 1Authorization of Notes.

 

The Company will authorize the issue and sale of $100,000,000 aggregate
principal amount of its 4.22% Senior Secured Notes due August 8, 2022 (the
“Notes”, such term to include any such notes issued in substitution therefor
pursuant to Section 13). The Notes shall be substantially in the form set out in
Exhibit 1. Certain capitalized and other terms used in this Agreement are
defined in Schedule B; and references to a “Schedule” or an “Exhibit” are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.

 

Section 2Sale and Purchase of Notes; Guaranty Agreement; Security.

 

Section 2.1           Notes. Subject to the terms and conditions of this
Agreement, the Company will issue and sell to each Purchaser and each Purchaser
will purchase from the Company, at the Closing provided for in Section 3, Notes
in the principal amount specified opposite such Purchaser’s name in Schedule A
at the purchase price of 100% of the principal amount thereof. The Purchasers’
obligations hereunder are several and not joint obligations and no Purchaser
shall have any liability to any Person for the performance or non-performance of
any obligation by any other Purchaser hereunder.

 

Section 2.2           MHGCI Guaranty Agreement. The obligations of the Company
hereunder, under the Notes and under each Security Document to which it is a
party are absolutely, unconditionally and irrevocably guaranteed by MHGCI
pursuant to that certain MHGCI Guaranty Agreement dated as of even date herewith
(as the same may be amended, supplemented, restated or otherwise modified from
time to time, the “MHGCI Guaranty Agreement”) substantially in the form of
Exhibit 2; provided, that the MHGCI Guaranty Agreement shall automatically
terminate and be of no further force or effect on the Termination Date (as
defined in the MHGCI Guaranty Agreement) and in no event shall any obligation of
MHGCI thereunder be reinstated following the Termination Date. Upon the
reasonable request of the Company (and at the sole cost and expense of the
Company), the holders of Notes agree to deliver written confirmation of such
termination in form and substance reasonably acceptable to the Required Holders.

 

 

 

 

 

Section 2.3           Security for the Notes. The obligations of the Company
hereunder and under the Notes are secured by all of the tangible and intangible
assets of the Company pursuant to the Security Documents.

 

Section 3Closing.

 

The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Schiff Hardin LLP, 666 Fifth Avenue, 17th Floor, New York, New
York 10103, at 11:00 a.m., New York, New York time, at a closing (the “Closing”)
on August 8, 2012 or on such other Business Day thereafter as may be agreed upon
by the Company and the Purchasers. At the Closing the Company will deliver to
each Purchaser the Notes to be purchased by such Purchaser in the form of a
single Note (or such greater number of Notes in denominations of at least
$100,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser’s name (or in the name of its nominee), against
delivery by such Purchaser to the Company or its order of immediately available
funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company as directed by the
Company in the funding instructions delivered pursuant to Section 4.14. If at
the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such
Purchaser shall, at its election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment.

 

Section 4Conditions to Closing.

 

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions:

 

Section 4.1           Representations and Warranties.

 

(a)          Representations and Warranties of the Company. The representations
and warranties of the Company in this Agreement and in each Security Document to
which it is a party shall be correct when made and at the time of the Closing.

 

(b)          Representations and Warranties of MHGCI. The representations and
warranties of MHGCI in the MHGCI Guaranty Agreement shall be correct when made
and at the time of the Closing.

 

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Section 4.2           Performance; No Default. The Company and MHGCI shall have
performed and complied with all agreements and conditions contained in this
Agreement and each Security Document (in the case of the Company) and the MHGCI
Guaranty Agreement (in the case of MHGCI) required to be performed or complied
with by it prior to or at the Closing, and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Section 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10 had such Section applied since such date.

 

Section 4.3           Compliance Certificates.

 

(a)          Officer’s Certificate of the Company. The Company shall have
delivered to such Purchaser an Officer’s Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.13
have been fulfilled.

 

(b)          Secretary’s Certificate of the Company. The Company shall have
delivered to such Purchaser a certificate of its Secretary or Assistant
Secretary, dated the date of the Closing, certifying as to (1) the resolutions
attached thereto and other limited liability company proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and each
Security Document to which it is a party and (2) the Company’s organizational
documents as then in effect.

 

(c)          Officer’s Certificates of MHGCI. MHGCI shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1(b), 4.2 and 4.13 have been
fulfilled.

 

(d)          Secretary’s Certificates of MHGCI. MHGCI shall have delivered to
such Purchaser a certificate of its Secretary or an Assistant Secretary, dated
the date of the Closing, certifying as to (1) the resolutions attached thereto
and other limited liability company proceedings relating to the authorization,
execution and delivery of the MHGCI Guaranty Agreement and (2) MHGCI’s
organizational documents as then in effect.

 

Section 4.4           MHGCI Guaranty Agreement. The MHGCI Guaranty Agreement
shall have been duly authorized, executed and delivered by MHGCI and shall be in
full force and effect.

 

Section 4.5           Security Documents.

 

(a)          General. Each Security Document (other than the Mortgages) shall
have been duly authorized, executed and delivered by the parties thereto and
shall be in full force and effect and such Purchaser shall have received a duly
executed copy thereof. The Company shall have delivered the certificates
representing the issued and outstanding capital stock, if any, pledged under the
Security Documents and instruments of assignment executed in blank to the
Collateral Agent. Each document (including any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by any Purchaser to be filed, registered or recorded in order to
create in favor of the Collateral Agent, for the equal and ratable benefit of
the Purchasers and the other Secured Parties, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person (other than
with respect to Liens expressly permitted to be prior pursuant to Section 10.4),
shall be in proper form for filing, registration or recordation. Such Purchaser
shall have received the results of a recent Lien search with respect to the
Company and its Subsidiaries, and such search shall reveal no Liens on any of
the assets of the Company or any Subsidiary except for Liens permitted by
Section 10.4 or discharged on or prior to the Closing Date pursuant to
documentation satisfactory to such Purchaser.

 

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(b)          Real Property Collateral Deliverables.

 

(1)         Flood Insurance. With respect to any parcel of real property
improved by anything other than gas or liquid storage tanks that are principally
above ground and that is located in a special flood hazard area as identified by
FEMA, a policy of flood insurance that (i) covers such parcel that is referenced
on Schedule 9.10 and (ii) is written in an amount not less than the portion of
the outstanding principal amount of the Indebtedness to be secured by a Mortgage
that is reasonably allocable to the improvements (other than above-ground gas or
liquid storage tanks) located on such real property or the maximum limit of
coverage made available with respect to the particular type of property under
the National Flood Insurance Act of 1968, as amended, whichever is less.

 

(2)         Surveys. A copy of an as-built survey dated not more than 30 days
prior to the date of the Closing of each parcel of real property referenced in
Schedule 4.5(b) certified by a registered engineer or land surveyor. Each such
survey shall be accompanied by an affidavit of an authorized signatory of the
owner of such property (which affidavit shall be delivered to the Title
Companies) stating that there have been no improvements or encroachments to the
property since the date of the respective survey such that the existing survey
is no longer accurate. Such survey shall be prepared to current ALTA/ACSM
standards and shall show the area of such property, all boundaries of the land
with courses and distances indicated, including chord bearings and arc and chord
distances for all curves, and shall show dimensions and locations of all
easements, private drives, roadways, and other facts materially affecting such
property, and shall show such other details as such Purchaser may reasonably
request, including, without limitation, any encroachment (and the extent thereof
in feet and inches) onto the property or by any of the improvements on the
property upon adjoining land or upon any easement burdening the property; any
improvements, to the extent constructed, and the relation of the improvements to
any required setbacks and if improvements are existing, the locations of all
utilities serving the improvements.

 

(3)         Environmental Assessments. Any Phase I environmental assessments or
other environmental reports in the custody or control of the Company regarding
any parcel of real property referenced in Schedule 9.10, showing no
environmental conditions in violation of Environmental Laws nor liabilities
under Environmental Laws, either of which could reasonably be expected to have a
Material Adverse Effect.

 

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Section 4.6           Intercreditor Agreement. Each Lender (or the
administrative agent under the Credit Agreement on behalf of each Lender), each
Purchaser and the Collateral Agent shall have executed and delivered, and the
Company shall have acknowledged, that certain Intercreditor and Collateral
Agency Agreement dated as of August 8, 2012 (as the same may be amended,
supplemented, replaced, restated or otherwise modified from time to time, the
“Intercreditor Agreement”) substantially in the form of Exhibit 3.

 

Section 4.7           Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from O’Melveny & Myers LLP, counsel for the Company and MHGCI,
covering the matters set forth in Exhibit 4.7(a) and covering such other matters
incident to the transactions contemplated hereby as such Purchaser or special
counsel to the Purchasers may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to the Purchasers), (b) from
Carlsmith Ball LLP, special Hawaii counsel for the Company and MHGCI covering
the matters set forth in Exhibit 4.7(b) and covering such other matters incident
to the transactions contemplated hereby as such Purchaser or special counsel to
the Purchasers may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to the Purchasers), (c) from Nathan C. Nelson,
General Counsel of the Company and MHGCI covering the matters set forth in
Exhibit 4.7(c) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or special counsel to the Purchasers may
reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers), (d) from Morihara Lau & Fong LLP, special Hawaii
regulatory counsel for the Company and MHGCI covering the matters set forth in
Exhibit 4.7(d) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or special counsel to the Purchasers may
reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers) and (e) from Schiff Hardin LLP, the Purchasers’
special counsel in connection with such transactions, substantially in the form
set forth in Exhibit 4.7(e) and covering such other matters incident to such
transactions as such Purchaser may reasonably request.

 

Section 4.8           Purchase Permitted By Applicable Law, Etc. On the date of
the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation, Regulation T, U
or X of the Board of Governors of the Federal Reserve System) and (c) not
subject such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation. If requested by such Purchaser, such Purchaser
shall have received an Officer’s Certificate from the Company certifying as to
such matters of fact, as such Purchaser may reasonably specify, to enable such
Purchaser to determine whether such purchase is so permitted.

 

Section 4.9           Sale of Other Notes. Contemporaneously with the Closing
the Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as specified in
Schedule A.

 

Section 4.10         Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of the Purchasers’ special counsel referred
to in Section 4.7(e) to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.

 

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Section 4.11         Private Placement Number. A Private Placement Number issued
by Standard & Poor’s CUSIP Service Bureau (in cooperation with the CMIAO) shall
have been obtained for the Notes.

 

Section 4.12         Approvals and Consents. All consents, authorizations and
approvals (including, without limitation, shareholders’ consents) from, and all
declarations, filings and registrations with, all Governmental Authorities or
third parties that are necessary in connection with the issuance and sale of the
Notes, the execution and delivery of this Agreement, the Security Documents and
the MHGCI Guaranty Agreement and the other transactions contemplated hereby and
by the Security Documents shall have been obtained, or made, and remain in full
force and effect. Such Purchaser shall have received copies of any such
consents, authorizations, declarations, filings and registrations issued by
federal or State of Hawaii Governmental Authorities.

 

Section 4.13         Changes in Corporate Structure. None of MHGCI, the Company
or any Subsidiary shall have changed its jurisdiction of incorporation or
organization, as applicable, or been a party to any merger or consolidation or
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.

 

Section 4.14         Funding Instructions. At least three Business Days prior to
the date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company directing the
manner of the payment of funds and setting forth (a) the name and address of the
transferee bank, (b) such transferee bank’s ABA number, (c) the account name and
number into which the purchase price for the Notes is to be deposited and
(d) the name and telephone number of the account representative responsible for
verifying receipt of such funds.

 

Section 4.15         Proceedings and Documents. All corporate, limited liability
company and other proceedings in connection with the transactions contemplated
by this Agreement, the MHGCI Guaranty Agreement, the Security Documents and the
Intercreditor Agreement and all documents and instruments incident to such
transactions shall be satisfactory to such Purchaser and its special counsel,
and such Purchaser and its special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Purchaser or such special counsel may reasonably request.

 

Section 5Representations and Warranties of the Company.

 

The Company represents and warrants to each Purchaser that:

 

Section 5.1           Organization; Power and Authority. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation, and is duly qualified as a
foreign limited liability company and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the limited liability company power and
authority to own or hold under lease the properties it purports to own or hold
under lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement, the Notes and each Security Document to
which it is a party and to perform the provisions hereof and thereof.

 

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Section 5.2           Authorization, Etc.

 

(a)          This Agreement, the Notes and each Security Document to which the
Company is a party have been duly authorized by all necessary limited liability
company action on the part of the Company, and this Agreement and each such
Security Document constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (1) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (2) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

(b)          The MHGCI Guaranty Agreement has been duly authorized by all
necessary limited liability company action on the part of MHGCI, and the MHGCI
Guaranty Agreement constitutes a legal, valid and binding obligation of MHGCI
enforceable against MHGCI in accordance with its terms, except as such
enforceability may be limited by (1) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (2) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

Section 5.3           Disclosure. The Company, through its agents, Wells Fargo
Securities, LLC, and Macquarie Capital (USA) Inc., has delivered to each
Purchaser a copy of a Private Placement Memorandum, dated July 3, 2012 (the
“Memorandum”), relating to the transactions contemplated hereby. The Memorandum
fairly describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. This Agreement,
the MHGCI Guaranty Agreement, the Security Documents, the Memorandum and the
documents, certificates or other writings delivered to the Purchasers by or on
behalf of the Company in connection with the transactions contemplated hereby
and identified in Schedule 5.3, and the financial statements listed in
Schedule 5.5 (this Agreement, the MHGCI Guaranty Agreement, the Security
Documents, the Memorandum and such documents, certificates or other writings and
such financial statements delivered to each Purchaser prior to July 19, 2012
being referred to, collectively, as the “Disclosure Documents”), taken as a
whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as disclosed in
the Disclosure Documents, since December 31, 2011, there has been no change in
the financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except changes that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents.

 

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Section 5.4           Organization and Ownership of Shares of Subsidiaries;
Affiliates.

 

(a)          Schedule 5.4 contains (except as noted therein) complete and
correct lists (1) of the Company’s Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (2) of the
Company’s Affiliates, other than Subsidiaries, and (3) of the Company’s
directors and senior officers.

 

(b)          All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(other than the Lien of the Security Documents and as otherwise disclosed in
Schedule 5.4).

 

(c)          Each Subsidiary is a corporation or other legal entity duly
organized, validly existing and, where applicable, in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and, where applicable, is in good standing in
each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease, to transact the business it transacts and proposes to
transact.

 

(d)          No Subsidiary is a party to, or otherwise subject to, any legal,
regulatory, contractual or other restriction (other than this Agreement, the
Security Documents, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law or similar statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of capital stock or similar equity interests of such
Subsidiary.

 

Section 5.5           Financial Statements; Material Liabilities. The Company
has delivered to each Purchaser copies of the financial statements of MHGCI and
its Subsidiaries (including the Company and HGC) listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of MHGCI and its Subsidiaries (including the Company and HGC), as of
the respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments). MHGCI and
its Subsidiaries (including the Company and HGC) do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

 

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Section 5.6           Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement, the Notes
and the Security Documents to which it is a party and the execution, delivery
and performance by MHGCI of the MHGCI Guaranty Agreement will not
(a) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien (other than the Liens contemplated by the
Security Documents) in respect of any property of MHGCI, the Company or any
Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, certificate of formation or limited liability company
agreement or similar organizational document, or any other agreement or
instrument to which MHGCI, the Company or any Subsidiary is bound or by which
MHGCI, the Company or any Subsidiary or any of their respective properties may
be bound or affected, (b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to MHGCI, the Company or
any Subsidiary or (c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to MHGCI, the Company or any
Subsidiary.

 

Section 5.7           Governmental Authorizations, Etc. Except for filings
required to perfect the Liens created by the Security Documents, no consent,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by (a) the Company of this Agreement, the Notes or any Security
Document to which it is a party or (b) MHGCI of the MHGCI Guaranty Agreement, in
each case, subject, however, to compliance with all relevant terms and
conditions set forth in all consents, approvals, authorizations, registrations,
filings and declarations (1) described in Schedule 5.7, which have been obtained
or made, are in full force and effect and are not subject to appeal or any
condition which has not been satisfied and (2) as may be necessary in connection
with the exercise of foreclosure remedies including the sale of Collateral.

 

Section 5.8           Litigation; Observance of Agreements, Statutes and Orders.

 

(a)          There are no actions, suits, investigations or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or any property of the Company or any Subsidiary in any court
or before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

(b)          Neither the Company nor any Subsidiary is (1) in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, (2) in violation of any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or (3) in violation of any applicable law,
ordinance, rule or regulation of any Governmental Authority (including without
limitation Environmental Laws, ERISA or the USA PATRIOT ACT or any of the other
laws and regulations that are referred to in Section 5.16) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

-9-

 

 

Section 5.9           Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not, individually or in the aggregate, Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of U.S.
federal, state or other taxes for all fiscal periods are adequate.

 

Section 5.10         Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their respective properties that, individually
or in the aggregate, are Material, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement and the Security Documents.
All leases that, individually or in the aggregate, are Material are valid and
subsisting and are in full force and effect in all material respects.

 

Section 5.11         Licenses, Permits, Etc.

 

(a)          The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, proprietary software,
service marks, trademarks, trade names and domain names, or rights thereto,
that, individually or in the aggregate, are Material, without known conflict
with the rights of others.

 

(b)          To the best knowledge of the Company, no product or service of the
Company or any of its Subsidiaries infringes in any material respect any
license, permit, franchise, authorization, patent, copyright, proprietary
software, service mark, trademark, trade name, domain name or other right owned
by any other Person.

 

(c)          To the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Subsidiaries
with respect to any patent, copyright, proprietary software, service mark,
trademark, trade name, domain name or other right owned or used by the Company
or any of its Subsidiaries.

  

-10-

 

 

Section 5.12         Compliance with ERISA.

 

(a)          The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA (other than for
contributions or premiums that are not delinquent) or the penalty or excise tax
provisions of the Code relating to any Plan, and no event, transaction or
condition has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Company or any ERISA Affiliate, or
in the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Section 303 of ERISA
or to Section 430(k) of the Code or to any such penalty or excise tax provisions
under the Code or federal law or Section 4068 of ERISA, other than such
liabilities or Liens as would not be, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

 

(b)          The present value of the aggregate benefit liabilities under each
of the Plans subject to Title IV of ERISA (other than Multiemployer Plans),
determined as of the end of such Plan’s most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan’s
most recent actuarial valuation report, did not exceed as of such date the
aggregate current value of the assets of such Plan allocable to such benefit
liabilities (x) with respect to Plans of MHGCI and its Subsidiaries, by more
than $20,000,000 in the aggregate for all such Plans and (y) with respect to
Plans of ERISA Affiliates of the Company (other than MHGCI and its
Subsidiaries), in an amount that, individually or in the aggregate, would be
Material. The term “benefit liabilities” has the meaning specified in
Section 4001 of ERISA and the terms “current value” and “present value” have the
meaning specified in Section 3 of ERISA.

 

(c)          The Company and its ERISA Affiliates have not incurred, and are not
reasonably expected to incur, withdrawal liabilities under Section 4201 or 4204
of ERISA in respect of Multiemployer Plans that, individually or in the
aggregate, are Material.

 

(d)          The expected postretirement benefit obligation (determined as of
the last day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement Codification 715, without regard
to liabilities attributable to continuation coverage mandated by Section 4980B
of the Code) of the Company and its Subsidiaries is not Material.

 

(e)          The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any non-exempt transaction that is
subject to the prohibitions of Section 406 of ERISA or in connection with which
a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such
Purchaser’s representation in Section 6.2 as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by such Purchaser.

 

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Section 5.13         Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes, the MHGCI Guaranty Agreement
or any similar Securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than the Purchasers and not more than 17 other Institutional
Investors of the type described in clause (c) of the definition thereof, each of
which has been offered the Notes and the MHGCI Guaranty Agreement at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes or the MHGCI Guaranty Agreement to the registration requirements of
Section 5 of the Securities Act or to the registration requirements of any
securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14         Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes to refinance existing Indebtedness and for
other general limited liability company purposes. No part of the proceeds from
the sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any Securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 25% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 25% of the value of such assets. As used in this
Section, the terms “margin stock” and “purpose of buying or carrying” shall have
the meanings assigned to them in said Regulation U.

 

Section 5.15         Existing Indebtedness; Future Liens.

 

(a)          Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of August 8, 2012 (including a description of the obligors and
obligees, principal amount outstanding and collateral therefor, if any, and
Guaranty thereof, if any), since which date there has been no Material change in
the amounts, interest rates, sinking funds, installment payments or maturities
of the Indebtedness of the Company or its Subsidiaries. Neither the Company nor
any Subsidiary is in default and no waiver of default is currently in effect, in
the payment of any principal or interest on any Indebtedness of the Company or
such Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.

 

(b)          Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit any of its property to be
subject to a Lien not permitted by Section 10.4.

 

(c)          None of MHGCI, the Company or any Subsidiary is a party to, or
otherwise subject to any provision contained in, any instrument evidencing
Indebtedness of MHGCI, the Company or such Subsidiary, any agreement relating
thereto or any other agreement (including, but not limited to, its charter or
other organizational document) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of MHGCI or the Company, except
as specifically indicated in Schedule 5.15.

 

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Section 5.16         Foreign Assets Control Regulations, Etc.

 

(a)          None of MHGCI, the Company or any Controlled Entity is (1) a Person
whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of
Treasury (“OFAC”) (an “OFAC Listed Person”) or (2) a department, agency or
instrumentality of, or is otherwise controlled by or acting on behalf of,
directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity,
organization, foreign country or regime that is subject to any OFAC Sanctions
Program (each OFAC Listed Person and each other Person, entity, organization and
government of a country described in clause (2), a “Blocked Person”).

 

(b)          No part of the proceeds from the sale of the Notes hereunder
constitutes or will constitute funds obtained on behalf of any Blocked Person or
will otherwise be used, directly by the Company or indirectly through any
Controlled Entity, in connection with any investment in, or any transactions or
dealings with, any Blocked Person.

 

(c)          To the Company’s actual knowledge after making due inquiry, none of
MHGCI, the Company or any Controlled Entity (1) is under investigation by any
Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under any applicable law (collectively, “Anti-Money
Laundering Laws”), (2) has been assessed civil penalties under any Anti-Money
Laundering Laws or (3) has had any of its funds seized or forfeited in an action
under any Anti-Money Laundering Laws. The Company has taken reasonable measures
appropriate to the circumstances (in any event as required by applicable law) to
ensure that MHGCI, the Company and each Controlled Entity is and will continue
to be in compliance with all applicable current and future Anti-Money Laundering
Laws.

 

(d)          No part of the proceeds from the sale of the Notes hereunder will
be used, directly or indirectly, for any improper payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, official of any public international organization or
anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage. The Company has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable law) to ensure that MHGCI, the Company and each Controlled Entity is
and will continue to be in compliance with all applicable current and future
anti-corruption laws and regulations.

 

Section 5.17         Status under Certain Statutes. None of MHGCI, the Company
or any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 2005, as amended,
the ICC Termination Act of 1995, as amended, the Federal Power Act, as amended.
None of MHGCI, the Company or any Subsidiary is subject to regulation under
federal or state law as a public utility except that the Company is subject to
regulation as a public utility under Chapter 269 of the Hawaii Revised Statutes.

 

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Section 5.18         Environmental Matters.

 

(a)          Neither the Company nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)          Neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect.

 

(c)          Neither the Company nor any Subsidiary has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them and has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect.

 

(d)          All buildings on all real properties now owned, leased or operated
by the Company or any Subsidiary are in compliance with applicable Environmental
Laws, except where failure to comply could not reasonably be expected to result
in a Material Adverse Effect.

 

Section 5.19         Security Documents. The Security Documents are effective to
create in favor of the Collateral Agent, for the benefit of the Secured Parties,
a legal, valid and enforceable security interest in the Collateral and the
proceeds thereof. When (a) financing statements and other filings specified on
Schedule 5.19 in appropriate form are filed in the offices specified on Schedule
5.19, the Security Documents shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Company in such
Collateral and the proceeds thereof, as security for the Notes and the other
Senior Secured Obligations, in each case prior and superior in right to any
other Person (except Liens permitted by Section 10.4) to the extent any such
security interest may be perfected by the filing of a financing statement and
(b) Mortgages specified on Schedule 5.19 are filed in the offices specified
therefor on Schedule 5.19, the Mortgages shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Company in
the real estate subject to such Mortgage and the proceeds thereof, as security
for the Notes and the other Senior Secured Obligations, in each case prior and
superior in right to any other Person (except Liens permitted by Section 10.4).

 

Section 5.20         Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all obligations of the Company under the Credit Agreement (actual or
contingent).

 

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Section 5.21         Solvency. The Company is, and after giving effect to the
issuance and sale of the Notes and incurrence of other Indebtedness on the
Closing Date and other obligations being incurred in connection herewith will be
and will continue to be, Solvent.

 

Section 6Representations of the Purchasers.

 

Section 6.1           Purchase for Investment. Each Purchaser severally
represents that it is purchasing the Notes for its own account or for one or
more separate accounts maintained by such Purchaser or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of such Purchaser’s or their property shall at all
times be within such Purchaser’s or their control. Each Purchaser understands
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.

 

Section 6.2           Source of Funds. Each Purchaser severally represents that
at least one of the following statements is an accurate representation as to
each source of funds (a “Source”) to be used by such Purchaser to pay the
purchase price of the Notes to be purchased by such Purchaser hereunder:

 

(a)          the Source is an “insurance company general account” (as the term
is defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by
or on behalf of any employee benefit plan together with the amount of the
reserves and liabilities for the general account contract(s) held by or on
behalf of any other employee benefit plans maintained by the same employer (or
affiliate thereof as defined in PTE 95-60) or by the same employee organization
in the general account do not exceed 10% of the total reserves and liabilities
of the general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile, and the other applicable conditions of PTE 95-60 are satisfied; or

 

(b)          the Source is a separate account that is maintained solely in
connection with such Purchaser’s fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or

 

(c)          the Source is either (1) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (2) a bank collective investment
fund, within the meaning of PTE 91-38 and, except as disclosed by such Purchaser
to the Company in writing pursuant to this clause (c), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund, and the other applicable conditions of
either PTE 90-1 or PTE 91-38 are satisfied; or

 

-15-

 

 

 

(d)          the Source constitutes assets of an “investment fund” (within the
meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are managed by the QPAM in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or
by the same employee organization and managed by such QPAM, represent more than
20% of the total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person
controlling or controlled by the QPAM maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part VI(h) of the QPAM Exemption and (1) the identity of such QPAM
and (2) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate (within the
meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization represent 10% or more of the assets of such investment
fund, have been disclosed to the Company in writing pursuant to this clause (d);
or

 

(e)          the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a Person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5%
or more interest in the Company and (1) the identity of such INHAM and (2) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or

 

(f)          the Source is a governmental plan; or

 

(g)          the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this clause (g);
or

 

(h)          the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.

 

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in Section 3 of ERISA.

 

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Section 7Information as to Company.

  

Section 7.1           Financial and Business Information. The Company shall
deliver (or cause to be delivered) to each holder of Notes that is an
Institutional Investor:

 

(a)          Quarterly Statements.

 

(1)         within 45 days after the end of each quarterly fiscal period in each
fiscal year of MHGCI (other than the last quarterly fiscal period of each such
fiscal year) ending prior to December 31, 2012, copies of,

 

(i)          consolidated and consolidating balance sheets of MHGCI and its
Subsidiaries (including, without limitation, HGC and the Company) as at the end
of such quarter, and

 

(ii)         consolidated and consolidating statements of income or operations,
changes in members’ equity and cash flows of MHGCI and its Subsidiaries
(including, without limitation, HGC and the Company), for such quarter and (in
the case of the second and third quarters) for the portion of the fiscal year
ending with such quarter,

 

setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Responsible Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments; and

 

(2)         within 45 days after the end of each quarterly fiscal period in each
fiscal year of the Company (other than the last quarterly fiscal period of each
such fiscal year) ending on or after December 31, 2012, copies of,

 

(i)          consolidated and consolidating balance sheets of the Company and
its Subsidiaries as at the end of such quarter, and

 

(ii)         consolidated and consolidating statements of income or operations,
changes in members’ equity and cash flows of the Company and its Subsidiaries,
for such quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,

 

setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Responsible Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments;

 

-17-

 

 

(b)          Annual Statements. within 90 days after the end of each fiscal year
of the Company, duplicate copies of

 

(1)         consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such year, and

 

(2)         consolidated and consolidating statements of income or operations,
changes in members’ equity and cash flows of the Company and its Subsidiaries
for such year,

 

setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and,
with respect to the consolidated financial statements, accompanied by an opinion
thereon (without a “going concern” or similar qualification or exception and
without any qualification or exception as to the scope of the audit on which
such opinion is based) of KPMG LLP or an independent public accounting firm of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances;

 

(c)          Reports to Lenders; Press Releases — promptly upon their becoming
available, one copy of (1) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to its principal lending banks
as a whole (excluding information sent to such banks in the ordinary course of
administration of a bank facility, such as information relating to pricing and
borrowing availability) or to its public Securities holders generally, and
(2) all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;

 

(d)          Notice of Default or Event of Default — promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of
any Default or Event of Default or that any Person has given any notice or taken
any action with respect to a claimed default hereunder or that any Person has
given any notice or taken any action with respect to a claimed default of the
type referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto;

 

(e)          ERISA Matters — promptly, and in any event within ten days after a
Responsible Officer becoming aware of any of the following that could reasonably
be expected to be Material, a written notice setting forth the nature thereof
and the action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:

 

(1)         with respect to any Plan, any reportable event, as defined in
Section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations; or

 

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(2)         the taking by the PBGC of steps to institute, or the threatening in
writing by the PBGC of the institution of, proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or

 

(3)         any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA (other than for contributions or premiums that are not
delinquent) or the penalty or excise tax provisions of the Code relating to any
Plan, or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Section 303 or 4068 of
ERISA or such penalty or excise tax provisions of the Code;

 

(f)          Notices from Governmental Authority — promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and

 

(g)          Requested Information — with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of MHGCI, the Company or any of its Subsidiaries
or relating to the ability of the Company to perform its obligations hereunder,
under the Notes and under any Security Documents as from time to time may be
reasonably requested by any such holder of Notes.

 

Section 7.2           Officer’s Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a Responsible Officer of the Company:

 

(a)          Covenant Compliance — setting forth the information (including
detailed calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.3,
inclusive, Section 10.5 and Section 10.6 during the quarterly or annual period
covered by the statements then being furnished (including with respect to each
such Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the terms of
such Sections, and the calculation of the amount, ratio or percentage then in
existence); and

 

(b)          Event of Default — certifying that such Responsible Officer has
reviewed the relevant terms hereof and of the Security Documents and has made,
or caused to be made, under his or her supervision, a review of the transactions
and conditions of the Company and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being furnished to the
date of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed or
exists (including, without limitation, any such event or condition resulting
from the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof and
what action the Company shall have taken or proposes to take with respect
thereto.

 

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Section 7.3           Visitation. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:

 

(a)          No Default — if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
not more than once a year the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with the Company’s officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants, and (with
the consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary; and

 

(b)          Default — if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or properties of
the Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.

 

Section 8Payment and Prepayment of the Notes.

 

Section 8.1           Maturity. As provided therein, the entire unpaid principal
balance of the Notes shall be due and payable on the stated maturity date
thereof.

 

Section 8.2           Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than $2,500,000
in aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus accrued and
unpaid interest thereon and the Make-Whole Amount determined for the prepayment
date with respect to such principal amount. The Company will give each holder of
Notes written notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date (which shall be a Business
Day), the aggregate principal amount of the Notes to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Responsible Officer as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details
of such computation. Two Business Days prior to such prepayment, the Company
shall deliver to each holder of Notes a certificate of a Responsible Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.

 

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Section 8.3           Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes at the time outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.

 

Section 8.4           Maturity; Surrender, Etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.

 

Section 8.5           Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase, made by the Company or an
Affiliate, pro rata to the holders of all Notes at the time outstanding, upon
the same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 10 Business Days. If the holders
of more than 20% of the principal amount of the Notes then outstanding accept
such offer, the Company shall, or shall cause its Affiliate to, promptly notify
the remaining holders of such fact and the expiration date for the acceptance by
holders of Notes of such offer shall be extended by the number of days necessary
to give each such remaining holder at least five Business Days from its receipt
of such notice to accept such offer. The Company will promptly cancel all Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase
of Notes pursuant to any provision of this Agreement and no Notes may be issued
in substitution or exchange for any such Notes.

 

Section 8.6           Offer to Prepay Notes in the Event of a Change of Control.

 

(a)          Notice of Change of Control or Control Event. The Company will,
within five Business Days after any Responsible Officer has knowledge of the
occurrence of any Change of Control or any Control Event, give written notice of
such Change of Control or Control Event to each holder of Notes unless notice in
respect of such Change of Control (or the Change of Control contemplated by such
Control Event) shall have been given pursuant to Section 8.6(b). If a Change of
Control has occurred, such notice shall contain and constitute an offer to
prepay Notes as described in Section 8.6(c) and shall be accompanied by the
certificate described in Section 8.6(g).

