SECOND

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Dated to be Effective as of June 1, 2006

 

among

 

ENSERCO ENERGY INC.

 

as Borrower,

 

and

 

FORTIS CAPITAL CORP.

as Administrative Agent, Collateral Agent,

Documentation Agent, Arranger, an Issuing Bank and a Bank

 

and

 

BNP PARIBAS

 

as a Bank and an Issuing Bank

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

as a Bank

 

and

 

SOCIETE GENERALE

 

as a Bank

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

as a Bank

 

THE OTHER FINANCIAL INSTITUTIONS WHICH

MAY BECOME PARTIES HERETO

 

THIS AGREEMENT PROVIDES FOR AN

UNCOMMITTED FACILITY WITH A DEMAND FEATURE.

ALL ADVANCES AND ISSUANCES OF LETTERS OF CREDIT

ARE DISCRETIONARY ON THE PART OF THE BANKS

IN THEIR SOLE AND ABSOLUTE DISCRETION.

THE BANKS MAY MAKE DEMAND FOR PAYMENT AT ANY TIME

IN THEIR SOLE AND ABSOLUTE DISCRETION

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered
into effective as of June 1, 2006, among ENSERCO ENERGY INC., a South Dakota
corporation (the “Borrower”), FORTIS CAPITAL CORP. (“Fortis”), a Connecticut
corporation, as a Bank, an Issuing Bank and as Administrative Agent,
Documentation Agent and Collateral Agent for the Banks, BNP PARIBAS (“BNP
Paribas”), a bank organized under the laws of France, as an Issuing Bank and a
Bank, U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), a national banking
association, as a Bank, SOCIETE GENERALE, a bank organized under the laws of
France, as a Bank (“SocGen”), and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW
YORK BRANCH, successor by merger to UFJ BANK LIMITED, NEW YORK BRANCH (“BTMU”),
a bank organized under the laws of Japan, acting through its New York Branch, as
a Bank, and each other financial institution which may become a party hereto
(collectively, the “Banks”).

WHEREAS, Fortis, as Agent, the Banks and the Borrower have entered into an
Amended and Restated Credit Agreement effective as of May 14, 2004 (as amended,
the “Existing Credit Agreement”) which presently provides for an Uncommitted
Line of $200,000,000; and

WHEREAS, the Borrower has requested and the Banks are prepared to extend and
increase the Uncommitted Line to $260,000,000 and to make certain other
amendments to the Existing Credit Agreement;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.01      Certain Defined Terms. The following terms have the following
meanings:

“Account” has the meaning stated in the New York Uniform Commercial Code as in
effect from time to time.

“Account Debtor” means a Person who is obligated to the Borrower under an
Account of the Borrower.

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests or equity of any Person, or otherwise causing any Person
to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary);
provided, however, that the relevant Borrower or the Subsidiary is the surviving
entity.

 

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“Adjusted Pro Rata Share” shall have the meaning ascribed to it in the
Intercreditor Agreement.

“Advance Maturity Date” means the maturity date of advances made hereunder which
will be the earliest to occur of (a) written demand by Agent, or (b) the
Expiration Date.

“Advance Line Limit” means the maximum amount of Revolving Loans which may be
outstanding at any time, which maximum amount shall be determined as follows:

Borrowing Base
Sub-Cap in effect

Advance Line Limit

$260,000,000

$100,000,000

$250,000,000

$100,000,000

$200,000,000

$75,000,000

$175,000,000

$75,000,000

$150,000,000

$50,000,000

$100,000,000

$50,000,000

 

 

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.

“Agent” means Fortis in its capacity as administrative agent and collateral
agent for the Banks hereunder, and any successor agent arising under
Section 10.09.

“Agent-Related Persons” means Fortis and any successor agent arising under
Section 10.09, together with their respective Affiliates and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

“Agent’s Payment Office” means the address for payments set forth on
Schedule 11.02 hereto in relation to Agent, or such other address as Agent may
from time to time specify.

“Agreement” means this Credit Agreement.

“Aggregate Amount” means the Effective Amount of all outstanding Revolving Loans
plus the Effective Amount of all L/C Obligations.

“Applicable Margin” means:

(a)

with respect to Base Rate Loans: one percent (1.00%); and

 

 

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(b)        with respect to Eurodollar Rate Loans: one point forty-five percent
(1.45%).

“Approved Brokerage Accounts” means brokerage accounts maintained by the
Borrower with an Eligible Broker for the purpose of allowing the Borrower to
engage in the purchase and sale of commodity futures, commodity options, forward
or leverage contracts and/or actual or cash commodities, and subject to a fully
perfected first priority security interest in favor of Agent for the benefit of
the Banks (including a tri-party control agreement, acceptable to Banks).

“Approving Banks” has the meaning set forth in Section 2.13.

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.

“Bank Blocked Accounts” means (a) account no. 103657535433 in the name of
Borrower maintained with U.S. Bank into which collections from the Borrower’s
Accounts will be deposited pursuant to Section 7.14 below and which is subject
to a Blocked Account Agreement, (b) account no. 9030-422249 in the name of the
Borrower maintained with Toronto Dominion Bank into which collections in
Canadian Dollars from the Borrower’s Accounts will be deposited pursuant to
Section 7.14 below and which is subject to a Blocked Account Agreement, (c)
account no. 31441031373 in the name of U.S. Bank maintained with Bank of
Montreal on behalf of Borrower into which collections of Canadian Dollars from
Borrower’s Accounts will be deposited pursuant to Section 7.14 below and which
is subject to a Blocked Account Agreement, and (d) any other account approved by
Agent which is also subject to a Blocked Account Agreement.

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978, as amended
(11 U.S.C. §101, et seq.).

“Banks” shall initially mean the Banks identified on the signature pages hereto
and their successors and assigns. At such time as additional lending
institutions are added to this Agreement, either through an amendment to this
Agreement or through an Assignment and Acceptance in accordance with
Section 11.07 hereof, the term “Banks” shall mean the Banks identified on the
signature pages hereto and their successors and assigns and each such additional
lending institution. References to the “Banks” shall include Fortis and BNP
Paribas, including in their capacity as Issuing Banks; for purposes of
clarification only, to the extent that Fortis and BNP Paribas may have any
rights or obligations in addition to those of the Banks due to their status as
Issuing Banks and, in the case of Fortis, as Agent, Fortis’ and BNP Paribas’
status as such will be specifically referenced.

“Base Rate” means, for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; or (b) the per annum rate of interest established by
Fortis Bank S.A./N.V. from time to time at its principal office in New York City
as its “prime rate” or “base rate” for U.S. dollar loans (with any change on
such “prime rate” or “base rate” to become effective as and when such “prime
rate” or “base rate” changes). (The “prime rate” or “base

 

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rate” is a rate set by Fortis Bank S.A./N.V. based upon various factors
including Fortis Bank S.A./N.V.’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.)

“Base Rate Loan” means any Loan bearing interest based upon the Base Rate.

“Blocked Account Agreements” means (a) the Amended and Restated Blocked Account
Agreement dated December 15, 2001, as amended, among Agent, Borrower and U.S.
Bank, (b) the Bank Blocked Account Agreement dated May 14, 2004 among Agent,
Borrower and Toronto Dominion Bank, (c) the Blocked Account Agreement among
Agent, Borrower, U.S. Bank and Bank of Montreal, and (d) any other Blocked
Account Agreement pertaining to a Bank Blocked Account.

“Borrower” means Enserco Energy Inc., a South Dakota corporation.

“Borrower’s Canadian Security Agreement” means a security agreement, in form and
substance acceptable to Agent, duly executed by the Borrower and delivered to
Agent, for the benefit of the Banks, granting to Agent, as collateral agent for
the Banks, a first and prior security interest in and Lien upon the Borrower’s
Collateral located in Canada, subject to Permitted Liens.

“Borrower’s Second Amended and Restated Security Agreement” means a security
agreement, in form and substance acceptable to Agent, duly executed by the
Borrower and delivered to Collateral Agent (as defined therein), for the benefit
of the Secured Parties (as defined therein), granting to Collateral Agent, as
collateral agent for the Secured Parties, a first and prior security interest in
and Lien upon all Collateral, subject to Permitted Liens.

“Borrowing” means a borrowing hereunder consisting of Revolving Loans made to
the Borrower on the same day by the Banks under Article II.

“Borrowing Base Advance Cap” means at any time an amount equal to the least of:

(a)

$260,000,000.00;

 

(b)

the Borrowing Base Sub-Cap; or

(c)

the sum of:

 

(i)

the amount of Cash Collateral and other liquid investments which are acceptable
to the Banks in their sole discretion and which are subject to a first perfected
security interest in favor of Agent, as collateral agent for the Banks, which
shall not include Cash Collateral in which a Lien has been granted by the
Borrower in order to secure the margin requirements of a swap contract permitted
under Section 8.06(b); plus

 

 

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(ii)

90% of equity (net liquidity value) in Approved Brokerage Accounts; plus

(iii)

90% of the amount of Tier I Accounts; plus

 

(iv)

80% of the amount of Tier II Accounts; plus

(v)

85% of the amount of Tier I Unbilled Eligible Accounts; plus

(vi)

75% of the amount of Tier II Unbilled Eligible Accounts; plus

(vii)

80% of the amount of Eligible Inventory; plus

 

(viii)

80% of the amount of Eligible Exchange Receivables; plus

(ix)

80% of the amount of Undelivered Product Value; less

 

(x)

the amounts (including disputed items) which would be subject to a so-called
“First Purchaser Lien” as defined in Texas Bus. & Com. Code Section 9.343,
comparable laws of the states of Oklahoma, Kansas, Wyoming or New Mexico, or any
other comparable law, except to the extent a Letter of Credit secures payment of
amounts subject to such First Purchaser Lien; less

(xi)

120% of the amount of any mark to market exposure to the Swap Banks under Swap
Contracts as reported by the Swap Banks, reduced by Cash Collateral held by a
Swap Bank.

In no event shall any amounts described in (c)(i) through (c)(ix) above which
may fall into more than one of such categories be counted more than once when
making the calculation under subsection (c) of this definition.

“Borrowing Base Collateral Position Report” means a report detailing all
Collateral which has been or is being used in determining availability for an
advance or letter of credit issuance under the Borrowing Base Line, such report
to be in the form attached hereto as Exhibit D.

“Borrowing Base Line” means the uncommitted line of credit (a) to finance
working capital requirements related to Product activities; (b) to provide for
Letters of Credit as described hereunder; and (c) to fund payments due to any
Swap Bank under a Swap Contract.

“Borrowing Base Sub-Cap” means, on the Closing Date, an amount equal to
$200,000,000.00; provided, however, Borrower may elect to change such Borrowing
Base Sub-Cap five (5) times during any twelve (12) month period to be any of
$100,000,000.00, $150,000,000.00, $175,000,000.00, $200,000,000.00,
$250,000,000.00 or $260,000,000.00

 

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(provided that, regardless of any Elected Performance L/C Cap, the Borrowing
Base Sub-Cap shall never exceed $260,000,000.00), which modified Borrowing Base
Sub-Cap shall continue in effect until again changed by Borrower in accordance
with this Agreement, or until automatically reduced as hereinafter set forth.
Notwithstanding the foregoing, Borrower may not elect a Borrowing Base Sub-Cap
unless Borrower’s Net Working Capital and Tangible Net Worth at the time of
election are greater than, or equal to, the amounts specified below:

(a)        If Borrower elects $260,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $48,100,000.00 plus an amount equal
to 30% of the Elected Performance L/C Cap;

(b)        If Borrower elects $250,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $46,250,000.00 plus an amount equal
to 30% of the Elected Performance L/C Cap;

(c)        If Borrower elects $200,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $37,000,000.00 plus an amount equal
to 30% of the Elected Performance L/C Cap;

(d)        If Borrower elects $175,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $32,375,000.00 plus an amount equal
to 30% of the Elected Performance L/C Cap;

(e)        If Borrower elects $150,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $27,750,000 plus an amount equal to
30% of the Elected Performance L/C Cap; or

(f)         If Borrower elects $100,000,000.00, Borrower’s Net Working Capital
and Tangible Net Worth must each be at least $18,500,000 plus an amount equal to
30% of the Elected Performance L/C Cap.