 

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(b)          Condition to Company Action. The Company will not take any action
that consummates or finalizes a Change of Control unless (1) at least 30 days
prior to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in Section
8.6(c), accompanied by the certificate described in Section 8.6(g), and (2)
contemporaneously with such action, the Company prepays all Notes required to be
prepaid in accordance with this Section 8.6.

 

(c)          Offer to Prepay Notes. The offer to prepay Notes contemplated by
Sections 8.6(a) and (b) shall be an offer to prepay, in accordance with and
subject to this Section 8.6, all, but not less than all, Notes held by each
holder (in this case only, “holder” in respect of any Note registered in the
name of a nominee for a disclosed beneficial owner shall mean such beneficial
owner) on a date specified in such offer (the “Proposed Prepayment Date”). If
such Proposed Prepayment Date is in connection with an offer contemplated by
Section 8.6(a), such date shall be a Business Day not less than 30 days and not
more than 60 days after the date of such offer (or if the Proposed Prepayment
Date shall not be specified in such offer, the Proposed Prepayment Date shall be
the Business Day nearest to the 30th day after the date of such offer).

 

(d)          Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.6 by causing a notice of such
acceptance or rejection to be delivered to the Company at least five Business
Days prior to the Proposed Prepayment Date. A failure by a holder of Notes to so
respond to an offer to prepay made pursuant to this Section 8.6 shall be deemed
to constitute a rejection of such offer by such holder.

 

(e)          Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes, together
with accrued and unpaid interest on such Notes accrued to the date of
prepayment. The prepayment shall be made on the Proposed Prepayment Date, except
as provided by Section 8.6(f).

 

(f)          Deferral Pending Change of Control. The obligation of the Company
to prepay Notes pursuant to the offers required by Section 8.6(c) and accepted
in accordance with Section 8.6(d) is subject to the occurrence of the Change of
Control in respect of which such offers and acceptances shall have been made. In
the event that such Change of Control does not occur before or on the Proposed
Prepayment Date in respect thereof, the prepayment shall be deferred until, and
shall be made on the date on which, such Change of Control occurs. The Company
shall keep each holder of Notes reasonably and timely informed of (1) any such
deferral of the date of prepayment, (2) the date on which such Change of Control
and the prepayment are expected to occur and (3) any determination by the
Company that efforts to effect such Change of Control have ceased or been
abandoned (in which case the offers and acceptances made pursuant to this
Section 8.6 in respect of such Change of Control automatically shall be deemed
rescinded without penalty or other liability).

 

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(g)          Officer’s Certificate. Each offer to prepay the Notes pursuant to
this Section 8.6 shall be accompanied by a certificate, executed by a
Responsible Officer and dated the date of such offer, specifying (1) the
Proposed Prepayment Date, (2) that such offer is made pursuant to this Section
8.6 and that failure by a holder to respond to such offer by the deadline
established in Section 8.6(d) shall result in such offer to such holder being
deemed rejected, (3) the principal amount of each Note offered to be prepaid,
(4) the interest that would be due on each Note offered to be prepaid, accrued
to the Proposed Prepayment Date, (5) that the conditions of this Section 8.6
have been fulfilled and (6) in reasonable detail, the nature and date of the
Change of Control.

 

Section 8.7           Offer to Prepay Upon Asset Dispositions or Insurance and
Condemnation Events.

 

(a)          Notice and Offer. In the event the Company or a Subsidiary receives
Net Cash Proceeds from Asset Dispositions or Insurance and Condemnation Events
where the Company has elected or is required to apply such Net Cash Proceeds to
the payment or prepayment of Indebtedness pursuant to clause (ii) of the second
paragraph of Section 10.6, the Company shall, no later than the 30 days prior to
the applicable Reinvestment Date, give written notice of such event (a
“Prepayment Event”) to each holder of Notes. Such notice shall contain, and
shall constitute, an irrevocable offer to prepay a Ratable Portion of the Notes
held by such holder on the date specified in such notice (the “Prepayment
Date”), which date shall not be less than 30 days and not more than 60 days
after the date of such notice. Such notice shall also state (1) that such offer
is being made pursuant to this Section 8.7 and that the failure by a holder to
respond to such offer by the deadline established in Section 8.7(b) shall result
in such offer to such holder being deemed rejected; (2) the Ratable Portion of
each such Note offered to be prepaid; (3) the prepayment price of each Note as
described in Section 8.7(b); (4) the interest that would be due on the Ratable
Portion of each such Note offered to be prepaid, accrued to, but not including,
the Prepayment Date and (5) in reasonable detail, a description of the nature
and the date of the Prepayment Event giving rise to such offer of prepayment.

 

(b)          Acceptance and Payment. A holder of Notes may accept or reject the
offer to prepay pursuant to this Section 8.7 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 10 days prior to
the Prepayment Date. A failure by a holder of the Notes to so respond to an
offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute
a rejection of such offer by such holder. If so accepted, such offered
prepayment in respect of the Ratable Portion of the Notes of each holder that
has accepted such offer shall be due and payable on the Prepayment Date. Such
offered prepayment shall be made at 100% of the aggregate Ratable Portion of the
Notes of each holder that has accepted such offer, together with interest on
that portion of the Notes then being prepaid accrued to, but not including, the
Prepayment Date but, in any case, without any Make-Whole Amount.

 

Section 8.8           Make-Whole Amount. “Make-Whole Amount” shall mean, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

 

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“Called Principal” shall mean, with respect to any Note, the principal of such
Note that is to be prepaid pursuant to Section 8.2 or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the context
requires.

 

“Discounted Value” shall mean, with respect to the Called Principal of any Note,
the amount obtained by discounting all Remaining Scheduled Payments with respect
to such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” shall mean, with respect to the Called Principal of any
Note, 0.50% over the yield to maturity implied by the yield(s) reported as of
10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg
Financial Markets for the most recently issued actively traded on-the-run U.S.
Treasury securities (“Reported”) having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. If there are
no such U.S. Treasury securities Reported having a maturity equal to such
Remaining Average Life, then such implied yield to maturity will be determined
by (a) converting U.S. Treasury bill quotations to bond equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between the yields Reported for the applicable most recently issued actively
traded on-the-run U.S. Treasury securities with the maturities (1) closest to
and greater than such Remaining Average Life and (2) closest to and less than
such Remaining Average Life. The Reinvestment Yield shall be rounded to the
number of decimal places as appears in the interest rate of the applicable Note.

 

If such yields are not Reported or the yields Reported as of such time are not
ascertainable (including by way of interpolation), then “Reinvestment Yield”
shall mean, with respect to the Called Principal of any Note, 0.50% over the
yield to maturity implied by the U.S. Treasury constant maturity yields
reported, for the latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable
successor publication) for the U.S. Treasury constant maturity having a term
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. If there is no such U.S. Treasury constant maturity having a
term equal to such Remaining Average Life, such implied yield to maturity will
be determined by interpolating linearly between (1) the U.S. Treasury constant
maturity so reported with the term closest to and greater than such Remaining
Average Life and (2) the U.S. Treasury constant maturity so reported with the
term closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Note.

 

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“Remaining Average Life” shall mean, with respect to any Called Principal, the
number of years obtained by dividing (a) such Called Principal into (b) the sum
of the products obtained by multiplying (1) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (2) the
number of years, computed on the basis of a 360-day year composed of twelve
30-day months, that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” shall mean, with respect to the Called Principal
of any Note, all payments of such Called Principal and interest thereon that
would be due after the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or Section 12.1.

 

“Settlement Date” shall mean, with respect to the Called Principal of any Note,
the date on which such Called Principal is to be prepaid pursuant to Section 8.2
or has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.

 

Section 9Affirmative Covenants.

 

The Company covenants that so long as any of the Notes are outstanding:

 

Section 9.1           Compliance with Law. Without limiting Section 10.10, the
Company will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, Environmental Laws, the USA
PATRIOT ACT and the other laws and regulations that are referred to in Section
5.16, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-compliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.2           Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated. In addition, the Company will maintain flood insurance
consistent with the flood insurance required by Section 4.5(b)(1). All such
insurance shall, (a) provide that no cancellation or material modification
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof, (b) name the Collateral Agent as an
additional insured party thereunder and (c) in the case of each casualty
insurance policy, name the Collateral Agent as lender’s loss payee. Without
limiting the foregoing, the Company will, and will cause each of its
Subsidiaries to, maintain the insurance required by the Security Documents.

 

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Section 9.3           Maintenance of Properties. The Company will, and will
cause each of its Subsidiaries to, maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Section 9.4           Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent the same have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have
or might become a Lien on properties or assets of the Company or any Subsidiary,
provided that neither the Company nor any Subsidiary need pay any such tax,
assessment, charge, levy or claim if (a) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such taxes,
assessments, charges, levies and claims in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

 

Section 9.5           Corporate Existence, Etc. Subject to Section 10.7, the
Company will at all times preserve and keep its limited liability company
existence in full force and effect. Subject to Sections 10.6 and 10.7, the
Company will at all times preserve and keep in full force and effect the limited
liability company or other applicable existence of each of its Subsidiaries
(unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and
franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and keep in
full force and effect such limited liability company or other applicable
existence, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.

 

Section 9.6           Notes to Rank Pari Passu.

 

(a)          The Notes and all other obligations of the Company under this
Agreement shall at all times rank at least pari passu in right of payment with
all obligations (actual or contingent) of the Company under the Credit
Agreement.

 

(b)          The obligations of any Subsidiary Guarantor under the Subsidiary
Guaranty Agreement shall at all times rank at least pari passu in right of
payment with all obligations (actual or contingent) of such Subsidiary Guarantor
under their Guaranties in respect of the Credit Agreement.

 

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(c)          The Company will not, and will not permit any Subsidiary to, grant
any Lien in favor of, or for the benefit of, the lenders party to the Credit
Agreement unless such Lien is granted in favor of the Collateral Agent to secure
the obligations under the Credit Agreement, this Agreement and the Notes in
accordance with the Intercreditor Agreement.

 

Section 9.7           Books and Records. The Company will, and will cause each
of its Subsidiaries to, maintain proper books of record and account in
conformity with GAAP and all applicable requirements of any Governmental
Authority having legal or regulatory jurisdiction over the Company or such
Subsidiary, as the case may be.

 

Section 9.8           Subsidiary Guarantors. The Company will cause any
Subsidiary which becomes a co-obligor or guarantor in respect of Indebtedness
under the Credit Agreement to deliver to each holder of Notes (concurrently with
it becoming a co-obligor or guarantor in respect of such Indebtedness) the
following items:

 

(a)          an executed subsidiary guaranty agreement in form and substance
reasonably satisfactory to the Required Holders (a “Subsidiary Guaranty
Agreement”); and

 

(b)          an opinion of counsel (which may be in-house counsel) addressed to
each holder of Notes which opinion shall be reasonably satisfactory to the
Required Holders, to the effect that the Subsidiary Guaranty Agreement entered
into by such Subsidiary has been duly authorized, executed and delivered and
that the Subsidiary Guaranty Agreement constitutes the legal, valid and binding
contract and agreement of such Subsidiary enforceable in accordance with its
terms, except as such enforceability may be limited by (1) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (2) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

 

Section 9.9           Further Assurances; Collateral Matters.

 

(a)          Further Assurances. The Company will, and will cause each
Subsidiary to, execute and deliver such further documentation and take such
further action as may be reasonably requested by the holders of Notes to carry
out the provisions and purposes of this Agreement and the Security Documents and
to create, preserve, and perfect the Liens of the Collateral Agent for the
benefit of the Secured Parties in the Collateral.

 

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(b)          Additional Subsidiaries. At the Company’s own expense, promptly,
and in any event within 10 Business Days after the formation or acquisition of
any new direct or indirect Subsidiary of the Company after the date hereof, the
Company will (1) notify the holders of Notes of such event, (2) amend the
Security Documents as appropriate in light of such event to pledge to the
Collateral Agent for the benefit of the Secured Parties 100% of the capital
stock or other equity interests of each Person which becomes a Subsidiary and
execute and deliver all documents or instruments required thereunder or
appropriate to perfect the security interest created thereby, (3) deliver to the
Collateral Agent all stock certificates and other instruments added to the
Collateral thereby free and clear of all Liens, accompanied by undated stock
powers or other instruments of transfer executed in blank, (4) cause each such
Person that becomes a direct or indirect Subsidiary after the date of Closing to
execute a Subsidiary Guaranty Agreement or such other pledge and security
agreement in form and substance satisfactory to the Required Holders, (5) cause
each document (including each UCC financing statement and each filing with
respect to intellectual property owned by each such Person that becomes a direct
or indirect Subsidiary of the Company after the date hereof) required by law or
reasonably requested by the Required Holders to be filed, registered or recorded
in order to create in favor of the Collateral Agent for the benefit of the
Secured Parties a valid, legal and perfected first-priority security interest in
and lien on the Collateral subject to the Security Documents to be so filed,
registered or recorded and evidence thereof delivered to the holders of Notes
(provided that no filing shall be required with respect to intellectual property
if the Required Holders determine that such property is not material to the
business of such Subsidiary), and (6) deliver an opinion of counsel in form and
substance satisfactory to the Required Holders with respect to each such Person
and the matters set forth in this section.

 

(c)          Real Property Collateral. The Company will notify the holders of
Notes, within 10 days after the acquisition of any owned real property by the
Company or any Subsidiary that is not subject to the existing Security
Documents, and within 60 days of such acquisition, deliver such mortgages, deeds
of trust, title insurance policies, Phase I environmental assessments, surveys
and other documents reasonably requested by the Required Holders in connection
with granting and perfecting a first priority Lien, other than Liens permitted
by Section 10.4, on such real property in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, all in form and substance acceptable to
the Required Holders.

 

(d)          Exclusions. The provisions of clause (b) and (c) of this Section
9.9 shall not apply to assets as to which the Required Holders and the Company
shall reasonably determine that the costs and burdens of obtaining a security
interest therein or perfection thereof outweigh the value of the security
afforded thereby.

 

Section 9.10         Mortgages. On or prior to the earlier of (a) October 8,
2012 and (b) the date of the first Extension of Credit (under and as defined in
the Credit Agreement), the Company shall (at the sole cost and expense of the
Company) deliver to each holder of a Note:

 

(1)         Mortgages. A duly executed copy of the Mortgage(s) relating to the
real property specified on Schedule 9.10 which shall have been duly authorized,
executed and delivered by the parties thereto and shall be in full force and
effect.

 

(2)         Title Insurance. A marked-up commitment for a policy of title
insurance (including, such endorsements as are requested by the Required
Holders), insuring each Mortgage and showing no prior Liens other than Liens
permitted to be prior pursuant to Section 10.4, issued by First American Title
Insurance Company or Title Guaranty (the “Title Companies”) with the final title
insurance policy (or policies) being delivered by the applicable title company
promptly thereafter. Further, the Company agrees to provide or obtain any
customary affidavits and indemnities as may be required or necessary to obtain
title insurance satisfactory to the Required Holders.

 

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(3)         Title Exceptions. Copies of all recorded documents creating
exceptions to the title policy referred to in Section 9.10(2).

 

(4)         Surveys. A copy of an as-built survey dated not more than 30 days
prior to the date of the Closing of each parcel of real property referenced in
Schedule 9.10(4) certified by a registered engineer or land surveyor. Each such
survey shall be accompanied by an affidavit of an authorized signatory of the
owner of such property (which affidavit shall be delivered to the Title
Companies) stating that there have been no improvements or encroachments to the
property since the date of the respective survey such that the existing survey
is no longer accurate. Such survey shall be prepared to current ALTA/ACSM
standards and shall show the area of such property, all boundaries of the land
with courses and distances indicated, including chord bearings and arc and chord
distances for all curves, and shall show dimensions and locations of all
easements, private drives, roadways, and other facts materially affecting such
property, and shall show such other details as the Required Holders may
reasonably request, including, without limitation, any encroachment (and the
extent thereof in feet and inches) onto the property or by any of the
improvements on the property upon adjoining land or upon any easement burdening
the property; any improvements, to the extent constructed, and the relation of
the improvements to any required setbacks and if improvements are existing, the
locations of all utilities serving the improvements.

 

(5)         Matters Relating to Flood Hazard Properties. A standard flood hazard
determination form as developed by FEMA for each parcel of improved real
property subject to a Mortgage.

 

(6)         Opinion(s) of Counsel. Opinion(s) in form and substance satisfactory
to the Required Holders, dated the date of the Mortgage(s) from Morihara Lau &
Fong LLP and/or other special Hawaii counsel for the Company reasonably
acceptable to the Required Holders, covering such matters incident to the items
referenced in this Section 9.10 as the Required Holders or special counsel to
the holders of Notes may reasonably request (and the Company hereby instructs
its counsel to deliver such opinion(s) to the holders of Notes).

 

(7)         Additional Documents. Such other documents or instruments relating
to the matters set forth in this Section 9.10 as the Required Holders may
reasonably request.

 

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Section 10Negative Covenants.

 

The Company covenants that so long as any of the Notes are outstanding:

 

Section 10.1         Consolidated Total Indebtedness to Consolidated
Capitalization Ratio. The Company will not, at the end of any fiscal quarter,
permit the Consolidated Total Indebtedness to Consolidated Capitalization Ratio
to exceed 0.65 to 1.00.

 

Section 10.2         Consolidated Interest Coverage Ratio. The Company will not,
at the end of any fiscal quarter, permit the Consolidated Interest Coverage
Ratio to be less than 3.00 to 1.00.

 

Section 10.3         Subsidiary Debt. The Company will not at any time permit
the aggregate amount of Subsidiary Debt to exceed an amount equal to 10% of
Consolidated Total Assets as of the then most recently ended fiscal quarter of
the Company.

 

Section 10.4         Limitation on Liens. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien upon any of its property, assets or revenues,
whether now owned or held or hereafter acquired, or any income or profits
therefrom, or assign or otherwise convey any right to receive income or profits,
except the following:

 

(a)          Liens created pursuant to the Security Documents;

 

(b)          Liens for taxes, assessments or other governmental charges or
levies that are not yet due and payable or the payment of which is not at the
time required by Section 9.4;

 

(c)          Liens (other than any Lien imposed by ERISA) incidental to the
conduct of business or the ownership of properties and assets (including
landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, suppliers’ and
other similar Liens, including Liens pursuant to customary reservations or
retentions of title) and Liens to secure (or to obtain letters of credit that
secure) the performance of bids, tenders, leases or trade contracts or to secure
statutory obligations (including pledges, deposits and other obligations under
workers compensation, unemployment and health insurance and other social
security legislation), surety or appeal bonds, in each case, incurred in the
ordinary course of business and not in connection with the borrowing of money;

 

(d)          leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to the ownership of property or assets or the ordinary conduct of the business
of the Company or any Subsidiary, and Liens incidental to minor survey
exceptions, zoning restrictions and the like, provided that such Liens do not,
in the aggregate, materially detract from the value of such property;

 

(e)          any attachment or judgment Lien unless the judgments secured
thereby (1) shall not, within 60 days after the entry thereof, have been
satisfied, discharged or execution thereof stayed pending appeal, or shall not
have been satisfied or discharged within 60 days after the expiration of any
such stay or (2) exceed, individually or in the aggregate, $5,000,000 (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage);

 

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(f)          Liens securing Indebtedness of a Subsidiary to the Company or to a
Wholly-Owned Subsidiary;

 

(g)          Liens existing on the date of the Closing and reflected in
Schedule 10.4;

 

(h)          Liens securing Indebtedness of the Company or a Subsidiary incurred
to finance the acquisition or construction of fixed or capital assets; provided
that:

 

(1)         any such Lien shall extend solely to the item or items of such
property (or improvement thereon) so acquired and, if required by the terms of
the instrument originally creating such Lien, other property (or improvement
thereon) which is an improvement to or is acquired for specific use in
connection with such acquired or constructed property (or improvement thereon)
or which is real property being improved by such acquired or constructed
property (or improvement thereon);

 

(2)         the principal amount of the Indebtedness secured by any such Lien
shall at no time exceed an amount equal to the lesser of (i) the cost to the
Company or a Subsidiary of the property (or improvement thereon) so acquired or
constructed and (ii) the fair market value (as determined in good faith by one
or more officers of the Company to whom authority to enter into the subject
transaction has been delegated by the board of directors or other applicable
governing body of the Company) of such property (or improvement thereon) at the
time of such acquisition or construction;

 

(3)         any such Lien shall be created contemporaneously with, or within
180 days after, the acquisition or construction of such property; and

 

(4)         at the time of such incurrence and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing and the
aggregate principal amount of all Indebtedness secured by such Liens shall be
permitted by the limitations set forth in Sections 10.1 and 10.3;

 

(i)          any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Company or any Subsidiary at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been assumed), provided that
(1) no such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person becoming a Subsidiary or such acquisition
of property, (2) each such Lien shall extend solely to the item or items of
property so acquired and, if required by the terms of the instrument originally
creating such Lien (i) other property which is an improvement to or is acquired
for specific use in connection with such acquired property or (ii) other
property that does not constitute property or assets of the Company or any of
its Subsidiaries, (3) at the time of such incurrence and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing
and (4) the aggregate amount of all Indebtedness secured by such Liens shall be
permitted by the limitations set forth in Sections 10.1 and 10.3;

 

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(j)          any extensions, renewals, refundings or replacements of any Lien
permitted by the preceding paragraphs (g), (h) and (i) of this Section 10.4;
provided that (1) such Liens shall not be extended to cover any additional
property, (2) the unpaid principal amount of Indebtedness or other obligations
secured thereby shall not be increased or the maturity thereof reduced and
(3) at such time and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing; and

 

(k)          Liens incurred in the ordinary course of business in connection
with (1) overdraft protection arrangements and other related cash management
programs or (2) the collection or disposition of delinquent accounts receivable
which are not incurred in connection with the borrowing of money or the
obtaining of credit.

 

Section 10.5         Limitation on Dividends. The Company will not, and will not
permit any Subsidiary to, declare or pay, directly or indirectly, any dividend
on, or make any payment or other distribution on account of, or purchase,
redeem, retire or otherwise acquire (directly or indirectly), or set apart
assets for a sinking or other analogous fund for the purchase, redemption,
retirement or other acquisition of, any class of Capital Stock of the Company or
any Subsidiary Guarantor, or make, directly or indirectly, any distribution of
cash, property or assets to the holders of shares of any Capital Stock of the
Company or any Subsidiary thereof (all of the foregoing, the “Restricted
Payments”); provided that:

 

(a)          the Company or any Subsidiary thereof may pay dividends in shares
of its own Qualified Capital Stock;

 

(b)          any Subsidiary of the Company may pay cash dividends to the Company
or any Subsidiary Guarantor or ratably to all holders of its outstanding
Qualified Capital Stock; and

 

(c)          the Company may declare and make (and each Subsidiary of the
Company may declare and make to enable the Company to do the same) Restricted
Payments to HGC, so that HGC may:

 

(1)         pay corporate operating (including, without limitation, directors
fees and expenses) and overhead expenses (including, without limitation, rent,
utilities and salary) in the ordinary course of business and fees and expenses
of attorneys, accountants, appraisers and the like;

 

(2)         redeem, retire or otherwise acquire shares of its Capital Stock or
options or other equity or phantom equity in respect of its Capital Stock from
present or former officers, employees, directors or consultants (or their family
members or trusts or other entities for the benefit of any of the foregoing) or
make severance payments to such Persons in connection with the death, disability
or termination of employment or consultancy of any such officer, employee,
director or consultant to the extent that such purchase is made with the Net
Cash Proceeds of any offering of equity securities of or capital contributions
to HGC;

 

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(3)         make cash payments under the Management Agreement;

 

(4)         pay cash dividends to holders of its outstanding Qualified Capital
Stock; and

 

(5)         (A) make required payments of principal and interest under the HGC
Credit Agreement in an amount up to the greater of $10,000,000 during any period
of four consecutive fiscal quarters or the Aggregate Cash Available for
Distribution or (B) prepay any amount outstanding under the HGC Credit Agreement
with Net Cash Proceeds to the extent not applied to the prepayment of the
Indebtedness under the Credit Agreement pursuant to Section 2.4(b)(iii) and
Section 2.4(b)(iv) of the Credit Agreement or the Notes pursuant to Section 8.7
hereof.

 

Notwithstanding the foregoing, the Company shall only be permitted to make
Restricted Payments pursuant to clauses (c)(3), (c)(4), and (c)(5)(B) of this
Section 10.5 to the extent, after giving to any such Restricted Payment,
Aggregate Cash Available for Distribution would not be less than $0; provided
that, the Company shall be prohibited from making any Restricted Payment
pursuant to clauses (c)(3), (c)(4) and (c)(5) of this Section 10.5 during the
occurrence and continuance of a Default or Event of Default.

 

Section 10.6         Sale of Assets. Except as permitted by Section 10.7, the
Company will not, and will not permit any Subsidiary to, make any Asset
Disposition except:

 

(a)          the sale of obsolete, worn-out or surplus assets no longer used or
usable in the business of the Company or any of its Subsidiaries;

 

(b)          sales by the Company or its Subsidiaries of inventory to Persons in
the ordinary course of their businesses and the granting of any option or other
right to purchase, lease or otherwise acquire inventory in the ordinary course
of the Company’s business or the business of its Subsidiaries; and

 

(c)          sales or other dispositions by the Company or its Subsidiaries of
any property, provided that (i) no Event of Default shall have occurred and be
continuing, (ii) the purchase price paid to the Company or its Subsidiaries for
such property shall be no less than the fair market value of such property as
determined in good faith by the Company at the time of such sale (provided that
details of such determination be made available to the holders of Notes upon
request of the Required Holders) and (iii) the aggregate purchase price paid to
the Company or its Subsidiaries for such property during the same fiscal year
pursuant to this clause (c) shall not exceed an amount equal to 15% of
Consolidated Total Assets.

 

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Notwithstanding the foregoing, in the event the Company or any Subsidiary
receives (1) Net Cash Proceeds from Asset Dispositions in excess of $5,000,000
in any fiscal year of the Company or (2) Net Cash Proceeds from Insurance and
Condemnation Events in excess of $10,000,000 in any fiscal year of the Company,
the Company shall use the amount of such Net Cash Proceeds in excess of the
amount stated in clause (1) or (2), as applicable, to either (i) reinvest in
assets used or useful in the business of the Company and its Subsidiaries on or
prior to the applicable Reinvestment Date or (ii) pay or prepay outstanding
Indebtedness of the Company or any Subsidiary which Indebtedness is not
subordinated to the Notes, provided that in the course of making such
application the Company shall offer to prepay each outstanding Note in
accordance with Section 8.6 in a principal amount which equals the Ratable
Portion for such Note. If any holder of a Note fails to accept such offer of
prepayment, then the Company shall either (x) prepay or pay or cause to prepay
or pay additional Indebtedness of the Company or any Subsidiary which
Indebtedness is not subordinated to the Notes or (y) to the extent then
permitted pursuant to Section 10.5, make a Restricted Payment to HGC the
proceeds of which are used by HGC to prepay or pay outstanding Indebtedness
under the HGC Credit Agreement.

 

Section 10.7         Merger, Consolidation. The Company will not, and will not
permit any Subsidiary to, consolidate with or merge with any other Person or
convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person; provided that:

 

(a)          any Subsidiary may (1) consolidate with or merge with, or convey,
transfer or lease all or substantially all of its assets in a single transaction
or series of transactions to, (i) the Company or a Subsidiary Guarantor so long
as in any merger or consolidation involving (A) the Company, the Company shall
be the surviving or continuing entity and (B) a Subsidiary Guarantor, a
Subsidiary Guarantor shall be the surviving or continuing entity or (ii) any
other Person so long as the surviving or continuing entity is a Subsidiary or
(2) convey, transfer or lease all or substantially all of its assets in
compliance with the provisions of Section 10.6; and

 

(b)          the Company may consolidate or merge with, or convey, transfer or
lease all or substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:

 

(1)         the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease all or
substantially all of the assets of the Company as an entirety, as the case may
be, shall be a solvent corporation or limited liability company organized and
existing under the laws of the United States or any State thereof (including the
District of Columbia), and, if the Company is not such corporation or limited
liability company, (i) such corporation or limited liability company shall have
executed and delivered to each holder of any Notes its assumption of the due and
punctual performance and observance of each covenant and condition of this
Agreement, the Notes and each Security Document to which it is a party; (ii)
such corporation or limited liability company shall have caused to be delivered
to each holder of any Notes an opinion of nationally recognized independent
counsel, or other independent counsel reasonably satisfactory to the Required
Holders, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply with the
terms hereof and (iii) each Guarantor shall have reaffirmed its obligations
under the applicable Guaranty Agreement;

 

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(2)         all consents, approvals or authorizations of, or registrations,
filings or declarations with, any Governmental Authority required in connection
with such transaction shall have been obtained or made, shall be in full force
and effect and shall not be subject to appeal or any condition which has not
been satisfied is required in connection; and

 

(3)         immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing.

 

No such conveyance, transfer or lease of all or substantially all of the assets
of the Company shall have the effect of releasing the Company or any successor
corporation or limited liability company that shall theretofore have become such
in the manner prescribed in this Section 10.7 from its liability under this
Agreement, the Notes or the Security Documents.

 

Section 10.8         Transactions with Affiliates. The Company will not, and
will not permit any Subsidiary to, enter into directly or indirectly any
Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Subsidiary), except (1) the Management Agreement, the Intercompany
Loan Agreement and the Tax Sharing Agreement and (2) other transactions upon
fair and reasonable terms not materially less favorable to the Company or such
Subsidiary than would be obtainable in a comparable arm’s-length transaction
with a Person not an Affiliate.

 

Section 10.9         Line of Business. The Company will not, and will not permit
any Subsidiary to, engage in any business if, as a result, the general nature of
the business (and any activity reasonably related or ancillary thereto) in which
the Company and its Subsidiaries, taken as a whole, would then be engaged would
be substantially changed from the general nature of the business (and any
activity reasonably related or ancillary thereto) in which the Company and its
Subsidiaries, taken as a whole, are engaged on the date of this Agreement as
described in the Memorandum; provided that nothing herein shall restrict the
Company or any of its Subsidiaries from exploring additional clean and renewable
energy alternatives, including renewable natural gas and liquefied natural gas
(LNG) and the distribution thereof.

 

Section 10.10         Terrorism Sanctions Regulations. The Company will not, and
will not permit any Subsidiary to, (a) become a Person described or designated
in the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(b) knowingly engage in any dealings or transactions with any such Person.

 

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Section 11Events of Default.

 

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

 

(a)          the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

(b)          the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or

 

(c)          the Company defaults in the performance of or compliance with any
term contained in Section 7.1(d), Section 9.6, Section 9.10 or Section 10; or

 

(d)          the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in Sections 11(a), (b) and
(c)) and such default is not remedied within 30 days after the earlier of (1) a
Responsible Officer obtaining actual knowledge of such default and (2) the
Company receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a “notice of default” and to refer
specifically to this Section 11(d)); or

 

(e)          any representation or warranty made in writing by or on behalf of
the Company or any Guarantor or by any officer of the Company or any Guarantor
in this Agreement, the applicable Guaranty Agreement, any Security Document or
in any writing furnished in connection with the transactions contemplated hereby
or thereby proves to have been false or incorrect in any material respect on the
date as of which made; or

 

(f)          (1) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $5,000,000 beyond any period of grace
provided with respect thereto, (2) the Company or any Subsidiary is in default
in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least $5,000,000
or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (3) as a
consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (i) the Company or any Subsidiary has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000, or (ii) one or more Persons have the
right to require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or

 

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(g)          the Company or any Subsidiary (1) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (2) files,
or consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (3) makes an assignment for
the benefit of its creditors, (4) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (5) is adjudicated as
insolvent or to be liquidated, or (6) takes corporate or similar action for the
purpose of any of the foregoing; or

 

(h)          a court or other Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Subsidiaries, or any such petition shall be filed against the Company or any of
its Subsidiaries and such petition shall not be dismissed within 60 days; or

 

(i)          a final judgment or judgments for the payment of money aggregating
in excess of $5,000,000 (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) are rendered
against one or more of the Company and its Subsidiaries and which judgments are
not, within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such stay;
or

 

(j)          if (1) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
Section 412 of the Code, (2) a notice of intent to terminate any Plan shall have
been filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA Section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may
become a subject of any such proceedings, (3) the aggregate “amount of unfunded
benefit liabilities” (within the meaning of Section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall exceed
$20,000,000, (4) the Company or any ERISA Affiliate shall have incurred any
liability pursuant to Title I or IV of ERISA (other than for contributions that
are not delinquent) or the penalty or excise tax provisions of the Code relating
to any Plan, (5) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (6) the Company or any Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare benefits
in a manner that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (1) through (6)
above, either individually or together with any other such event or events
described in clauses (1) through (6) above, could reasonably be expected to have
a Material Adverse Effect; or

 

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(k)          the Company or any Subsidiary defaults in the performance of or
compliance with any term contained in any Security Document and such default is
not remedied within the period of grace, if any, allowed with respect thereto or
any Security Document shall cease to be in full force and effect for any reason
whatsoever (other than termination in accordance with its terms) or any Security
Document shall, fail or cease to create a valid and perfected first priority
Lien on any material portion of the Collateral purported to be covered thereby
or the Company or any Subsidiary shall contest or deny the validity or
enforceability in any material respect of any Lien granted under any Security
Document or any of its obligations thereunder; or

 

(l)          at any time prior to the delivery of the audited financial
statements of the Company and its Subsidiaries required by Section 7.1(b) for
the fiscal year ending December 31, 2012, MHGCI shall fail to own, directly or
indirectly, 100% of the issued and outstanding Capital Stock of the Company;

 

As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

 

Section 12Remedies on Default, Etc.

 

Section 12.1         Acceleration.

 

(a)          If an Event of Default with respect to the Company described in
Section 11(g) or (h) (other than an Event of Default described in clause (1) of
Section 11(g) or described in clause (6) of Section 11(g) by virtue of the fact
that such clause encompasses clause (1) of Section 11(g)) has occurred, all the
Notes then outstanding shall automatically become immediately due and payable.

 

(b)          If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.

 

(c)          If any Event of Default described in Section 11(a) or (b) has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.

 

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (1) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (2) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

 

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Section 12.2         Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

 

Section 12.3         Rescission. At any time after any Notes have been declared
due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) neither the Company nor any other Person shall
have paid any amounts which have become due solely by reason of such
declaration, (c) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

 

Section 12.4         No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder’s rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys’ fees, expenses and disbursements.

 

Section 13Registration; Exchange; Substitution of Notes.

 

Section 13.1         Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. If any holder of one or more Notes
is a nominee, then the name and address of the beneficial owner of such Note or
Notes shall also be registered in such register as an owner and holder thereof.
Prior to due presentment for registration of transfer, the Person(s) in whose
name any Note(s) shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

 

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Section 13.2         Transfer and Exchange of Notes. Upon surrender of any Note
to the Company at the address and to the attention of the designated officer
(all as specified in Section 18(3)), for registration of transfer or exchange
(and in the case of a surrender for registration of transfer accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note; provided, that, without limiting the provisions of Section
8.5, Notes may not be transferred to Macquarie Group Limited or any subsidiary
or Affiliate thereof (including, without limitation, any fund managed or
controlled thereby or any investment scheme or similar vehicle or separate
managed accounts related thereto) (other than the Company and its Subsidiaries)
(each, a “Restricted Affiliate”) without the prior written consent of the
Company in its sole discretion; provided, however, any holder of a Note may
conclusively rely upon a representation from a proposed transferee as to whether
or not such proposed transferee constitutes a Restricted Affiliate. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note shall be dated and
bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes. Notes shall not be transferred in denominations of less than
$100,000, provided that if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $100,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2. Each transferee of a Note shall deliver
an executed joinder to the Intercreditor Agreement to the Company and the
Collateral Agent.

 

Section 13.3         Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(3)) of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which evidence shall be,
in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

 

(a)          in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

(b)          in the case of mutilation, upon surrender and cancellation thereof,

 

within ten Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.

 

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Section 14Payments on Notes.

 

Section 14.1         Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of Wells
Fargo Bank, National Association, in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.

 

Section 14.2         Home Office Payment. So long as any Purchaser or its
nominee shall be the holder of any Note, and notwithstanding anything contained
in Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, interest and
all other amounts becoming due hereunder by the method and at the address
specified for such purpose below such Purchaser’s name in Schedule A, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by a Purchaser or
its nominee, such Purchaser will, at its election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by a Purchaser under this Agreement and that
has made the same agreement relating to such Note as the Purchasers have made in
this Section 14.2.

 

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Section 15Expenses, Etc.

 

Section 15.1         Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel and, if reasonably
required by the Required Holders, local or other counsel) incurred by the
Purchasers and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in respect
of this Agreement, the Notes, any Guaranty Agreement or any Security Document
(whether or not such amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement, the Notes, any Guaranty Agreement or any Security Document or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, the Notes, any Guaranty
Agreement or any Security Document, or by reason of being a holder of any Note,
(b) the costs and expenses, including financial advisors’ fees, incurred in
connection with the insolvency or bankruptcy of MHGCI, the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby, by the Notes, by any Guaranty Agreement or by
the Security Documents, (c) the fees, costs and expenses, including without
limitation reasonable attorneys’ fees, of the Collateral Agent required to be
paid by the Company or any Subsidiary pursuant to any Security Document or
required to be reimbursed by any holder of a Note pursuant to the Intercreditor
Agreement, (d) the costs and expenses, including without limitation reasonable
attorneys’ fees, of preparing, recording and filing all financing statements,
instruments and other documents to create, perfect and fully preserve and
protect the Liens granted pursuant to the Security Documents and the rights of
the holders of the Notes or of the Collateral Agent for the benefit of the
holders of the Notes and the other parties party to the Intercreditor Agreement
and (e) the costs and expenses incurred in connection with the initial filing of
this Agreement and all related documents and financial information with the
CMIAO; provided, that such costs and expenses under this clause (e) shall not
exceed $3,500. The Company will pay, and will save each Purchaser and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those, if any, retained by
a Purchaser or other holder in connection with its purchase of the Notes).

 

Section 15.2         Survival. The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, the Notes or any Security
Document, and the termination of this Agreement or any Security Document.

 

Section 16Survival of Representations and Warranties; Entire Agreement.

 

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between each Purchaser and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.

 

Section 17Amendment and Waiver.

 

Section 17.1         Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing; and (b) no amendment or waiver may, without the
written consent of each Purchaser and the holder of each Note at the time
outstanding, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of (x) interest on the Notes or (y) the Make-Whole Amount,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any amendment or waiver, or (iii) amend any of
Sections 8, 11(b), 12, 17 or 20.

 

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Section 17.2         Solicitation of Holders of Notes.

 

(a)          Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, of the Notes or of any Security Document. The Company will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.

 

(b)          Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security or provide other credit
support, to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof, of the Notes or of any Security Document unless
such remuneration is concurrently paid, or security is concurrently granted or
other credit support concurrently provided, on the same terms, ratably to each
holder of a Note even if such holder did not consent to such waiver or
amendment.

 

(c)          Consent in Contemplation of Transfer. Any consent made pursuant to
this Section 17 by a holder of Notes that has transferred or has agreed to
transfer its Notes to the Company, any Subsidiary or any Affiliate of the
Company pursuant to Section 8.5 and has provided or has agreed to provide such
written consent as a condition to such transfer shall be void and of no force or
effect except solely as to such holder, and any amendments effected or waivers
granted or to be effected or granted that would not have been or would not be so
effected or granted but for such consent (and the consents of all other holders
of Notes that were acquired under the same or similar conditions) shall be void
and of no force or effect except solely as to such holder.

 

Section 17.3         Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note.

 

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Section 17.4         Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.

 

Section 18Notices.

 

All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy or electronic mail if the sender on the same day sends a
confirming copy of such notice by an internationally recognized overnight
delivery service (charges prepaid), (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by an internationally
recognized overnight delivery service (charges prepaid). Any such notice must be
sent:

 

(1)         if to any Purchaser or its nominee, to such Purchaser or nominee at
the address specified for such communications in Schedule A, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,

 

(2)         if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or

 

(3)         if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of the chief executive officer or the general
counsel, or at such other address as the Company shall have specified to the
holder of each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.

 

Section 19Reproduction of Documents.

 

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

 

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Section 20Confidential Information.

 

For the purposes of this Section 20, “Confidential Information” shall mean
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (1) its directors, officers,
employees, agents, attorneys, trustees and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by its Notes), (2) its auditors, financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(3) any other holder of any Note and the Collateral Agent, (4) any Institutional
Investor to which it sells or offers to sell such Note or any part thereof or
any participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 20), (5) any Person from which it offers to purchase any Security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (6)
any federal or state regulatory authority having jurisdiction over such
Purchaser, (7) the NAIC or the CMIAO or, in each case, any similar organization,
or any nationally recognized rating agency that requires access to information
about such Purchaser’s investment portfolio, or (8) any other Person to which
such delivery or disclosure may be necessary or appropriate (i) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser,
(ii) in response to any subpoena or other legal process, (iii) in connection
with any litigation to which such Purchaser is a party or (iv) if an Event of
Default has occurred and is continuing, to the extent such Purchaser may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under such
Purchaser’s Notes, this Agreement or any Security Document. Each holder of a
Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 20 as though it were a party
to this Agreement. On reasonable request by the Company in connection with the
delivery to any holder of a Note of information required to be delivered to such
holder under this Agreement or requested by such holder (other than a holder
that is a party to this Agreement or its nominee), such holder will enter into
an agreement with the Company embodying the provisions of this Section 20.

 

In the event that as a condition to receiving access to information relating to
the Company or its Subsidiaries in connection with the transactions contemplated
by or otherwise pursuant to this Agreement, any Purchaser is required to agree
to a confidentiality undertaking (whether through Intralinks or otherwise) which
is different from the terms of this Section 20, the terms of this Section 20
shall, as between such Purchaser and the Company, supersede the terms of any
such other confidentiality undertaking.

 

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Section 21Substitution of Purchaser.

 

Each Purchaser shall have the right to substitute any one of its Affiliates as
the purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, any reference to such Purchaser in this Agreement (other than in
this Section 21), shall be deemed to refer to such Affiliate in lieu of such
original Purchaser. In the event that such Affiliate is so substituted as a
Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, any reference to such Affiliate as a
“Purchaser” in this Agreement (other than in this Section 21), shall no longer
be deemed to refer to such Affiliate, but shall refer to such original
Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

 

Section 22Miscellaneous.

 

Section 22.1         Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

 

Section 22.2         Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day; provided that if the maturity date of any
Note is a date other than a Business Day, the payment otherwise due on such
maturity date shall be made on the next succeeding Business Day and shall
include the additional days elapsed in the computation of interest payable on
such next succeeding Business Day.

 

Section 22.3         Accounting Terms. All accounting terms used herein which
are not expressly defined in this Agreement have the meanings respectively given
to them in accordance with GAAP. Except as otherwise specifically provided
herein, (a) all computations made pursuant to this Agreement shall be made in
accordance with GAAP, and (b) all financial statements shall be prepared in
accordance with GAAP. For purposes of determining compliance with the financial
covenants contained in this Agreement, any election by the Company to measure
any financial liability using fair value (as permitted by Accounting Standard
Codification Topic No. 825-10-25 – Fair Value Option or any similar accounting
standard) shall be disregarded and such determination shall be made as if such
election had not been made.

 

Section 22.4         Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Section 22.5         Construction, Etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.

 

Section 22.6         Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

 

Section 22.7         Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would permit the application of the laws of a jurisdiction
other than such State.

 

Section 22.8         Jurisdiction and Process; Waiver of Jury Trial.

 

(a)          The Company irrevocably submits to the non-exclusive jurisdiction
of any New York State or federal court sitting in the Borough of Manhattan, The
City of New York, over any suit, action or proceeding arising out of or relating
to this Agreement or the Notes. To the fullest extent permitted by applicable
law, the Company irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any claim that it is not subject to the jurisdiction
of any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.

 

(b)          The Company consents to process being served by or on behalf of any
holder of Notes in any suit, action or proceeding of the nature referred to in
Section 22.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (1) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (2) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

 

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(c)          Nothing in this Section 22.8 shall affect the right of any holder
of a Note to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)          The parties hereto hereby waive trial by jury in any action brought
on or with respect to this Agreement, the Notes, the Security Documents or any
other document executed in connection herewith or therewith.

 

* * * * *

-48-

 

  

The execution hereof by the Purchasers shall constitute a contract among the
Company and the Purchasers for the uses and purposes hereinabove set forth.

 

  The Gas Company, LLC         By  /s/ JEFFREY M. KISSEL      Name:     Title:
PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

This Agreement is hereby

accepted and agreed to as

of the date hereof.

 

[Add Purchaser Signature Blocks

 

Signature Page to Note Purchase Agreement

 

-49-

 

 

Information Relating to Purchasers

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Liberty National Life Insurance Company
[Redacted]  $10,850,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Globe Life and Accident Insurance Company
[Redacted]  $7,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Farmers New World Life Insurance Company
[Redacted]  $7,150,000 

 

 

 

  

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  The Prudential Insurance Company of America
[Redacted]  $18,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Prudential Arizona Reinsurance Captive Company
[Redacted]  $5,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Prudential Arizona Reinsurance Universal Company
[Redacted]  $1,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Prudential Annuities Life Assurance Corporation
[Redacted]  $1,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  United of Omaha Life Insurance Company
[Redacted]  $25,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Connecticut General Life Insurance Company  $1,000,000 
[Redacted]  $2,000,000     $2,000,000     $1,000,000     $1,000,000    
$1,000,000     $1,000,000     $3,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  Life Insurance Company of North America
[Redacted]  $7,000,000 

 

 

 

 

Name and Address of Purchaser  Principal Amount of
Notes to be Purchased  CIGNA Health and Life Insurance Company
[Redacted]  $6,000,000 

 

 

 

 

Defined Terms

 

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

 

“Affiliate” shall mean, at any time, and with respect to any Person, any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and, with respect to the Company, shall include any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of voting or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries beneficially own or hold,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, “Control” shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to an
Affiliate of the Company.

 

“Aggregate Cash Available for Distribution” shall mean, as of any date of
determination, the sum of (i) $6,500,000 for the fiscal quarters which commenced
prior to June 30, 2012 and (ii) (a) the aggregate amount of Cash Available for
Distribution for the fiscal quarters which commenced after June 30, 2012 and
prior to such date of determination, minus (b) the aggregate amount of (x)
Restricted Payments made pursuant to clauses (3), (4) and (5) of Section 10.5(c)
and (y) any loan or advance of funds by the Company to HGC (or other parent
entity) or pursuant to the Intercompany Loan Agreement made after July 1, 2012.
It being understood and agreed that, for the purposes of determining the portion
of “Aggregate Cash Available for Distribution” allocable to the fiscal quarter
commencing July 1, 2012, the negative covenant contained in Section 10.5 of this
Agreement shall be deemed to be effective as of July 1, 2012.

 

“Agreement” shall mean this Agreement as it may be amended or supplemented from
time to time.

 

“Anti-Money Laundering Laws” is defined in Section 5.16(c).

 

“Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, any Capital Stock owned thereby) of the Company
or any Subsidiary thereof whether by sale, lease, transfer or otherwise, and any
issuance of Capital Stock by any Subsidiary of the Company to any Person other
than the Company or any Subsidiary thereof (other than dispositions of assets
with a fair market value of less than $500,000). The term “Asset Disposition”
shall not include (a) any Equity Issuance, (b) the sale of inventory in the
ordinary course of business, (c) the transfer of assets to the Company or any
Subsidiary Guarantor pursuant to any other transaction permitted pursuant to
Section 10.7, (d) the write-off, discount, sale or other disposition of
defaulted or past-due receivables and similar obligations in the ordinary course
of business and not undertaken as part of an accounts receivable financing
transaction, (e) the disposition of any Swap Contract, (f) dispositions of
investments in cash and Cash Equivalents, and (g) the transfer by the Company or
any Subsidiary Guarantor of its assets to the Company or any Subsidiary
Guarantor.

 

Schedule B
(to Note Purchase Agreement)

 

 

 

 

“Blocked Person” is defined in Section 5.16(a).

 

“Business Day” shall mean (a) for the purposes of Section 8.8 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York,
New York are required or authorized to be closed, and (b) for the purposes of
any other provision of this Agreement, any day other than a Saturday, a Sunday
or a day on which commercial banks in New York, New York or Honolulu, Hawaii are
required or authorized to be closed.

 

“Capital Asset” shall mean, with respect to the Company and its Subsidiaries,
any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a Consolidated balance sheet of the Company and its
Subsidiaries.

 

“Capital Expenditures” shall mean, with respect to the Company and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Company and its Subsidiaries during such period, as determined in
accordance with GAAP, net of any Net Cash Proceeds received from all
dispositions of Capital Assets during such period (to the extent permitted
hereunder) that have been reinvested pursuant to clause (i) of the second
paragraph of Section 10.6; provided that Capital Expenditures shall not be less
than zero.

 

“Capital Lease” shall mean, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

 

“Capital Stock” shall mean (1) in the case of a corporation, capital stock,
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (3) in the case of a partnership, partnership interests (whether
general or limited), (4) in the case of a limited liability company, membership
interests, (5) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (6) any and all warrants, rights or options to
purchase any of the foregoing.

 

“Cash Available for Distribution” shall mean, for any fiscal quarter, the sum
(without duplication) of:

 

(a)          Net Cash Flow from Operating Activities during such fiscal quarter;

 

(b)          less Restricted Payments made pursuant to Section 10.5(c)(2) during
such fiscal quarter;

 

(c)          plus Restricted Payments made pursuant to Section 10.5(c)(3) during
such fiscal quarter;

 

(d)          plus payments of principal received by the Company pursuant to the
Intercompany Loan Agreement during such fiscal quarter;

 

(e)          less principal payments made by the Company or its Subsidiaries in
respect of Indebtedness and Guaranties in respect of Indebtedness during such
fiscal quarter; and

 

-2-

 

 

(f)          less Capital Expenditures and asset purchases of the Company and
its Subsidiaries during such fiscal quarter (except to the extent attributable
to the incurrence of Capital Lease obligations or otherwise financed by
incurring Indebtedness; provided that if, on an aggregate basis, the total
amount of Indebtedness (including Capital Lease obligations) that financed all
Capital Expenditures and asset purchases of the Company and its Subsidiaries on
and after July 1, 2012, through the end of such fiscal quarter exceeds 70% of
the aggregate amount of all such Capital Expenditures and asset purchases, this
exception shall in no event be greater than 70% of the aggregate amount of such
Capital Expenditures and asset purchases of the Company and its Subsidiaries on
and after July 1, 2012 through, the end of such fiscal quarter).

 

“Cash Equivalents” shall mean, collectively, (1) marketable direct obligations
issued or unconditionally guaranteed by the United States or any agency thereof
maturing within 180 days from the date of acquisition thereof, (2) commercial
paper maturing no more than 180 days from the date of creation thereof and
currently having the highest rating obtainable from either S&P or Moody’s,
(3) certificates of deposit maturing no more than 180 days from the date of
creation thereof issued by commercial banks incorporated under the laws of the
United States, each having combined capital, surplus and undivided profits of
not less than $500,000,000 and having a rating of “A” or better by a nationally
recognized rating agency; provided that the aggregate amount invested in such
certificates of deposit shall not at any time exceed $5,000,000 for any one such
certificate of deposit and $10,000,000 for any one such bank, or (4) time
deposits maturing no more than 30 days from the date of creation thereof with
commercial banks or savings banks or savings and loan associations each having
membership either in the FDIC or the deposits of which are insured by the FDIC
and in amounts not exceeding the maximum amounts of insurance thereunder.

 

“Change of Control” shall mean (1) the Sponsor shall cease to directly or
indirectly own and control more than 50% of the economic and voting interests in
HGC, (2) the failure of HGC to own 100% of outstanding equity interests of the
Company or (3) the failure of the Sponsor to be entitled, directly or
indirectly, whether through ownership of membership interests, contract or
otherwise, to direct or cause the direction of the management and policies of
the Company.

 

“Closing” is defined in Section 3.

 

“CMIAO” shall mean the Capital Markets & Investment Analysis Office of the NAIC
(formerly known as the Securities Valuation Office) or any successor to such
office.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

 

“Collateral” shall mean all property of the Company and its Subsidiaries, now
owned or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

 

“Collateral Agent” shall mean Wells Fargo Bank, National Association, as
collateral agent under the Intercreditor Agreement, and its successors and
permitted assigns in such capacity.

 

-3-

 

 

“Company” shall mean The Gas Company, LLC, a Hawaii limited liability company or
any successor that becomes such in the manner prescribed in Section 10.7.

 

“Confidential Information” is defined in Section 20.

 

“Consolidated” shall mean, when used with reference to financial statements or
financial statement items of any Person, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.

 

“Consolidated Capitalization” shall mean, as of any date of determination, the
sum of (i) Consolidated Total Indebtedness at such time and (ii) Consolidated
Net Worth as of the end of the most recent fiscal quarter for which financial
statements are available.

 

 

“Consolidated EBITDA” shall mean, for any fiscal quarter, for the Company and
its Subsidiaries in accordance with GAAP and determined on a Consolidated basis,
Consolidated Net Income for such fiscal quarter adjusted for, to the extent used
in determining Consolidated Net Income for such fiscal quarter:

 

(a)          any extraordinary gains/losses and generally non-recurring
income/expense and any unrealized gains/losses for derivatives during such
fiscal quarter;

 

(b)          depreciation, amortization and other non-cash charges or losses of
the Company and its Subsidiaries (including, but not limited to, the non-cash
portion of net periodic defined benefit costs, bad debt expense net of cash
recoveries, deferred rent, amortization of debt financing costs and asset
retirement obligations) during such fiscal quarter;

 

(c)          provision/benefit for current and deferred income taxes (both state
and federal) during such fiscal quarter;

 

(d)          Consolidated Interest Expense, net of interest income, during the
relevant fiscal quarter;

 

(e)          Indebtedness-related fees (which includes, but is not limited to,
commitment fees and agency fees) during such fiscal quarter; and

 

(f)          expenses incurred under the Management Agreement during such fiscal
quarter.

 

“Consolidated Interest Coverage Ratio” shall mean, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on or immediately prior to such date to (b)
Consolidated Interest Expense for the period of four consecutive fiscal quarters
ending on or immediately prior to such date

 

“Consolidated Interest Expense” shall mean, for any period, the sum of the
following determined on a Consolidated basis, without duplication, for the
Company and its Subsidiaries in accordance with GAAP, interest expense
(including, without limitation, interest expense attributable to Capital Leases
and all net payment obligations pursuant to Swap Contracts) for such period.

  

-4-

 

 

“Consolidated Net Income” shall mean, for any period, the net income (or loss)
of the Company and its Subsidiaries for such period, determined on a
Consolidated basis, without duplication, in accordance with GAAP; provided, that
in calculating Consolidated Net Income of the Company and its Subsidiaries for
any period, there shall be excluded (a) the net income (or loss) of any Person
(other than a Subsidiary which shall be subject to clause (c) below), in which
the Company or any of its Subsidiaries has a joint interest with a third party,
except to the extent such net income is actually paid in cash to the Company or
any of its Subsidiaries by dividend or other distribution during such period,
(b) the net income (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of the Company or any of its Subsidiaries or is merged into or
consolidated with the Company or any of its Subsidiaries or that Person’s assets
are acquired by the Company or any of its Subsidiaries except to the extent
included pursuant to the foregoing clause (a), and (c) the net income (if
positive), of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary to the Company or any of
its Subsidiaries of such net income (i) is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Subsidiary or (ii) would be subject to any taxes payable on such dividends or
distributions, but in each case only to the extent of such prohibition or taxes.

 

“Consolidated Net Worth” shall mean, as of any date of determination with
respect to the Company and its Subsidiaries, (i) the sum of all amounts that
would, in conformity with GAAP, be included on the Consolidated balance sheet of
the Company and its Subsidiaries under “stockholders’ equity” or such similar
caption on such date and minus (ii) accumulated other comprehensive income (or
loss) determined on a Consolidated basis, without duplication, in accordance
with GAAP.

 

“Consolidated Total Assets” shall mean, at any date of determination, with
respect to the Company and its Subsidiaries, the total assets, on a consolidated
basis, of the Company and its Subsidiaries, determined in accordance with GAAP.

 

“Consolidated Total Indebtedness” shall mean, as of any date of determination
with respect to the Company and its Subsidiaries on a Consolidated basis without
duplication, the sum of all Indebtedness of the Company and its Subsidiaries.

 

“Consolidated Total Indebtedness to Consolidated Capitalization Ratio” shall
mean, as of any date of determination, the ratio of (a) Consolidated Total
Indebtedness on such date to (b) Consolidated Capitalization on such date.

 

“Control Event” shall mean (a) the execution by the Company or any of its
Subsidiaries or Affiliates of any agreement or letter of intent with respect to
any proposed transaction or event or series of transactions or events which,
individually or in the aggregate, may reasonably be expected to result in a
Change of Control or (b) the execution of any written agreement which, when
fully performed by the parties thereto, would result in a Change of Control.

 

-5-

 

 

“Controlled Entity” shall mean any of the Subsidiaries of the Company and any of
their or the Company’s respective Controlled Affiliates. As used in this
definition, “Control” shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Credit Agreement” shall mean the Credit Agreement dated as of August 8, 2012 by
and among the Company, the Lenders (as defined therein) from time to time
parties thereto, Wells Fargo Bank, National Association, as administrative
agent, and the other agents party thereto, as amended, restated, joined,
supplemented or otherwise modified from time to time, and any renewals,
extensions or replacements thereof, which constitute the primary bank credit
facility of the Company and its Subsidiaries

 

“Default” shall mean an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

 

“Default Rate” shall mean that rate of interest that is the greater of (a) 2.00%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (b) 2.00% over the rate of interest publicly announced by Wells
Fargo Bank, National Association, in New York, New York as its “base” or “prime”
rate.

 

“Disclosure Documents” is defined in Section 5.3.

 

“Disqualified Capital Stock” shall mean any Capital Stock that, by its terms (or
by the terms of any security or other Capital Stock into which it is convertible
or for which it is exchangeable) or upon the happening of any event or
condition, (a) matures or is mandatorily redeemable (other than solely for
Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Notes and other
obligations under this Agreement and the Security Documents that are accrued and
payable), (b) is redeemable at the option of the holder thereof (other than
solely for Qualified Capital Stock) (except as a result of a change of control
or asset sale so long as any rights of the holders thereof upon the occurrence
of a change of control or asset sale event shall be subject to the prior
repayment in full of the Notes and all other obligations under this Agreement
and the Security Documents that are accrued and payable), in whole or in part,
(c) provides for the scheduled payment of dividends in cash or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Capital Stock
that would constitute Disqualified Capital Stock, in each case, prior to the
date that is 91 days after the maturity date of the Notes; provided, that if
such Capital Stock is issued pursuant to a plan for the benefit of the Company
or its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Capital Stock solely because it may be
required to be repurchased by the Company or its Subsidiaries in order to
satisfy applicable statutory or regulatory obligations.

 

“Environmental Laws” shall mean any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to Hazardous Materials.

 

-6-

 

 

“Equity Issuance” shall means (1) any issuance by the Company or any Subsidiary
thereof to any Person other than the Company or a Subsidiary thereof, of
(a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to
the exercise of options or warrants or (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity and (2) any capital
contribution from any Person (other than the Company or a Subsidiary Guarantor)
into the Company or any Subsidiary thereof. The term “Equity Issuance” shall not
include any Asset Disposition.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under Section 414
of the Code.

 

“Event of Default” is defined in Section 11.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“FDIC” shall mean the Federal Deposit Insurance Corporation or any successor
thereto.

 

“FEMA” shall mean the Federal Emergency Management Agency and any successor
thereto.

 

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

 

“Governmental Authority” shall mean

 

(a)          the government of

 

(1)         the United States of America or any state or other political
subdivision thereof, or

 

(2)         any other jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or

 

(b)          any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.

 

“Guarantors” shall mean, collectively, MHGCI, so long as the MHGCI Guaranty
Agreement is in effect, and each Subsidiary party to the Subsidiary Guaranty
Agreement.

 

-7-

 

 

“Guaranty” shall mean, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

 

(a)          to purchase such indebtedness or obligation or any property
constituting security therefor;

 

(b)          to advance or supply funds (1) for the purchase or payment of such
indebtedness or obligation, or (2) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
indebtedness or obligation;

 

(c)          to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such indebtedness or obligation of the
ability of any other Person to make payment of the indebtedness or obligation;
or

 

(d)          otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.

 

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

 

“Guaranty Agreement” shall mean the MHGCI Guaranty Agreement or the Subsidiary
Guaranty Agreement.

 

“Hazardous Materials” shall mean any and all pollutants, toxic or hazardous
wastes or other substances that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

 

“HGC” shall mean HGC Holdings LLC, a Hawaii limited liability company.

 

“HGC Credit Agreement” means the credit agreement dated as of August 8, 2012
among HGC, as borrower; the several banks and other financial institutions from
time to time parties thereto, as lenders; and Wells Fargo Bank, National
Association, as administrative agent for such lenders.

 

“holder” shall mean, with respect to any Note the Person in whose name such Note
is registered in the register maintained by the Company pursuant to
Section 13.1; provided, however, that if such Person is a nominee, then for the
purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this
Schedule B, “holder” shall mean the beneficial owner of such Note whose name and
address appears in such register.

 

-8-

 

 

“Indebtedness” with respect to any Person shall mean, at any time, without
duplication,

 

(a)          its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;

 

(b)          its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);

 

(c)          all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;

 

(d)          all liabilities for borrowed money secured by any Lien with respect
to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);

 

(e)          all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money); and

 

(f)          any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (e) hereof.

 

Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

 

“INHAM Exemption” is defined in Section 6.2(e).

 

“Institutional Investor” shall mean (a) any Purchaser of a Note, (b) any holder
of a Note holding (together with one or more of its affiliates) more than
$2,000,000 of the aggregate principal amount of the Notes then outstanding,
(c) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form, and (d) any Related Fund of any holder of any Note.

 

“Insurance and Condemnation Event” shall mean the receipt by the Company or any
of its Subsidiaries of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their respective property.

 

“Intercompany Loan Agreement” shall mean that certain Credit Agreement dated as
March 31, 2008 between the Sponsor and the Company as in effect on the date of
the Closing.

 

-9-

 

 

“Intercreditor Agreement” is defined in Section 4.6.

 

“Lender” shall mean each financial institution from time to time party to the
Credit Agreement as a “lender.”

 

“Lien” shall mean, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

 

“Make-Whole Amount” is defined in Section 8.8.

 

“Management Agreement” shall mean that certain Corporation Allocation Policy
Infrastructure and Specialized Funds, dated as of December 2004 (as amended on
April 24, 2008) as in effect on the date of the Closing.

 

“Material” shall mean material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, (b) the ability of the Company or
any Subsidiary to perform its obligations under this Agreement, the Notes or the
Security Documents to which it is a party or (c) the validity or enforceability
of this Agreement, the Notes or any Security Documents.

 

“Memorandum” is defined in Section 5.3.

 

“MHGCI” shall mean Macquarie HGC Investment LLC, a Hawaii limited liability
company and the owner of HGC.

 

“MHGCI Guaranty Agreement” is defined in Section 2.2.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgages” shall mean the collective reference to each mortgage, deed of trust
or other real property security document, encumbering any real property now or
hereafter owned by the Company or any Subsidiary, in each case, in form and
substance reasonably satisfactory to the Required Holders and executed by the
Company or such Subsidiary in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, as any such document may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Multiemployer Plan” shall mean any “multiemployer plan” (as such term is
defined in Section 4001(a)(3) of ERISA) to which contributions are or, within
the preceding five years, have been made or required to be made, by the Company
or any ERISA Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.

 

-10-

 

 

“NAIC” shall mean the National Association of Insurance Commissioners or any
successor thereto.

 

“Net Cash Flow from Operating Activities” shall mean, with respect to the
Company and its Subsidiaries for any period, the net cash flow from operating
activities of the Company and its Subsidiaries during such period, as determined
in accordance with GAAP.

 

“Net Cash Proceeds” shall mean, as applicable, (a) with respect to any Asset
Disposition or Insurance and Condemnation Event, the gross proceeds received by
the Company or any of its Subsidiaries therefrom (including any cash, Cash
Equivalents, deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, as and when received) less the sum of (1) in the case
of an Asset Disposition, all income taxes and other taxes assessed by a
Governmental Authority as a result of such transaction, (2) all reasonable and
customary out-of-pocket fees and expenses incurred in connection with such
transaction or event and (3) the principal amount of, premium, if any, and
interest on any Indebtedness secured by a Lien on the asset (or a portion
thereof) disposed of, which Indebtedness is required to be repaid in connection
with such transaction or event (other than the Senior Secured Obligations) and
(b) with respect to any offering of equity securities, the gross cash proceeds
received by the Company or any of its Subsidiaries therefrom less all reasonable
and customary out-of-pocket legal, underwriting and other fees and expenses
incurred in connection therewith.

 

“Notes” is defined in Section 1.

 

“OFAC” is defined in Section 5.16(a).

 

“OFAC Listed Person” is defined in Section 5.16(a).

 

“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

 

“Officer’s Certificate” shall mean a certificate of a Responsible Officer of the
Company.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or
Governmental Authority.

 

“Plan” shall mean, other than any Multiemployer Plans, (1) an “employee pension
benefit plan” (as defined in Section 3(2) of ERISA) subject to Title I of ERISA
that is established or maintained, or to which contributions are made or
required to be made, by the Company or any Subsidiary or with respect to which
the Company or any Subsidiary may have any liability or (2) an “employee pension
benefit plan” (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA
that is or, within the preceding five years, has been established or maintained,
or to which contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.