Borrower shall elect which Borrowing Base Sub-Cap is in effect from time to time
by delivering to Agent and Banks a written notice of such election in the form
of Exhibit I which is attached hereto. In the event that after Borrower makes a
Borrowing Base Sub-Cap election and Borrower’s Net Working Capital or Tangible
Net Worth as reflected on a Compliance Certificate delivered to Agent are not in
compliance with the requirements set forth above, the Borrowing Base Sub-Cap
shall be automatically reduced to the appropriate level set forth above to cause
compliance with the requirements set forth above, provided that if Borrower
fails to qualify for (a), (b), (c), (d) or (e) or fails to elect a Borrowing
Base Sub-Cap, then the Borrowing Base Sub-Cap shall be $100,000,000.00. Such
reduction shall take place upon Agent’s receipt of such Compliance Certificate
or notice of election. NOTWITHSTANDING THE FOREGOING, BORROWER MAY NOT ELECT A
BORROWING BASE SUB-CAP IN AN AMOUNT IN EXCESS OF THE THEN TOTAL UNCOMMITTED LINE
AMOUNT SUBSCRIBED AS SET FORTH ON SCHEDULE 2.01 FROM TIME TO TIME.

“Borrowing Date” means any date on which a Borrowing occurs under Section 2.03.

 

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“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York or Dallas, Texas are authorized, or
required, by law to close.

“Canadian Dollars,” and “C $” each mean lawful money of Canada.

“Capital Adequacy Regulation” means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Bank or of any corporation controlling a Bank.

“Capital Stock” means capital stock, equity interest or other obligations or
securities of, or any interest in, any Person.

“Cash Collateral” means currency issued by the United States and Marketable
Securities which have been Cash Collateralized for the benefit of the Banks or
the Swap Banks, as applicable.

“Cash Collateralize” means to pledge and deposit with or deliver to US Bank, for
the benefit of Agent, the Issuing Banks and the Banks, Cash Collateral as
collateral for the Obligations pursuant to documentation in form and substance
satisfactory to Agent (which documents are hereby consented to by all the
Banks). The Borrower hereby grants Agent, for the benefit of Agent, the Issuing
Banks and the Banks, a security interest in all such Cash Collateral to secure
the Obligations. Cash Collateral consisting of cash shall be maintained in the
Bank Blocked Accounts.

“Change of Control” means the sale, pledge, hypothecation, assignment or other
transfer, whether direct or indirect, of more than twenty-five percent (25%) of
the Capital Stock or other ownership rights in the Borrower to any entity other
than Black Hills Energy, Inc. (including any sale, pledge, hypothecation,
assignment or other transfer by Parent of the Capital Stock or other ownership
rights in any Person owning, directly or indirectly, more than twenty-five
percent (25%) of the Capital Stock or other ownership rights in the Borrower)
without the prior written consent of all of the Banks.

“Close-out Amount” shall have the meaning ascribed to it in the Intercreditor
Agreement.

“Closing Date” means the date on which all conditions precedent set forth in
Section 5.01 are satisfied or waived by all Banks.

“Code” means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.

“Collateral” means all assets of the Borrower including, without limitation, all
accounts, equipment, chattel paper, inventory, Product in transit, instruments,
contract rights, the Bank Blocked Accounts, Borrower’s operating account, stock,
partnership interests, and general intangibles, whether presently existing or
hereafter acquired or created and the proceeds thereof.

 

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“Collateral Position” means the total availability under the Borrowing Base
Advance Cap.

“Commercial Letters of Credit” means a Letter of Credit which is intended at the
time of Issuance to be drawn upon for the purchase of Product.

“Compliance Certificate” means a certificate, in form attached hereto as
Exhibit B, whereby the Borrower certifies that it is in compliance with this
Agreement.

“Contingent Obligation” means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or other
obligation of another Person (which obligations and Person are referred to
herein as the “primary obligation” and the “primary obligor,” respectively),
including any obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefore, (ii) to advance or
provide funds for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof (each, a
“Guaranty Obligation”); (b) with respect to any Surety Instrument (other than
any Letter of Credit) issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments; or (c) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered; or (d) in respect of any swap contract,
including Swap Contracts.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.

“Control Agreements” means the Assignment of Investment Account dated June 15,
2003, as amended, between Agent and Borrower (and acknowledged by U.S. Bank),
and any other control agreement, in form and substance satisfactory to Agent,
executed by Agent, Borrower and a depository institution, pursuant to which
Borrower assigns, pledges and transfers all of its right, title and interest in
and to an account specified therein and pursuant to which the parties agree that
such account will be under the sole dominion and control of Agent.

“Conversion/Continuation Date” means any date on which, under Section 2.04, the
Borrower (a) converts Loans of one Type to another Type, or (b) continues such
Loans as Loans of the same Type, but with a new Interest Period.

 

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“Conversion to Reduced Funding Banks Date” has the meaning specified in
Section 2.13.

“Credit Extension” means and includes (a) the making of any Loans hereunder, and
(b) the Issuance of any Letters of Credit hereunder.

“Credit Limit” means the maximum amount of Accounts and Exchange Receivables, in
the aggregate, owing by a Person to the Borrower which may be treated as
Eligible Accounts and Eligible Exchange Receivables with respect to such Person,
as indicated on the approved account list as agreed to by the Banks from time to
time.

“Current Assets” means those assets of the Borrower and its consolidated
Subsidiaries which would in accordance with GAAP be classified as current assets
of a corporation conducting a business the same as or similar to the businesses
of the Borrower and its consolidated Subsidiaries.

“Current Liabilities” means Indebtedness of the Borrower and its consolidated
Subsidiaries which would in accordance with GAAP be classified as current
liabilities of a corporation conducting a business the same as or similar to the
businesses of the Borrower and its consolidated Subsidiaries.

“Declining Bank” has the meaning specified in Section 2.13 and “Declining Banks”
means all Banks that are a Declining Bank.

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would constitute an Event of Default.

“Default Rate” has the meaning specified in Subsection 2.07(a).

“Economic Basis” means the calculation of financial accounting terms using mark
to market of certain assets and liabilities as if the accounting standards of
the Emerging Issues Task Force (EITF) under EITF-98-10 (accounting for contracts
involved in energy trading and risk management activities) applied.

“Effective Amount” means (a) with respect to any Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Loans occurring on such date; and
(b) with respect to any outstanding L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including changes as a result of
expiration or cancellation, any amendments, reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date. In
determining the Effective Amount of any Letter of Credit that is denominated in
Canadian Dollars, the Agent may at any time determine the United States Dollar
Equivalent of such Letter of Credit and if the Agent determines that the United
States Dollar Equivalent is in excess of the U.S. Dollar amounts shown on the
Agent's books and records at such time, the Agent may advise the Borrower. In
such event, the Effective

 

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Amount of such Letter of Credit shall be deemed to be the United States Dollar
Equivalent amount and the Agent shall record and reflect such revised amount on
its books and records.

“Elected Ninety (90) Day Swap L/C Cap” means a minimum initial election of an
amount equal to $50,000,000.00; provided, however, Borrower may elect to change
such Elected Ninety (90) Day Swap L/C Cap five (5) times during any twelve (12)
month period to be $50,000,000.00 or $75,000,000.00, which modified Elected
Ninety (90) Day Swap L/C Cap shall continue in effect until again changed by
Borrower in accordance with this Agreement, or until automatically reduced as
hereinafter set forth. Notwithstanding the foregoing, Borrower may not elect an
Elected Ninety (90) Day Swap L/C Cap unless The Borrowing Base Sub-Cap in effect
at the time of election is greater than or equal to, the amounts specified
below:

(a)        If the Borrower elects $25,000,000, the Borrowing Base Sub-Cap in
effect at the time of election must be equal to or greater than $100,000,000; or

(b)        If the Borrower elects $50,000,000, the Borrowing Base Sub-Cap in
effect at the time of election must be equal to or greater than $175,000,000; or

(c)        If the Borrower elects $75,000,000, the Borrowing Base Sub-Cap in
effect at the time of election must be equal to or greater than $250,000,000.

Borrower shall elect which Elected Ninety (90) Day Swap L/C Cap is in effect
from time to time by delivering to Agent a written notice of such election in
the form of Exhibit K which is attached hereto. In the event that after Borrower
makes an Elected Ninety (90) Day Swap L/C Cap election and the Borrowing Base
Sub-Cap is not in compliance with the requirements set forth above, the Elected
Ninety (90) Day Swap L/C Cap shall be automatically reduced to the appropriate
level set forth above to cause compliance with the requirements set forth above,
provided that if Borrower fails to qualify for (a), (b) or (c), or fails to
elect an Elected Ninety (90) Day Swap L/C Cap, the Elected Ninety (90) Day Swap
L/C Cap shall be zero. Such reduction shall take place upon Agent’s receipt of
such Compliance Certificate or notice of election. NOTWITHSTANDING THE
FOREGOING, BORROWER MAY NOT ELECT AN ELECTED NINETY (90) DAY SWAP L/C CAP IN AN
AMOUNT IN EXCESS OF THE AMOUNT OF THE THEN L/C SUB-LIMIT CAP FOR NINETY (90) DAY
SWAP LC/S AS SET FORTH IN THE DEFINITION OF L/C SUB-LIMIT CAP BELOW.

“Elected Performance L/C Cap” means a minimum initial election of an amount
equal to $5,000,000.00; provided, however, Borrower may elect to change such
Elected Performance L/C Cap five (5) times during any twelve (12) month period
to be $10,000,000.00, $15,000,000.00, $20,000,000.00 or $25,000,000.00, which
modified Elected Performance L/C Cap shall continue in effect until again
changed by Borrower in accordance with this Agreement, or until automatically
reduced as hereinafter set forth. Notwithstanding the foregoing, Borrower may
not elect an Elected Performance L/C Cap unless Borrower’s Net Working Capital
and Tangible Net Worth at the time of election are greater than, or equal to,
the amounts specified below:

 

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(a)        If Borrower elects $5,000,000.00, Borrower’s Net Working Capital and
Tangible Net Worth must be at least $1,500,000.00 plus an amount equal to the
greater of (i) $18,000,000.00 or (ii) the amount of Net Working Capital and
Tangible Net Worth then required under the definition of Borrowing Base Sub-Cap;
or

(b)        If Borrower elects $10,000,000.00, Borrower’s Net Working Capital and
Tangible Net Worth must be at least $3,000,000.00 plus an amount equal to the
greater of (i) $18,000,000.00 or (ii) the amount of Net Working Capital and
Tangible Net Worth then required under the definition of Borrowing Base Sub-Cap;
or

(c)        If Borrower elects $15,000,000.00, Borrower’s Net Working Capital and
Tangible Net Worth must be at least $4,500,000.00 plus an amount equal to the
greater of (i) $18,000,000.00 or (ii) the amount of Net Working Capital and
Tangible Net Worth then required under the definition of Borrowing Base Sub-Cap;
or

(d)        If Borrower elects $20,000,000.00, Borrower’s Net Working Capital and
Tangible Net Worth must be at least $6,000,000.00 plus an amount equal to the
greater of (i) $18,000,000.00 or (ii) the amount of Net Working Capital and
Tangible Net Worth then required under the definition of Borrowing Base Sub-Cap;
or

(e)        If Borrower elects $25,000,000.00, Borrower’s Net Working Capital and
Tangible Net Worth must be at least $7,500,000.00 plus an amount equal to the
greater of (i) $18,000,000.00 or (ii) the amount of Net Working Capital and
Tangible Net Worth then required under the definition of Borrowing Base Sub-Cap.

Borrower shall elect which Elected Performance L/C Cap is in effect from time to
time by delivering to Agent a written notice of such election in the form of
Exhibit J which is attached hereto. In the event that after Borrower makes an
Elected Performance L/C Cap election and Borrower’s Net Working Capital or
Tangible Net Worth as reflected on a Compliance Certificate delivered to Agent
are not in compliance with the requirements set forth above, the Elected
Performance L/C Cap shall be automatically reduced to the appropriate level set
forth above to cause compliance with the requirements set forth above, provided
that if Borrower fails to qualify for (a), (b), (c), (d) or (e), or fails to
elect an Elected Performance L/C Cap, the Elected Performance L/C Cap shall be
zero. Such reduction shall take place upon Agent’s receipt of such Compliance
Certificate or notice of election. NOTWITHSTANDING THE FOREGOING, BORROWER MAY
NOT ELECT AN ELECTED PERFORMANCE L/C CAP IN AN AMOUNT IN EXCESS OF THE AMOUNT OF
THE THEN L/C SUB-LIMIT CAP FOR PERFORMANCE L/CS AS SET FORTH IN THE DEFINITION
OF L/C SUB-LIMIT CAP BELOW.

“Eligible Accounts” means, at the time of any determination thereof, each of the
Borrower’s Accounts as to which the following requirements have been fulfilled
to the satisfaction of all the Banks (or after the Conversion to Reduced Funding
Banks Date, all Approving Banks):

(a)        Such Account either (i) is the result of a sale of Product to a Tier
I or Tier II Account Party, (ii) is secured by letters of credit in form
acceptable to the Required

 

11

 

 

Banks (or after the Conversion to Reduced Funding Banks Date, all Approving
Banks) in their sole discretion and issued by banks approved by the Required
Banks (or after the Conversion to Reduced Funding Banks Date, all Approving
Banks) in their sole discretion, or (iii) when added to the outstanding Accounts
owing by any one Account Debtor, is for an amount less than $500,000 in the
aggregate (in such case, the Account Debtor will be treated as a Tier II Account
Party);

(b)

Borrower has lawful and absolute title to such Account;

(c)        Such Account is a valid, legally enforceable obligation of the Person
who is obligated under such Account for goods actually delivered to such Account
Debtor in the ordinary course of the Borrower’s business;

(d)        Such Account shall have excluded therefrom any portion that is
subject to any dispute, offset, counterclaim reduction, adjustment, contra
account or other claim or defense on the part of the Account Debtor or to any
claim on the part of the Account Debtor denying liability under such Account;
provided, however, that in the event that the portion that is subject to any
such dispute, counterclaim or other claim or defense is secured with a letter of
credit, such portion secured by the letter of credit shall not be excluded;

(e)        Such Account is not evidenced by any chattel paper, promissory note
or other instrument;

(f)         Such Account is subject to a perfected first priority security
interest (or properly filed and acknowledged assignment, in the case of U.S.
government contracts, if any) in favor of Agent pursuant to the Loan Documents,
prior to the rights of, and enforceable as such against, any other Person, and
such Account is not subject to any security interest or Lien in favor of any
Person other than the Liens of the Banks pursuant to the Loan Documents and
First Purchaser Liens;

(g)        Such Account shall have excluded therefrom any portion which is not
payable in United States Dollars or Canadian Dollars. If an Account is payable
in Canadian Dollars, it shall be taken into account for purposes of any dollar
limitations contained herein at the United States Dollar Equivalent of such
Account;

(h)        Such Account has been due and payable for 15 days or less (or 30 days
or less, if the Account Debtor is a governmental entity) from the due date under
the related invoice and no extension or indulgence has been granted extending
the due date beyond a 15 day period (or 30 days, as the case may be) and no
invoice shall have a due date more than 45 days from the date of the invoice. In
the event that 25% or more of the Accounts of any Account Debtor exceed the time
limitations set forth above, all Accounts of such Account Debtor shall be
excluded;

(i)         No Account Debtor in respect of such Account is an Affiliate of the
Borrower; provided, however, if the Account Debtor which is an Affiliate of the
Borrower is a Tier II Account Party, and, at the time the Account is created,
Parent has an investment grade credit rating, such Account shall not be
excluded;

 

12

 

 

 

(j)         No Account Debtor in respect of such Account is incorporated in or
primarily conducting business in any jurisdiction outside of the U.S. or Canada,
unless such Account Debtor and the Account is approved in writing by all Banks
(or after the Conversion to Reduced Funding Banks Date, all Approving Banks).

(k)        No Account Debtor, or guarantor of such Account Debtor’s Obligations
with respect to such Account (provided the Banks have relied on the
creditworthiness of the guarantor in approving such Account), in respect of such
Account (i) is insolvent, or generally fails to pay, or admits in writing its
inability to pay its debts as they become due, whether at stated maturity or
otherwise, or (ii) commences any Insolvency Proceeding with respect to itself;
or (iii) has had an Insolvency Proceeding commenced or filed against it;

provided that the amount of Accounts owing by an Account Debtor to the Borrower
(excluding Accounts described in paragraph (a)(ii) above relating to Accounts
secured by letters of credit) which may be treated as Eligible Accounts may not
exceed the Credit Limit for such Account Debtor.

For purposes of applying the above requirements for determining an Eligible
Account, if the Agent requests the approval of a Bank to treat an Account as an
Eligible Account, and such Bank does not respond to Agent within five (5)
Business Days of the receipt of such written request, such Bank shall be deemed
to have approved the treatment of the Account as an Eligible Account.

“Eligible Assignee” means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000.00; (b) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic Cooperation
and Development (the “OECD”), or a political subdivision of any such country,
and having a combined capital and surplus of at least $100,000,000.00; provided,
however, that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial lending and that is (i) a Subsidiary of a Bank (or bank referred to
in the preceding clauses (a) or (b)), (ii) a Subsidiary of a Person of which a
Bank (or bank referred to in the preceding clauses (a) or (b)), is a Subsidiary,
or (iii) a Person of which a Bank (or bank referred to in the preceding
clauses (a) or (b)) is a Subsidiary; and (d) any Person upon which Agent and
Borrower have agreed may serve as an Eligible Assignee.

“Eligible Broker” means any broker approved in writing by Agent and all the
Banks.

“Eligible Commodity Futures Accounts” means an account or accounts with an
Eligible Broker in which Agent is granted a first and prior security interest as
Agent for the Banks pursuant to Hedging Assignments which security interest is
subject only to the rights of the Eligible Broker under such accounts.

“Eligible Exchange Receivables” means all enforceable rights of the Borrower
under an Exchange Receivable which (a) are evidenced by a written agreement
enforceable

 

13

 

 

against the Exchange Debtor thereof, (b) are current pursuant to the terms of
the contract or invoice, (c) are free and clear of all Liens in favor of third
parties, except Liens in favor of the Agent for the benefit of the Banks,
(d) are not the subject of a dispute between the Exchange Debtor and the
Borrower, (e) are valued at an independent posting acceptable to all the Banks
(or after the Conversion to Reduced Funding Banks Date, all Approving Banks) in
their sole discretion, (f) if arising pursuant to contracts involving an amount
in excess of an aggregate of $500,000, are (i) contracts by exchangers
pre-approved by all the Banks (or after the Conversion to Reduced Funding Banks
Date, all Approving Banks) in their sole discretion, or (ii) contracts secured
by letters of credit in form acceptable to Agent in its sole discretion and
issued by banks approved by all the Banks (or after the Conversion to Reduced
Funding Banks Date, all Approving Banks) in their sole discretion, (g) when
added to the Exchange Receivables owing by any one Exchange Debtor, is for an
amount less than $500,000 in the aggregate, and (h) have not been otherwise
determined by any Bank (or after the Conversion to Reduced Funding Banks Date,
any Approving Bank) in its sole discretion to be unacceptable to such Bank (or
Approving Bank as applicable); provided that the amount of Exchange Receivables
owing by an Exchange Debtor to the Borrower (excluding Exchange Receivables
described in clause (f)(ii) above relating to contracts secured by letters of
credit) which may be treated as an Eligible Exchange Receivables may not exceed
the Credit Limit for such Exchange Debtor. Such Exchange Receivable shall have
excluded therefrom any portion that is subject to any dispute, offset,
counterclaim reduction, adjustment, contra account, account payable exchange
payable or other claim or defense on the part of the Exchange Debtor or to any
claim on the part of the Exchange Debtor denying liability under such Exchange
Receivable; provided, however, that in the event that the portion that is
subject to any such dispute, counterclaim or other claim or defense is secured
with a letter of credit, such portion secured by the letter of credit shall not
be excluded. The Product and Account relating to or creating any Eligible
Exchange Receivable shall not be simultaneously included in any other
availability calculation, including, without limitation, Undelivered Product
Value, Eligible Inventory or Eligible Accounts.

“Eligible Inventory” means, at the time of determination thereof, all of the
Borrower’s inventory stored in terminals located in the U.S. or Canada (and
provided all the Banks must have approved all terminal owners) valued at current
market (as referenced by a published source acceptable to all Banks or after the
Conversion to Reduced Funding Banks Date, all Approving Banks in their sole
discretion), and in all instances as to which the following requirements have
been fulfilled to the satisfaction of all the Banks (or after the Conversion to
Reduced Funding Banks Date, all Approving Banks):

(a)        The inventory is owned by the Borrower free and clear of all Liens in
favor of third parties, except Liens in favor of the Banks under the Loan
Documents and except for Permitted Liens;

(b)        The inventory has not been identified to deliveries with the result
that a buyer would have rights to the inventory that would be superior to
Agent’s security interest for the benefit of the Banks, nor shall such inventory
have become the subject of a customer’s ownership or Lien;

(c)        The inventory is in transit in the U.S. or Canada under the control
and ownership of the Borrower or is in a pipeline or a bill of lading has been
issued to Agent if

 

14

 

 

such inventory is in the hands of a third party carrier or is located in the
U.S. or Canada at the locations described on Schedule 7.03(f), or at such other
place as has been specifically agreed to in writing by all Banks (or after the
Conversion to Reduced Funding Banks Date, all Approving Banks) and the Borrower;

(d)        If the inventory is located in a terminal or storage facility, such
terminal or facility, together with the related storage agreement, must be
acceptable to each Bank in its sole discretion, and the Borrower shall have
furnished to Agent a signed letter in form and substance satisfactory to Agent
addressed to each owner of a terminal or storage facility, which letter may be
delivered by Agent to such terminal or storage facility owner upon an Event of
Default hereunder; and

(e)        The inventory is subject to a fully perfected first priority security
interest in favor of Agent for the benefit of the Banks pursuant to the Loan
Documents.

“Environmental Claims” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment.

“Environmental Laws” means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.

“ERISA” means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.

 

15

 

 

 

“Eurodollar Effective Amount” means the product of the principal amount of a
Eurodollar Rate Loan or requested Eurodollar Rate Loan and the number of days in
the applicable Interest Period for such Eurodollar Rate Loan.

“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan:

(a)        the rate per annum equal to the rate determined by Agent to be the
offered rate that appears on the page of the Dow Jones Market Service screen (or
any successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or

(b)        if the rate referenced in the preceding subsection (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum equal to the rate determined by Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

(c)        if the rates referenced in the preceding subsections (a) and (b) are
not available, the rate per annum determined by Agent as the rate of interest
(rounded upward to the next 1/100th of 1%) at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by the London Branch of Fortis Bank, S.A./N.V. as stated on Dow
Jones Market Service Page 3750 as of 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period. If such interest rates
shall cease to be available from Dow Jones Market Service, such interest rates
shall be determined from such financial reporting service or other information
as shall be mutually acceptable to Agent and the Borrower.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

“Event of Default” means any of the events or circumstances specified in
Section 9.01.