 

-11-

 

 

“Preferred Stock” shall mean any class of capital stock of a Person that is
preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

 

“Prepayment Date” is defined in Section 8.7(a).

 

“Prepayment Event” is defined in Section 8.7(a).

 

“property” or “properties” shall mean, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.

 

“Proposed Prepayment Date” is defined in Section 8.6(c).

 

“PTE” is defined in Section 6.2(a).

 

“Purchaser” or “Purchasers” shall mean each of the purchasers whose signatures
appear at the end of this Agreement and such Purchaser’s successors and assigns
(so long as any such assignment complies with Section 13.2), provided, however,
that any Purchaser of a Note that ceases to be the registered holder or a
beneficial owner (through a nominee) of such Note as the result of a transfer
thereof pursuant to Section 13.2 shall cease to be included within the meaning
of “Purchaser” of such Note for the purposes of this Agreement upon such
transfer.

 

“QPAM Exemption” is defined in Section 6.2(d).

 

“Qualified Capital Stock” shall mean any Capital Stock that is not Disqualified
Capital Stock.

 

“Qualified Institutional Buyer” shall mean any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.

 

“Ratable Portion” for any Note shall mean an amount equal to the product of
(a) the Net Cash Proceeds from any Asset Dispositions or Insurance and
Condemnation Events being applied to the payment or prepayment of Indebtedness
pursuant to clause (ii) of the second paragraph of Section 10.6 multiplied by
(b) a fraction, the numerator of which is the aggregate outstanding principal
amount of such Note and the denominator of which is the aggregate outstanding
principal amount of the sum of (1) the Notes and (2) the Indebtedness under the
Credit Agreement.

 

“Reinvestment Date” shall mean, (a) with respect to Net Cash Proceeds from Asset
Dispositions, the date that is 180 days after receipt of such Net Cash Proceeds
unless such Net Cash Proceeds are committed to be reinvested prior to such date,
in which case the Reinvestment Date shall be 360 days after receipt of such Net
Cash Proceeds and (b) with respect to Net Cash Proceeds from Insurance and
Condemnation Events, the date that is 270 days after receipt of such Net Cash
Proceeds unless such Net Cash Proceeds is committed to be reinvested prior to
such date, in which case the Reinvestment Date shall be 540 days after receipt
of such Net Cash Proceeds.

 

-12-

 

 

“Related Fund” shall mean, with respect to any holder of any Note, any fund or
entity that (a) invests in Securities or bank loans, and (b) is advised or
managed by such holder, the same investment advisor as such holder or by an
affiliate of such holder or such investment advisor.

 

“Required Holders” shall mean, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).

 

“Responsible Officer” shall mean the chief executive officer, president, chief
financial officer, principal accounting officer, comptroller, treasurer or
assistant treasurer of the Company.

 

“Restricted Affiliate” is defined in Section 13.2.

 

“Restricted Payments” is defined in Section 10.5.

 

“S&P” shall mean Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw Hill Company Inc. and any successor thereto.

 

“Secured Parties” shall mean the holders of the Notes and the other holders of
Senior Secured Obligations.

 

“Securities” or “Security” shall have the meaning specified in Section 2(1) of
the Securities Act.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in
effect.

 

“Security Agreement” shall mean that certain Security Agreement dated as of
August 8, 2012 entered into between the Company and the Collateral Agent and
substantially in the form attached hereto as Exhibit 4, as such agreement may be
amended, supplemented, restated or otherwise modified from time to time.

 

“Security Documents” shall mean the Security Agreement, the Mortgages, the
Intercreditor Agreement and all other security documents hereafter delivered to
the Collateral Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of the Company or any Subsidiary under this
Agreement or the Notes and the other Senior Secured Obligations.

 

“Senior Secured Obligations” shall have the meaning given for such term in the
Intercreditor Agreement.

 

-13-

 

 

“Solvent” shall mean, when used with respect to any Person, that (a) the fair
value and the fair salable value of its assets (excluding any Indebtedness due
from any Affiliate of such Person) are each in excess of the fair valuation of
its total liabilities (including all contingent liabilities computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become an actual and
matured liability), (b) such Person is able to pay its debts or other
obligations in the ordinary course as they mature and (c) such Person has
capital not unreasonably small to carry on its business and all business in
which it proposes to be engaged.

 

“Source” is defined in Section 6.2.

 

“Sponsor” shall mean Macquarie Infrastructure Company, Inc., a Delaware
corporation.

 

“Subsidiary” shall mean, as to any Person, any other Person in which such first
Person or one or more of its Subsidiaries or such first Person and one or more
of its Subsidiaries owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
second Person, and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such first Person or one or more
of its Subsidiaries or such first Person and one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.

 

“Subsidiary Debt” shall mean (without duplication), as of the date of any
determination thereof, the sum of all Indebtedness of Subsidiaries of the
Company (including all Guaranties of Indebtedness of the Company (other than
Guaranties by a Subsidiary Guarantor of Indebtedness subject to the
Intercreditor Agreement)) but excluding Indebtedness owing to the Company or any
Wholly-Owned Subsidiary.

 

“Subsidiary Guarantor” shall mean each Subsidiary party to the Subsidiary
Guaranty Agreement.

 

“Subsidiary Guaranty Agreement” is defined in Section 9.8(a).

 

“Swap Contract” shall mean (a) any and all interest rate swap transactions,
basis swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other
similar transactions or any of the foregoing (including, but without limitation,
any options to enter into any of the foregoing), and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement.

 

“Tax Sharing Agreement” shall mean that certain Income Tax Allocation Agreement,
dated as of January 1, 2007, by and among the Company, HGC, MHGCI and HGC
Investment Corporation, a Delaware corporation, as in effect on the date of the
Closing.

 

“Title Companies” is defined in Section 9.10(2).

 

-14-

 

 

“USA PATRIOT ACT” shall mean United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

 

“Wholly-Owned Subsidiary” shall mean, at any time, any Subsidiary one hundred
percent of all of the equity interests (except directors’ qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company’s other Wholly-Owned Subsidiaries at such time.

 

-15-

 

 

[Form of Note]

 

The Gas Company, LLC

 

4.22% Senior Secured Note Due August 8, 2022

 

No. [_____] [Date] $[_______] PPN 36714# AA5

 

For Value Received, the undersigned, The Gas Company, LLC (herein called the
“Company”), a limited liability company organized and existing under the laws of
the State of Hawaii, hereby promises to pay to ____________, or registered
assigns, the principal sum of _____________________ Dollars (or so much thereof
as shall not have been prepaid) on August 8, 2022 (the “Maturity Date”), with
interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of 4.22% per annum from the date
hereof, payable semiannually, on the eighth day of February and August in each
year, commencing with the February 8 or August 8 next succeeding the date
hereof, and on the Maturity Date, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law, on any overdue payment
of interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum
from time to time equal to the greater of (i) 6.22% or (ii) 2.00% over the rate
of interest publicly announced by Wells Fargo Bank, National Association, from
time to time in New York, New York as its “base” or “prime” rate, payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at the
principal offices of Wells Fargo Bank, National Association, in New York, New
York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

 

This Note is one of a series of Senior Secured Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of August 8, 2012 (as
from time to time amended, the “Note Purchase Agreement”), between the Company
and the respective Purchasers named therein and is entitled to the benefits
thereof. Each holder of this Note will be deemed, by its acceptance hereof, to
have (i) agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreement and (ii) made the representation set forth in
Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer accompanied by a
written instrument of transfer duly executed, by the registered holder hereof or
such holder’s attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.

 

EXHIBIT 1

(to Note Purchase Agreement)

 

 

 

 

This Note is subject to prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

 

The payment by the Company of the principal of, interest on, Make-Whole Amount,
if any, is secured by the Collateral as set forth in the Security Documents.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

 

  The Gas Company, LLC           By       Name:       Title:  

 

-2-

 

 

Execution Version

 

 

MHGCI Guaranty Agreement

 

Dated as of August 8, 2012

 

  Re: $100,000,000 4.22% Senior Secured Notes due August 8, 2022       of      
The Gas Company, LLC  

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page SECTION 1. Definitions 3       SECTION 2. Guaranty of Notes and Note
Purchase Agreement 4       SECTION 3. Guaranty of Payment and Performance 4    
  SECTION 4. General Provisions Relating to the Guaranty 4       SECTION 5.
Representations and Warranties of the Guarantor 9       SECTION 6. Amendments,
Waivers and Consents 11       SECTION 7. Notices 11       SECTION 8. Termination
11       SECTION 9. Miscellaneous 12

 

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MHGCI Guaranty Agreement

 

  Re: $100,000,000 4.22% Senior Secured Notes due August 8, 2022       of      
The Gas Company, LLC  

 

This MHGCI Guaranty Agreement dated as of August 8, 2012 (this “Guaranty”) is
entered into by the undersigned, Macquarie HGC Investment LLC, a Hawaii limited
liability company (the “Guarantor”).

 

Recitals

 

A.           The Guarantor is the indirect owner of 100% of the issued and
outstanding equity interests of The Gas Company, LLC, a Hawaii limited liability
company (the “Company”).

 

B.           The Company has entered into that certain Note Purchase Agreement
dated as of August 8, 2012 (as the same may be amended, supplemented, restated
or otherwise modified from time to time, the “Note Purchase Agreement”) with
each of the institutional investors named on Schedule A attached thereto
(collectively, the “Note Purchasers”), providing for, among other things, the
issue and sale by the Company to the Note Purchasers of $100,000,000 aggregate
principal amount of its 4.22% Senior Secured Notes due August 8, 2022
(collectively, the “Notes”). The Note Purchasers together with their successors
and assigns are collectively referred to herein as the “Holders.”

 

C.           The Note Purchasers have required as a condition of their purchase
of the Notes that the Company causes the Guarantor to enter into this Guaranty,
and the Company has agreed to cause the Guarantor to execute this Guaranty in
order to induce the Note Purchasers to purchase the Notes and thereby benefit
the Company and its Subsidiaries by providing funds to the Company for the
purposes described in Section 5.14 of the Note Purchase Agreement.

 

Now, therefore, as required by Section 4.4 of the Note Purchase Agreement and in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency whereof are hereby acknowledged, the Guarantor does
hereby covenant and agree as follows:

 

Section 1Definitions.

 

Capitalized terms used herein shall have the meanings set forth in the Note
Purchase Agreement unless defined herein.

 

-3-

 

 

 

Section 2Guaranty of Notes and Note Purchase Agreement.

 

The Guarantor does hereby irrevocably, absolutely and unconditionally guarantee
unto the Holders from the date hereof until the Termination Date (as defined
below): (1) the full and prompt payment of the principal of, Make-Whole Amount,
if any, and interest on the Notes from time to time outstanding, as and when
such payments shall become due and payable whether by lapse of time, upon
redemption or prepayment, by extension or by acceleration or declaration or
otherwise (including, to the extent permitted by applicable law, interest due on
overdue payments of principal, Make-Whole Amount, if any, or interest at the
rate set forth in the Notes) in federal or other immediately available funds of
the United States of America which at the time of payment or demand therefor
shall be legal tender for the payment of public and private debts, (2) the full
and prompt performance and observance by the Company of each and all of the
obligations, covenants and agreements required to be performed or owed by the
Company under the terms of the Notes, the Note Purchase Agreement and each
Security Document and (3) the full and prompt payment, upon demand by any Holder
of all costs and expenses, legal or otherwise (including reasonable attorneys’
fees), if any, as shall have been expended or incurred in the protection or
enforcement of any rights, privileges or liabilities in favor of the Holders
under or in respect of the Notes, the Note Purchase Agreement, any Security
Document or under this Guaranty or in any consultation or action in connection
therewith or herewith.

 

Section 3Guaranty of Payment and Performance.

 

Subject to Section 8 hereof, this is an irrevocable, absolute and unconditional
guarantee of payment and performance (and not merely of collection) and the
Guarantor hereby waives, to the fullest extent permitted by law, any right to
require that any action on or in respect of any Note, the Note Purchase
Agreement or any Security Document be brought against the Company or any other
Person or that resort be had to any direct or indirect security for the Notes or
for this Guaranty or any other remedy. Subject to Section 8 hereof, any Holder
may, at its option, proceed hereunder against the Guarantor in the first
instance to collect monies when due, the payment of which is guaranteed hereby,
without first proceeding against the Company or any other Person and without
first resorting to any direct or indirect security for the Notes or for this
Guaranty or any other remedy. Except as set forth in Section 8 hereof, the
liability of the Guarantor hereunder shall in no way be affected or impaired by
any acceptance by any Holder of any direct or indirect security for, or other
guaranties of, any indebtedness, liability or obligation of the Company or any
other Person to any Holder or by any failure, delay, neglect or omission by any
Holder to realize upon or protect any such guarantees, indebtedness, liability
or obligation or any notes or other instruments evidencing the same or any
direct or indirect security therefor or by any approval, consent, waiver, or
other action taken, or omitted to be taken by any such Holder.

 

Section 4General Provisions Relating to the Guaranty.

 

(a)          The Guarantor hereby consents and agrees that, until the
Termination Date, any Holder or Holders from time to time, with or without any
further notice to or assent from the Guarantor or any other Person may, without
in any manner affecting the liability of the Guarantor under this Guaranty, and
upon such terms and conditions as any such Holder or Holders may deem advisable:

 

(1)         extend in whole or in part (by renewal or otherwise), modify,
change, compromise, release or extend the duration of the time for the
performance or payment of any indebtedness, liability or obligation of the
Company or of any other Person secondarily or otherwise liable for any
indebtedness, liability or obligation of the Company on the Notes, or waive any
default with respect thereto, or waive, modify, amend or change any provision of
the Note Purchase Agreement, any Security Document, any other agreement or waive
this Guaranty; or

 

-4-

 

 

(2)         sell, release, surrender, modify, impair, exchange or substitute any
and all property, of any nature and from whomsoever received, held by, or for
the benefit of, any such Holder as direct or indirect security for the payment
or performance of any Indebtedness, liability or obligation of the Company or of
any other Person secondarily or otherwise liable for any indebtedness, liability
or obligation of the Company on the Notes; or

 

(3)         settle, adjust or compromise any claim of the Company against any
other Person secondarily or otherwise liable for any indebtedness, liability or
obligation of the Company on the Notes.

 

The Guarantor hereby ratifies and confirms any such extension, renewal, change,
sale, release, waiver, surrender, exchange, modification, amendment, impairment,
substitution, settlement, adjustment or compromise and that the same shall be
binding upon it, and hereby waives, to the fullest extent permitted by law, any
and all defenses, counterclaims or offsets which it might or could have by
reason thereof, it being understood that the Guarantor shall at all times be
bound by this Guaranty and remain liable hereunder.

 

(b)          The Guarantor hereby waives, to the fullest extent permitted by
law, until the Termination Date:

 

(1)         notice of acceptance of this Guaranty by the Holders or of the
creation, renewal or accrual of any liability of the Company, present or future,
or of the reliance of such Holders upon this Guaranty (it being understood that
every indebtedness, liability and obligation described in Section 2 hereof shall
conclusively be presumed to have been created, contracted or incurred in
reliance upon the execution of this Guaranty);

 

(2)         demand of payment by any Holder from the Company or any other Person
indebted in any manner on or for any of the indebtedness, liabilities or
obligations hereby guaranteed; and

 

(3)         presentment for the payment by any Holder or any other Person of the
Notes or any other instrument, protest thereof and notice of its dishonor to any
party thereto and to the Guarantor.

 

The obligations of the Guarantor under this Guaranty and the rights of any
Holder to enforce such obligations by any proceedings, whether by action at law,
suit in equity or otherwise, shall not be subject to any reduction, limitation,
impairment or termination, whether by reason of any claim of any character
whatsoever or otherwise and shall not be subject to any defense, set-off,
counterclaim (other than any compulsory counterclaim), recoupment or termination
whatsoever.

 

(c)          Subject to Section 8 hereof, the obligations of the Guarantor
hereunder shall be binding upon the Guarantor and its successors and assigns,
and shall remain in full force and effect irrespective of:

 

-5-

 

 

(1)         the genuineness, validity, regularity or enforceability of the
Notes, the Note Purchase Agreement, any Security Document or any other agreement
or any of the terms of any thereof, the continuance of any obligation on the
part of the Company or any other Person on or in respect of the Notes or under
the Note Purchase Agreement, any Security Document or any other agreement or the
power or authority or the lack of power or authority of the Company to issue the
Notes or the Company to execute and deliver the Note Purchase Agreement, any
Security Document or any other agreement or of the Guarantor to execute and
deliver this Guaranty or to perform any of its obligations hereunder or the
existence or continuance of the Company or any other Person as a legal entity;
or

 

(2)         any default, failure or delay, willful or otherwise, in the
performance by the Company, the Guarantor or any other Person of any obligations
of any kind or character whatsoever under the Notes, the Note Purchase
Agreement, any Security Document, this Guaranty or any other agreement; or

 

(3)         any creditors’ rights, bankruptcy, receivership or other insolvency
proceeding of the Company or any other Person or in respect of the property of
the Company or any other Person or any merger, consolidation, reorganization,
dissolution, liquidation, the sale of all or substantially all of the assets of
or winding up of the Company or any other Person; or

 

(4)         impossibility or illegality of performance on the part of the
Company, the Guarantor or any other Person of its obligations under the Notes,
the Note Purchase Agreement, any Security Document, this Guaranty or any other
agreements; or

 

(5)         in respect of the Company or any other Person, any change of
circumstances, whether or not foreseen or foreseeable, whether or not imputable
to the Company or any other Person, or other impossibility of performance
through fire, explosion, accident, labor disturbance, floods, droughts,
embargoes, wars (whether or not declared), civil commotion, acts of God or the
public enemy, delays or failure of suppliers or carriers, inability to obtain
materials, action of any federal or state regulatory body or agency, change of
law or any other causes affecting performance, or any other force majeure,
whether or not beyond the control of the Company or any other Person and whether
or not of the kind hereinbefore specified; or

 

(6)         any attachment, claim, demand, charge, lien, order, process,
encumbrance or any other happening or event or reason, similar or dissimilar to
the foregoing, or any withholding or diminution at the source, by reason of any
taxes, assessments, expenses, indebtedness, obligations or liabilities of any
character, foreseen or unforeseen, and whether or not valid, incurred by or
against the Company, the Guarantor or any other Person or any claims, demands,
charges or liens of any nature, foreseen or unforeseen, incurred by the Company,
the Guarantor or any other Person, or against any sums payable in respect of the
Notes or under the Note Purchase Agreement, any Security Document or this
Guaranty, so that such sums would be rendered inadequate or would be unavailable
to make the payments herein provided; or

 

-6-

 

 

(7)         any order, judgment, decree, ruling or regulation (whether or not
valid) of any court of any nation or of any political subdivision thereof or any
body, agency, department, official or administrative or regulatory agency of any
thereof or any other action, happening, event or reason whatsoever which shall
delay, interfere with, hinder or prevent, or in any way adversely affect, the
performance by the Company, the Guarantor or any other Person of its respective
obligations under or in respect of the Notes, the Note Purchase Agreement, any
Security Document, this Guaranty or any other agreement; or

 

(8)         the failure of the Guarantor to receive any benefit from or as a
result of its execution, delivery and performance of this Guaranty; or

 

(9)         any failure or lack of diligence in collection or protection,
failure in presentment or demand for payment, protest, notice of protest, notice
of default and of nonpayment, any failure to give notice to the Guarantor of
failure of the Company, the Guarantor or any other Person to keep and perform
any obligation, covenant or agreement under the terms of the Notes, the Note
Purchase Agreement, any Security Document, this Guaranty or any other agreement
or failure to resort for payment to the Company, the Guarantor or to any other
Person or to any other guaranty or to any property, security, liens or other
rights or remedies; or

 

(10)        the acceptance of any additional security or other guaranty, the
advance of additional money to the Company or any other Person, the renewal or
extension of the Notes or amendments, modifications, consents or waivers with
respect to the Notes, the Note Purchase Agreement any Security Document or any
other agreement, or the sale, release, substitution or exchange of any security
for the Notes; or

 

(11)        any merger or consolidation of the Company, the Guarantor or any
other Person into or with any other Person or any sale, lease, transfer or other
disposition of any of the assets of the Company, the Guarantor or any other
Person to any other Person, or any change in the ownership of any shares or
other equity interests of the Company, the Guarantor or any other Person; or

 

(12)        any defense whatsoever that: (i) the Company or any other Person
might have to the payment of the Notes (including, principal, Make-Whole Amount,
if any, or interest), other than payment thereof in federal or other immediately
available funds or (ii) the Company or any other Person might have to the
performance or observance of any of the provisions of the Notes, the Note
Purchase Agreement, any Security Document or any other agreement, whether
through the satisfaction or purported satisfaction by the Company or any other
Person of its debts due to any cause such as bankruptcy, insolvency,
receivership, merger, consolidation, reorganization, dissolution, liquidation,
winding-up or otherwise; or

 

(13)        any act or failure to act with regard to the Notes, the Note
Purchase Agreement, any Security Document, this Guaranty or any other agreement
or anything which might vary the risk of the Guarantor or any other Person; or

 

-7-

 

 

(14)        any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Guarantor or any other Person in respect of
the obligations of the Guarantor or other Person under this Guaranty or any
other agreement;

 

provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
Guaranty and the parties hereto that the obligations of the Guarantor shall be
absolute and unconditional and shall not be discharged, impaired or varied
except by the payment of the principal of, Make-Whole Amount, if any, and
interest on the Notes in accordance with their respective terms whenever the
same shall become due and payable as in the Notes provided, at the place
specified in and all in the manner and with the effect provided in the Notes and
the Note Purchase Agreement, as each may be amended or modified from time to
time. Without limiting the foregoing, it is understood that repeated and
successive demands may be made and recoveries may be had hereunder as and when,
from time to time, the Company shall default under or in respect of the terms of
the Notes, the Note Purchase Agreement or any Security Document and that
notwithstanding recovery hereunder for or in respect of any given default or
defaults by the Company under the Notes, the Note Purchase Agreement or any
Security Document, this Guaranty shall remain in full force and effect and shall
apply to each and every subsequent default.

 

(d)          All rights of any Holder under this Guaranty shall be considered to
be transferred or assigned at any time or from time to time upon the transfer of
any Note held by such Holder whether with or without the consent of or notice to
the Guarantor under this Guaranty or to the Company.

 

(e)          To the extent of any payments made under this Guaranty, the
Guarantor shall, until the Termination Date, be subrogated to the rights of the
Holder or Holders upon whose Notes such payment was made, but the Guarantor
covenants and agrees that such right of subrogation and any and all claims of
the Guarantor against the Company, any endorser or other guarantor or against
any of their respective properties shall be junior and subordinate in right of
payment to the prior indefeasible final payment in cash in full of all of the
Notes and satisfaction by the Company of its obligations under the Note Purchase
Agreement and each Security Document and by the Guarantor of its obligations
under this Guaranty, and, until the Termination Date, the Guarantor shall not
take any action to enforce such right of subrogation, and the Guarantor shall
not accept any payment in respect of such right of subrogation, until all of the
Notes and all amounts payable by the Guarantor hereunder have indefeasibly been
finally paid in cash in full and all of the obligations of the Company under the
Note Purchase Agreement and each Security Document and of the Guarantor under
this Guaranty have been satisfied. Notwithstanding any right of the Guarantor to
ask, demand, sue for, take or receive any payment from the Company, all rights,
liens and security interests of the Guarantor, whether now or hereafter arising
and howsoever existing, in any assets of the Company shall be and hereby are,
until the Termination Date, subordinated to the rights, if any, of the Holders
in those assets. The Guarantor shall not have any right to possession of any
such asset or to foreclose upon any such asset, whether by judicial action or
otherwise, unless and until the earlier of (i) the occurrence of the Termination
Date and (ii) the date all of the Notes and the obligations of the Company under
the Note Purchase Agreement and each Security Document shall have been paid in
cash in full and satisfied.

 

-8-

 

 

(f)          The Guarantor agrees that to the extent the Company or any other
Person makes any payment on any Note, which payment or any part thereof is
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, recovered, rescinded or is required to be retained by or repaid to a
trustee, receiver, or any other Person under any bankruptcy code, common law, or
equitable cause, then and to the extent of such payment, the obligation or the
part thereof intended to be satisfied shall be revived and continued in full
force and effect with respect to the Guarantor’s obligations hereunder, as if
said payment had not been made. The liability of the Guarantor hereunder shall
not be reduced or discharged, in whole or in part, by any payment to any Holder
from any source that is thereafter paid, returned or refunded in whole or in
part by reason of the assertion of a claim of any kind relating thereto,
including, but not limited to, any claim for breach of contract, breach of
warranty, preference, illegality, invalidity or fraud asserted by any account
debtor or by any other Person.

 

(g)          No Holder shall be under any obligation: (1) to marshal any assets
in favor of the Guarantor or in payment of any or all of the liabilities of the
Company under or in respect of the Notes, the Note Purchase Agreement or any
Security Document or the obligations of the Guarantor hereunder or (2) to pursue
any other remedy that the Guarantor may or may not be able to pursue themselves
and that may lighten the Guarantor’s burden, any right to which the Guarantor
hereby expressly waives.

 

(h)          If an event permitting the acceleration of the maturity of the
principal amount of the Notes shall at any time have occurred and be continuing
and such acceleration shall at such time be prevented or the right of any Holder
to receive any payment under any Note shall at such time be delayed or otherwise
affected by reason of the pendency against the Company of a case or proceeding
under a bankruptcy or insolvency law, the Guarantor agrees that, for purposes of
this Guaranty and its obligations hereunder, the maturity of such principal
amount shall be deemed to have been accelerated with the same effect as if the
Holders had accelerated the same in accordance with the terms of the Note
Purchase Agreement, and the Guarantor shall forthwith pay such accelerated
principal of, premium, if any, and interest on the Notes and any other amounts
guaranteed hereunder.

 

Section 5Representations and Warranties of the Guarantor.

 

The Guarantor represents and warrants to each Holder that:

 

(a)          The Guarantor is a limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign limited liability company and
is in good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on (1) the business,
operations, affairs, financial condition, assets or properties of the Guarantor
and its subsidiaries, taken as a whole, or (2) the ability of the Guarantor to
perform its obligations under this Guaranty or (3) the validity or
enforceability of this Guaranty (herein in this Section 5, a “Material Adverse
Effect”). The Guarantor has the limited liability company power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Guaranty and to perform the provisions hereof.

 

-9-

 

 

(b)          This Guaranty has been duly authorized by all necessary action on
the part of the Guarantor, and this Guaranty constitutes a legal, valid and
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except as such enforceability may be limited by
(1) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and
(2) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

(c)          The execution, delivery and performance by the Guarantor of this
Guaranty will not (1) contravene, result in any breach of, or constitute a
default under, or result in the creation of any lien in respect of any material
property of the Guarantor or any of its subsidiaries under any material
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
organizational document or any other agreement or instrument to which the
Guarantor or any of its subsidiaries is bound or by which the Guarantor or any
of its subsidiaries or any of their respective material properties may be bound
or affected, (2) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or governmental authority applicable to the Guarantor or any of its
subsidiaries or (3) violate any provision of any statute or other rule or
regulation of any governmental authority applicable to the Guarantor or any of
its subsidiaries.

 

(d)          No consent, approval or authorization of, or registration, filing
or declaration with, any governmental authority is required in connection with
the execution, delivery or performance by the Guarantor of this Guaranty.

 

(e)          Neither the Guarantor nor any of its subsidiaries is subject to
regulation under Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as
amended, the Federal Power Act, as amended. Neither the Guarantor nor any of its
subsidiaries is subject to regulation under federal or state law as a public
utility except that the Company is subject to regulation as a public utility
under Chapter 269 of the Hawaii Revised Statutes.

 

(g)          The Guarantor is solvent, has capital not unreasonably small in
relation to its business or any contemplated or undertaken transaction and has
assets having a value both at fair valuation and at present fair salable value
greater than the amount required to pay its debts as they become due and greater
than the amount that will be required to pay its probable liability on its
existing debts as they become absolute and matured. The Guarantor does not
intend to incur, or believe or should have believed that it will incur, debts
beyond its ability to pay such debts as they become due. The Guarantor will not
be rendered insolvent by the execution and delivery of, and performance of its
obligations under, this Guaranty. The Guarantor does not intend to hinder, delay
or defraud its creditors by or through the execution and delivery of, or
performance of its obligations under, this Guaranty.

 

(h)          The obligations of the Guarantor under this Guaranty rank at least
pari passu in right of payment with all other unsecured indebtedness (actual or
contingent) of the Guarantor that is not expressed to be subordinate or junior
in rank to any other unsecured indebtedness of the Guarantor including, without
limitation, all obligations of the Guarantor under any guaranty of indebtedness
of any other Person, including without limitation any guaranty of indebtedness
under the Credit Agreement.

 

-10-

 

 

Section 6Amendments, Waivers and Consents.

 

(a)          This Guaranty may be amended, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only with) the
written consent of the Guarantor and the Required Holders, except that (1) no
amendment or waiver of any of the provisions of Sections 3, 4 or 5, or any
defined term (as it is used therein), will be effective as to any Holder unless
consented to by such Holder in writing, and (2) no such amendment or waiver may,
without the written consent of each Holder, (i) change the percentage of the
principal amount of the Notes the Holders of which are required to consent to
any such amendment or waiver or (ii) amend Section 2 or this Section 6.

 

(b)          Any amendment or waiver consented to as provided in this Section 6
applies equally to all Holders of Notes affected thereby and is binding upon
them and upon each future holder and upon the Guarantor. No such amendment or
waiver will extend to or affect any obligation, covenant or agreement not
expressly amended or waived or impair any right consequent thereon. No course of
dealing between the Guarantor and any Holder nor any delay in exercising any
rights hereunder shall operate as a waiver of any rights of any Holder. As used
herein, the term “this Guaranty” and references thereto shall mean this Guaranty
as it may from time to time be amended or supplemented.

 

Section 7Notices.

 

All communications provided for hereunder shall be in writing, mailed or
delivered, postage prepaid, if addressed to the Guarantor, c/o The Gas Company,
LLC, 745 Fort Street, Suite 1800, Honolulu, HI 96813, Attention: Jeffrey M.
Kissel, President and Chief Executive Officer, or if addressed to a Holder, as
set forth in Schedule A to the Note Purchase Agreement or to such other address
as such Holder or the Guarantor may designate to the other in writing. Notices
under this Section 7 will be deemed given only when actually received.

 

Section 8Termination.

 

Notwithstanding anything to the contrary set forth herein, this Guaranty shall
automatically terminate and be of no further force and effect immediately upon
the date (such date the “Termination Date”) of delivery by the Company (by
electronic transmission or otherwise) to the Holders of copies of the annual
audited financial statements for the fiscal year ending December 31, 2011
required by Section 7.1(b) of the Note Purchase Agreement and the applicable
officer’s certificate required to be delivered with such financial statements
pursuant to Section 7.2 of the Note Purchase Agreement and in no event shall any
obligation of the Guarantor under this Guaranty be reinstated following the
Termination Date, provided, that the Guarantor shall have been, or shall
concurrently be, released pursuant to the provisions of the MHGCI Guaranty
Agreement (as defined in the Credit Agreement), including, without limitation
Section 8 thereof, in each case, as in effect on the date hereof.

 

-11-

 

 

Section 9Miscellaneous.

 

(a)          No remedy herein conferred upon or reserved to any Holder is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Guaranty now or hereafter existing at law or in equity.
No delay or omission to exercise any right or power accruing upon any default,
omission or failure of performance hereunder shall impair any such right or
power or shall be construed to be a waiver thereof but any such right or power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle any Holder to exercise any remedy reserved to it under this
Guaranty, it shall not be necessary for such Holder to physically produce its
Note in any proceedings instituted by it or to give any notice, other than such
notice as may be herein expressly required.

 

(b)          The Guarantor will pay all sums becoming due under this Guaranty by
the method and at the address specified for such purpose for such Holder, in the
case of a Holder that is a Note Purchaser, on Schedule A to the Note Purchase
Agreement or by such other method or at such other address as any Holder shall
have from time to time specified to the Guarantor or the Company on behalf of
the Guarantor in writing for such purpose, without the presentation or surrender
of this Guaranty or any Note.

 

(c)          Any provision of this Guaranty that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

 

(d)          This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of each Holder and its
successors and assigns so long as its Notes remain outstanding and unpaid. If
the Guarantor enters into any consolidation or merger, pursuant to which the
Guarantor is not the surviving entity (the “Successor Corporation”), the
Successor Corporation shall execute and deliver to each Holder its assumption of
the due and punctual performance and observance of each covenant and condition
of this Guaranty (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders).