“Exchange Act” means the Securities and Exchange Act of 1934, as amended, and
regulations promulgated thereunder.

“Exchange Debtor” means a Person who is obligated to the Borrower under an
Exchange Receivable.

“Exchange Receivable” means a right of the Borrower to receive Product in
exchange for the sale or trade of Product previously delivered to an Exchange
Debtor by the Borrower.

 

16

 

 

 

“Exhibit G Cut-Off” has the meaning specified in Subsection 3.02(b).

“Existing Letters of Credit” means all Letters of Credit existing as of the
Closing Date.

“Expiration Date” means the earliest to occur of:

(a)

May 11, 2007; or

 

(b)

the date demand for payment is made by the Required Banks; or

(c)

the date an Event of Default occurs.

 

“FDIC” means the Federal Deposit Insurance Corporation, and any Governmental
Authority succeeding to any of its principal functions.

“Federal Funds Rate” means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
“H.15(519)”) on the preceding Business Day opposite the caption “Federal Funds
(Effective)” or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by Agent of the rates for the last transaction in overnight
Federal Funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal Funds transactions in New York City
selected by Agent.

“First Purchaser Lien” has the meaning specified in the definition of “Borrowing
Base Advance Cap.”

“Foreign Bank” has the meaning specified in Section 10.10.

“FRB” means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

“Guaranty Obligation” has the meaning specified in the definition of “Contingent
Obligation.”

 

17

 

 

 

“Hedging Assignment” means a security agreement among Borrower, Agent and a
broker relating to the collateral assignment to Agent, as collateral agent for
the Banks, of all sums owing from time to time to Borrower with respect to any
Eligible Commodities Futures Accounts maintained by Borrower, such agreement to
be substantially in the form attached hereto as Exhibit K or in other form and
substance acceptable to the Banks in their sole discretion.

“Honor Date” has the meaning specified in Subsection 3.03(b).

“ICC” has the meaning specified in Section 3.09.

“Indebtedness” of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business on ordinary terms); (c) all
non-contingent reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to capital leases; (g)
all obligations with respect to Swap Contracts; (h) all indebtedness referred to
in clauses (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such indebtedness; and (i) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses
(a) through (g) above.

“Indemnified Liabilities” has the meaning specified in Section 11.05.

“Indemnitees” has the meaning specified in Section 11.05.

“Independent Auditor” has the meaning specified in Subsection 7.01(a).

“Information” has the meaning specified in Section 11.08.

“Insolvency Proceeding” means, with respect to any Person (a) any case, action
or proceeding with respect to such Person before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors generally
or any substantial portion of its creditors; undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.

“Intercreditor Agreement” means the Intercreditor Agreement dated as of June 1,
2006 among the Banks relating to the sharing of Collateral with and among the
Swap Banks.

 

18

 

 

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the 90th day after such Loan is made, if the Interest Period for such Loan is
longer than 90 days, and the last day of each Interest Period applicable to such
Loan; and (b) as to any Base Rate Loan, the later of (i) the 5th Business Day of
each month, or (ii) the date of payment shown on the billing delivered to the
Borrower by the Agent, but in no event later than the Expiration Date.

“Interest Period” means, as to any Eurodollar Rate Loan, the period commencing
on the Borrowing Date of such Loan or on the Conversion/Continuation Date on
which the Loan is converted into or continued as a Eurodollar Rate Loan, and
ending on the date selected by the Borrower in its Notice of Borrowing or Notice
of Conversion/Continuation as the ending date thereof, not to exceed a period of
one or two weeks or one, two, three or four months thereafter; provided,
however, that:

(a)        any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Rate Loan, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day;

(b)        any Interest Period pertaining to a Eurodollar Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

(c)        no Interest Period shall extend beyond the scheduled Expiration Date.

“IRS” means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.

“Issuance Date” means the date on which any Letter of Credit is actually issued
hereunder.

“Issue” means, with respect to any Letter of Credit, to issue or to extend the
expiry of, or to renew or increase the amount of, such Letter of Credit; and the
terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.

“Issuing Banks” means Fortis, BNP Paribas, and any other Bank which with Agent’s
consent Issues Letters of Credit hereunder, in such Bank’s capacity as an issuer
of one or more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under Section 2.14.

“L/C Advance” means each Bank’s participation in any L/C Borrowing or Reducing
L/C Borrowing in accordance with its Pro Rata Share with respect to Letters of
Credit Issued prior to the Conversion to Reduced Funding Banks Date and the
Approving Banks’ participation in any L/C Borrowing or Reducing L/C Borrowing in
accordance with its Pro Rata Share with respect to all Letters of Credit Issued
thereafter.

 

19

 

 

 

“L/C Amendment Application” means an application form for amendment of
outstanding Standby or Commercial Letters of Credit as shall at any time be in
use at any Issuing Bank, as such Issuing Bank shall request.

“L/C Application” means an application form for Issuances of Standby or
Commercial Letters of Credit as shall at any time be in use at any Issuing Bank,
as such Issuing Bank shall request.

“L/C Borrowing” means an extension of credit resulting from either a drawing
under any Letter of Credit or a Reducing L/C Borrowing, which extension of
credit shall not have been reimbursed on the date when made nor converted into a
Borrowing of Revolving Loans under Section 3.03.

“L/C Cap” means the maximum availability for Issuance of Letters of Credit under
the Borrowing Base Line which shall be an amount equal to the total Effective
Amount of L/C Obligations plus the Effective Amount of then outstanding Loans
not to exceed the lesser of the Borrowing Base Advance Cap or the L/C Sub-limit
Cap for each type of Letter of Credit.

“L/C Obligations” means at any time the sum of (a) the aggregate undrawn amount
of all Letters of Credit then outstanding, plus (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all outstanding L/C
Borrowings.

“L/C-Related Documents” means the Letters of Credit, the L/C Applications, the
L/C Amendment Applications and any other document relating to any Letter of
Credit, including, but not limited to, any Issuing Bank’s standard form
documents for letter of credit issuances.

“L/C Sub-limit Cap’ means the cap upon L/C Obligations under particular types of
Letters of Credit Issued under the Borrowing Base Line as follows (each such
type below is referred to herein as a “Type” of Letter of Credit):

(a)        Performance L/Cs - $25,000,000.00, but not to exceed the Elected
Performance L/C Cap then in effect;

(b)

Transportation L/Cs - $50,000,000.00;

(c)        Ninety (90) Day Swap L/Cs - $75,000,000.00, but not to exceed The
Elective Ninety (90) Day Swap L/C Cap then in effect;

(d)        Three Hundred Sixty-Five (365) Day Swap L/Cs - $50,000,000.00; and

(e)        Supply L/Cs - $260,000,000.00 less any amounts outstanding under (a),
(b), (c) or (d) above.

“Lending Office” means, as to any Bank, the office or offices of such Bank
specified as its “Lending Office” on Schedule 11.02, or such other office or
offices as such Bank may from time to time notify the Borrower and Agent.

 

20

 

 

 

“Letters of Credit” means (a) any letters of credit (whether Standby Letters of
Credit or Commercial Letters of Credit) Issued by an Issuing Bank pursuant to
Article III, (b) any Reducing Letters of Credit, and (c) any Existing Letters of
Credit.

“Lien” means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge, encumbrance, or lien, statutory or other in
respect of any property, including those created by, arising under or evidenced
by any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as debtor,
under the Uniform Commercial Code or any comparable law.

“Loan” means any extension of credit by a Bank to the Borrower under Article II
or Article III in the form of a Revolving Loan or an L/C Advance.

“Loan Documents” means this Agreement, the Notes, the Security Agreements, the
L/C-Related Documents, the Control Agreement, the fee letters and all other
documents delivered to Agent or any Bank in connection herewith.

“Loan Parties” means the Borrower.

“Long Position” means the aggregate number of MMBTUS of natural gas or barrels
of crude oil/distillates for crude blending which are either held in inventory
or which Borrower has contracted to purchase (whether by purchase of a contract
on a commodities exchange or otherwise), or which Borrower will receive in
exchange or under a swap contract including, without limitation, all option
contracts representing the obligation of Borrower to purchase Product at the
option of a third party, and in each case, for which a fixed purchase price has
been set. Long Positions will be expressed as a positive number.

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the FRB.

“Marketable Securities” means (a) certificates of deposit issued by any bank
with a Fitch rating of A or better, (b) commercial paper rated P-1, A-1 or F-1,
(c) bankers acceptances rated prime, or (d) U.S. Government obligations with
tenors of 90 days or less.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial
or otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party; (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party or (d) any Loan Party at any time asserts that any Loan Document is not
legal or valid, or is not binding upon or enforceable against such Loan Party.

“Maturity Date” means May 11, 2008.

“Maximum Rate” has the meaning specified in Section 11.10.

 

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“Multiemployer Plan” means a “multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes,
is making, or is obligated to make contributions or, during the preceding three
(3) calendar years, has made, or been obligated to make, contributions.

“Net Position” means the number of MMBTUS of natural gas or barrels of crude
oil/distillates for crude blending resulting from the netting of the sum of all
Long Positions and Short Positions of Borrower.

“Net Position Report” means a report in form attached hereto as Exhibit E.

“Net Working Capital” means the excess of Current Assets over Current
Liabilities (excluding the current portion of Subordinated Debt), less
investments in Capital Stock. In calculating Net Working Capital, (i) the amount
of Subordinated Debt excluded from liabilities in such calculation shall not
exceed 50% of the resulting Net Working Capital, provided, however, that this
limitation will not apply in the event Subordinated Debt is used to cure any
financial covenant default, and (ii) all amounts due from Parent, employees,
owners, Subsidiaries and Affiliates shall be excluded from Current Assets.

“Ninety (90) Day Swap L/Cs” means standby Letters of Credit with a tenor of less
than ninety-one (91) days Issued to support payments owed to counterparties
under swap contracts.

“Notes” means the promissory notes executed by the Borrower in favor of a Bank
pursuant to Subsection 2.02(b), in form approved by the Banks. A Note will be
issued by the Borrower to each entity that becomes a Bank hereunder from time to
time, but will not be issued to Participants of a Bank.

“Notice of Borrowing” means the applicable notice in substantially the form of
Exhibit A-1.

“Notice of Conversion/Continuation” means a notice in substantially the form of
Exhibit A-2.

“Obligations” means (a) all advances, debts, liabilities, obligations, covenants
and duties arising under any Loan Document owing by the Borrower to any Bank, or
any affiliate of any Bank, Agent, or any Indemnitee, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising, including without limitation
overdraft costs arising as a result of transfers of funds made through the
automated clearinghouse system and all obligations of the Borrower under
Revolving Loans and arising from Letters of Credit, excluding any of the
foregoing referred to in clause (b) hereof, and (b) all indebtedness,
liabilities and obligations owing by Borrower to any Swap Bank under a Swap
Contract, whether due or to become due, absolute or contingent, or now existing
or hereafter arising. For purposes of determining the amount of the Borrower’s
Obligations under a Swap Contract, the amount of such Obligation shall be an
amount equal to the Close-out Amount with respect to such Swap Contract.

 

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“Organization Documents” means (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement, (c) for any limited liability company,
the articles of organization and all other documents or filings as may be
required by the Secretary of State (or other applicable governmental agency) in
the state of such limited liability company’s formation.

“Other Taxes” has the meaning specified in Subsection 4.01(b).

“Parent” means Black Hills Corporation.

“Participant” has the meaning specified in Subsection 11.07(d).

“PBGC” means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.

“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which the Borrower sponsors, maintains, or to which
it makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.

“Performance L/C” means any Letters of Credit securing counterparties for
performance under Product contracts with an expiry date of 90 days or less.

“Permitted Liens” has the meaning specified in Section 8.01.

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower sponsors or maintains or to which the Borrower makes, is
making, or is obligated to make contributions and includes any Pension Plan.

“Product” means natural gas, crude oil or distillates for crude blending.

“Pro Rata Share” means, as to any Bank at any time, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of
such Bank’s total Effective Amount divided by the combined total Effective
Amount of all the Banks.

“Reducing Letters of Credit” means any letters of credit (whether Standby
Letters of Credit or Commercial Letters of Credit) that (a) are Issued by an
Issuing Bank pursuant to Article III, and (b) specifically provide that the
amount available for drawing under such letters of credit will be reduced,
automatically and without any further amendment or endorsement to such letters
of credit, by the amount of any payment or payments made to the beneficiary of
such

 

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Letter of Credit by the Borrower if such payment or payments (i) are made
through a Bank and (ii) reference such letters of credit by the letter of credit
numbers thereof, notwithstanding the fact that such payment or payments are not
made pursuant to conforming and proper draws under such letters of credit.

“Reducing L/C Borrowing” means any extension of credit by the Banks to the
Borrower for the purpose of funding any payment or payments made to the
beneficiary of a Reducing Letter of Credit by the Borrower if such payment or
payments (a) are made through a Bank, (b) reference the Reducing Letter of
Credit by the letter of credit number thereof, and (c) are not made pursuant to
a conforming and proper draws under such Reducing Letter of Credit.

“Reportable Event” means, any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.

“Required Banks” means Banks, with a minimum of two (2) Banks, holding at least
sixty-seven percent (67%) of all of the Effective Amount.

“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.

“Responsible Officer” means those persons named on the Responsible Officer List.

“Responsible Officer List” means the list of the Borrower’s Responsible Officers
furnished to Agent hereunder as it may be modified from time to time.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock, membership
interest or equity interest of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock, membership interest or
equity interest or of any option, warrant or other right to acquire any such
capital stock, membership interest or equity interest.

“Revolving Loan” has the meaning specified in Section 2.01.

“Security Agreements” means the Borrower’s Second Amended and Restated Security
Agreement, the Borrower’s Canadian Security Agreement, the Blocked Account
Agreements, the Control Agreements, and all Hedging Assignments, all of which
shall also secure the Swap Banks (as more fully described in such agreements),
notwithstanding the fact that the definitions used herein of any of the
foregoing terms may refer to the securing only of the Banks.

 

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"Sharing Event" shall have the meaning ascribed to it in the Intercreditor
Agreement.

“Short Position” means the aggregate number of MMBTUS of natural gas or barrels
of crude oil/distillates for crude blending which Borrower has contracted to
sell (whether by sale of a contract on a commodities exchange or otherwise) or
deliver on exchange or under a swap contract, including, without limitation, all
option contracts representing the obligation of Borrower to sell Product at the
option of a third party and in each case for which a fixed sales price has been
set. Short Positions shall be expressed as a negative number.

“Standby Letter of Credit” means a Letter of Credit which is not intended at the
time Issued to be drawn upon.

“Stop Loss Limit” means the limit on mark to market losses on a defined basis
(e.g., daily, monthly) prior to triggering remedial actions such as restrictions
on trading or liquidation of a transaction or portfolio.

“Subordinated Debt” means Indebtedness of the Borrower which has been reported
to the Banks and which has been subordinated to the Obligations pursuant to a
Subordination Agreement substantially in the form attached hereto as Exhibit H.

“Subsidiary” of a Person means any corporation, association, partnership, joint
venture or other business entity of which more than 50% of the voting stock or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a “Subsidiary” refer to a
Subsidiary of the Borrower.

“Supply L/C” means any Letters of Credit to be used to facilitate the purchase
of Product for resale or to secure the purchase of Product with an expiry date
of ninety (90) days or less.

“Surety Instruments” means all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

“Swap Banks” means Fortis, BNP Paribas, SocGen and U.S. Bank and their
Affiliates in their capacity as a party to a Swap Contract, and any other Bank
approved by all the Banks which has signed and become a party to the
Intercreditor Agreement; provided, in each case, that any of the same remain a
Bank or an Affiliate of a Bank hereunder and a party to the Intercreditor
Agreement and/or remain entitled to the benefit of the Security Agreements;
provided further, however, that BNP Paribas Futures, Inc. shall not be treated
as a Swap Bank.

“Swap Contract” means any agreement entered into with any Swap Bank, whether or
not in writing, relating to any single transaction that is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or bill option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction, currency
swap, cross-currency rate swap, currency option or any other similar

 

25

 

 

transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing and, unless the context clearly requires, any
master agreement relating to or governing any or all of the foregoing. No Swap
Contract will be executed hereunder unless it is subject to the applicable ISDA
Master Agreement or its equivalent (i.e., long-form confirmations).

“Swap L/Cs” means Ninety (90) Day Swap L/Cs and Three Hundred Sixty-Five (365)
Day Swap L/Cs.

“Tangible Net Worth” means (a) the sum of the Borrower’s assets, as determined
in accordance with GAAP, less (b) Borrower’s Total Liabilities as determined in
accordance with GAAP, less (c) all amounts due from employees, owners,
Subsidiaries and Affiliates, less (d) investments in Capital Stock, less (e) the
intangible assets of the Borrower, as determined in accordance with GAAP. In
calculating Tangible Net Worth, the amount of Subordinated Debt excluded from
liabilities in such calculation shall not exceed 50% of the resultant Tangible
Net Worth, provided, however, that this limitation will not apply in the event
Subordinated Debt is used to cure any financial covenant default.

“Taxes” has the meaning specified in Subsection 4.01(a).

“Three Hundred Sixty-Five (365) Day Swap L/Cs” means standby Letters of Credit
with a tenor greater than ninety (90) days and less than three hundred and
sixty-five (365) days Issued to support payments owed to counterparties under
swap contracts.

“Tier I Account” means an Eligible Account with a Tier I Account Party.

“Tier I Account Party” means an Account Debtor which is approved by all Banks
(or, with respect to an Account Debtor of any Account created after the
Conversion to Reduced Funding Banks Date, all Approving Banks) as a Tier I
Account Party.

“Tier I Unbilled Eligible Account” means Unbilled Eligible Accounts with a Tier
I Account Party.

“Tier II Account” means an Eligible Account with a Tier II Account Party.

“Tier II Account Party” means (i) an Account Debtor which is approved by all
Banks (or, with respect to an Account Debtor of any Account created after the
Conversion to Reduced Funding Banks Date, all Approving Banks) as a Tier II
Account Party, or (ii) an Account Debtor treated as a Tier II Account Party
under paragraph (a)(iii) of the definition of "Eligible Accounts."

“Tier II Unbilled Eligible Account” means Unbilled Eligible Accounts with a Tier
II Account Party.

“Total Liabilities” means all of Borrower’s liabilities, determined in
accordance with GAAP, excluding Subordinated Debt.

“Transportation Agreement” means any agreement between Borrower and any
transporter of Product.

 

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“Transportation Agreement Report” means a report containing (a) the value of
Borrower’s liability under each Transportation Agreement, (b) the related
marketing contracts and offsetting profits for each Transportation Agreement,
and (c) a certification of compliance of limits set for Unhedged Transportation
Exposure.

“Transportation L/C” means (a) any Letters of Credit securing pipeline companies
for transportation expenses with an expiry date of three hundred sixty-five
(365) days or less, and (b) any Letters of Credit to be used to purchase Product
for resale or to secure the purchase of Product with an expiry date of more than
ninety (90) days but less than three hundred sixty-six (366) days.

“Type” means either a Base Rate Loan or a Eurodollar Rate Loan.

“Unbilled Eligible Accounts” means Accounts of the Borrower for Product which
has been delivered to an Account Debtor and which would be Eligible Accounts but
for the fact that such Accounts have not actually been invoiced at such time.

“Uncommitted Line” means the aggregate Uncommitted Line Portions of all the
Banks as is set forth on Schedule 2.01 hereto.

“Uncommitted Line Portion” means for each Bank the Portion of each of the
Uncommitted Line limits assigned to such Bank as set forth on Schedule 2.01.

“Undelivered Product Value” means the lesser of the (a) cost or (b) current
market value of Product purchased by the Borrower under the Letters of Credit
but which has not been physically delivered to the Borrower. Undelivered Product
Value cannot simultaneously be included in an Eligible Exchange Receivable.

“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“Unhedged Transportation Exposure” means the amount of any transportation
expenses Borrower incurs prior to the transportation of Product.

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

“United States Dollar Equivalent,” of any Canadian Dollars shall mean the amount
of such Canadian Dollars converted to United States Dollars computed, unless
otherwise agreed, at Fortis' selling rate for Canadian Dollars most recently in
effect on or prior to the date of determination.

“United States Dollars,” and “U.S.$” each mean lawful money of the United
States.

1.02

Other Interpretive Provisions.

 

 

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(a)        The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.

(b)        The words “hereof”, “herein”, “hereunder” and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and Subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

(c)

(i)            The term “documents” includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.

 

(ii)

The term “including” is not limiting and means “including without limitation.”

 

(iii)

In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” the words “to” and “until” each
mean “to but excluding”, and the word “through” means “to and including.”

(d)        Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.

(e)        The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.

(f)         This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.

(g)        This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to Agent, the Banks, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or Agent merely
because of Agent’s or Banks’ involvement in their preparation.

(h)        Unless otherwise indicated, references to “$” shall mean United
States Dollars.

 

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1.03

Accounting Principles.

(a)        Unless the context otherwise clearly requires, all accounting terms
not expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made in accordance with GAAP,
consistently applied, except for the financial computations relating to the
terms “Net Working Capital” and “Tangible Net Worth” which are to be made on an
Economic Basis.

(b)        References herein to “fiscal year” and “fiscal quarter” refer to such
fiscal periods of the Borrower.

ARTICLE II

THE CREDITS

2.01      Amounts and Terms of Uncommitted Line. Each Bank severally agrees, on
an UNCOMMITTED AND ABSOLUTELY DISCRETIONARY basis, and on the terms and
conditions set forth herein, to consider making Loans, from time to time, in
United States Dollars, to the Borrower under the Borrowing Base Line (each such
loan, a “Revolving Loan”) on any Business Day during the period from the Closing
Date to the Expiration Date to finance working capital needs of the Borrower, in
an aggregate amount not to exceed at any time outstanding (i) such Bank’s
Uncommitted Line Portion for the Borrowing Base Line; or (ii) the Advance Line
Limit; provided, however, that, after giving effect to any Borrowing of
Revolving Loans, the Aggregate Amount shall not at any time exceed the Borrowing
Base Advance Cap.

THE BORROWER ACKNOWLEDGES AND AGREES THAT THE BANKS HAVE ABSOLUTELY NO DUTY TO
FUND ANY REVOLVING LOAN REQUESTED BY THE BORROWER BUT WILL EVALUATE EACH LOAN
REQUEST AND IN EACH BANK’S ABSOLUTE AND SOLE DISCRETION WILL DECIDE WHETHER TO
FUND SUCH LOAN REQUEST. THE BORROWER FURTHER ACKNOWLEDGES AND AGREES THAT NO
SWAP BANK HAS ANY DUTY TO ENTER INTO ANY SWAP CONTRACT AND THE ENTERING INTO OF
ANY SWAP CONTRACT SHALL BE AT EACH SWAP BANK’S ABSOLUTE AND SOLE DISCRETION.

2.02

Loan Accounts.

(a)        The Loans made by each Bank and the Letters of Credit Issued by an
Issuing Bank shall be evidenced by one or more accounts or records maintained by
Agent in the ordinary course of business. The accounts or records maintained by
Agent shall be rebuttable presumptive evidence of the amount of the Loans made
by the Banks to the Borrower and the Letters of Credit Issued for the account of
the Borrower hereunder, and the interest and payments thereon. Any failure to so
record or any error in so doing shall not, however, limit or otherwise affect
the Obligation of the Borrower hereunder to pay any amount owing with respect to
the Loans or any Letter of Credit.