 

(e)          This Guaranty may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

 

(f)          This Guaranty shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

 

-12-

 

 

(h)          The Guarantor irrevocably submits to the non-exclusive jurisdiction
of any New York State or federal court sitting in the Borough of Manhattan, The
City of New York, over any suit, action or proceeding arising out of or relating
to this Guaranty. To the fullest extent permitted by applicable law, the
Guarantor irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

 

(i)          The Guarantor consents to process being served by or on behalf of
any Holder in any suit, action or proceeding of the nature referred to in
Section 9(h) by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, return receipt requested,
to it at its address specified in Section 7 or at such other address of which
such holder shall then have been notified pursuant to said Section. The
Guarantor agrees that such service upon receipt (1) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (2) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

 

(j)          Nothing in this Section 9 shall affect the right of any Holder to
serve process in any manner permitted by law, or limit any right that any Holder
may have to bring proceedings against the Guarantor in the courts of any
appropriate jurisdiction or to enforce in any lawful manner a judgment obtained
in one jurisdiction in any other jurisdiction.

 

(k)          The parties hereto hereby waive trial by jury in any action brought
on or with respect to this Guaranty or any other document executed in connection
herewith or therewith.

 

-13-

 

 

In Witness Whereof, the undersigned has caused this Guaranty to be duly executed
by an authorized representative as of the date first written above.

 

  Macquarie HGC Investment LLC         By:     Name:     Title:  

 

-14-

 

 

Execution Version

 

 

Intercreditor and Collateral Agency Agreement

 

Dated as of August 8, 2012

 

By and Among

 

Wells Fargo Bank, National Association,

as Collateral Agent

 

And

 

Wells Fargo Bank, National Association,

as Administrative Agent

 

And

 

The Noteholders Party Hereto,

as Creditors

 

 

 

 

 

 

 

 

Exhibit 3

(To Note Purchase Agreement) 

-15-

 

 

Table of Contents

 

Section   Heading Page           SECTION 1. Definitions   2             Section
1.1. Definitions 2           Section 1.2. Effectiveness of this Agreement 8    
      SECTION 2. Relationships Among Secured Parties 8             Section 2.1.
Restrictions on Actions 8           Section 2.2. Representations and Warranties;
Agreements of Creditors 9           Section 2.3. Cooperation; Accountings 10    
      Section 2.4. Termination of Credit Agreement, Note Agreement or Additional
Secured Facility 10           SECTION 3. Appointment and Authorization of
Collateral Agent; Appointment of Co-Agents 10             Section 3.1.
Appointment and Authorization of Collateral Agent 10           Section 3.2.
Appointment of Co-Agents 11           SECTION 4. Agency Provisions 11          
  Section 4.1. Delegation of Duties 11           Section 4.2. Exculpatory
Provisions 11           Section 4.3. Reliance by Collateral Agent 12          
Section 4.4. Knowledge or Notice of Default, Event of Default, Special Event of
Default or Acceleration 12           Section 4.5. Non-Reliance on Collateral
Agent and Other Creditors 12           Section 4.6. Indemnification 13          
Section 4.7. Collateral Agent in Its Individual Capacity 13           Section
4.8. Successor Collateral Agent 13           SECTION 5. Actions by the
Collateral Agent 15             Section 5.1. Duties and Obligations 15          
Section 5.2. Notification of Default or Acceleration 15           Section 5.3.
Actions of Collateral Agent; Exercise of Remedies 15           Section 5.4.
Instructions from Creditors 15           Section 5.5. Protective Advances 16    
      Section 5.6. Changes to Security Documents 16           Section 5.7.
Release of Collateral 16

 

-i-

 

 

  Section 5.8. Other Actions 16           Section 5.9. Cooperation 17          
Section 5.10. Distribution of Proceeds 17           Section 5.11. Senior
Preferential Payments and Special Collateral Account 18           Section 5.12.
Authorized Investments 19           Section 5.13. Restoration of Obligations 19
          Section 5.14. Bankruptcy Preferences 19           SECTION 6.
Bankruptcy Proceedings 20       SECTION 7. Miscellaneous 20             Section
7.1. Creditors; Other Collateral 20           Section 7.2. Marshalling 20      
    Section 7.3. Consents, Amendments, Waivers 21           Section 7.4.
Governing Law 21           Section 7.5. Parties in Interest 21           Section
7.6. Counterparts 21           Section 7.7. Termination 22           Section
7.8. Notices 22           Section 7.9. Senior Secured Obligations Held by
Company 23

 

-ii-

 

 

Attachment to Intercreditor and Collateral Agency Agreement:

 

Exhibit A – List of Security Documents

 

Exhibit B – Addresses of Creditors

 

Exhibit C – Joinder

 

Exhibit D –Additional Secured Lender Joinder

 

Exhibit E –Administrative Agent Joinder

 

-iii-

 

 

Intercreditor and Collateral Agency Agreement

 

This Intercreditor and Collateral Agency Agreement dated as of August 8, 2012
(this “Agreement”), is entered into by and among Wells Fargo Bank, National
Association, in its capacity as Collateral Agent (as hereinafter defined), Wells
Fargo Bank, National Association, in its capacity as Administrative Agent (as
hereinafter defined) for the Lenders (as hereinafter defined), each Noteholder
(as hereinafter defined) named on the signature pages hereof and each other
Creditor which becomes a party hereto after the date hereof.

 

Recitals:

 

The Gas Company, LLC, a Hawaii limited liability company (the “Company”), and
HGC Holdings LLC, a Hawaii limited liability company, are concurrently herewith
entering into that certain Credit Agreement dated as of August 8, 2012 (as
amended, supplemented, replaced, restated or otherwise modified from time to
time, the “Credit Agreement”) with the several banks and other financial
institutions or entities from time to time party thereto as lenders and Wells
Fargo Bank, National Association, as administrative agent, pursuant to which the
Lenders are providing revolving credit loans and other extensions of credit to
the Company.

 

The Company is concurrently herewith entering into that certain Note Purchase
Agreement dated as of August 8, 2012 (as amended, restated, supplemented,
replaced, refinanced or otherwise modified from time to time, the “Note
Agreement”) with each of the purchasers listed on Schedule A thereto
(collectively, the “Noteholders”), pursuant to which the Noteholders will
purchase $100,000,000 aggregate principal amount of 4.22% Senior Secured Notes
due August 8, 2022 of the Company (the “Senior Secured Notes”).

 

The Company may from time to time enter into Additional Secured Facilities (as
hereinafter defined) pursuant to which the Additional Senior Lenders (as
hereinafter defined) provide Additional Secured Debt (as hereinafter defined) to
the Company.

 

The Revolving Obligations (as hereinafter defined), the Senior Note Obligations
(as hereinafter defined) and any Additional Secured Obligations (as hereinafter
defined) will be secured equally and ratably by the Collateral (as hereinafter
defined) pursuant to the Security Documents (as hereinafter defined) and
administered in accordance with the terms and conditions hereof. The Lenders and
the Noteholders desire to appoint Wells Fargo Bank, National Association, as the
collateral agent (the “Collateral Agent”) to act on behalf of the Creditors (as
hereinafter defined) regarding the Collateral, all as more fully provided
herein. The parties hereto have entered into this Agreement to, among other
things, define the rights, duties, authority and responsibilities of the
Collateral Agent and the relationship between the Creditors regarding their pari
passu interests in the Collateral.

 

Now, therefore, in consideration of the premises and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

 

 

 

Section 1Definitions.

 

Section 1.1         Definitions. The following terms shall have the meanings
assigned to them in this Section 1.1 or in the provisions of this Agreement
referred to below:

 

“Additional Secured Debt” shall mean indebtedness of the Company so long as
(a) such indebtedness and the Lien with respect to such indebtedness are in each
case permitted by each of (i) the Credit Agreement, (ii) the Note Agreement and
(iii) each Additional Secured Facility then outstanding, (b) immediately before
and after giving effect thereto, no Event of Default shall have occurred which
is continuing or be caused thereby and the Company shall be in pro forma
compliance with the financial covenants contained in each of the Credit
Agreement and the Note Agreement and (c) the holders of such indebtedness shall
have become a party hereto pursuant to an Additional Secured Lender Joinder.

 

“Additional Secured Facility” shall mean any credit agreement or note agreement
pursuant to which the Company incurs Additional Secured Debt.

 

“Additional Secured Facility Documents” shall mean each Additional Secured
Facility, any guaranty relating thereto and all other agreements, documents,
certificates and instruments relating to, arising out of, or in any way
connected therewith or any of the transactions contemplated thereby (including,
without limitation, the Security Documents).

 

“Additional Secured Facility Exposure” shall mean, with respect to each
Additional Secured Lender, the sum, with duplication, of (a) the aggregate
outstanding principal amount of outstanding loans (whether term loans or
revolving loans) and other extensions of credit of such Additional Secured
Lender as of such date and (b) the amount of the undrawn commitment of such
Additional Secured Lender to fund further borrowing requests by the Company or
otherwise extend credit pursuant to such Additional Secured Facility (as used in
this definition, collectively, the “Undrawn Commitment”) as of such date;
provided, that, if (1) a Bankruptcy Proceeding with respect to the Company has
been commenced, (2) any of the Senior Secured Obligations have been accelerated
(which acceleration has not been rescinded) and the Collateral Agent shall have
received notice of such acceleration, (3) such Additional Secured Lender has
terminated its Undrawn Commitment or (4) a Default or Event of Default under the
applicable Additional Secured Facility shall exist and such Additional Secured
Lender shall not have, concurrently with its delivery of any instructions to the
Collateral Agent, acknowledged in writing its willingness to continue to fund
borrowing requests by the Company and otherwise extend credit, in each case, in
accordance with the applicable Additional Secured Facility, then “Additional
Secured Facility Exposure” shall mean, as of such date of determination, for
such Additional Secured Lender, the amounts referred to in clause (a) of this
definition for such Additional Secured Lender as of such date.

 

“Additional Secured Lender” shall mean the financial institutions providing
Additional Secured Debt pursuant to an Additional Secured Facility, and their
successors and permitted assigns.

 

“Additional Secured Lender Joinder” shall mean a joinder to this Agreement in
substantially the form of Exhibit D hereto.

 

- 2 -

 

 

“Additional Secured Obligations” shall mean the obligations of the Company under
any Additional Secured Facility and the other Additional Secured Facility
Documents.

 

“Administrative Agent” shall mean the party identified as such in the Credit
Agreement, and its successor and permitted assigns.

 

“Administrative Agent Joinder” shall mean a joinder to this Agreement in
substantially the form of Exhibit E hereto.

 

“Affiliate” shall mean, at any time, and as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, “control” of
a Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

 

“Agreement” shall have the meaning assigned thereto in the Preamble hereof, and
shall include such agreement as amended, supplemented, replaced, restated or
otherwise modified in accordance with its terms.

 

“Bankruptcy Code” shall mean the Bankruptcy Reform Act of 1978, as codified
under Title 11 of the United States Code, and the Bankruptcy Rules promulgated
thereunder, as the same may be in effect from time to time.

 

“Bankruptcy Proceeding” shall mean, with respect to any Person, a general
assignment by such Person for the benefit of its creditors, or the institution
by or against such Person of any proceeding seeking relief as debtor, or seeking
to adjudicate such Person as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of such Person or its debts, under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for such Person or for any substantial part of its property.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York are required or authorized to be
closed.

 

“Cash Equivalent Investments” shall mean: (a) direct obligations of the United
States government or any agencies thereof and obligations guaranteed by the
United States government, in each case having remaining terms to maturity of not
more than 30 days; and (b) certificates of deposit, time deposits and
acceptances, having remaining terms to maturity of not more than 30 days issued
by United States banks which have a combined capital and surplus of at least
$1,000,000,000 and having an “A” rating or better assigned thereto by Standard &
Poor’s Ratings Group, a Division of The McGraw Hill Companies, Inc. or Moody’s
Investors Service, Inc.

 

“Cash Management Agreement” shall mean any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements between the
Company or a Subsidiary of the Company and a Cash Management Provider.

 

- 3 -

 

 

“Cash Management Provider” shall mean any Person that, at the time it enters
into a Cash Management Agreement, is a Lender, an Affiliate of a Lender, the
Administrative Agent or an Affiliate of the Administrative Agent.

 

“Collateral” shall mean (a) all collateral under, and cash received in respect
of, the Security Documents, (b) all collateral held by the Collateral Agent, the
Administrative Agent or any other Creditor under the Loan Documents, the Senior
Note Documents or the Additional Secured Facility Documents, (c) all cash
received as a result of the exercise of any setoff rights of any Creditor and
(d) all cash received as a result of any claim under any Secured Guaranty.

 

“Collateral Agent” shall mean the party identified as such in the Recitals
hereof, and its successors and permitted assigns in such capacity.

 

“Company” shall mean that party identified as such in the Recitals hereof, and
its successors and permitted assigns.

 

“Credit Agreement” shall have the meaning assigned thereto in the Recitals
hereof.

 

“Creditor” shall mean any one of the Administrative Agent, the Lenders, the
Noteholders, any Additional Secured Lender, any Secured Hedge Provider under a
Secured Hedge Agreement, any Cash Management Provider and any successors and
permitted assigns to the interests in the Senior Secured Obligations owing to
any such Persons.

 

“Default” shall mean any event or condition, the occurrence of which would, with
the lapse of time or the giving of notice, or both, constitute an Event of
Default.

 

“Event of Default” shall mean any event or occurrence which would constitute an
“Event of Default” under the terms of the Credit Agreement, the Note Agreement
or any Additional Secured Facility or an event of default under the terms of any
Security Document.

 

“Hedge Agreement” shall mean “Hedge Agreement” (or equivalent term) as defined
in the Credit Agreement.

 

“Joinder” shall mean a joinder to this Agreement in the form of Exhibit C
hereto.

 

“L/C Exposure” shall mean, as of any date of determination and without
duplication, the “L/C Obligations” (or equivalent term) as defined in the Credit
Agreement.

 

“L/C Issuer” shall mean Wells Fargo Bank, National Association or any other
Lender who becomes an “Issuing Lender” (or equivalent term) under the Credit
Agreement or any Affiliate thereof and its permitted successors as “Issuing
Lender” (or equivalent term) under the Credit Agreement.

 

- 4 -

 

 

“Lender Exposure” shall mean, as of any date of determination, for any Lender,
the sum, without duplication, of (a) the Total Outstandings of such Lender as of
such date and (b) the Revolving Availability of such Lender as of such date;
provided, that, if (1) a Bankruptcy Proceeding with respect to the Company has
been commenced, (2) any of the Senior Secured Obligations have been accelerated
(which acceleration has not been rescinded) and the Collateral Agent shall have
received notice of such acceleration, (3) such Lender has terminated its
Revolving Commitment or (4) a Default or Event of Default under the Credit
Agreement shall exist and such Lender shall not have, concurrently with its
delivery of any instructions to the Collateral Agent, acknowledged in writing
its willingness to continue to fund borrowing requests by the Company (or, if
such Lender is also the L/C Issuer, its willingness to issue Letters of Credit
requested by the Company) and otherwise extend credit, in each case, in
accordance with the Credit Agreement, then “Lender Exposure” shall mean, as of
such date of determination, for such Lender, such Lender’s Total Outstandings as
of such date.

 

“Lenders” shall mean the several banks and other financial institutions or
entities from time to time party to the Credit Agreement as lenders, and their
successors and permitted assigns.

 

“Letters of Credit” shall mean all letters of credit issued under or pursuant to
the Credit Agreement.

 

“Letters of Credit Collateral Account” shall have the meaning assigned thereto
in Section 5.10 hereof.

 

“Lien” shall mean, any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).

 

“Loan Documents” shall mean the Credit Agreement, any guaranty relating thereto
and all other agreements, documents, certificates and instruments relating to,
arising out of, or in any way connected therewith or any of the transactions
contemplated thereby (including, without limitation, the Security Documents).

 

“Majority Creditors” shall mean Creditors, considered as a single class, holding
more than 50% of the sum of (a) the aggregate principal amount of the Lender
Exposure of all Lenders, (b) the aggregate outstanding principal amount of the
indebtedness evidenced by the Senior Secured Notes and (c) the aggregate
principal amount of Additional Secured Facility Exposure of all Additional
Secured Lenders.

 

“Note Agreement” shall have the meaning assigned thereto in the Recitals hereof,
and shall include such agreement as amended, supplemented, replaced, restated or
otherwise modified in accordance with its terms.

 

“Noteholders” those parties identified as such in the Recitals hereof, and their
successors and permitted assigns.

 

“Notice of Default” shall mean a notice pursuant to Section 5.2 hereof from the
Collateral Agent to the Creditors of the occurrence of a Default or an Event of
Default.

 

“Notice of Special Default” shall have the meaning assigned thereto in Section
5.11(a).

 

- 5 -

 

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

 

“Required Additional Secured Lenders” shall mean, with respect to any Additional
Secured Facility, the Additional Secured Lenders required pursuant to the terms
of such Additional Secured Facility to waive Events of Default thereunder.

 

“Required Holders” shall have the meaning assigned thereto in the Note
Agreement.

 

“Required Lenders” shall mean the “Required Lenders” as defined in the Credit
Agreement.

 

“Revolving Availability” shall mean an amount equal to the “Revolving Credit
Commitment” (or equivalent term) as defined in the Credit Agreement of a Lender
minus the “Extensions of Credit” (or equivalent term) as defined in the Credit
Agreement of such Lender.

 

“Revolving Commitment” shall mean the commitment of the Lenders to fund further
borrowing requests by the Company, participate in L/C Exposure and otherwise
extend credit, in each case, in accordance with the Credit Agreement.

 

“Revolving Obligations” shall mean the obligations of the Company under the
Credit Agreement and the other Loan Documents.

 

“Secured Guaranty” shall mean any guaranty of any Senior Secured Obligation to
the extent that recoveries thereunder are subject to this Agreement (including,
without limitation, Section 5.10).

 

“Secured Hedge Agreement” shall mean any Hedge Agreement entered into by the
Company or a Subsidiary thereof with a Secured Hedge Provider in order to manage
existing or anticipated interest rate, exchange rate or commodity price risks or
to secure feed stock or inventory and not for speculative purposes.

 

“Secured Hedge Provider” shall mean any Person that, at the time it enters into
a Hedge Agreement, is a Lender, an Affiliate of a Lender, the Administrative
Agent or an Affiliate of the Administrative Agent.

 

“Security Documents” shall mean the documents set forth on Exhibit A hereto and
all other agreements, documents and instruments relating to, arising out of, or
in any way connected with any of the foregoing documents or granting to the
Collateral Agent Liens to secure the Senior Secured Obligations, whether now or
hereafter executed, each as amended or amended and restated in conjunction
herewith, or as may be amended, supplemented, replaced, restated or otherwise
modified from time to time hereafter in accordance with the terms hereof and
thereof. Security Documents shall not, however, include the Credit Agreement,
the Note Agreement, any Additional Secured Facility or the Senior Secured Notes.

 

“Senior Note Documents” shall mean the Note Agreement, the Senior Secured Notes,
any guaranty relating thereto and all other agreements, documents, certificates
and instruments relating to, arising out of, or in any way connected therewith
or any of the transactions contemplated thereby (including, without limitation,
the Security Documents).

 

- 6 -

 

 

“Senior Note Obligations” shall mean the obligations of the Company under the
Note Agreement, the Senior Secured Notes and the other Senior Note Documents.

 

“Senior Preferential Payment” shall mean any payments, property constituting
Collateral or proceeds of the Collateral, from the Company or any other source
(including, without limitation under any Secured Guaranty) with respect to the
Senior Secured Obligations which are:

 

a. received by a Creditor within 90 days prior to the (1) commencement of a
Bankruptcy Proceeding with respect to the Company or any of its Subsidiaries or
(2) the acceleration of the Revolving Obligations, the Senior Note Obligations
or the Additional Secured Obligations and which payment reduces the amount of
the Senior Secured Obligations owed to such Creditor below the amount owed to
such Creditor as of the 90th day prior to such occurrence;

 

b. received by a Creditor (1) within 90 days prior to the occurrence of any
other Event of Default which has not been waived or cured within 45 days after
the occurrence thereof and which payment reduces the amount of the Senior
Secured Obligations owed to such Creditor below the amount owed to such Creditor
as of the 90th day prior to the occurrence of such Event of Default or (2)
within 45 days after the occurrence of such Event of Default; or

 

c. received by a Creditor after the occurrence of a Special Event of Default
except as provided in Section 5.11(b).

 

“Senior Secured Notes” shall have the meaning assigned thereto in the Recitals
hereof.

 

“Senior Secured Obligations” shall mean, collectively, (a) the indebtedness,
obligations and liabilities of the Company and its Subsidiaries (i) to the
Lenders, the L/C Issuer and the Administrative Agent under the Loan Documents
(including, without limitation, the Revolving Obligations) and (ii) to the
Lenders, Affiliates of a Lender, the Administrative Agent or an Affiliate of the
Administrative Agent under Cash Management Agreements and Secured Hedge
Agreements, (b) the indebtedness, obligations and liabilities of the Company and
its Subsidiaries to the Noteholders under the Senior Note Documents (including,
without limitation, the Senior Note Obligations), (c) the indebtedness,
obligations and liabilities of the Company and its Subsidiaries to the
Additional Secured Lenders under the Additional Secured Facilities (including,
without limitation, the Additional Secured Obligations) and (d) the obligations
and liabilities of the Company and its Subsidiaries to the Collateral Agent
under this Agreement, the Loan Documents, the Senior Note Documents, any
Additional Secured Facility Documents and the Security Documents, in each case
whether now existing or hereafter arising, joint or several, direct or indirect,
absolute or contingent, due or to become due, matured or unmatured, liquidated
or unliquidated, arising by contract, operation of law or otherwise, and all
obligations of the Company and its Subsidiaries, to the Creditors, arising out
of any extension, refinancing or refunding of any of the foregoing obligations.

 

- 7 -

 

 

“Special Collateral Account” shall mean that certain interest bearing restricted
account maintained by the Collateral Agent for the purpose of receiving and
holding Senior Preferential Payments.

 

“Special Event of Default” shall mean (a) the commencement of a Bankruptcy
Proceeding with respect to the Company or any of its Subsidiaries, (b) any other
Event of Default which has not been waived or cured within 45 days after the
occurrence thereof, (c) the acceleration of the Revolving Obligations, the
Senior Note Obligations or any Additional Secured Obligations or (d) any demand
for payment under any Secured Guaranty.

 

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

 

“Total Outstandings” shall mean “Extensions of Credit” (or equivalent term) as
defined in the Credit Agreement.

 

Section 1.2         Effectiveness of this Agreement. The effectiveness of this
Agreement is conditioned upon (a) the execution and delivery of this Agreement
by the Collateral Agent, the Administrative Agent and the Noteholders and
(b) the execution, delivery and effectiveness of the Credit Agreement and the
Note Agreement by each of the parties thereto.

 

Section 2Relationships Among Secured Parties.

 

Section 2.1         Restrictions on Actions. Each Creditor (or in the case of
the Lenders, the Administrative Agent on behalf of the Lenders) agrees that, so
long as any Senior Secured Obligations are outstanding, the provisions of this
Agreement shall provide the exclusive method by which any Creditor may exercise
rights and remedies under the Security Documents. Therefore, each Creditor
shall, for the mutual benefit of all Creditors, except as permitted under this
Agreement:

 

(a)   Refrain from taking or filing any action, judicial or otherwise, to
enforce any rights or pursue any remedy under the Security Documents, except for
delivering notices hereunder;

 

(b)   Refrain from (1) selling any Senior Secured Obligations to the Company or
any of its Affiliates after the occurrence of and during the continuance of any
Default or Event of Default and (2) accepting any guaranty of, or any other
security for, the Senior Secured Obligations from the Company or any of its
Affiliates, except for (i) any cash collateral received by the Administrative
Agent or any other Creditor pursuant to the requirement of the Loan Documents,
the Senior Note Documents or any Additional Secured Facility Documents (which
cash collateral shall constitute Collateral for purposes of this Agreement),
(ii) any Secured Guaranty or (iii) any security granted to the Collateral Agent
for the benefit of all Creditors; and

 

- 8 -

 

 

(c)   Refrain from exercising any rights or remedies under the Security
Documents which have or may have arisen or which may arise as a result of a
Default or Event of Default;

 

provided, however, that nothing contained in subsections (a) through (c) above,
shall prevent any Creditor from (1) imposing a default rate of interest in
accordance with the Credit Agreement, the Note Agreement or any Additional
Secured Facility, as applicable, (2) accelerating the maturity of, or demanding
payment from the Company or any Subsidiary on, any Senior Secured Obligation
owing to such Creditor, (3) instituting legal action against the Company or any
Subsidiary to obtain a judgment or other legal process in respect of such Senior
Secured Obligation, (4) subject to Section 6, filing to commence a Bankruptcy
Proceeding against the Company or any Subsidiary and filing claims and otherwise
participating in any voluntary or involuntary Bankruptcy Proceeding, (5) raising
any defenses in any action in which it has been made a party defendant or has
been joined as a third party, except that the Collateral Agent may direct and
control any defense directly relating solely to the Collateral or any one or
more of the Security Documents but not relating to any Creditor, which shall be
governed by the provisions of this Agreement or (6) exercising any right of
setoff, recoupment or similar right; provided that the amounts so setoff or
recouped shall constitute Collateral for purposes of this Agreement and the
Creditor shall promptly cause such amounts to be delivered to the Collateral
Agent for deposit in the Special Collateral Account.

 

Section 2.2         Representations and Warranties; Agreements of Creditors.

 

(a)   Each of the Creditors (or in the case of the Lenders, the Administrative
Agent on behalf of the Lenders), individually and not jointly, represents and
warrants to the other parties hereto that:

 

(1)         the execution, delivery and performance by such Creditor of this
Agreement has been duly authorized by all necessary corporate or similar
proceedings and does not and will not contravene any provision of law, its
charter or by-laws or any amendment thereof, or of any indenture, agreement,
instrument or undertaking binding upon such Creditor; and

 

(2)         the execution, delivery and performance by such Creditor of this
Agreement will result in a valid and legally binding obligation of such Creditor
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium, regulatory and similar laws or generally
application and by general principles of equity.

 

(b)   The Administrative Agent further represents and warrants to the other
parties hereto that as of the date hereof the Administrative Agent has the power
and authority under the Loan Documents to execute and deliver this Agreement and
to carry out its obligations hereunder, in each case, on behalf of the Lenders.

 

- 9 -

 

 

(c)  The Administrative Agent and each Lender shall cause each of their
Affiliates that are Secured Hedge Providers or Cash Management Providers to
comply with the provisions of this Agreement.

 

Section 2.3         Cooperation; Accountings. Each of the Creditors will, upon
the reasonable request of another Creditor or the Collateral Agent, from time to
time execute and deliver or cause to be executed and delivered such further
instruments, and do and cause to be done such further acts as may be necessary
or proper to carry out more effectively the provisions of this Agreement. Each
Creditor agrees to provide to each other Creditor and the Collateral Agent upon
reasonable request a statement of all payments received by it in respect of
Senior Secured Obligations. The Collateral Agent will from time to time provide
to each other Creditor upon reasonable request a statement of all (a) amounts
received pursuant to the Security Documents (including, without limitation, in
connection with the exercise of remedies thereunder) and (b) disbursements made
therewith.

 

Section 2.4         Termination of Credit Agreement, Note Agreement or
Additional Secured Facility. Upon payment in full of all Senior Secured
Obligations to any Creditor, and, in the case of the Credit Agreement and any
Additional Secured Facility which includes a revolving credit facility, the
termination of such Lender’s Revolving Commitment or such Additional Secured
Lender’s commitment to fund further borrowing requests by the Company or
otherwise extend credit under the applicable Additional Secured Facility, such
Creditor shall cease to be a party to this Agreement; provided, however, if all
or any part of any payments to such Creditor are thereafter invalidated or set
aside or required to be repaid to any Person in any Bankruptcy Proceeding or
pursuant to Section 5.11, then this Agreement in respect of such Creditor shall
be renewed as of such date and shall thereafter continue in full force and
effect to the extent of the Senior Secured Obligations so invalidated, set aside
or repaid.

 

Section 3 Appointment and Authorization of Collateral Agent; Appointment of
Co-Agents.

 

Section 3.1         Appointment and Authorization of Collateral Agent.

 

(a)  Each Creditor (or in the case of the Lenders, the Administrative Agent on
behalf of the Lenders) hereby designates and appoints Wells Fargo Bank, National
Association, as the Collateral Agent of such Creditor under this Agreement and
the Security Documents and Wells Fargo Bank, National Association, hereby
accepts such designation and appointment. The appointment made by this Section
3.1(a) is given for valuable consideration and coupled with an interest and is
irrevocable so long as the Senior Secured Obligations, or any part thereof,
shall remain unpaid or subject to disgorgement hereunder, any Lender is
obligated to fund any borrowing under the Loan Documents or any Additional
Secured Lender is obligated to fund any borrowing under any Additional Secured
Facility Documents.

 

- 10 -

 

 

(b)  Each Creditor (or in the case of the Lenders, the Administrative Agent on
behalf of the Lenders) has reviewed the Security Documents set forth on Exhibit
A and hereby irrevocably authorizes Wells Fargo Bank, National Association, as
the Collateral Agent for such Creditor to (1) execute and enter into each of the
Security Documents and all other instruments relating to said Security
Documents, (2) to take action on its behalf expressly permitted to perfect,
maintain and preserve the Liens granted thereby, (3) to execute instruments of
release or to take such other action necessary to release Liens upon the
Collateral to the extent authorized by this Agreement, the Security Documents or
the requisite Creditors and (4) to exercise such other powers and perform such
other duties as are, in each case, expressly delegated to the Collateral Agent
by the terms hereof.

 

(c)  Notwithstanding any provision to the contrary elsewhere in this Agreement
or the Security Documents, the Collateral Agent shall not have any duties or
responsibilities except those expressly set forth herein or therein or any trust
or fiduciary relationship with any Creditor, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any Security Document or otherwise exist against the
Collateral Agent.

 

Section 3.2         Appointment of Co-Agents. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Collateral Agent may
appoint a bank or trust company or one or more other Persons reasonably
acceptable to the Majority Creditors, either to act as co-agent or co-agents,
jointly with the Collateral Agent, or to act as separate agent or agents on
behalf of the Creditors with such power and authority as may be necessary for
the effectual operation of the provisions hereof and of the Security Documents
and as may be specified in the instrument of appointment.

 

Section 4Agency Provisions.

 

Section 4.1         Delegation of Duties. The Collateral Agent may exercise its
powers and execute any of its duties under this Agreement and the Security
Documents jointly with any co-trustee or co-trustees appointed pursuant to
Section 3.2 or by or through employees, agents, attorneys-in-fact or separate
trustees appointed pursuant to Section 3.2 and shall be entitled to take and to
rely on advice of counsel concerning all matters pertaining to such powers and
duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agents, attorneys-in-fact, co-trustees or separate trustees
selected by it with reasonable care. Subject to Section 3.2, the Collateral
Agent may utilize the services of such Persons as the Collateral Agent in its
sole discretion may determine, and all reasonable fees and expenses of such
Persons shall be borne by the Company.

 

Section 4.2         Exculpatory Provisions. Neither the Collateral Agent nor any
of the Collateral Agent’s officers, directors, employees, agents,
attorneys-in-fact, co-trustees, separate trustees or Affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any Security Document
(except for its or such Person’s own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Creditors for any recitals,
statements, representations or warranties made by the Company or any Creditor or
any officer of any thereof contained in any Security Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by, the Collateral Agent under or in connection with this Agreement,
any Security Document or any other document in any way connected therewith, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Security Documents or any Lien under the Security Documents
or the perfection or priority of any such Lien or for any failure of the Company
to perform its obligations thereunder. Neither the Collateral Agent nor any of
the Collateral Agent’s officers, directors, employees, agents,
attorneys-in-fact, co-trustees, separate trustees or Affiliates shall be under
any obligation to the Creditors to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, the
Security Documents.

 

- 11 -

 

 

Section 4.3         Reliance by Collateral Agent. The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing (in
electronic or physical form), resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company), independent accountants and other
experts selected by the Collateral Agent. The Collateral Agent shall be fully
justified in failing or refusing to take action under this Agreement or the
Security Documents unless it shall first receive such advice or concurrence of
the Majority Creditors as is contemplated by Section 5 hereof and it shall first
be indemnified to its reasonable satisfaction by the Creditors against any and
all liability and expense which may be incurred by it by reason of taking,
continuing to take or refraining from taking any such action. The Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Security Documents in accordance with the
provisions of Section 5.8 hereof and in accordance with written instructions of
the Majority Creditors pursuant to Section 5.3 hereof, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Creditors and all future holders of the Senior Secured Obligations.

 

Section 4.4         Knowledge or Notice of Default, Event of Default, Special
Event of Default or Acceleration. The Collateral Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, Event of Default,
Special Event of Default or the acceleration of any of the Senior Secured
Obligations unless the Collateral Agent has received written notice from the
Administrative Agent, a Creditor or the Company referring to the Credit
Agreement, the Note Agreement or the applicable Additional Secured Facility,
describing such Default, Event of Default, Special Event of Default or
acceleration, setting forth in reasonable detail the facts and circumstances
thereof and stating that the Collateral Agent may rely on such notice without
further inquiry.

 

Section 4.5         Non-Reliance on Collateral Agent and Other Creditors. Each
Creditor expressly acknowledges that except as expressly set forth in this
Agreement, neither the Collateral Agent nor any of the Collateral Agent’s
officers, directors, employees, agents, attorneys-in-fact, co-trustees, separate
trustees or Affiliates has made any representations or warranties to it and that
no act by the Collateral Agent hereinafter taken, including any review of the
affairs of the Company or any Subsidiary, shall be deemed to constitute any
representation or warranty by the Collateral Agent to any Creditor. Each
Creditor represents that it has, independently and without reliance upon the
Collateral Agent or any other Creditor, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and its Subsidiaries. Each
Creditor also represents that it will, independently and without reliance upon
the Collateral Agent or any other Creditor, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
the Security Documents and this Agreement and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Creditors by the Collateral Agent hereunder or under any
Security Document, the Collateral Agent shall not have any duty or
responsibility to provide the Creditors with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company or any Subsidiary which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents, attorneys-in-fact co-trustees, separate trustees or Affiliates.

 

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Section 4.6         Indemnification. Each Creditor shall indemnify the
Collateral Agent in its capacity as such (to the extent not reimbursed by the
Company or a Subsidiary of the Company and without limiting the obligation of
the Company or such Subsidiary to do so), ratably according to its respective
share of the sum of (a) the aggregate amount of Lender Exposure, (b) the
aggregate principal amount of indebtedness evidenced by the Senior Secured Notes
and (c) the aggregate amount of Additional Secured Facility Exposure, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following an Event of Default or the payment of the Senior Secured Obligations)
be imposed on, incurred by or asserted against the Collateral Agent arising out
of actions or omissions of the Collateral Agent specifically required or
permitted by this Agreement or by the exercise of remedies pursuant to written
instructions of the Majority Creditors pursuant to Section 5.3 hereof; provided
that no Creditor shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent due to the Collateral Agent’s
gross negligence or willful misconduct. The agreements in this Section 4.6 shall
survive the payment of the Senior Secured Obligations.

 

Section 4.7         Collateral Agent in Its Individual Capacity. Wells Fargo
Bank, National Association, and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company and
its Affiliates as though such Person was not the Collateral Agent hereunder.
With respect to any obligations owed to it under the Credit Agreement, Wells
Fargo Bank, National Association, shall have the same rights and powers under
this Agreement as any Creditor and may exercise the same as though it were not
the Collateral Agent, and the terms “Creditor” and “Creditors” shall include
Wells Fargo Bank, National Association, in its individual capacity.

 

Section 4.8         Successor Collateral Agent.

 

(a)          The Collateral Agent may resign at any time upon 30 days’ written
notice to the Creditors and the Company, may be removed at any time, with or
without cause, by the Majority Creditors by written notice delivered to the
Company, the Collateral Agent and the Creditors and, if the Collateral Agent is
a Lender or Additional Secured Lender, may be removed by the Required Holders at
any time that the Collateral Agent has failed to take any action that the
Collateral Agent is required to take hereunder after request therefor by the
Majority Creditors or the Collateral Agent has taken any action hereunder that
the Collateral Agent is not authorized to take hereunder or that violates the
terms hereof. After any resignation or removal hereunder of the Collateral
Agent, the provisions of this Section 4 shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it in its capacity as
Collateral Agent hereunder while it was the Collateral Agent under this
Agreement.

 

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(b)          Upon receiving written notice of any such resignation or removal, a
successor Collateral Agent shall be appointed by the Majority Creditors;
provided, however, that such successor Collateral Agent shall be (1) a bank or
trust company having a combined capital and surplus of at least $1,000,000,000,
subject to supervision or examination by a Federal or state lending authority
and (2) authorized under the laws of the jurisdiction of its incorporation or
organization to assume the functions of the Collateral Agent. If a successor
Collateral Agent shall not have been appointed pursuant to this Section 4.8(b)
within such 30 day period after the Collateral Agent’s resignation or upon
removal of the Collateral Agent, then any Creditor or the Collateral Agent
(unless the Collateral Agent is being removed) may petition a court of competent
jurisdiction for the appointment of a successor Collateral Agent. Such court
shall, after such notice as it may deem proper, appoint a successor Collateral
Agent meeting the qualifications specified in this Section 4.8(b). The Creditors
hereby consent to such petition and appointment so long as such criteria are
met. If a successor Collateral Agent shall not have been appointed pursuant to
this Section 4.8(b) within 360 days after the Collateral Agent’s resignation or
upon removal of the Collateral Agent, then the resignation or removal shall
nonetheless become effective and the Creditors acting collectively shall
thereafter have the rights and obligations of the Collateral Agent hereunder and
under the Security Documents until a successor Collateral Agent has been
appointed and accepted such appointment. The appointment of a successor
Collateral Agent pursuant to this Section 4.8(b) shall become effective upon the
acceptance of the appointment as Collateral Agent hereunder by a successor
Collateral Agent. Upon such effective appointment, the successor Collateral
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent.

 

(c)          The resignation or removal of a Collateral Agent shall take effect
on the day specified in the notice described in Section 4.8(a), unless
previously a successor Collateral Agent shall have been appointed and shall have
accepted such appointment, in which event such resignation or removal shall take
effect immediately upon the acceptance of such appointment by such successor
Collateral Agent, provided, however, that no such resignation or removal shall
be effective hereunder unless and until a successor Collateral Agent shall have
been appointed and shall have accepted such appointment.

 

(d)          Upon the effective appointment of a successor Collateral Agent, the
successor Collateral Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent and the
predecessor Collateral Agent hereby appoints the successor Collateral Agent the
attorney-in-fact of such predecessor Collateral Agent to accomplish the purposes
hereof, which appointment is coupled with an interest. Such appointment and
designation shall be full evidence of the right and authority to act as
Collateral Agent hereunder and all Collateral, power, trusts, duties, documents,
rights and authority of the previous Collateral Agent shall rest in the
successor, without any further deed or conveyance. The predecessor Collateral
Agent shall, nevertheless, on the written request of the Majority Creditors or
successor Collateral Agent, execute and deliver any other such instrument
transferring to such successor Collateral Agent all the Collateral, properties,
rights, power, trust, duties, authority and title of such predecessor. The
Company, to the extent requested by the Majority Creditors or the Collateral
Agent shall procure any and all documents, conveyances or instruments and
execute same, to the extent required, in order to reflect the transfer to the
successor Collateral Agent.

 

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Section 5Actions by the Collateral Agent.

 

Section 5.1         Duties and Obligations. The duties and obligations of the
Collateral Agent are only those set forth in this Agreement and in the Security
Documents.

 

Section 5.2         Notification of Default or Acceleration. If the Collateral
Agent has been notified in writing as provided in Section 4.4 that a Default or
an Event of Default has occurred or that any of the Senior Secured Obligations
have been accelerated, the Collateral Agent shall notify the Creditors and may
notify the Company of such determination. Any Creditor that has delivered notice
to the Company or the Administrative Agent pursuant to the Credit Agreement, the
Note Agreement or any Additional Secured Facility, as applicable, that a Default
or an Event of Default has occurred or that any of the Senior Secured
Obligations have been accelerated, or facts which indicate that a Default or an
Event of Default has occurred or the Senior Secured Obligations have been
accelerated, shall deliver to the Collateral Agent a written statement to such
effect. Failure to do so, however, does not constitute a waiver of any such
Default or Event of Default by the Creditors. Upon receipt of a notice described
herein or in Section 4.4 from a Creditor of the occurrence of a Default or an
Event of Default or that any of the Senior Secured Obligations have been
accelerated, the Collateral Agent shall promptly (and in any event no later than
three Business Days after receipt of such notice in the manner provided in
Section 7.8 hereof) issue its “Notice of Default” to all Creditors. The Notice
of Default may contain a recommendation of actions by the Creditors and/or
request instructions from the Creditors as to specific matters and shall specify
the date on which responses are due in order to be timely within Section 5.4
hereof.

 

Section 5.3         Actions of Collateral Agent; Exercise of Remedies. The
Collateral Agent shall take only such actions and exercise only such remedies
under the Security Documents as are approved in a written notice or notices
delivered to the Collateral Agent and signed by the Majority Creditors.

 

Section 5.4         Instructions from Creditors. If any Creditor does not
respond in a timely manner to any notice from the Collateral Agent or request
for instructions within the time period specified by the Collateral Agent in a
Notice of Default or request for instructions (which shall be a minimum of 10
Business Days), the Senior Secured Obligations held by such Creditor shall be
deemed to have voted against any action set forth in such notice or request for
instructions.

 

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Section 5.5         Protective Advances. If the Collateral Agent has asked the
Creditors for instruction to make a payment with regard to a Default or Event of
Default which the Collateral Agent, in good faith, believes to be required to
protect the interests of the Creditors in the Collateral and if the Majority
Creditors have not yet responded to such request, the Collateral Agent shall be
authorized to make such payment, but shall not be required to make such payment
and shall in no event have any liability for failure to make such payment.

 

Section 5.6         Changes to Security Documents. Any term of the Security
Documents may be amended, and the performance or observance by the parties to a
Security Document of any term of such Security Document may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the Collateral Agent only upon the written consent of the Majority Creditors;
provided that no amendment to the Security Documents which directly or
indirectly narrows the description of the Collateral or the obligations being
secured thereby, changes the priority of payments to the Creditors under the
Security Documents, changes any voting provisions contained therein or amends
the definition of “Majority Creditors” may be made without the written consent
of all of the Creditors.

 

Notwithstanding the foregoing, the Collateral Agent may, without the consent of
the Majority Creditors, amend the Security Documents (a) to add property
hereafter acquired by the Company intended to be subjected to the Security
Documents or to correct or amplify the description of any property subject to
the Security Documents and (b) to cure any ambiguity or cure, correct or
supplement any defective provisions of the Security Documents (so long as the
same shall in no respect be adverse to the interest of any Creditor).

 

Section 5.7         Release of Collateral. Unless a Default or an Event of
Default has occurred and is continuing, the Collateral Agent may, without the
approval of the Creditors as required by Section 5.3 hereof, release any
Collateral under the Security Documents which is permitted to be sold or
disposed of by the Company and its Subsidiaries, pursuant to each of the Credit
Agreement, the Note Agreement and each Additional Secured Facility and execute
and deliver such releases as may be necessary to terminate of record the
Collateral Agent’s security interest in such Collateral. In determining whether
any such release is permitted, the Collateral Agent may rely upon instructions
from the Required Lenders in respect of the Credit Agreement, the Required
Holders in respect of the Note Agreement and the applicable Required Additional
Secured Lenders in respect of the applicable Additional Secured Facility.

 

Section 5.8         Other Actions. The Collateral Agent shall have the right to
take such actions, or omit to take such actions, hereunder and under the
Security Documents not inconsistent with the written instructions of the
Majority Creditors delivered pursuant to Section 5.3 hereof or the terms of this
Agreement, including actions the Collateral Agent deems necessary or appropriate
to perfect or continue the perfection of the Liens on the Collateral for the
benefit of the Creditors. Except as otherwise provided by applicable law, the
Collateral Agent shall have no duty as to the collection or protection of the
Collateral or any income thereon, nor as to the preservation of rights against
prior parties, nor as to the preservation of rights pertaining to the Collateral
beyond the safe custody of any Collateral in the Collateral Agent’s actual
possession.

 

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Section 5.9         Cooperation. To the extent that the exercise of the rights,
powers and remedies of the Collateral Agent in accordance with this Agreement
requires that any action be taken by any Creditor, such Creditor shall take such
reasonable action and reasonably cooperate with the Collateral Agent to ensure
that the rights, powers and remedies of all Creditors are exercised in full.

 

Section 5.10         Distribution of Proceeds. All amounts owing with respect to
the Senior Secured Obligations shall be secured by the Collateral without
distinction as to whether some Senior Secured Obligations are then due and
payable and other Senior Secured Obligations are not then due and payable. Upon
any realization upon the Collateral and/or the receipt of any payments under any
Security Document or realization under any Secured Guaranty, the Creditors agree
that the proceeds thereof shall be applied (a) first, to the amounts owing to
the Collateral Agent by the Company or the Creditors pursuant to this Agreement
or the Security Documents, including, without limitation, payment of expenses
incurred by the Collateral Agent with respect to maintenance and protection of
the Collateral and of expenses incurred with respect to the sale of or
realization upon any of the Collateral or the perfection, enforcement or
protection of the rights of the Creditors (including reasonable attorneys’ fees
and expenses of every kind); (b) second, equally and ratably to the payment of
all amounts (including, without limitation, principal, interest, fees, expenses,
any make-whole amount or breakage amount) then due to the Creditors under the
Credit Agreement, the Note Agreement and each Additional Secured Facility which
payments shall be distributed ratably to each Lender, each Noteholder and each
Additional Secured Lender according to the aggregate amount of such amounts then
owing to each Creditor; and (c) third, the balance, if any, shall be returned to
the Company or such other Persons as are entitled thereto; provided that such
balance shall be held by the Collateral Agent if (1) all Senior Secured
Obligations have not been accelerated or are not yet due and payable or (2) an
indemnification claim by the Collateral Agent or any Creditor is pending under
any Loan Document, Senior Note Document or Additional Secured Facility Document.

 

Any payment pursuant to this Section 5.10 with respect to the outstanding amount
of any undrawn Letters of Credit shall be paid to the Collateral Agent for
deposit in an account (the “Letters of Credit Collateral Account”) to be held as
collateral for the Senior Secured Obligations and disposed of as provided
herein. On each date on which a payment is made to a beneficiary pursuant to a
draw on a Letter of Credit, the Collateral Agent shall distribute from the
Letters of Credit Collateral Account for application to the payment of the
reimbursement obligation due to the Lenders with respect to such draw an amount
equal to the product of (1) the amount then on deposit in the Letters of Credit
Collateral Account and (2) a fraction, the numerator of which is the amount of
such draw and the denominator of which is the outstanding amount of all undrawn
Letters of Credit immediately prior to such draw. On each date on which a
reduction in the outstanding amount of undrawn Letters of Credit occurs other
than on account of a payment made to a beneficiary pursuant to a draw on a
Letter of Credit, then the Collateral Agent shall distribute from the Letters of
Credit Collateral Account an amount equal to the product of (1) the amount then
on deposit in the Letters of Credit Collateral Account and (2) a fraction, the
numerator of which is the amount of such reduction in the outstanding amount of
undrawn Letters of Credit and the denominator of which is the outstanding amount
of all undrawn Letters of Credit immediately prior to such reduction, which
amount shall be distributed as provided in the first paragraph of this
Section 5.10. At such time as the outstanding amount of all undrawn Letters of
Credit is reduced to zero, any amount remaining in the Letters of Credit
Collateral Account, after the distribution therefrom as provided above, shall be
distributed as provided in the first paragraph of this Section 5.10.

 

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Section 5.11Senior Preferential Payments and Special Collateral Account.

 

(a)          The Collateral Agent shall give each Creditor a written notice (a
“Notice of Special Default”) promptly, but no later than, three Business Days
after being notified in writing by a Creditor that an Event of Default
constituting a Special Event of Default has occurred. After the receipt of such
Notice of Special Default, all Senior Preferential Payments other than those
payments received pursuant to subsection (b) of this Section 5.11 shall be
deposited into the Special Collateral Account. Each Creditor agrees that no
Default or Event of Default shall occur as a result of payments so made on a
timely basis to the Collateral Agent.

 

(b)          If (1) such Special Event of Default is waived by the Required
Lenders, the Required Holders or the applicable Required Additional Secured
Lenders, as applicable, and if no other Event of Default has occurred and is
continuing, (2) such Special Event of Default is cured by the Company or by any
amendment of the Credit Agreement, the Note Agreement or an Additional Secured
Facility, as applicable, and if no other Event of Default has occurred and is
continuing or (3) except with respect to a Special Event of Default resulting
from a Bankruptcy Proceeding, none of the Senior Secured Obligations have been
accelerated nor have the Majority Creditors instructed the Collateral Agent to
foreclose on the Collateral, seek the appointment of a receiver, commence
litigation against the Company or any of its Subsidiaries, liquidate the
Collateral, commence a Bankruptcy Proceeding against the Company or any of its
Subsidiaries, seize Collateral, or exercise other remedies of similar character
prior to the 180th day following such Special Event of Default, the Collateral
Agent thereupon shall return all amounts, together with their pro rata share of
interest earned thereon, held in the Special Collateral Account representing
payment of any Senior Secured Obligations to the Creditor initially entitled
thereto, and no payments thereafter received by a Creditor shall constitute a
Senior Preferential Payment by reason of such cured or waived Special Event of
Default. No payment returned to a Creditor for which such Creditor has been
obligated to make a deposit into the Special Collateral Account shall thereafter
ever be characterized as a Senior Preferential Payment. If the Special Event of
Default is an Event of Default under the terms of one or more of the Credit
Agreement, the Note Agreement or any Additional Secured Facility, the Collateral
Agent shall not return any payments to the Creditors pursuant to clause
(1) above unless such Special Event of Default shall have been waived under each
such agreement where such Special Event of Default is an Event of Default by the
Required Lenders, the Required Holders and/or the applicable Required Additional
Secured Lenders, as applicable.

 

(c)          Each Creditor agrees that upon its knowledge of the occurrence of a
Special Event of Default it shall (1) promptly notify the Collateral Agent of
the receipt of any Senior Preferential Payments, (2) hold such amounts in trust
for the Creditors and act as agent of the Creditors during the time any such
amounts are held by it and (3) deliver to the Collateral Agent such amounts for
deposit into the Special Collateral Account.

 

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(d)          If any of the Senior Secured Obligations have been accelerated or
the Majority Creditors have instructed the Collateral Agent to foreclose on the
Collateral, seek the appointment of a receiver, commence litigation against the
Company or any of its Subsidiaries, liquidate the Collateral, commence a
Bankruptcy Proceeding against the Company or any of its Subsidiaries, seize
Collateral, or exercise other remedies of similar character, then all funds,
together with interest earned thereon, held in the Special Collateral Account
and all subsequent Senior Preferential Payments shall be applied in accordance
with the provisions of Section 5.10 above.

 

Section 5.12         Authorized Investments. Any and all funds held by the
Collateral Agent in its capacity as Collateral Agent, whether pursuant to any
provision of any of the Security Documents or otherwise, shall to the extent
feasible within a reasonable time be invested by the Collateral Agent in Cash
Equivalent Investments. Any interest earned on such funds shall be disbursed to
the Creditors in accordance with Section 5.10 or Section 5.11, as applicable.
The Collateral Agent may hold any such funds in a common interest bearing
account. To the extent that the interest rate payable with respect to any such
account varies over time, the Collateral Agent may use an average interest rate
in making the interest allocations among the respective Creditors. The
Collateral Agent shall have no duty to place funds held pursuant to this
Section 5.12 in investments which provide a maximum return; provided, however,
that the Collateral Agent shall to the extent feasible invest funds in Cash
Equivalent Investments with reasonable promptness. In the absence of gross
negligence or willful misconduct, the Collateral Agent shall not be responsible
for any loss of any funds invested in accordance with this Section 5.12.

 

Section 5.13         Restoration of Obligations. For the purposes of determining
the amount of outstanding Senior Secured Obligations, if any Creditor is
required to deposit any Senior Preferential Payment in the Special Collateral
Account, then the obligations intended to be satisfied by such Senior
Preferential Payment shall be revived, as of the date of the deposit of such
amount with the Collateral Agent, in the amount of such Senior Preferential
Payment and such obligation shall continue in full force and effect (and bear
interest from such deposit date at the non-default rate provided in the
underlying document) as if such Creditor had not received such payment. All such
revived obligations shall be included as Senior Secured Obligations for purposes
of allocating any payments under Section 5.10 and for applying the definition of
Majority Creditors. If any such revived obligation shall not be allowed as a
claim under the Bankruptcy Code due to the fact that the Senior Preferential
Payment has in fact been made by the Company, the Creditors shall make such
other equitable arrangements for the purchase and sale of participations in the
Senior Secured Obligations and shall execute and deliver such agreements as are
necessary to evidence such arrangements, in each case in order to effectuate the
intent of this Section 5.13.

 

Section 5.14         Bankruptcy Preferences. If any payment to a Creditor is
subsequently invalidated, declared to be fraudulent or preferential or set aside
and is required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, and such
Creditor has previously made a deposit in respect of such payment into the
Special Collateral Account pursuant to Section 5.11, then the Collateral Agent
shall distribute to such Creditor proceeds from the Special Collateral Account
in an amount equal to such deposit or so much thereof as is affected by such
events together with any interest earned thereon (which amount of interest shall
not exceed the amount of interest, if any, such Creditor is then required to
repay) and if, due to previous disbursements to the Creditors pursuant to
Section 5.11(d), the proceeds in the Special Collateral Account are insufficient
for such purpose, then each other Creditor shall pay to such Creditor upon
demand an amount equal to a ratable portion of such disbursements of the deposit
and interest thereon which was distributed to each such Creditor according to
the aggregate amounts so distributed to each such Creditor.

 

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Section 6Bankruptcy Proceedings.

 

The following provisions shall apply during any Bankruptcy Proceeding of the
Company or any of its Affiliates:

 

(a)          The Collateral Agent shall represent all Creditors in connection
with all matters directly relating solely to the Collateral, including, without
limitation, use, sale or lease of Collateral, use of cash collateral, relief
from the automatic stay and adequate protection. The Collateral Agent shall act
on the instructions of the Majority Creditors; provided that no such vote by the
Majority Creditors shall treat the Lenders, the Noteholders or the Additional
Secured Lenders differently with respect to rights in the Collateral from any
other class of Creditors.

 

(b)          Each Creditor shall be free to act independently on any issue not
directly relating solely to the Collateral. Each Creditor shall give prior
notice to the Collateral Agent of any action hereunder to the extent that such
notice is possible. If such prior notice is not given, such Creditor shall give
prompt notice following any action taken hereunder.

 

(c)          Any proceeds of the Collateral received by any Creditor as a result
of, or during, any Bankruptcy Proceeding will be delivered promptly to the
Collateral Agent for distribution in accordance with Section 5.10.

 

Section 7 Miscellaneous.

 

Section 7.1         Creditors; Other Collateral. The Creditors agree that all of
the provisions of this Agreement shall apply to any and all properties, assets
and rights of the Company and its Subsidiaries, in which the Collateral Agent or
any Creditor at any time acquires a security interest or Lien pursuant to the
Security Documents, the Loan Documents, the Senior Note Documents or any
Additional Secured Facility Documents, including, without limitation, real
property or rights in, on or over real property, notwithstanding any provision
to the contrary in any mortgage, leasehold mortgage or other document purporting
to grant or perfect any Lien in favor of the Creditors or any of them or the
Collateral Agent for the benefit of the Creditors.

 

Section 7.2         Marshalling. The Collateral Agent shall not be required to
marshall any present or future security for (including, without limitation, the
Collateral), or guaranties of, the Senior Secured Obligations or any of them, or
to resort to such security or guaranties in any particular order; and all of
each of such Person’s rights in respect of such security and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that they lawfully may, the Creditors hereby agree that they will not
invoke any law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Creditors’ rights under the Security
Documents or under any other instrument evidencing any of the Senior Secured
Obligations or under which any of the Senior Secured Obligations is outstanding
or by which any of the Senior Secured Obligations is secured or guaranteed.

 

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Section 7.3         Consents, Amendments, Waivers. All amendments, waivers or
consents of any provision of this Agreement shall be effective only if the same
shall be in writing and signed by the Majority Creditors and the Collateral
Agent; provided, however, that no such amendment, waiver or consent to Section
2.2 shall be effective without the written consent of any Creditor adversely
affected thereby; provided, further, that no such amendment, waiver or consent
to Sections 2.1, 4.6, 4.8, 5.3, 5.6, 5.7, 5.10, 5.11, 6 or this Section 7.3 or
to the definition of “Additional Secured Facility Exposure,” “Additional Secured
Lender,” “Additional Secured Debt,” “Collateral,” “Lender Exposure,” “Majority
Creditors,” “Senior Preferential Payment,” “Senior Secured Obligations” or
“Special Event of Default” or any defined term as used in such sections or
definitions shall be effective without the written consent of all of the
Creditors (other than Cash Management Providers and Secured Hedge Providers).

 

Section 7.4         Governing Law. This Agreement shall be deemed to be a
contract under seal and shall for all purposes be governed by and construed in
accordance with the laws of the State of New York (without regard to conflicts
of law provisions thereof other than Section 5-1401 of the New York General
Obligations Law).

 

Section 7.5         Parties in Interest.

 

(a)          All terms of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, including, without limitation, any future holder of the Senior
Secured Obligations; provided that (1) no Creditor (other than a Lender) may
assign or transfer its rights hereunder or under the Security Documents (and no
successor Administrative Agent which is appointed pursuant to the Credit
Agreement shall succeed to any rights hereunder or under the Security Documents)
without such assignees, transferees or successor delivering an executed Joinder,
Additional Secured Lender Joinder or Administrative Agent Joinder, as
applicable, to the Collateral Agent pursuant to which such assignee, transferee
or successor agrees to be bound by the terms of this Agreement as though named
herein and (2) no Lender may assign or transfer its rights hereunder or under
the Security Documents unless (i) such assignees or transferees are party to the
Credit Agreement and (ii) the Administrative Agent is bound by the provisions of
this Agreement (whether as a party or by Administrative Agent Joinder).

 

(b)          The Collateral Agent has no duty to acknowledge, and shall be
deemed to not have any knowledge of, any notice from or for the benefit of any
Creditor or Person claiming to be a Creditor, or to provide any notice or other
communication to any Creditor, unless such Creditor or Person claiming to be a
Creditor has complied with Section 7.5(a).

 

Section 7.6         Counterparts. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.

 

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Section 7.7         Termination. Upon payment in full of the Senior Secured
Obligations in accordance with their respective terms and the termination of the
Revolving Commitments and any undrawn commitments under an Additional Secured
Facility, this Agreement shall terminate except for those provisions hereof that
by their express terms shall survive the termination of this Agreement.

 

Section 7.8         Notices. Except as otherwise expressly provided herein, all
notices, consents and waivers and other communications made or required to be
given pursuant to this Agreement shall be in writing and shall be delivered by
hand, mailed by registered or certified mail or prepaid overnight air courier,
or by facsimile communications, addressed as follows:

 

If to the Collateral Agent, at: Wells Fargo Bank, National Association,   as
Collateral Agent   1525 West W.T. Harris Boulevard   Mail Code: D1109-019  
Charlotte, NC 28262   Attn: Syndication Agency Services   Telephone:
704-590-2706   Facsimile: 704-590-2790   Email:
agencyservices.requests@wellsfargo.com     If to any Creditor, at: Such address
as set forth on Exhibit B hereto     If to the Company, at: The Gas Company, LLC
  745 Fort Street   Suite 1800   Honolulu, HI 96813   United States of America  
Attention: Jeffrey M. Kissel,   President and Chief Executive Officer  
Telephone No.: (808) 535-5908   Facsimile No.: (808) 535-5943   E-mail:
JKissel@hawaiigas.com     With a copy to: The Gas Company, LLC   745 Fort Street
  Suite 1800   Honolulu, HI 96813   United States of America   Attention: Nathan
C. Nelson, General Counsel   Telephone No.: (808) 535-5912   Facsimile No.:
(808) 535-5943   E-mail: NNelson@hawaiigas.com

 

- 22 -

 

 

or at such other address for notice as the Collateral Agent or such Creditor
shall last have furnished in writing to the Person giving the notice, provided
that a notice by overnight air courier shall only be effective if delivered at a
street address designated for such purpose and a notice by facsimile
communication shall only be effective if made by confirmed transmission at a
telephone number designated for such purpose.

 

Section 7.9         Senior Secured Obligations Held by Company. Solely for the
purpose of (a) determining whether the holders of the requisite percentage of
the aggregate principal amount of Senior Secured Obligations then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement, or have directed the taking of any action provided herein to be taken
upon the direction of the holders of a specified percentage of the aggregate
principal amount of Senior Secured Obligations then outstanding or (b)
determining Majority Creditors, Senior Secured Obligations directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding and not to represent any Revolving Availability or Additional
Secured Facility Exposure.

 

*          *           *

 

- 23 -

 

 

In witness whereof, the parties hereto have caused these presents to be duly
executed as an instrument under seal by their authorized representatives as of
the date first written above.

 

  Wells Fargo Bank, National Association,
as Collateral Agent       By:     Name:   Title:

  

 

 

 

  Wells Fargo Bank, National Association, as Administrative Agent       By:     
  Name:      Title:        _____________, as a Noteholder       By:       Name: 
    Title:

 

Signature Page to Intercreditor and Collateral Agency Agreement

 

 

 

  

The undersigned hereby acknowledges (a) the terms of the foregoing Agreement,
(b) that the foregoing Agreement is for the sole benefit of the Creditors and
that it has no rights or benefits under such Agreement, (c) that the foregoing
Agreement is for the purpose of defining the rights, duties authority and
responsibilities of the Collateral Agent and the relationship among the
Creditors regarding their pari passu interest in the Collateral and that nothing
therein shall impair, as between the Company and any Creditor, the obligations
of the Company under the Loan Documents, the Senior Note Documents or any
Additional Secured Facility Documents and (d) that the provisions of the
foregoing Agreement may be waived, amended or modified without its consent.

 

  The Gas Company, LLC         By:       Name:        Title:   

 

Signature Page to Intercreditor and Collateral Agency Agreement

 

 

 

 

Security Documents

 

Security Agreement dated as of August 8, 2012 entered into between the Company
and the Collateral Agent and substantially in the form attached hereto as
Exhibit 4, as such agreement may be amended, supplemented, restated or otherwise
modified from time to time.

 

Each other “Security Document” as defined in the Credit Agreement.

 

Each other “Security Document” as defined in the Note Agreement.

  

Exhibit A

(to Intercreditor and Collateral Agency Agreement)

 

 

 

 

Addresses of Creditors

 

Lenders:

 

Administrative Agent:

 

Wells Fargo Bank, National Association

1525 West W.T. Harris Boulevard

Mail Code: D1109-019

Charlotte, NC 28262

Attn: Syndication Agency Services

Telephone: 704-590-2706

Facsimile: 704-590-2790

Email:  agencyservices.requests@wellsfargo.com

 

Noteholders:

 

Noteholder Notice Address     Liberty National Life Insurance Company Prudential
Private Placement Investors, L.P.   c/o Prudential Capital Group   2200 Ross
Avenue   Suite 4200E   Dallas, TX 75201       Attention:  Managing Director,
Energy Finance Group – Oil & Gas     Globe Life and Accident Insurance Company
Prudential Private Placement Investors, L.P.   c/o Prudential Capital Group  
2200 Ross Avenue   Suite 4200E   Dallas, TX 75201       Attention:  Managing
Director, Energy Finance Group – Oil & Gas

 

Exhibit B

(to Intercreditor and Collateral Agency Agreement)

 

 

 

 

Farmers New World Life Insurance Company Prudential Private Placement Investors,
L.P.   c/o Prudential Capital Group   2200 Ross Avenue   Suite 4200E   Dallas,
TX 75201       Attention:  Managing Director, Energy Finance Group – Oil & Gas  
  The Prudential Insurance Company of America The Prudential Insurance Company
of America   c/o Prudential Capital Group   2200 Ross Avenue   Suite 4200E  
Dallas, TX 75201       Attention:  Managing Director, Energy Finance Group – Oil
& Gas     Prudential Arizona Reinsurance Captive Company Prudential Arizona
Reinsurance Captive Company   c/o Prudential Capital Group   2200 Ross Avenue  
Suite 4200E   Dallas, TX 75201       Attention:  Managing Director, Energy
Finance Group – Oil & Gas     Prudential Arizona Reinsurance Universal Company
Prudential Arizona Reinsurance Universal Company   c/o Prudential Capital Group
  2200 Ross Avenue   Suite 4200E   Dallas, TX 75201       Attention:  Managing
Director, Energy Finance Group – Oil & Gas     Prudential Annuities Life
Assurance Corporation

Prudential Annuities Life Assurance Corporation

c/o Prudential Capital Group

2200 Ross Avenue

Suite 4200E

Dallas, TX 75201

 

Attention: Managing Director, Energy Finance Group – Oil & Gas

    United of Omaha Life Insurance Company

4 - Investment Accounting

United of Omaha Life Insurance Company

Mutual of Omaha Plaza

Omaha, NE 68175-1011

    Connecticut General Life Insurance Company c/o Cigna Investments, Inc.
Attention:  Fixed Income Securities
Wilde Building, A5PRI
900 Cottage Grove Rd
Bloomfield, Connecticut 06002
E-Mail:  CIMFixedIncomeSecurities@Cigna.com

 

B-2

 

 

Life Insurance Company of North America c/o Cigna Investments, Inc.  
Attention:  Fixed Income Securities   Wilde Building, A5PRI   900 Cottage Grove
Rd   Bloomfield, Connecticut 06002   E-Mail:  CIMFixedIncomeSecurities@Cigna.com
    CIGNA Health and Life Insurance Company c/o Cigna Investments, Inc.  
Attention:  Fixed Income Securities   Wilde Building, A5PRI   900 Cottage Grove
Rd   Bloomfield, Connecticut 06002   E-Mail:  CIMFixedIncomeSecurities@Cigna.com

  

B-3

 

  

Joinder to Intercreditor Agreement

 

Wells Fargo Bank, National Association, as Collateral Agent

__________

__________, __________ ___

Attention: __________

Telecopy: (___) ___-____

Telephone: (___) ___-____

 

Reference is made to the Intercreditor and Collateral Agency Agreement dated as
of August 8, 2012 (as amended or otherwise modified from time to time, the
“Intercreditor Agreement”; capitalized terms not otherwise defined herein being
used as defined in the Intercreditor Agreement) among Wells Fargo Bank, National
Association, as Collateral Agent, the Administrative Agent, the Noteholders
party thereto and certain other creditors of the Company, relating to
indebtedness of The Gas Company, LLC, a Hawaii limited liability company.