(b)        Upon the request of any Bank made through Agent, the Loans made by
such Bank may be evidenced by one or more Notes, instead of loan accounts. Each

 

29

 

 

such Bank may endorse on the schedules annexed to its Note(s) the date, amount
and maturity of each Loan made by it and the amount of each payment of principal
made by the Borrower with respect thereto. Each such Bank is irrevocably
authorized by the Borrower to endorse its Note(s) and each Bank’s record shall
be rebuttable presumptive evidence of the information set forth therein;
provided, however, that the failure of a Bank to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise affect
the Obligations of the Borrower hereunder or under any such Note to such Bank.

2.03

Procedure for Borrowing.

(a)        Each Borrowing of Revolving Loans consisting only of Base Rate Loans,
if approved by all the Banks in their sole discretion, shall be made upon the
Borrower’s irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing, which notice must be received by Agent prior to 1:00 p.m.
(New York City time) on the Borrowing Date specifying the amount of the
Borrowing. Each such Notice of Borrowing shall be by electronic transfer or
facsimile, confirmed immediately in an original writing. Each Borrowing of
Revolving Loans that includes any Eurodollar Rate Loans, if approved by all the
Banks in their sole discretion, shall be made upon the Borrower’s irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing
(which notice must be received by Agent prior to 1:00 p.m. (New York City time)
three (3) Business Days prior to the requested Borrowing Date), specifying the
amount of the Borrowing. Each such Notice of Borrowing shall be by electronic
transfer or facsimile, confirmed immediately in an original writing. Each
requested Eurodollar Rate Loan must have a Eurodollar Effective Amount of at
least $10,000,000.00.

(b)        Agent will promptly notify each Bank of its receipt of any Notice of
Borrowing and of the amount of such Bank’s Pro Rata Share of that Borrowing.

(c)        Unless a Bank has provided Agent with, and Agent has actually
received, a written notice in the form attached hereto as Exhibit G at least the
greater of 24 hours or one Business Day prior to Agent’s receipt of any Notice
of Borrowing that such Bank does not approve further Borrowings and/or Issuances
of Letters of Credit, if Agent advances a Loan pursuant to a Notice of
Borrowing, each Bank will make the amount of its Pro Rata Share of such
Borrowing available to Agent for the account of the Borrower at Agent’s Payment
Office by 3:00 p.m. (New York City time) on the Borrowing Date requested by the
Borrower in funds immediately available to Agent. The proceeds of such Loan will
be made available to the Borrower by the Agent at such office by crediting the
operating account of the Borrower maintained with US Bank with the aggregate of
the amounts made available by the Agent. If any Bank in a timely manner provides
Agent with such a written notice of its disapproval of further Borrowings and/or
Issuances of Letters of Credit, then Agent shall notify the Borrower that one or
more of the Banks have elected not to fund further Borrowings and/or participate
in further Issuances of Letters of Credit and whether a Bank (or Banks) has
(have) elected to become the Approving Bank(s) thereby triggering the Conversion
to Reduced Funding Banks Date.

2.03A

Conversion and Continuation Elections.

(a)        The Borrower may, upon irrevocable written notice to Agent in
accordance with Subsection 3A(b):

 

30

 

 

 

(ii)

elect, as of any Business Day, in the case of Base Rate Loans, or as of the last
day of the applicable Interest Period, in the case of any Eurodollar Rate Loan,
to convert any such Loans into Loans of any other Type (provided, however, the
Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least
$10,000,000.00); or

(iii)

elect, as of the last day of the applicable Interest Period, to continue any
Revolving Loans having Interest Periods expiring on such day (provided, however,
the Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least
$10,000,000.00);

provided, however, that if at any time the aggregate amount of Eurodollar Rate
Loans in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof, to have a Eurodollar Effective Amount of less than
$10,000,000.00, such Eurodollar Rate Loans shall automatically convert into Base
Rate Loans, and on and after such date the right of the Borrower to continue
such Loans as, and convert such Loans into, Eurodollar Rate Loans shall
terminate.

(b)        The Borrower shall deliver a Notice of Conversion/Continuation to be
received by Agent not later than 1:00 p.m. (New York City time) on the
Conversion/Continuation Date if the Loans are to be converted into Base Rate
Loans; and three (3) Business Day in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as Eurodollar Rate
Loans, specifying:

(i)

the proposed Conversion/Continuation Date;

(ii)

the aggregate amount of Loans to be converted or continued;

(iii)

the Type of Loans resulting from the proposed conversion or continuation; and

(iv)

other than in the case of conversions into Base Rate Loans, the duration of the
requested Interest Period.

(c)        If upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans, the Borrower has failed to timely select a new Interest
Period to be applicable to its Eurodollar Rate Loans, or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.

(d)        Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Borrower,
Agent will promptly notify each Bank of the details of any automatic conversion.
All conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans, with respect to which the
notice was given, held by each Bank. Agent will promptly

 

31

 

 

notify, in writing, each Bank of the amount of such Bank’s Pro Rata Share of
that Conversion/Continuation.

(e)        Unless all Banks otherwise agree, during the existence of a Default
or Event of Default, the Borrower may not elect to have a Loan converted into or
continued as a Eurodollar Rate Loan.

(f)         After giving effect to any Borrowing, conversion or continuation of
Loans, there may not be more than ten (10) Interest Periods in effect.

(g)        If any Bank has provided Agent with, and Agent has actually received,
a written notice in the form of Exhibit G by 2:00 p.m. (New York City time) on
the day prior to the requested Conversion/Continuation Date, then Agent shall
notify the Borrower no later than 3:30 p.m. (New York City time) that one or
more of the Banks have elected not to convert/continue such Loan and whether
Bank(s) has (have) elected to become the Approving Bank(s) thereby triggering
the Conversion to Reduced Funding Banks Date.

2.04      Optional Prepayments. The Borrower may, at any time or from time to
time, upon the Borrower’s irrevocable written notice to Agent received prior to
12:00 p.m. noon (New York City time) on the date of prepayment, prepay Loans in
whole or in part. Agent will promptly notify each Bank of its receipt of any
such prepayment, and of such Bank’s Pro Rata Share of such prepayment.

2.05

Mandatory Prepayments of Loans.

(a)        The Aggregate Amount shall not at any time exceed the Borrowing Base
Advance Cap. If the Aggregate Amount on any day ever exceeds the Borrowing Base
Advance Cap, the Borrower shall immediately (1) repay on that date the excess
amount or (2) Cash Collateralize on such date the excess amount.

(b)        If on any date the Effective Amount of all L/C Obligations exceeds
the L/C Cap, or any LC Obligations relating to a Type of Letter of Credit
described herein exceeds the applicable L/C Sub-limit Cap, the Borrower shall
Cash Collateralize on such date the outstanding Letters of Credit, or the
outstanding Type of Letters of Credit, as the case may be, in an amount equal to
the excess above any such cap, and on the Maturity Date, Borrower shall Cash
Collateralize all then outstanding Letters of Credit in an amount equal to the
Effective Amount of all L/C Obligations related to such Letters of Credit. If on
any date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount of all Revolving Loans
then outstanding plus the Effective Amount of all L/C Obligations exceeds the
lesser of (a) the Borrowing Base Advance Cap or (b) the total Uncommitted Line,
the Borrower shall immediately, and without notice or demand, prepay the
outstanding principal amount of the Revolving Loans and L/C Borrowings by an
amount equal to the applicable excess.

2.06      Repayment. Unless payment is demanded by the Required Banks prior
thereto, the Borrower shall repay the principal amount of each Revolving Loan to
Agent on behalf of the Banks, on the Advance Maturity Date for such Loan.

 

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2.07

Interest.

(a)        Each Revolving Loan (except for a Revolving Loan made as a result of
a drawing under a Letter of Credit or a Reducing L/C Borrowing) shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a floating rate per annum equal to the Base Rate plus the
Applicable Margin at all times such Loan is a Base Rate Loan or at the
Eurodollar Rate plus the Applicable Margin at all times such Loan is an
Eurodollar Rate Loan. Each Revolving Loan made as a result of a drawing under a
Letter of Credit or a Reducing L/C Borrowing shall bear interest on the
outstanding principal amount thereof from the date funded at a floating rate per
annum equal to the Base Rate plus the Applicable Margin until such Loan has been
outstanding for more than two (2) Business Days and, thereafter, shall bear
interest on the outstanding principal amount thereof at a floating rate per
annum equal to the Base Rate, plus three percent (3.0%) per annum (the “Default
Rate”).

(b)        Interest on each Revolving Loan shall be paid upon demand, or if no
demand is made, shall be paid in arrears on each Interest Payment Date.

(c)        Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Borrower agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Default Rate.

(d)        Anything herein to the contrary notwithstanding, the Obligations of
the Borrower to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Borrower shall pay such Bank interest at the highest rate permitted by
applicable law.

(e)        Regardless of any provision contained in any Note or in any of the
Loan Documents, none of the Banks shall ever be deemed to have contracted for or
be entitled to receive, collect or apply as interest under any such Note or any
Loan Document, or otherwise, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, and, in the event that any
of the Banks ever receive, collect or apply as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of the Note, and, if the principal balance of such
Note is paid in full, any remaining excess shall forthwith be paid to the
Borrower. In determining whether or not the interest paid or payable under any
specific contingency exceeds the highest lawful rate, the Borrower and such Bank
shall, to the maximum extent permitted under applicable law, (i) characterize
any non-principal payment as an expense, fee, or premium, rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and
(iii) spread the total amount of interest throughout the entire contemplated
term of such Note so that the interest rate is uniform throughout such term;
provided, however, that if all Obligations under the Note and

 

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all Loan Documents are performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual term
thereof exceeds the maximum lawful rate, such Bank shall refund to the Borrower
the amount of such excess, or credit the amount of such excess against the
aggregate unpaid principal balance of such Bank’s Note at the time in question.

2.08      Fees. In addition to certain fees described in Section 3.08, the
Borrower shall pay the Agent and the Banks fees in accordance with a separate
fee letter between the Agent, the Banks and Borrower.

2.09

Computation of Interest and Fees.

(a)        All computations of interest and fees (other than fees due and
payable at closing) shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof through the
last day thereof.

(b)        Each determination of an interest rate by Agent shall be rebuttable
presumptive evidence thereof.

2.10

Payments by the Borrower.

(a)        All payments to be made by the Borrower shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to Agent for the account of
the Banks at Agent’s Payment Office, and shall be made in United States Dollars
and in immediately available funds, no later than 1:00 p.m. (New York City time)
on the date specified herein. Agent will promptly distribute to each Bank its
Pro Rata Share (or after the occurrence of a Sharing Event, under the
Intercreditor Agreement, its Adjusted Pro Rata Share) of such payment in like
funds as received. Any payment received by Agent later than 1:00 p.m. (New York
City time) shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue. If and to the
extent the Borrower makes a payment in full to Agent no later than 1:00 p.m.
(New York City time) on any Business Day and Agent does not distribute to each
Bank its Pro Rata Share of such payment in like funds as received on the same
Business Day, Agent shall pay to each Bank on demand interest on such amount as
should have been distributed to such Bank at the Federal Funds Rate for each day
from the date such payment was received until the date such amount is
distributed.

(b)        Subject to the provisions set forth in the definition of “Interest
Period” here, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.

(c)        Unless Agent receives notice from the Borrower prior to the date on
which any payment is due to the Banks that the Borrower will not make such
payment in full as and when required, Agent may assume that the Borrower has
made such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required),

 

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in reliance upon such assumption, distribute to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the Borrower
has not made such payment in full to Agent, each Bank shall repay to Agent on
demand such amount distributed to such Bank, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Bank until the date repaid.