 

By executing and delivering this Joinder, the undersigned holder of Senior
Secured Obligations issued pursuant to the Note Agreement agrees, on its own
behalf, to be bound by all of the terms and provisions of the Intercreditor
Agreement as a Noteholder. The address set forth under the signature of the
undersigned constitutes its address for the purposes of Section 7.8 of the
Intercreditor Agreement.

 

Dated as of:

 

  _____________, as a Noteholder       By:        Name:      Title:      
[Insert address for notices]

 

 

 

Exhibit C

(to Intercreditor and Collateral Agency Agreement)

  

 

 

 

Joinder to Intercreditor Agreement (Additional Secured Lender)

 

Wells Fargo Bank, National Association, as Collateral Agent

__________

__________, __________ ___

Attention: __________

Telecopy: (___) ___-____

Telephone: (___) ___-____

 

Reference is made to the Intercreditor and Collateral Agency Agreement dated as
of August 8, 2012 (as amended or otherwise modified from time to time, the
“Intercreditor Agreement”; capitalized terms not otherwise defined herein being
used as defined in the Intercreditor Agreement) among Wells Fargo Bank, National
Association, as Collateral Agent, the Administrative Agent, the Noteholders
party thereto and certain other creditors of the Company, relating to
indebtedness of The Gas Company, LLC, a Hawaii limited liability company.

 

We acknowledge that we have received and reviewed a copy of the Intercreditor
Agreement. By executing and delivering this Joinder, the undersigned holder of
Senior Secured Obligations issued pursuant to [describe Additional Secured
Facility] agrees, on its own behalf, to be bound by all of the terms and
provisions of the Intercreditor Agreement as an Additional Secured Lender.

 

The Additional Secured Facility Documents relating to the applicable Additional
Secured Facility are described on Schedule 1 attached hereto.

 

The address set forth under the signature of the undersigned constitutes its
address for the purposes of Section 7.8 of the Intercreditor Agreement.

 

Dated as of:

 

  _____________, as an Additional Secured Lender       By:        Name:   
  Title:       [Insert address for notices]

  

Exhibit D

(to Intercreditor and Collateral Agency Agreement)

 

 

 

 

EXECUTION VERSION

 

Joinder to Intercreditor Agreement (Administrative Agent)

 

Wells Fargo Bank, National Association, as Collateral Agent

__________

__________, __________ ___

Attention: __________

Telecopy: (___) ___-____

Telephone: (___) ___-____

 

Reference is made to the Intercreditor and Collateral Agency Agreement dated as
of August 8, 2012 (as amended or otherwise modified from time to time, the
“Intercreditor Agreement”; capitalized terms not otherwise defined herein being
used as defined in the Intercreditor Agreement) among Wells Fargo Bank, National
Association, as Collateral Agent, the Administrative Agent, the Noteholders
party thereto and certain other creditors of the Company, relating to
indebtedness of The Gas Company, LLC, a Hawaii limited liability company.

 

By executing and delivering this Joinder, the undersigned successor
Administrative Agent agrees, on its own behalf, to be bound by all of the terms
and provisions of the Intercreditor Agreement as Administrative Agent. The
address set forth under the signature of the undersigned constitutes its address
for the purposes of Section 7.8 of the Intercreditor Agreement.

 

Dated as of:

 

  _____________, as successor Administrative Agent       By:        Name:   
  Title:       [Insert address for notices]

 

Exhibit E

(to Intercreditor and Collateral Agency Agreement)

 

 

 

 

 

 

SECURITY AGREEMENT

 

Dated as of August 8, 2012

 

between

 

THE GAS COMPANY, LLC

 

as Grantor

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Collateral Agent, on behalf of the
Secured Parties

 

 

 

 

 

Exhibit 4

(to Note Purchase Agreement) 

7

 

 

Table of Contents

 

    Page       ARTICLE I DEFINITIONS 1       Section 1.01 Certain Defined Terms
1       ARTICLE II THE COLLATERAL 9       Section 2.01 Collateral 9      
Section 2.02 Grant to Collateral Agent 10       Section 2.03 Intellectual
Property 11       Section 2.04 Perfection 11       Section 2.05 Instruments 11  
    Section 2.06 Use of Collateral 12       Section 2.07 Rights and Obligations
12       Section 2.08  Termination 12       ARTICLE III REPRESENTATIONS AND
WARRANTIES 13       Section 3.01 Name; Jurisdiction of Organization; Chief
Executive Office 13       Section 3.02 Title 13       Section 3.03 Perfection
and Priority 13       Section 3.04 Intellectual Property 14       Section 3.05
Investment Property 14       Section 3.06 Deposit Accounts; Securities Accounts
14       Section 3.07 Commercial Tort Claims 15       Section 3.08 Valid
Security Interests 15       ARTICLE IV COVENANTS 15       Section 4.01 Generally
15       Section 4.02 Preservation and Protection of Security Interests 16      
Section 4.03 Maintenance of Perfected Security Interest; Further Documentation
17       Section 4.04 Changes in Location, Name, Etc 17       Section 4.05 Taxes
18       Section 4.06 Further Assurances 18       Section 4.07 Insurance 18    
  ARTICLE V REMEDIES 19

 

i

 

 

Section 5.01 Events of Default, Etc 19       Section 5.02 Private Sale 20      
Section 5.03 Application of Proceeds 21       Section 5.04 Deficiency 21      
Section 5.05 Assignment of Governmental Approvals 21       Section 5.06 Security
Interest Absolute 21       ARTICLE VI THE COLLATERAL AGENT 22       Section 6.01
Appointment as Attorney-in-Fact 22       Section 6.02 Performance in Lieu of
Grantor 23       Section 6.03 Duty of the Collateral Agent 23       Section 6.04
Authority of the Collateral Agent 23       Section 6.05 Role of the Collateral
Agent 24       ARTICLE VII MISCELLANEOUS PROVISIONS 24       Section 7.01
Indemnification 24       Section 7.02 Amendments 24       Section 7.03 Waivers
24       Section 7.04 Notices 25       Section 7.05 Successors and Assigns 25  
    Section 7.06 Counterparts 26       Section 7.07 Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial 26       Section 7.08 Captions 26      
Section 7.09 Severability 26       Section 7.10 Entire Agreement 26      
Section 7.11  Expenses 26

  

Schedule 1 Organization and Chief Executive Office of Grantor Schedule 2
Assigned Project Documents Schedule 3 Government Approvals Schedule 4 Material
Intellectual Property Schedule 5 Deposit Accounts and Securities Accounts
Schedule 6 Commercial Tort Claims Schedule 7 Investment Property

 

ii

 

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”), dated as of August 8, 2012 is made
by and between THE GAS COMPANY, LLC a Hawaii limited liability company (the
“Grantor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
collateral agent for the benefit of and representative of the Secured Parties
(in such capacity, herein called the “Collateral Agent”).

 

RECITALS

 

A.           Pursuant to the Credit Agreement, dated as of the date hereof (the
“Credit Agreement”), by and among the Grantor, the Lenders party thereto and
Wells Fargo Bank, National Association, as the Administrative Agent (the
“Administrative Agent”), the lenders party from time to time thereto have agreed
to make extensions of credit to the Grantor on the terms and subject to the
conditions set forth therein.

 

B.           It is a requirement under the Credit Agreement and a condition
precedent to the making of the loans thereunder that the Grantor shall have
executed and delivered this Agreement to the Collateral Agent.

 

C.           Pursuant to the Note Purchase Agreement, dated as of the date
hereof (the “Note Purchase Agreement”), by and among the Grantor and each of the
purchasers listed on Schedule A thereto (collectively, the “Noteholders”), the
Noteholders have agreed to purchase $100,000,000 aggregate principal amount of
4.22% Senior Secured Notes due August 8, 2022 of the Grantor (the “Notes”).

 

D.           It is a requirement under the Note Purchase Agreement and a
condition precedent to the issuance and sale of the Notes thereunder that the
Grantor shall have executed and delivered this Agreement to the Collateral
Agent.

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Grantor hereby agrees with the Collateral Agent as follows:

  

ARTICLE I

 

DEFINITIONS

 

Section 1.01 Certain Defined Terms.

 

(a) In addition to the terms defined in the preamble and the recitals, the
following terms used herein shall have the respective meanings set forth below:

 

“Accounts” has the meaning assigned to the term “accounts” in the Uniform
Commercial Code.

 

“Additional Secured Debt” shall mean indebtedness of the Grantor so long as (a)
such indebtedness is permitted by each of (i) the Credit Agreement, (ii) the
Note Purchase Agreement and (iii) each Additional Secured Facility then
outstanding, (b) immediately before and after giving effect thereto, no Event of
Default shall have occurred which is continuing or be caused thereby and the
Grantor shall be in pro forma compliance with the financial covenants contained
in each of the Credit Agreement and the Note Purchase Agreement and (c) the
holders of such indebtedness shall have become a party to the Intercreditor
Agreement pursuant to the terms thereof.

 

1

 

 

“Additional Secured Facility” shall mean any credit agreement or note agreement
pursuant to which the Grantor incurs Additional Secured Debt.

 

“Additional Secured Facility Documents” shall mean each Additional Secured
Facility, any guaranty relating thereto and all other agreements, documents,
certificates and instruments relating to, arising out of, or in any way
connected therewith or any of the transactions contemplated thereby (including,
without limitation, the Security Documents).

 

“Additional Secured Lender” shall mean the financial institutions providing
Additional Secured Debt pursuant to an Additional Secured Facility, and their
successors and permitted assigns.

 

“Additional Secured Obligations” shall mean the obligations of the Grantor under
any Additional Secured Facility and the other Additional Secured Facility
Documents.

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such first Person or any of its Subsidiaries.
The term “control” means (a) the power to vote 10% or more of the securities or
other equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise. The terms “controlling” and
“controlled” have meanings correlative thereto.

 

“Assigned Agreements” has the meaning assigned to such term in Section 2.01
hereof.

 

“Bank” has the meaning assigned to the term “bank” in the Uniform Commercial
Code.

 

“Capital Stock” means (a) in the case of a corporation, capital stock, (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests, (e) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (f) any and all warrants, rights or options to
purchase any of the foregoing.

 

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender, an Affiliate of a Lender, the Administrative
Agent or an Affiliate of the Administrative Agent, in its capacity as a party to
such Cash Management Agreement.

 

2

 

 

“Chattel Paper” has the meaning assigned to the term “chattel paper” in the
Uniform Commercial Code.

 

“Collateral” has the meaning assigned to that term in Section 2.01 hereof.

 

“Commercial Tort Claim” has the meaning assigned to the term “commercial tort
claim” in the Uniform Commercial Code.

 

“Control” has, with respect to Deposit Accounts, Investment Property, Electronic
Chattel Paper and Letter-of-Credit Rights, the respective meaning assigned to
the term “control” in the Uniform Commercial Code.

 

“Copyright Collateral” shall mean all Copyrights, whether now owned or hereafter
acquired by Grantor.

 

“Copyrights” shall mean, collectively, (a) all copyrights, copyright
registrations and applications for copyright registrations, (b) all renewals and
extensions of all copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or hereafter coming into
existence, (i) to all income, royalties, damages and other payments (including
in respect of all past, present or future infringements) now or hereafter due or
payable under or with respect to any of the foregoing, (ii) to sue for all past,
present and future infringements with respect to any of the foregoing and (iii)
otherwise accruing under or pertaining to any of the foregoing throughout the
world.

 

“Creditor” shall mean any one of the Administrative Agent, the Lenders, the
Noteholders, any Additional Secured Lender and any successors and permitted
assigns to the interests in the Secured Obligations owing to any such Persons.

 

“Credit Party” shall mean the Grantor and each Subsidiary party to a Secured
Guaranty.

 

“Deposit Accounts” has the meaning assigned to the term “deposit accounts” in
the Uniform Commercial Code.

 

“Documents” has the meaning assigned to the term “documents” in the Uniform
Commercial Code.

 

“Electronic Chattel Paper” has the meaning assigned to the term “electronic
chattel paper” in the Uniform Commercial Code.

 

“Equipment” has the meaning assigned to the term “equipment” in the Uniform
Commercial Code.

 

“Event of Default” shall mean any event or occurrence which would constitute an
“Event of Default” under the terms of the Credit Agreement, the Note Purchase
Agreement or any Additional Secured Facility or an event of default under the
terms of any Security Document.

 

“Finance Documents” shall mean, collectively, the Loan Documents, the Senior
Note Documents and the Additional Secured Facility Documents.

 

3

 

 

“Fixtures” has the meaning assigned to the term “fixtures” in the Uniform
Commercial Code.

 

“General Intangibles” has the meaning assigned to the term “general intangibles”
in the Uniform Commercial Code.

 

“Goods” has the meaning assigned to the term “goods” in the Uniform Commercial
Code.

 

“Governmental Approvals” shall mean all authorizations, consents, approvals,
permits, licenses and exemptions of, registrations with or by, grants by, and
filings with, and reports to, all Governmental Authorities.

 

“Governmental Authorities” shall mean the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

 

“Grantor” shall have the meaning set forth in the preamble.

 

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, all as amended,
restated, supplemented or otherwise modified from time to time.

 

“Hedge Bank” means any Person that, at the time it enters into a Hedge Agreement
permitted under Article VIII of the Credit Agreement, is a Lender, an Affiliate
of a Lender, the Administrative Agent or an Affiliate of the Administrative
Agent, in its capacity as a party to such Hedge Agreement.

 

“Indemnified Liabilities” has the meaning set forth in Section 7.01 hereof.

 

“Instruments” has the meaning assigned to the term “instruments” in the Uniform
Commercial Code.

 

4

 

 

 

“Intellectual Property” shall mean all Copyright Collateral, all Patent
Collateral and all Trademark Collateral, together with (a) all inventions,
processes, production methods, proprietary information, know-how and trade
secrets; (b) all licenses or user or other agreements granted to Grantor with
respect to any of the foregoing, in each case whether now or hereafter owned or
used, (c) all information, customer lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and automatic
machinery software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such information,
knowledge, records or data; (f) all Governmental Approvals now held or hereafter
obtained by Grantor in respect of any of the foregoing; and (g) all causes of
action, claims and warranties now owned or hereafter acquired by Grantor in
respect of any of the foregoing. It is understood that Intellectual Property
shall include all of the foregoing owned or acquired by Grantor on a worldwide
basis.

 

“Intercompany Loan Agreement” means the Credit Agreement dated as of March 31,
2008 between the Sponsor and the Grantor as in effect on the date hereof.

 

“Intercompany Note” means any promissory note evidencing loans made by the
Grantor or any or its Subsidiaries to HGC or any of its Subsidiaries.

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement dated as of the
date hereof, by and among the Collateral Agent, the Administrative Agent, the
Noteholders and each other Creditor from time to time party thereto.

 

“Inventory” has the meaning assigned to the term “inventory” in the Uniform
Commercial Code.

 

“Investment Property” has the meaning assigned to the term “investment property”
in the Uniform Commercial Code.

 

“Issuers” means the collective reference to each issuer of any Investment
Property.

 

“Letter-of-Credit Rights” has the meaning assigned to the term “letter-of-credit
rights” in the Uniform Commercial Code.

 

“Lien” shall mean, with respect to any asset, any mortgage, leasehold mortgage,
lien, pledge, charge, security interest, hypothecation or encumbrance of any
kind in respect of such asset.

 

“Loan Documents” shall mean the Credit Agreement, any guaranty relating thereto
and all other agreements, documents, certificates and instruments relating to,
arising out of, or in any way connected therewith or any of the transactions
contemplated thereby (including, without limitation, the Security Documents),
all as may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Material Contract” shall mean (a) any contract or other agreement, written or
oral, of any Credit Party or any of its Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $5,000,000 per
annum or (b) any other contract or agreement, written or oral, of any Credit
Party or any of its Subsidiaries the failure to comply with which could
reasonably be expected to have a Material Adverse Effect (as defined in any
Finance Document).

 

5

 

 

“Material Intellectual Property” shall mean Intellectual Property owned by or
licensed to the Grantor and material to the Grantor’s business as conducted on
the date hereof.

 

“Patent Collateral” shall mean all Patents, whether now owned or hereafter
acquired by Grantor.

 

“Patents” shall mean, collectively, (a) all patents and patent applications, (b)
all reissues, divisions, continuations, renewals, extensions and
continuations-in-part of all patents or patent applications and (c) all rights,
now existing or hereafter coming into existence, (i) to all income, royalties,
damages, and other payments (including in respect of all past, present and
future infringements) now or hereafter due or payable under or with respect to
any of the foregoing, (ii) to sue for all past, present and future infringements
with respect to any of the foregoing and (iii) otherwise accruing under or
pertaining to any of the foregoing throughout the world, including all
inventions and improvements described or discussed in all such patents and
patent applications.

 

“Payment Intangible” has the meaning assigned to the term “payment intangible”
in the Uniform Commercial Code.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority
or other entity.

 

“Pledged Notes” shall mean all promissory notes listed on Schedule 7, all
Intercompany Notes at any time issued to the Grantor and all other promissory
notes issued to or held by the Grantor (other than promissory notes issued in
connection with extensions of trade credit by the Grantor in the ordinary course
of business).

 

“Pledged Stock” shall mean the shares of Capital Stock listed on Schedule 7,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, the Grantor while this Agreement is in
effect.

 

“Proceeds” has the meaning assigned to the term “proceeds” in the Uniform
Commercial Code.

 

“Revolving Obligations” shall mean the obligations of the Grantor under the
Credit Agreement and the other Loan Documents.

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Credit Party and any Cash Management Bank.

 

“Secured Hedge Agreement” means any Hedge Agreement permitted under Article VIII
of the Credit Agreement, in each case that is entered into by and between any
Credit Party and any Hedge Bank.

 

“Secured Guaranty” shall mean any guaranty of any Secured Obligation to the
extent that recoveries thereunder are subject to the Intercreditor Agreement
(including, without limitation, Section 5.10 thereof).

 

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“Secured Obligations” shall mean, collectively, (a) the indebtedness,
obligations and liabilities of the Grantor and its Subsidiaries to the Lenders,
the Issuing Lender and the Administrative Agent under the Loan Documents
(including, without limitation, the Revolving Obligations), (b) the
indebtedness, obligations and liabilities of the Grantor and its Subsidiaries
under any Secured Hedge Agreement and any Secured Cash Management Agreement, (c)
the indebtedness, obligations and liabilities of the Grantor and its
Subsidiaries to the Noteholders under the Senior Note Documents (including,
without limitation, the Senior Note Obligations), (d) the indebtedness,
obligations and liabilities of the Grantor and its Subsidiaries to the
Additional Secured Lenders under the Additional Secured Facilities (including,
without limitation, the Additional Secured Obligations), (e) the obligations and
liabilities of the Grantor and its Subsidiaries to the Collateral Agent under
this Agreement, the Loan Documents, the Senior Note Documents, any Additional
Secured Facility Documents and the Security Documents, in each case whether now
existing or hereafter arising, joint or several, direct or indirect, absolute or
contingent, due or to become due, matured or unmatured, liquidated or
unliquidated, arising by contract, operation of law or otherwise, and all
obligations of the Grantor and its Subsidiaries, to the Secured Parties, arising
out of any extension, refinancing or refunding of any of the foregoing
obligations and (f) the payment by the Grantor to the Collateral Agent of all
sums expended or advanced by the Collateral Agent pursuant to any provision of
this Agreement or any such other Security Document.

 

“Secured Parties” shall mean each Creditor that is a party to (or otherwise
subject to the provisions of) the Intercreditor Agreement.

 

“Security Documents” shall mean this Agreement, the Mortgages, the Intercreditor
Agreement and all other security documents hereafter delivered to the Collateral
Agent granting a Lien on any property of any Person to secure the Secured
Obligations.

 

“Senior Note Documents” shall mean the Note Purchase Agreement, the Notes, any
guaranty relating thereto and all other agreements, documents, certificates and
instruments relating to, arising out of, or in any way connected therewith or
any of the transactions contemplated thereby (including, without limitation, the
Security Documents).

 

“Senior Note Obligations” shall mean the obligations of the Grantor under the
Note Purchase Agreement, the Notes and the other Senior Note Documents.

 

“Securities Accounts” has the meaning assigned to the term “securities accounts”
in the Uniform Commercial Code.

 

“Securities Intermediary” has the meaning assigned to the term “securities
intermediary” in the Uniform Commercial Code.

 

“Security” has the meaning assigned to the term “security” in the Uniform
Commercial Code.

 

“Security Entitlement” has the meaning assigned to the term “security
entitlement” in the Uniform Commercial Code.

 

“Software” has the meaning assigned to the term “software” in the Uniform
Commercial Code.

 

“Sponsor” means Macquarie Infrastructure Company, Inc.

 

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“Subsidiary” shall mean as to any person, any corporation, partnership, limited
liability company or other entity of which more than 50% of the outstanding
equity interests having ordinary voting power to elect a majority of the board
of directors (or equivalent governing body) or other managers of such
corporation, partnership, limited liability company or other entity is at the
time owned by (directly or indirectly) or the management is otherwise controlled
by (directly or indirectly) such person (irrespective of whether, at the time,
equity interests of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency). Unless otherwise qualified,
references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the
Grantor.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, fines, additions
to tax or penalties applicable thereto.

 

“Trademark Collateral” shall mean all Trademarks, whether now owned or hereafter
acquired by Grantor. Notwithstanding the foregoing, Trademark Collateral shall
not include any Trademark which would be rendered invalid, abandoned, void or
unenforceable by reason of its being included as part of the Trademark
Collateral.

 

“Trademarks” shall mean, collectively, (a) all trade names, trademarks and
service marks, logos, trademark and service mark registrations and applications
for trademark and service mark registrations, (b) all renewals and extensions of
any of the foregoing and (c) all rights, now existing or hereafter coming into
existence, (i) to all income, royalties, damages and other payments (including
in respect of all past, present and future infringements) now or hereafter due
or payable under or with respect to any of the foregoing, (ii) to sue for all
past, present and future infringements with respect to any of the foregoing and
(iii) otherwise accruing under or pertaining to any of the foregoing throughout
the world, together, in each case, with the product lines and goodwill of the
business connected with the use of, or otherwise symbolized by, each such trade
name, trademark and service mark.

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in
effect in any applicable jurisdiction from time to time.

 

Article II

 

THE COLLATERAL

 

Section 2.01 Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by the Grantor or
in which the Grantor now has or at any time in the future may acquire any right,
title or interests, is collectively referred to as the “Collateral”:

 

(a)     all Accounts;

 

(b)     all Deposit Accounts;

 

(c)     all Instruments;

 

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(d)    all Documents;

 

(e)    all Chattel Paper, including all Electronic Chattel Paper;

 

(f)    all Inventory;

 

(g)    all Equipment;

 

(h)    all Fixtures;

 

(i)    all Goods not covered by the preceding clauses of this Section 2.01;

 

(j)    all letters of credit and Letter-of-Credit Rights;

 

(k)    all Intellectual Property;

 

(l)    all Investment Property;

 

(m)    all Commercial Tort Claims;

 

(n)    all Payment Intangibles, Software and General Intangibles not covered by
the preceding clauses of this Section 2.01;

 

(o)    all Securities and Securities Accounts;

 

(p)    all other tangible and intangible property of Grantor, including all
books, correspondence, pollution allowances, offsets and similar rights, credit
files, records, invoices, tapes, cards, computer runs and other papers and
documents in the possession or under the control of Grantor or any computer
bureau or service company from time to time acting for Grantor;

 

(q)    all Material Contracts that are specified on the attached Schedule 2 and,
to the extent assignable, all material agreements, leases and other similar
instruments related to the business and operations of the Grantor (including
those in which the Grantor is a third party beneficiary) to which the Grantor
becomes a party from time to time after the Closing Date, and all amounts
payable to the Grantor under any Material Contract and any other such material
agreement, lease or other similar instrument (such Material Contracts and all
such other material agreements, contracts, leases and other similar instruments,
collectively, the “Assigned Agreements”);

 

(r)    all Governmental Approvals required or obtained in connection with the
business and operations of the Grantor or any of its Subsidiaries and/or in
connection with any transactions contemplated by the Finance Documents
(including the Governmental Approvals listed in Schedule 3), except that any
such Governmental Approval that by its terms or by operation of law would become
void, voidable, terminable or revocable if a security interest therein were
granted hereunder, is excluded from the lien and security interest granted
pursuant to this Agreement, but only to the extent necessary to avoid such
voidness, voidability, terminability or revocability;

 

9

 

 

(s)    to the extent assignable, any present or future right, title or interest
of the Grantor under any insurance, indemnity, warranty or guaranty in respect
of the business and operations of the Grantor or any of its Subsidiaries and any
rents, revenues, incomes, profits, proceeds of insurance or other rights to
compensation in respect of the business and operations of the Grantor or any of
its Subsidiaries;

 

(t)    all other personal property and Fixtures of Grantor, whether now owned or
hereafter existing or hereafter acquired or arising, or in which Grantor may
have an interest, and wheresoever located, whether or not of a type which may be
subject to a security interest under the UCC, and any replacements, renewals, or
substitutions for any of the foregoing or additional tangible or intangible
personal property hereafter acquired by Grantor; and

 

(u)    all Proceeds and products in whatever form of all or any part of the
foregoing Collateral, including all rents, profits, income and benefits of the
foregoing Collateral and all proceeds of insurance and all condemnation awards
and all other compensation for any event of loss with respect to all or any part
of the foregoing Collateral (together with all rights to recover and proceed
with respect to the same), and all accessions to, substitutions for and
replacements of all or any part of the foregoing Collateral;

 

provided, however, that notwithstanding any of the other provisions set forth in
this Article 2, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest is
prohibited by any requirements of law of a Governmental Authority or requires a
consent not obtained of any Governmental Authority pursuant to such requirement
of law.

 

Section 2.02 Grant to Collateral Agent. The Grantor, as collateral security for
the prompt payment in full when due (whether at stated maturity, upon
acceleration, on any optional or mandatory prepayment date or otherwise) and
performance of any and all of the Secured Obligations, hereby collaterally
assigns, mortgages, pledges and grants to the Collateral Agent, for the benefit
of the Secured Parties, a continuing, first-priority security interest in, all
of the Grantor’s right, title and interest in, to and under the Collateral.
Neither the foregoing nor anything in this Agreement shall constitute an
assignment or grant of a security interest in, and “Collateral” shall not
include or be deemed to include, any intent-to-use United States federal
trademark application prior to the filing of a “Statement of Use” or “Amendment
to Allege Use” with respect thereto, to the extent, if any, that, and solely
during the period in which, such assignment or grant could impair the validity
or enforceability of such intent-to-use trademark application or the underlying
trademark under applicable law.

 

Section 2.03 Intellectual Property. Subject to the occurrence of an Event of
Default, solely for the purpose of enabling the Collateral Agent to exercise its
rights, remedies, powers and privileges under Section 6.01 hereof to the extent
the Collateral Agent is in such circumstance lawfully entitled to exercise those
rights, remedies, powers and privileges, and for no other purpose, the Grantor
hereby grants to the Collateral Agent, to the extent the Grantor is able to make
such grant without violation of any agreement to which the Grantor is a party, a
nonexclusive license (exercisable without payment of royalty or other
compensation to the Grantor) to use, assign, license or sublicense any of the
Intellectual Property of the Grantor, together with reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout of those items.

 

10

 

 

Section 2.04 Perfection.

 

(a)    The Grantor authorizes the Collateral Agent to execute and cause the
filing of such financing statements, continuation statements and other documents
in such offices as are or shall be necessary or as the Collateral Agent may
determine to be appropriate to create, perfect and establish the priority of the
liens granted by this Agreement in any and all of the Collateral, to preserve
the validity, perfection or priority of the liens granted by this Agreement in
any and all of the Collateral, or to enable the Collateral Agent to exercise its
remedies, rights, powers and privileges under this Agreement. Concurrently with
the execution and delivery of this Agreement, the Grantor shall (i) deliver to
the Collateral Agent any and all Instruments, endorsed or accompanied by such
instruments of assignment and transfer in such form and substance as the
Collateral Agent may reasonably request, , and (ii) take all such other actions
and authenticate or sign and file or record such other records or instruments,
as are necessary or as the Collateral Agent may request to perfect and establish
the priority of the liens granted by this Agreement in any and all of the
Collateral or to enable the Collateral Agent to exercise its remedies, rights,
powers and privileges under this Agreement.

 

(b)    The Grantor acknowledges that it is not authorized to file any amendment
or termination statement with respect to any financing statement relating to any
security interest granted hereunder without the prior written consent of the
Collateral Agent and agrees that it will not do so without the prior written
consent of the Collateral Agent, subject to the Grantor’s rights under Section
9-509(d)(2) of the UCC.

 

Section 2.05 Instruments. So long as no Event of Default has occurred and is
continuing, the Grantor may retain for collection in the ordinary course of
business any Instruments obtained by it in the ordinary course of business, and
the Collateral Agent shall, promptly upon the request, and at the expense of the
Grantor, make appropriate arrangements for making any Instruments pledged by the
Grantor available to the Grantor for purposes of presentation, collection or
renewal. Any such arrangement shall be effected, to the extent deemed
appropriate by the Collateral Agent, against a trust receipt or like document.

 

Section 2.06 Use of Collateral. So long as no Event of Default has occurred and
is continuing, the Grantor shall be entitled to use and possess the Collateral
in any lawful manner not in breach of this Agreement or any other Finance
Document, and subject to the rights, remedies, powers and privileges of the
Collateral Agent under Articles V and VI hereof.

 

Section 2.07 Rights and Obligations.

 

No reference in this Agreement to proceeds or to the sale or other disposition
of the Collateral shall authorize the Grantor to sell or otherwise dispose of
any Collateral except to the extent otherwise expressly permitted by the terms
of the Finance Documents. The Collateral Agent shall not be required to take
steps necessary to preserve any rights against prior parties to any part of the
Collateral.

 

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(b)    Notwithstanding anything to the contrary herein, the Grantor shall remain
liable to perform its duties and obligations under each of the Assigned
Agreements and any other agreements included in the Collateral in accordance
with their respective terms to the same extent as if this Agreement had not been
executed and delivered. The exercise by the Collateral Agent of any right,
remedy, power or privilege in respect of this Agreement shall not release the
Grantor from any of its duties and obligations under such Assigned Agreements
and any other agreements unless expressly assumed by the Collateral Agent in
writing. The Collateral Agent shall not have any duty, obligation or liability
under such Assigned Agreement or other agreement or in respect of any
Governmental Approval included in the Collateral by reason of this Agreement or
any other Security Document, nor shall the Collateral Agent be obligated to
perform any of the duties or obligations of the Grantor under any such Assigned
Agreement or other agreement or any such Governmental Approval or to take any
action to collect or enforce any claim (for payment) under any such Assigned
Agreement or agreement or Governmental Approval.

 

(c)    No lien granted by this Agreement in the Grantor’s right, title and
interest in any Assigned Agreement, other agreement, or Governmental Approval
shall be deemed to be a consent by the Collateral Agent to any such Assigned
Agreement, other agreement or Governmental Approval.

 

Section 2.08 Termination. This Agreement shall create continuing security
interests in the Collateral and shall remain in full force and effect for the
benefit of the Secured Parties until all Secured Obligations to be paid or
performed under the Finance Documents have been indefeasibly paid and performed
in full and any commitments under the Finance Documents have terminated, except
for unmatured surviving obligations that, by their terms, survive the
termination of the Loan Documents but are not, as of the date of determination,
due and payable and for which no outstanding claim has been made (“Unmatured
Surviving Obligations”). Upon the happening of all of such events, the security
interests granted hereby shall terminate and the Collateral Agent shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, other than as to
the release of the Collateral Agent’s Lien thereon and the absence of any
continuing Lien arising by, through or under the Collateral Agent, any remaining
Collateral and moneys received in respect of the Collateral, to or on the order
of the Grantor. The Collateral Agent, upon payment of its fees and expenses
(including reasonable attorney’s fees and expenses), shall execute and deliver
to the Grantor, at the Grantor’s expense, such documentation as the Grantor
shall reasonably request to evidence such termination or expiration and release
the liens created under this Agreement, including termination statement(s) for
any financing statement on file with respect to the Collateral. The security
interests created hereby shall be released with respect to any portion of the
Collateral that is sold, transferred or otherwise disposed of in compliance with
the terms and conditions of any of the Finance Documents. Notwithstanding the
foregoing, this Agreement shall continue to be effective or be reinstated and
relate back to such time as though this Agreement had always been in effect, as
the case may be, if at any time any amount received by the Collateral Agent or
any other Secured Party in respect of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or other Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Grantor or any other Person or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, any Grantor or
any other Person or any substantial part of its properties, or otherwise, all as
though such payments had not been made.