2.11      Payments by the Banks to Agent. If and to the extent any Bank shall
not have made its full amount available to Agent in immediately available funds
and Agent in such circumstances has made available to the Borrower such amount,
that Bank shall on the Business Day following such Borrowing Date make such
amount available to Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice by Agent submitted to any Bank with
respect to amounts owing under this Section 2.11 shall be conclusive, absent
manifest error. If such amount is so made available, such payment to Agent shall
constitute such Bank’s Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to Agent on the Business Day
following the Borrowing Date, Agent will notify the Borrower of such failure to
fund and, upon demand by Agent, the Borrower shall pay such amount to Agent for
Agent’s account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.

2.12      Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share (or after the occurrence
of a Sharing Event, under the Intercreditor Agreement, its Adjusted Pro Rata
Share) such Bank shall immediately (a) notify Agent of such fact, and
(b) purchase from the other Banks such participations in the Loans made by them
as shall be necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefore, together with an amount
equal to such paying Bank’s ratable share (according to the proportion of
(i) the amount of such paying Bank’s required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.09) with respect to
such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation. Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.

2.13

The Election of Approving Banks to Continue Funding.

(a)        Notice of Disapproval. If on any Business Day one or more Banks (the
“Declining Bank” or “Declining Banks”) provides the Agent with, and the Agent
has actually received, a written notice in the form of Exhibit G of its
disapproval, for reasons other than a Default, of further advances and issuances
of Letters of Credit, and the other Bank or

 

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Banks approve further Revolving Loans (including the conversion and extension of
such Revolving Loans) or the further issuances of, extensions of, the automatic
renewal of or amendment to Letters of Credit, the Agent shall notify the Banks
by 6:00 p.m. (New York City time) that same day.

(b)        Further Credit Extensions. If the Bank or Banks which are not the
Declining Banks desire, they may (on a pro rata basis, based on the Uncommitted
Line Portion of all Banks that have elected to continue funding, as adjusted
after such Conversion to Reduced Funding Banks Date (the “Adjusted Uncommitted
Line Portion”), after which such date the Adjusted Uncommitted Line Portion of
all Declining Banks shall be reduced to zero) make the full or partial amount of
such requested Revolving Loan or issue or amend the requested Letter of Credit
irrespective of the Declining Banks’ disapproval (in such case, the Banks that
elect to continue funding shall be referred to as the “Approving Banks” in
respect of such Conversion to Reduced Funding Banks Date) but not in an
aggregate amount that would exceed such Bank’s Adjusted Uncommitted Line
Portion. In such event, from each such date (each, a “Conversion to Reduced
Funding Banks Date”) forward (or until the next Conversion to Reduced Funding
Banks Date, if any, at which time one or more Banks that had been Approving
Banks may become a Declining Bank), all subsequent Revolving Loans and Issuances
of Letters of Credit or Amendments to Letters of Credit that increase the face
amount of a Letter of Credit (subject to Section 11.01)or extend the term of a
Letter of Credit shall be made unilaterally by the Approving Banks in respect of
such Conversion to Reduced Funding Banks Date and no Letter of Credit thereafter
Issued shall be participated in by the Declining Banks in respect of such
Conversion to Reduced Funding Banks Date.

(c)        Swap Banks. A Bank that becomes a Declining Bank shall not be
considered a Swap Bank with respect to swap contracts concluded after it has
become a Declining Bank. Accordingly, if a Swap Bank should conclude a swap
contract with the Borrower after it has become a Declining Bank, the Borrower’s
obligations under such swap contract shall not be secured by the Collateral
hereunder, and the Declining Bank shall not be entitled to any sharing of
amounts pursuant to the Intercreditor Agreement with respect to such swap
contracts concluded after it has become a Declining Bank.

(d)        Repayments. Until all Declining Banks are fully repaid, repayments
(including realizations from Collateral) shall be applied as follows:

(i)

For purposes of allocating repayments prior to the occurrence of a Sharing Event
hereunder, the Pro Rata Share of each Bank with respect to Loans and Letters of
Credit outstanding on a specified Conversion to Reduced Funding Banks Date shall
remain fixed at the percentage held by such Bank the day before such specified
Conversion to Reduced Funding Banks Date, without respect to any changes which
may subsequently occur in such Bank's Pro Rata Share (prior to the next
Conversion to Reduced Funding Banks Date). Upon the occurrence of the first
Conversion to Reduced Funding Banks Date and thereafter, repayments of all
outstanding Loans shall be

 

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applied to the Loans with the earliest advance date, notwithstanding the tenor
of the Loans.

(ii)

Following the occurrence of a Sharing Event and thereafter, repayments shall be
allocated according to Section 2.01 of the Intercreditor Agreement.

ARTICLE III

THE LETTERS OF CREDIT

3.01

The Letter of Credit Lines.

(a)        Subject to the limitations set forth in Subsection 3.01(b) below, on
an uncommitted basis and on the terms and conditions set forth herein and unless
a Bank has provided Agent with, and Agent has actually received, a written
notice in the form attached hereto as Exhibit G at least the greater of 24 hours
or one Business Day prior to Agent’s receipt of any request for the issuance of
a Letter of Credit that such Bank does not approve further Issuances of Letters
of Credit, (i) each Issuing Bank agrees, (A) from time to time on any Business
Day during the period from the Closing Date to the Expiration Date, to consider
the Issuance of Letters of Credit for the account of the Borrower under the
Borrowing Base Line and to consider whether to amend or renew Letters of Credit
previously Issued by it, in accordance with Subsection 3.02(c), and (B) to honor
conforming drafts under the Letters of Credit; and (ii) each of the Banks will
be deemed to have approved such Issuance, amendment or renewal, and shall
participate in Letters of Credit Issued for the account of the Borrower. If any
Bank gives Agent timely notice of its disapproval of further Borrowings and
Issuances of Letters of Credit, then Agent shall notify the Borrower that one or
more of the Banks have elected not to participate in the further issuances of
Letters of Credit, and whether a Bank (or Banks) has (have) elected to become
the Approving Bank(s) thereby triggering the Conversion to Reduced Funding Banks
Date. No Declining Bank shall have any obligation to and shall not be deemed to
have participated in any Letters of Credit which are Issued on or after the
Conversion to Reduced Funding Banks Date. An Issuing Bank which is a Declining
Bank shall have no obligation to Issue any Letters of Credit on or subsequent to
the date such Issuing Bank becomes a Declining Bank. Within the foregoing
limits, and subject to the other terms and conditions hereof including, without
limitation, the approval of all Banks (or after the Conversion to Reduced
Funding Banks, all Approving Banks) in their sole discretion, the Borrower’s
ability to request that an Issuing Bank Issue Letters of Credit shall be fully
revolving, and, accordingly, the Borrower may, during the foregoing period,
request that an Issuing Bank Issue Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed. Borrower
acknowledges and agrees that the Existing Letters of Credit are an Obligation
under this Agreement.

(b)        Each Issuing Bank is under no obligation to consider the Issuance of
or to Issue any Letter of Credit unless Agent shall have consented to the
Issuance of such Letter of Credit in its sole discretion. An Issuing Bank shall
not Issue any Letter of Credit even if consented to by Agent, if:

 

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(i)

any order, judgment or decree of any Governmental Authority or arbitrator shall
by its terms purport to enjoin or restrain such Issuing Bank from Issuing such
Letter of Credit, or any Requirement of Law applicable to such Issuing Bank or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Bank shall prohibit,
or request that such Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon
such Issuing Bank with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material to it;

(ii)

such Issuing Bank has received written notice from any Bank, any other Issuing
Bank, Agent or the Borrower, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Article V is not then satisfied if the
Conversion to Reduced Funding Banks Date has not occurred, or after the
Conversion to Reduced Funding Banks Date has occurred the Issuing Bank received
written notice from any Approving Bank, any other Issuing Bank, Agent or the
Borrower, on or prior to the Business Day prior to the requested date of
Issuance of such Letter of Credit, that one or more of the applicable conditions
contained in Article V is not then satisfied;

(iii)

the expiry date of any requested Type of Letter of Credit exceeds the earlier of
(a) the expiry date set forth herein for such Type, or (b) the Maturity Date, or
the amount of any requested Type of Letter of Credit exceeds the applicable L/C
Sub-limit Cap after taking into account all outstanding L/C Obligations with
respect to such Type of Letter of Credit;

(iv)

such requested Letter of Credit is not in form and substance acceptable to such
Issuing Bank, or the Issuance of such requested Letter of Credit shall violate
any applicable policies of such Issuing Bank;

(v)

such Letter of Credit is for the purpose of supporting the Issuance of any
letter of credit by any other Person;

 

 

38

 

 

 

(vi)

such Letter of Credit is denominated in a currency other than United States
Dollars or Canadian Dollars;

(vii)

the amount of such requested Letter of Credit, plus the Effective Amount of all
of the L/C Obligations, plus the Effective Amount of all Revolving Loans exceeds
the Borrowing Base Advance Cap, in which case the Agent shall notify each other
Issuing Bank that there is a deficiency.

(c)        Subject to the individual Sub-limits referenced under the definition
of "L/C Sub-limit Cap," any Letter of Credit may be issued in Canadian Dollars,
provided that the aggregate amount of all Letters of Credit issued and
outstanding hereunder in Canadian Dollars may not exceed the United States
Dollar Equivalent of U.S. $25,000,000.

3.02

Issuance, Amendment and Renewal of Letters of Credit.

(a)        Each Letter of Credit which is Issued hereunder shall be Issued upon
the irrevocable written request of the Borrower pursuant to a Notice of
Borrowing (Letter of Credit) in the applicable form attached hereto as Exhibit A
received by an Issuing Bank and the Agent by no later than 3:00 p.m. (New York
City time) on the proposed date of Issuance; provided, however, that each such
Issuance is subject to the consent of Agent. Each such request for Issuance of a
Letter of Credit shall be by electronic transfer or facsimile, confirmed by the
close of the next Business Day in an original writing, in the form of an L/C
Application, and shall specify in form and detail satisfactory to such Issuing
Bank and Agent: (i) the proposed date of Issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face amount of the Letter of Credit;
(iii) the expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; (vii) whether the Letter of Credit is a Standby or Commercial Letter
of Credit; and (viii) such other matters as such Issuing Bank may require. No
such Issuance will be made if prior to 5:00 p.m. (New York City time) on the day
before the proposed date of Issuance, a Bank has provided Agent with, and Agent
has actually received, a written notice in the form of Exhibit G. If Agent does
timely receive a written notice in the form of Exhibit G, Agent shall notify the
Borrower and such Issuing Bank by 3:00 p.m. (New York City time) on the proposed
date of Issuance, and the proposed Letter of Credit will not be Issued, unless
one or more of the Banks have elected to become Approving Banks thereby
triggering the Conversion to Reduced Funding Banks Date. If the Approving Banks
elect to Issue the Letter of Credit notwithstanding the Agent’s receipt of such
notice, they may (on a pro rata basis among the Banks that have elected to
continue funding) Issue the full amount, or a pro rata amount after taking into
account the Declining Bank’s Pro Rata Share, of such requested Letter of Credit.