 

12

 

 

ARTICLE III 

 

REPRESENTATIONS AND WARRANTIES

 

The Grantor hereby represents and warrants each of the following to the Secured
Parties as of the date of execution and delivery of this Agreement:

 

Section 3.01 Name; Jurisdiction of Organization; Chief Executive Office .

 

(a) Schedule 1 attached hereto correctly sets forth the Grantor’s full and
correct legal name, type of organization, jurisdiction of organization,
organizational identification number, if any, chief executive office and
principal place of business and mailing address as of the date of this
Agreement.

 

(b) The Grantor has not (i) changed its location (as defined in Section 9-307 of
the Uniform Commercial Code); (ii) previously changed its name except as set
forth on Schedule 1 or (iii) previously become a “new debtor” (as defined in the
Uniform Commercial Code) with respect to a currently effective security
agreement entered into by another Person except as set forth on Schedule 1.

 

Section 3.02 Title. The Grantor is the sole record and beneficial owner of the
Collateral in which it purports to grant a lien pursuant to this Agreement, and
the Grantor has full power and authority to grant the security interests in and
to the Collateral under this Agreement. Grantor will be the sole owner of such
collateral hereafter acquired, free and clear of any and all Liens or claims of
others except for Liens that are permitted under each Finance Document and
Grantor has full power and authority to grant the security interests in and to
the Collateral under this Agreement.

 

Section 3.03 Perfection and Priority. The security interests granted pursuant to
this Agreement shall constitute a valid and continuing first-priority, perfected
security interest in favor of the Collateral Agent, on behalf of and for the
benefit of the Secured Parties, in the Collateral for which perfection is
governed by the UCC or filings with the United States Copyright Office or the
United States Patent and Trademark Office, upon the fulfillment by the Grantor
of its obligations to perfect such security interests in accordance with Section
2.04 hereof, and all filings and other actions necessary or desirable to perfect
and protect such security interests have been duly made or taken. Such security
interests shall be prior to all other liens on the Collateral except for liens
having priority over the Collateral Agent’s liens by operation of law or
otherwise as permitted under the Finance Documents.

 

Section 3.04 Intellectual Property.

 

(a) Schedule 4 attached hereto sets forth all Material Intellectual Property of
the Grantor on the date hereof. The Material Intellectual Property set forth on
such schedule constitutes all of the intellectual property rights necessary to
conduct its business other than such Intellectual Property the absence of which
would not reasonably result in a Material Adverse Effect (as defined in any
Finance Document).

 

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(b) On the date hereof, all Material Intellectual Property owned by the Grantor
is valid and subsisting and, to the best knowledge of the Grantor, the use
thereof in the business of the Grantor does not infringe the intellectual
property rights of any other Person.

 

(c) Except as set forth in Schedule 4, on the date hereof, none of the Material
Intellectual Property owned by the Grantor is the subject of any licensing or
franchise agreement pursuant to which the Grantor is the licensor or franchisor.

 

(d) No holding, decision, or judgment has been rendered by any Governmental
Authority that would limit, cancel, or question the validity of, or the
Grantor’s rights in, any Material Intellectual Property in any respect that
could reasonably be expected to result in a Material Adverse Effect (as defined
in any Finance Document).

 

(e) No action or proceeding seeking to limit, cancel, or question the validity
of any Material Intellectual Property owned by the Grantor or the Grantor’s
ownership interest therein is, on the date hereof, pending, or, to the best
knowledge of the Grantor, threatened. There are no claims, judgments, or
settlements to be paid by the Grantor relating to the Material Intellectual
Property.

 

Section 3.05 Investment Property. (a) The shares of Pledged Stock pledged by the
Grantor hereunder as set forth on Schedule 7 constitute all the issued and
outstanding shares of all classes of the capital stock owned by the Grantor.

 

(b) All the shares of the Pledged Stock have been duly and validly issued and
are fully paid and nonassessable.

 

(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

 

(c) The Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.

 

Section 3.06 Deposit Accounts; Securities Accounts. The only Deposit Accounts or
Securities Accounts maintained by the Grantor on the date hereof are those set
forth on Schedule 5 attached hereto and no additional Deposit Accounts or
Securities Accounts shall be established by the Grantor without the prior
written consent of the Collateral Agent.

 

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Section 3.07 Commercial Tort Claims. The only existing or potential Commercial
Tort Claims of the Grantor, in excess of $5,000,000, existing on the date hereof
(regardless of whether the amount, defendant, or other material facts can be
determined and regardless of whether such Commercial Tort Claim has been
asserted, threatened, or has otherwise been made known to the obligee thereof or
whether litigation has been commenced for such claims) are those set forth on
Schedule 6 attached hereto.

 

Section 3.08 Valid Security Interests. Financing statements or other appropriate
instruments have been filed pursuant to the UCC as may be necessary to perfect
the security interest granted or purported to be granted hereby to the extent
any such security interest may be perfected by the filing of such a financing
statement. All other action necessary or requested by the Collateral Agent,
including with respect to titled Collateral, to protect and perfect the security
interest in each item of the Collateral has been duly taken, including the
delivery of all originals of any Chattel Paper, Instruments and certificated
securities, and all other Collateral with respect to which a security interest
may be perfected by the Collateral Agent’s taking possession thereof. Subject to
the requirements contained in the UCC with respect to the filing of continuation
statements and necessary filings with the U.S. Copyright Office and the U.S.
Patent and Trademark Office, this Agreement constitutes a valid, continuing and
perfected first-priority security interest in the Collateral in favor of the
Collateral Agent for the equal and ratable benefit of the Secured Parties,
subject to no Liens (other than Liens that are permitted under each Finance
Document), and is enforceable as such against creditors of and purchasers from
the Grantor and against any owner, lessee or mortgagee of the real property
where any of the Collateral is located or to which any of the Collateral relates
and against any purchaser of such real property and any present or future
creditor obtaining a Lien on such real property.

 

ARTICLE IV

 

COVENANTS

 

So long as any Secured Obligations are outstanding or any commitments under the
Finance Documents have not been terminated (other than Unmatured Surviving
Obligations), the Grantor covenants and agrees as follows, unless otherwise
consented to in writing by the Collateral Agent:

 

Section 4.01 Generally. The Grantor shall (a) except for the security interests
created pursuant to this Agreement, not create or suffer to exist any Lien upon
or with respect to any Collateral, except Liens that are permitted under each
Finance Document; (b) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement, any other Security Document,
any applicable law, or any policy of insurance covering the Collateral; (c) not
sell, transfer, or assign (by operation of law or otherwise) any Collateral
except as permitted under the Finance Documents; (d) not enter into any
agreement or undertaking restricting the right or ability of the Grantor or the
Collateral Agent to sell, assign, or transfer any Collateral except as permitted
under the Finance Documents; and (e) promptly notify the Collateral Agent of its
entry into any agreement or assumption of undertaking that restricts the ability
to sell, assign, or transfer any Collateral.

 

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Section 4.02 Preservation and Protection of Security Interests. The Grantor
shall:

  

(a) upon the acquisition after the date of this Agreement by the Grantor of any
Securities, Instruments, Deposit Accounts, Securities Accounts, other Investment
Property, Electronic Chattel Paper, or Letter-of-Credit Rights, promptly (x)
take such action with respect to that Collateral as is specified for that type
of Collateral in Section 2.04 hereof and (y) take all such other actions, and
authenticate or sign and file or record such other records or instruments, as
are necessary or as the Collateral Agent may reasonably request to create,
perfect and establish the priority of the liens granted by this Agreement in any
and all such Collateral, to preserve the validity, perfection or priority of the
liens granted by this Agreement in any and all of such Collateral or to enable
the Collateral Agent to exercise its remedies, rights, powers and privileges
under this Agreement, including, but not limited to, obtaining such agreements
from third parties as the Collateral Agent shall deem necessary in connection
with the preservation, perfection, or enforcement of any of its rights
hereunder;

 

(b) upon the Grantor’s acquiring, or otherwise becoming entitled to the benefits
of, any Copyright (or copyrightable material), Patent (or patentable invention),
Trademark (or associated goodwill) or other Intellectual Property or upon or
prior to the Grantor’s filing, either directly or through the Collateral Agent,
any licensee or any other designee, of any application with any Governmental
Authority for any Copyright, Patent, Trademark or other Intellectual Property,
in each case after the date of this Agreement, execute and deliver such
contracts, agreements and other instruments as the Collateral Agent may request
to create, perfect and establish the priority of the liens granted by this
Agreement in that and any related Intellectual Property (provided that no filing
shall be required with respect to Intellectual Property if Grantor determines
that such Intellectual Property is not material to the business of the Grantor
or that such a filing is not, in Grantor’s reasonable business judgment,
necessary or advisable for Grantor’s business);

 

(c) promptly give notice to the Collateral Agent upon the initiation of any
Commercial Tort Claim in excess of $5,000,000 and authorize the Collateral Agent
to amend Schedule 6 hereto, without any further action or consent from the
Grantor, to include any such Commercial Tort Claim as Collateral hereunder; and

 

(d) whether with respect to Collateral as of the date of this Agreement or
Collateral in which the Grantor acquires rights in the future, from time to time
at the Grantor’s expense, authorize, give, authenticate, execute, deliver, file
or record any and all financing statements, notices, contracts, agreements or
other records or instruments, obtain any and all Governmental Approvals, and
third party consents in accordance with the Finance Documents (including any
consent of any licensor, lessor or other Person obligated on any Collateral),
execute any agreement, or deliver any Collateral to the Collateral Agent, in
form and substance satisfactory to the Collateral Agent, in order to provide the
Collateral Agent with control with respect to Collateral in order for the
Collateral Agent to obtain, for the benefit of the Secured Parties, a perfected
security interest in such Collateral, and take all such other actions, as are
necessary or as the Collateral Agent may reasonably request, including with
respect to titled Collateral, to create, perfect and establish the priority of
the liens granted by this Agreement in any and all the Collateral, to preserve
the validity, perfection or priority of the liens granted by this Agreement in
any and all of the Collateral or to enable the Collateral Agent to exercise its
remedies, rights, powers and privileges under this Agreement, including causing
any or all Securities to be transferred of record into the name of the
Collateral Agent or its nominee upon the request of the Collateral Agent (and
the Collateral Agent agrees that if any Security is transferred into its name or
the name of its nominee, the Collateral Agent shall thereafter promptly give to
the Grantor copies of any notices and communications received by it with respect
to such Security).

 

16

 

 

Section 4.03 Maintenance of Perfected Security Interest; Further Documentation.

 

(a) The Grantor shall maintain the security interests created by this Agreement
as perfected security interests having at least the priority described in
Section 3.03 hereof and shall defend such security interests against the claims
and demands of all Persons.

 

(b) The Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail. The Collateral Agent and the other
Secured Parties shall have the right to inspect the Collateral as set forth in
the applicable Finance Documents.

 

(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of the Grantor, the Grantor shall
promptly and duly record, or cause to be recorded, such further instruments and
documents and take such further action as the Collateral Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including the filing of
any financing or continuation statement under the UCC (or other similar laws) in
effect in any jurisdiction with respect to the security interests created
hereby. The Collateral Agent shall not be responsible for filing any financing
or continuation statements or recording any documents or instruments in any
public office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral.

 

Section 4.04 Changes in Location, Name, Etc.

 

(a) The Grantor shall not, without prompt notice to the Collateral Agent, do any
of the following:

 

1.          change its jurisdiction of organization or the location of its chief
executive office from that referred to in Section 3.01(a) hereof; or

 

2.          change its name, identity, or organizational structure or its
principal and chief executive offices to such an extent that any financing
statement filed in connection with this Agreement would become misleading.

 

(b) The Grantor shall keep and maintain at its own cost and expense satisfactory
and complete records of the Collateral, including a record of all payments
received and all credits granted with respect to the Collateral and all other
dealings with the Collateral.

 

17

 

 

 

Section 4.05 Taxes. Except as expressly permitted by the Finance Documents, the
Grantor shall pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, services, materials and supplies) against the Collateral;
provided, that the Grantor shall in any event pay such taxes, assessments,
charges, levies or claims not later than 5 days prior to the date of any
proposed sale under any judgment, writ, or warrant of attachment entered or
filed against the Grantor or any of the Collateral as a result of the failure to
make such payment.

 

Section 4.06 Further Assurances. The Grantor, from time to time upon the written
request of the Collateral Agent, shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order fully to effect the purposes of this Agreement,
including within 10 business days after the date hereof issue a promissory note
under the Intercompany Loan Agreement and take the actions required pursuant to
Section 2.04 in connection with such promissory note.

 

Section 4.07 Insurance. The Grantor shall:

 

(a)          carry and maintain insurance during the term of this Agreement of
the types, in the amounts and subject to such deductibles and other terms
customarily carried from time to time by others engaged in substantially the
same business as such Person and operating in the same geographic area as such
Person, including, but not limited to, fire, public liability, property damage
and worker’s compensation;

 

(b)          furnish to any Secured Party, upon written request, full
information as to the insurance carried and prompt notice of any material
modification to the insurance required to be maintained hereunder;

 

(c)          carry and maintain each policy for such insurance with any other
insurer which is reasonably satisfactory to the Collateral Agent; and

 

(d)          obtain and maintain endorsements reasonably acceptable to the
Collateral Agent for such insurance naming the Collateral Agent as additional
insured and the Collateral Agent as lender’s loss payee (other than naming the
Collateral Agent as additional insured and the Collateral Agent as lender’s loss
payee with respect to worker’s compensation insurance);

 

provided that if the Grantor shall fail to maintain insurance in accordance with
this Section 4.07 of this Agreement, or if the Grantor shall fail to provide the
required endorsements with respect thereto, the Collateral Agent shall have the
right (but shall be under no obligation) to procure such insurance and the
Grantor agrees to reimburse the Collateral Agent for all reasonable costs and
expenses of procuring such insurance. All such policies as to which the
Collateral Agent is named as an additional insured or loss payee, as the case
may be, shall (i) provide that the same shall not be cancelled or terminated
without at least thirty (30) days’ (or ten (10) days’ in the case of nonpayment
of premium) prior written notice to each insured and each loss payee named
therein, (ii) provide for at least thirty (30) days’ prior written notice to
each insured and each loss payee named therein of the date on which such
policies shall terminate by lapse of time if not renewed, (iii) provide that the
insurer thereunder waives all right of subrogation against the Collateral Agent,
(iv) be primary without right of contribution from any other insurance carried
by or on behalf of the Collateral Agent, any Secured Party or the Collateral
Agent with respect to any interest in the Collateral (except with respect to
workers’ compensation insurance), (v) provide that no Person other than the
Grantor shall have any liability for any premiums with respect thereto, and
(vi) provide that inasmuch as the policies are written to cover more than one
insured, all terms and conditions, insuring agreements and endorsements, with
the exception of limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured. The Collateral Agent shall
not, by reason of accepting, rejecting, approving or obtaining insurance incur
any liability for the existence, nonexistence, form or legal sufficiency
thereof, the solvency of any insurer, or the payment of any losses.

 

18

 

 

ARTICLE V 

 

REMEDIES

 

Section 5.01 Events of Default, Etc. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent may exercise, for the
benefit of and on behalf of the Secured Parties, in addition to all other rights
and remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing, or relating to the Secured Obligations, all
rights and remedies with respect to the Collateral of a secured party under the
UCC (whether or not the UCC is in effect in the jurisdiction where such rights,
remedies, powers and privileges are asserted) and such additional rights,
remedies, powers and privileges to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights, remedies, powers and
privileges in respect of this Agreement or the Collateral may be asserted,
including the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral as
if the Collateral Agent were the sole and absolute owner of the Collateral (and
Grantor agrees to take all such action as may be appropriate to give effect to
such right). Without limiting the generality of the foregoing, the Collateral
Agent, without demand of performance or other demand, presentment, protest,
advertisement, or notice of any kind (except any notice required by law referred
to below) to or upon the Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith do any of the following:

 

(a) require Grantor to, and Grantor shall, assemble the Collateral owned by it
at such place or places, reasonably convenient to both the Collateral Agent and
the Grantor, designated in the Collateral Agent’s request;

 

(b) make any reasonable compromise or settlement it deems desirable with respect
to any of the Collateral and may extend the time of payment, arrange for payment
in installments, or otherwise modify the terms of, all or any part of the
Collateral;

 

(c) in its name or in the name of the Grantor or otherwise, demand, sue for,
collect and receive any money or property at any time payable or receivable on
account of or in exchange for all or any part of the Collateral, but shall be
under no obligation to do so; and

 

19

 

 

(d) upon 30 days’ prior written notice to the Grantor of the time and place,
with respect to all or any part of the Collateral which shall then be or shall
thereafter come into the possession, custody or control of the Collateral Agent
or any of its respective agents, sell, lease, assign, give option or options to
purchase, or otherwise dispose of all or any part of such Collateral (or
contract to do any of the foregoing), at such place or places as the Collateral
Agent deems best, for cash, for credit or for future delivery (without thereby
assuming any credit risk) and at public or private sale (except such notice as
is required above or by applicable statute and cannot be waived), and the
Collateral Agent or any other Person may be the purchaser, lessee or recipient
of any or all of the Collateral so disposed of at any public sale (or, to the
extent permitted by law, at any private sale) and thereafter hold the same
absolutely free from any claim or right of whatsoever kind, including any right
or equity of redemption (statutory or otherwise) of the Grantor, any such
demand, notice and right or equity being hereby expressly waived and released.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the sale may be so adjourned.

 

The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 5.01 shall be applied in accordance with
Section 5.03.

 

Section 5.02 Private Sale.

 

(a) The Collateral Agent shall incur no liability as a result of the sale, lease
or other disposition of all or any part of the Collateral at any private sale
pursuant to Section 5.01 conducted in a commercially reasonable manner. The
Grantor hereby waives any claims against the Collateral Agent arising by reason
of the fact that the price at which the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.

 

(b) The Grantor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933 and applicable state securities laws, the Collateral
Agent may be compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among other things, to
acquire the Collateral for their own account, for investment and not with a view
to distribution or resale. The Grantor acknowledges that any such private sales
may be at prices and on terms less favorable to the Collateral Agent than those
obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, agree that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Collateral Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the
respective issuer of such Collateral to register it for public sale. To the
extent permitted by applicable law, the Grantor hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any
applicable law now existing or hereafter enacted. The Grantor authorizes the
Collateral Agent, at any time and from time to time, to execute, in connection
with a disposition of any Collateral pursuant to the provisions of this
Agreement, any endorsements, assignments or other instruments of conveyance or
transfer with respect to such Collateral.

 

20

 

 

 

Section 5.03 Application of Proceeds. Except as otherwise expressly provided in
this Agreement, the Collateral Agent shall apply all Proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral, as provided in Section 9.4
of the Intercreditor Agreement.

 

Section 5.04 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 5.01 hereof are
insufficient to cover the costs and expenses of such exercise and the payment in
full of the Secured Obligations, the Grantor shall remain liable for any
deficiency.

 

Section 5.05 Assignment of Governmental Approvals. The Grantor shall, upon the
occurrence and during the continuance of an Event of Default at the request of
the Collateral Agent, contemporaneously with and at any other time following any
foreclosure by the Collateral Agent on any part of the Collateral, assign,
transfer or otherwise furnish to the Collateral Agent or to any transferee of
the interest of the Collateral Agent (to the extent so assignable or
transferable), all of the Grantor’s rights and interest in, to and under all
Governmental Approvals, including all offsets (including environmental credits
and offsets), allowances and similar rights issued under or in connection with
applicable law. At the request of the Collateral Agent upon the occurrence and
during the continuance of an Event of Default following collection, enforcement,
foreclosure, sale, lease, license or other disposition by the Collateral Agent
on or with respect to the Collateral, the Grantor agrees to use its best efforts
to assist the Collateral Agent in renewing or extending in the name of the
Collateral Agent (or any other Person) or otherwise obtaining the benefits of
all of the Governmental Approvals and other rights referred to in the
immediately preceding sentence to the extent that such Governmental Approvals
and other rights shall not be assignable or transferable.

 

Section 5.06 Security Interest Absolute. All the rights of the Collateral Agent
and the other Secured Parties hereunder and the security interest and all
obligations of the Grantor hereunder shall be absolute and unconditional
irrespective of:

 

(a) any lack of validity or enforceability of any of the Finance Documents or
any of the Collateral or any other agreement or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Obligations, or any other amendment, modification
or waiver of or any consent to any departure from or any termination or
cancellation of any Finance Document or any of the Collateral or any other
agreement or instrument related thereto;

 

(c) any exchange or release of any Collateral or any other collateral, or the
non-perfection of any of the security interests granted hereunder or any other
Security Document, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Secured Obligations; or

 

(d) to the full extent permitted by applicable law, any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Grantor or any third party pledgor.

 

21

 

 

ARTICLE VI

 

THE COLLATERAL AGENT

 

Section 6.01 Appointment as Attorney-in-Fact. The Grantor hereby irrevocably
constitutes and appoints the Collateral Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any documents or instruments that the Collateral Agent may deem is
necessary or advisable to accomplish the purposes of this Agreement, to perfect,
preserve the validity, perfection and priority of, and enforce any lien granted
by this Agreement and, after the occurrence and during the continuance of an
Event of Default, to exercise its rights, remedies, powers and privileges under
this Agreement. This appointment as attorney-in-fact is irrevocable and coupled
with an interest until this Agreement is terminated and the security interests
created hereby are released. Without limiting the generality of the foregoing,
the Collateral Agent shall be entitled under this Section 6.01 to do any of the
following:

 

(a) ask, demand, collect, sue for, recover, receive and give receipt and
discharge for amounts due and to become due under and in respect of all or any
part of the Collateral, defend any suit, action or proceeding brought against
the Grantor with respect to any Collateral, and settle, compromise or adjust any
such suit, action or proceeding;

 

(b) receive, endorse and collect any Accounts, Chattel Paper, Instruments or
General Intangibles;

 

(c) file any claims or take any action or proceeding in any court of law or
equity that the Collateral Agent may reasonably deem necessary or advisable for
the collection of all or any part of the Collateral, defend any suit, action or
proceeding brought against the Grantor with respect to any Collateral, and
settle, compromise or adjust any such suit, action or proceeding;

 

(d) execute, in connection with any sale or disposition of the Collateral
pursuant to Section 5.01 or Section 5.02 hereof, any endorsements, assignments,
bills of sale or other instruments of conveyance or transfer with respect to all
or any part of the Collateral;

 

(e) enforce the rights of the Grantor under any provision of any Assigned
Agreement to the extent permitted thereunder and under the terms of this
Agreement;

 

(f) pay or discharge Taxes and Liens levied or placed on the Collateral;

 

(g) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes; and

 

(h) do, at the Collateral Agent’s option and at the Grantor’s expense, at any
time, from time to time, all acts and things as are necessary to protect,
preserve, or realize upon the Collateral and the Collateral Agent’s and the
other Secured Parties’ security interests therein and to effect the intent of
this Agreement, all as fully and effectively as the Grantor might do.

 

22

 

 

 

Anything in this Section 6.01 to the contrary notwithstanding, the Collateral
Agent agrees that it shall not exercise any right under the power of attorney
provided for in this Section 6.01 unless an Event of Default shall have occurred
and be continuing.

 

Section 6.02 Performance in Lieu of Grantor. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent, without releasing the
Grantor from any obligation, covenant or condition hereof, itself may (but shall
not be obligated to) make any payment or perform, or cause the performance of,
any such obligation, covenant, condition or agreement or any other action in
such manner and to such extent as the Collateral Agent may deem necessary to
protect, perfect or continue the perfection of the security interest granted
under this Agreement. Any reasonable costs or expenses incurred by the
Collateral Agent in connection with the foregoing shall be payable by the
Grantor to the Collateral Agent on demand.

 

Section 6.03 Duty of the Collateral Agent. The Collateral Agent shall be
accountable only for amounts that it receives as a result of the exercise of
such powers. The Collateral Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as it deals with similar property for its
own account and as otherwise required by Article 9 of the UCC. None of the
Collateral Agent, the Secured Parties or any of their respective officers,
directors, employees, or agents shall be liable for failure to demand, collect,
or realize upon any Collateral or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Collateral upon the request
of the Grantor or any other Person or to take any other action whatsoever with
regard to any Collateral. The powers conferred on the Collateral Agent hereunder
are solely to protect its interest in the Collateral on behalf of the Secured
Parties, as to a first-priority security interest in such Collateral, and shall
not impose any duty upon the Collateral Agent or any Secured Party to exercise
any such powers. The Collateral Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their respective officers,
directors, employees, or agents shall be responsible to the Grantor for any act
or failure to act hereunder, except for their own gross negligence, bad faith or
willful misconduct.

 

Section 6.04 Authority of the Collateral Agent. The Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment, or other right or remedy provided for hereunder or resulting or
arising out of this Agreement shall, as between the Collateral Agent and the
other Secured Parties, be governed by such agreements with respect thereto as
may exist from time to time among them.

 

Section 6.05 Role of the Collateral Agent. The rights, duties, liabilities and
immunities of the Collateral Agent and its appointment and replacement hereunder
shall be governed by the provisions contained in this Agreement.

 

23

 

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

Section 7.01 Indemnification. The Grantor shall defend, indemnify and hold
harmless the Collateral Agent and the other Secured Parties and their officers,
directors and employees, from and against any and all costs, expenses,
disbursements, liabilities, obligations, losses, damages, injunctions,
judgments, suits, actions, causes of action, fines, penalties, claims and
demands, of every kind or nature (including reasonable attorney’s fees and
expenses) (herein collectively called the “Indemnified Liabilities”) which are
occasioned by, result from or arise out of any of the terms, agreements, or
covenants to be performed by the Grantor or any party thereto under this
Agreement or any applicable Assigned Agreement, other than Indemnified
Liabilities resulting from the Collateral Agent’s or other Secured Party’s gross
negligence or willful misconduct or by the Collateral Agent’s or other Secured
Party’s breach of its obligations hereunder or thereunder and other than
Indemnified Liabilities incurred after the Collateral Agent or any other Secured
Party has expressly assumed in writing the Grantor’s obligations under any
Assigned Agreement.

 

Section 7.02 Amendments. Any term, covenant, agreement or condition of this
Agreement may be amended or waived only by an instrument in writing signed by
the Grantor and the Collateral Agent.

 

Section 7.03 Waivers.

 

(a) The waiver (whether expressed or implied) by the Collateral Agent of any
breach of the terms or conditions of this Agreement, and the consent (whether
expressed or implied) of any Secured Party shall not prejudice any remedy of the
Collateral Agent or any Secured Party in respect of any continuing or other
breach of the terms and conditions hereof, and shall not be construed as a bar
to any right or remedy which the Collateral Agent or any Secured Party would
otherwise have on any future occasion under this Agreement.

 

(b) No failure to exercise nor any delay in exercising, on the part of the
Collateral Agent or any Secured Party of any right, power or privilege under
this Agreement shall operate as a waiver thereof; further, no single or partial
exercise of any right, power or privilege under this Agreement shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. All remedies hereunder and under the other Security Documents are
cumulative and are not exclusive of any other remedies that may be available to
a party, whether at law, in equity, or otherwise. The application of the
Collateral to satisfy the Secured Obligations pursuant to the terms hereof shall
not operate to release the Grantor or any other Credit Party from its
obligations until payment in full of any deficiency has been made in cash.

 

Section 7.04 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or, in the case of notice
given by mail, private courier, overnight delivery service or facsimile, when
received, addressed as follows, or to such other address as may be hereafter
notified in accordance with this Section 7.04 by the respective parties hereto:

 

24

 

 

The Grantor:

 

The Gas Company, LLC

745 Fort Street

Honolulu, HI 96813

United States of America

Attention of: Jeffrey M. Kissel, President and Chief Executive Officer

Telephone No.: (808) 535-5908

Facsimile No.: (808) 535-5943

E-mail: JKissel@hawaiigas.com

 

with a copy to:

 

The Gas Company, LLC

745 Fort Street

Suite 1800

Honolulu, HI 96813

United States of America

Attention of: Nathan C. Nelson, General Counsel

Telephone No.: (808) 535-5912

Facsimile No.: (808) 535-5943

E-mail: NNelson@hawaiigas.com 

 

The Collateral Agent:

 

Wells Fargo Bank, National Association

1525 West W.T. Harris Boulevard

Mail Code: D1109-019

Charlotte, NC 28262

Attn: Syndication Agency Services

Telephone: 704-590-2706

Facsimile: 704-590-2790

Email: agencyservices.requests@wellsfargo.com

 

Section 7.05 Successors and Assigns.

 

(a) This Agreement shall be binding upon and inure to the benefit of the
Collateral Agent and the Grantor and their successors and permitted assigns.

 

(b)  Nothing contained in this Agreement or any other Security Document is
intended to limit the right of any Secured Party to assign, transfer, or grant
participations in its rights in its Secured Obligations and in accordance with
the provisions of such Secured Party’s respective Finance Documents.

 

25

 

 

Section 7.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

 

Section 7.07 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the substantive
laws of the State of New York. Each of the parties hereto hereby irrevocably (a)
consents and submits to the non-exclusive jurisdiction of any New York state
court sitting in New York County, New York or any federal court of the United
States sitting in the Southern District of New York, as any party may elect
solely for purposes of any suit, action or proceeding arising out of or relating
to this Agreement (and not as a general submission to New York jurisdiction) and
(b) WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH ANY OF
THE PARTIES HERETO ARE PARTIES RELATING TO OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT.

 

Section 7.08 Captions. The headings of the several articles and sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

 

Section 7.09 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.

 

Section 7.10 Entire Agreement. This Agreement, together with any other agreement
executed in connection with this Agreement, is intended by the parties as a
final expression of their agreement as to the matters covered by this Agreement
and is intended as a complete and exclusive statement of the terms and
conditions of such agreement.

 

Section 7.11 Expenses. The Grantor agrees to pay or to reimburse the Collateral
Agent for all reasonable documented costs and expenses (including reasonable
attorney’s fees and expenses) that may be incurred by the Collateral Agent in
any effort to enforce any of the obligations of the Grantor in respect of the
Collateral or in connection with (a) the preservation of the liens on, or the
rights of the Secured Parties to the Collateral pursuant to this Agreement or
(b) any actual or attempted sale, lease, disposition, exchange, collection,
compromise, settlement or other realization in respect of, or care of, the
Collateral, including all such reasonable costs and expenses (and reasonable
attorney’s fees and expenses) incurred in any bankruptcy, reorganization,
workout or other similar proceeding.

 

[signature page follows]

 

26

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first written above.

 

  THE GAS COMPANY, LLC, as Grantor           By:       Name:       Title:      
      WELLS FARGO BANK, NATIONAL   ASSOCIATION, as Collateral Agent          
By:       Name:       Title:  

 

[Signature page to the TGC Credit Agreement]

 

 

 

 

Schedule 1

 

Organization and Chief Executive Office of Grantor

 

Borrower’s Legal Name, Type and Jurisdiction of Organization, and Organizational
Identification Number:

 

The Gas Company, LLC, a Hawaii limited liability company

 

Organizational ID#: 23473

 

Borrower’s Chief Executive Office and Mailing Address:

 

(a)          Chief Executive Office Address:

 

745 Fort Street

Suite 1800

Honolulu, HI 96813

Telephone No.: (808) 535-5908

E-mail: JKissel@hawaiigas.com

 

(b)          Mailing Address

 

PO Box 3000

Honolulu, HI 96802-3000

 

 

 

 

Schedule 2

 

Assigned Agreements

 

None.

 

 

 

 

Schedule 3

 

Government Approvals

 

Hawaii Public Utilities Commission Decision and Order No. 30434, filed on June
12, 2012 in Docket No. 2012-0073 re: Approval of Proposed Financing and Security
Arrangements and Related Matters.

 

 

 

 

Schedule 4

 

Material Intellectual Property

 

None.

 

 

 

 

Schedule 5

 

Deposit Accounts and Securities Accounts

 

1) Deposit Accounts: [redacted]

 

2) Securities Account: [redacted]

 

 

 

 

Schedule 6

 

Commercial Tort Claims

 

None.

 

 

 

 

Schedule 7

 

Investment Properties

 

DESCRIPTION OF INVESTMENT PROPERTY

 

Pledged Stock:

 

Issuer   Class of Stock   Stock Certificate No.   No. of Shares              

None.

 

Pledged Notes:

 

Issuer   Payee   Principal Amount          

 

None.