(b)        From time to time while a Letter of Credit is outstanding and prior
to the Expiration Date, an Issuing Bank will, upon the written request of the
Borrower received by such Issuing Bank and the Agent prior to 3:00 p.m. (New
York City time) on the proposed date of amendment, consider the amendment of any
Letter of Credit issued by it. Each such request for amendment of a Letter of
Credit shall be made by electronic transfer or facsimile,

 

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confirmed by the close of the next Business Day in an original writing, made in
the form of an L/C Amendment Application and shall specify in form and detail
satisfactory to the Issuing Bank and Agent: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as such Issuing Bank may require. Such Issuing Bank
shall be under no obligation to amend any Letter of Credit and shall not do so
without the consent of the Agent. No such amendment will be made if a Bank has
provided Agent with, and Agent has actually received, a written notice in the
form of Exhibit G by 5:00 p.m. (New York City time) on the Business Day
immediately preceding the proposed date of amendment (the “Exhibit G Cut-Off”).
If Agent does timely receive a written notice in the form of Exhibit G, Agent
shall notify the Borrower and such Issuing Bank by 3:00 p.m. (New York City
time) on the proposed date of amendment, and the Letter of Credit will not be
amended; provided, however, that if one or more Banks do approve such amendment,
Agent shall notify all Banks and the approving Banks may elect to become the
Approving Banks and amend such Letter of Credit, thereby triggering the
Conversion to Reduced Funding Banks Date. If a request in the form of Exhibit G
is received after the Exhibit G Cut-Off, Agent will make its best efforts to
honor such request but shall bear no liability for failing to honor such
request. The Issuing Banks shall be under no obligation to renew any Letter of
Credit.

(c)        If any outstanding Letter of Credit Issued by an Issuing Bank shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from such Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal such Issuing Bank would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
Subsection 3.02(c) upon the request of the Borrower, then unless a Bank has
provided Agent with, and Agent has actually received, a written notice in the
form of Exhibit G to such Issuing Bank by 12:00 p.m. noon (New York City time)
on the next to last date for Issuing Bank to provide notice to the beneficiary
of non-renewal, such Issuing Bank shall, subject to the consent of the Agent,
nonetheless be permitted to allow such Letter of Credit to renew, and the
Borrower and the Banks hereby authorize such renewal, and, accordingly, such
Issuing Bank shall be deemed to have received an L/C Amendment Application from
the Borrower requesting such renewal. If one or more Banks do not approve such
renewal, Agent shall notify all Banks and the approving Banks may elect to
become the Approving Banks and renew such Letter of Credit, thereby triggering
the Conversion to Reduced Funding Banks Date.

(d)        This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).

(e)        Each Issuing Bank will also deliver to Agent a true and complete copy
of each Letter of Credit or amendment to or renewal of a Letter of Credit Issued
by it.

3.03      Risk Participations, Drawings, Reducing Letters of Credit and
Reimbursements.

(a)        Immediately upon the Issuance of each Letter of Credit Issued by an
Issuing Bank which is Issued prior to the Conversion to Reduced Funding Banks
Date, each Bank shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from such Issuing Bank a participation in such Letter of
Credit and each drawing or Reducing Letter

 

40

 

 

of Credit Borrowing thereunder in an amount equal to the product of (i) the Pro
Rata Share of such Bank, times (ii) the maximum amount available to be drawn
under such Letter of Credit and the amount of such drawing or Reducing Letter of
Credit Borrowing, respectively. All Letters of Credit Issued after the
Conversion to Reduced Funding Banks Date shall be participated in only by the
Approving Banks. For purposes of Section 2.01, each Issuance of a Letter of
Credit shall be deemed to utilize the Uncommitted Line Portion of each Bank (or
Approving Bank, as the case may be) by an amount equal to the amount of such
participation.

(b)        In the event of any request for a drawing under a Letter of Credit
Issued by an Issuing Bank by the beneficiary or transferee thereof, such Issuing
Bank will promptly notify the Borrower. Any notice given by an Issuing Bank or
Agent pursuant to this Subsection 3.03(b) may be oral if immediately confirmed
in writing (including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice. The Borrower shall reimburse an Issuing Bank prior to 5:00 p.m. (New
York City time), on each date that any amount is paid by such Issuing Bank under
any Letter of Credit or to a Bank paying a beneficiary of a Reducing Letter of
Credit in the form of a Reducing L/C Borrowing (each such date, an “Honor
Date”), in an amount equal to the amount so paid by such Issuing Bank. Amounts
reimbursed by the Borrower with respect to draws under Letters of Credit issued
in Canadian Dollars shall be paid in United States Dollars at the United States
Dollar Equivalent of such draw. In the event the Borrower fails to reimburse
such Issuing Bank for the full amount of any drawing under any Letter of Credit
or of any Reducing L/C Borrowing, as the case may be, by 5:00 p.m. (New York
City time) on the Honor Date, such Issuing Bank will promptly notify Agent and
Agent will promptly notify each Bank thereof, and Borrower shall be deemed to
have requested that Revolving Loans be made by the Banks to be disbursed to such
Issuing Bank not later than one (1) Business Day after the Honor Date under such
Letter of Credit, subject to the amount of the unutilized portion of the
Borrowing Base Line.

(c)        In the event of any request for a Reducing L/C Borrowing by the
Borrower in association with any Reducing Letter of Credit, the amount available
for drawing under such Reducing Letter of Credit will be reduced automatically,
and without any further amendment or endorsement to such Reducing Letter of
Credit, by the amount actually paid to such beneficiary, notwithstanding the
fact that the payment creating such Reducing L/C Borrowing is not made pursuant
to a conforming and proper draw under the corresponding Reducing Letter of
Credit; provided, however, if any Bank has given the Issuing Banks, Agent, the
Borrower and each of the other Banks written notice that such Bank objects to
further Reducing L/C Borrowings at least three (3) Business Days prior to the
date the Borrower requests the Reducing L/C Borrowing, then the Issuing Banks
will not make such Reducing L/C Borrowing unless all Banks consent thereto.

(d)        Each Bank shall upon any notice pursuant to Subsection 3.03(b) make
available to Agent for the account of any Issuing Bank an amount in United
States Dollars at the United States Dollar Equivalent and in immediately
available funds equal to its Pro Rata Share of the amount of the drawing or of
the Reducing L/C Borrowing, as the case may be, whereupon the participating
Banks shall (subject to Subsection 3.03(e)) each be deemed to have made a
Revolving Loan to the Borrower in that amount. If any Bank so notified fails to
make available to Agent for the account of such Issuing Bank the amount of such
Bank’s Pro Rata Share of the amount of the drawing or of the Reducing L/C
Borrowing, as the case may be, by no

 

41

 

 

later than 3:00 p.m. (New York City time) on the Business Day following the
Honor Date, then interest shall accrue on such Bank’s obligation to make such
payment, from the Honor Date to the date such Bank makes such payment, at a rate
per annum equal to the Federal Funds Rate in effect from time to time during
such period. Agent will promptly give notice of the occurrence of the Honor
Date, but failure of Agent to give any such notice on the Honor Date or in
sufficient time to enable any Bank to effect such payment on such date shall not
relieve such Bank from its obligations under this Section 3.03.

(e)        With respect to any unreimbursed drawing or Reducing L/C Borrowing,
as the case may be, that is not converted into Revolving Loans in whole or in
part for any reason, the Borrower shall be deemed to have incurred from the
relevant Issuing Bank an L/C Borrowing in United States Dollars at the United
States Dollar Equivalent of such drawing or Reducing L/C Borrowing, as the case
may be, which L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at a rate per annum equal to the Default Rate,
and each Bank’s payment to such Issuing Bank pursuant to Subsection 3.03(d)
shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Bank in satisfaction of its
participation obligation under this Section 3.03.

(f)         Each Bank’s obligation in accordance with this Agreement to make the
Revolving Loans or L/C Advances, as contemplated by this Section 3.03, as a
result of a drawing under a Letter of Credit or Reducing L/C Borrowing, shall be
absolute and unconditional and without recourse to the relevant Issuing Bank and
shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against such Issuing Bank, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default, an Event of Default
or a Material Adverse Effect; or (iii) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

(g)        Notwithstanding the foregoing, each Revolving Loan and L/C Advance
made to fund payment of any Letter of Credit which was Issued or amended on or
after the Conversion to Reduced Funding Banks Date shall be made only by the
Approving Banks.

3.04

Repayment of Participations.

(a)        Upon (and only upon) receipt by Agent for the account of an Issuing
Bank of immediately available funds from the Borrower (i) in reimbursement of
any payment made by such Issuing Bank under a Letter of Credit or in connection
with a Reducing L/C Borrowing with respect to which any Bank has paid Agent for
the account of such Issuing Bank for such Bank’s participation in the Letter of
Credit pursuant to Section 3.03 or (ii) in payment of interest thereon, Agent
will pay to each Bank, in the same funds as those received by Agent for the
account of such Issuing Bank, the amount of such Bank’s Pro Rata Share of such
funds, and such Issuing Bank shall receive the amount of the Pro Rata Share of
such funds of any Bank that did not so pay Agent for the account of such Issuing
Bank.

(b)        If Agent or an Issuing Bank is required at any time to return to the
Borrower, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of the payments made by the Borrower to
Agent for the account of such

 

42

 

 

Issuing Bank pursuant to Subsection 3.04(a) in reimbursement of a payment made
under a Letter of Credit or in connection with a Reducing L/C Borrowing or
interest or fee thereon, each Bank shall, on demand of such Issuing Bank,
forthwith return to Agent or such Issuing Bank the amount of its Pro Rata Share
of any amounts so returned by Agent or such Issuing Bank plus interest thereon
from the date such demand is made to the date such amounts are returned by such
Bank to Agent or such Issuing Bank, at a rate per annum equal to the Federal
Funds Rate in effect from time to time.

3.05

Role of the Issuing Banks.

(a)        Each Bank and the Borrower agree that, in paying any drawing under a
Letter of Credit Issued by an Issuing Bank or funding any Reducing L/C
Borrowing, such Issuing Bank shall not have any responsibility to obtain any
document (other than any sight draft or certificates expressly required by such
Letter of Credit, but with respect to Reducing Letter of Credit Borrowings, no
document of any kind need be obtained) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the Person
executing or delivering any such document.

(b)        No Agent-Related Person nor any of the respective correspondents,
participants, assignees, officers, directors, employees, agents or
attorneys-in-fact of any Issuing Bank shall be liable to any Bank for: (i) any
action taken or omitted in connection herewith at the request or with the
approval or deemed approval of the Banks; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-Related
Document.

(c)        The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants,
assignees, officers, directors, employees, agents or attorneys-in-fact of any
Issuing Bank shall be liable or responsible for any of the matters described in
clauses (a) through (g) of Section 3.06; provided, however, anything in such
clauses or elsewhere herein to the contrary notwithstanding, that the Borrower
may have a claim against an Issuing Bank, and such Issuing Bank may be liable to
the Borrower, to the extent, but only to the extent, of any direct, as opposed
to consequential or exemplary, damages suffered by the Borrower which the
Borrower proves were caused by such Issuing Bank’s willful misconduct or gross
negligence or such Issuing Bank’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Banks may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Banks shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

43

 

 

 

3.06      Obligations Absolute.The Obligations of the Borrower under this
Agreement and any L/C-Related Document to reimburse an Issuing Bank for a
drawing under a Letter of Credit or for a Reducing L/C Borrowing, and to repay
any L/C Borrowing and any drawing under a Letter of Credit or Reducing L/C
Borrowing converted into Revolving Loans, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:

(a)        any lack of validity or enforceability of this Agreement or any
L/C-Related Document;

(b)        any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
Letter of Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;

(c)        the existence of any claim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of any
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), any Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;

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

(e)        any payment by any Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of any Letter of Credit; or any payment made by any Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;

(f)         any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Obligations of the Borrower in respect of any
Letter of Credit; or

(g)        any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower.

Notwithstanding anything to the contrary in this Section 3.06, the Issuing Banks
shall not be excused from liability to Borrower to the extent of any direct
damages (as opposed to consequential, indirect and punitive damages, claims in
respect of which are hereby waived by Borrower) suffered by Borrower that are
caused by any of the Issuing Bank’s gross negligence or

 

44

 

 

willful misconduct when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof, provided, however, that
the parties hereto expressly agree that:

(i)

the Issuing Banks may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation and may make payment upon presentation
of documents that appear on their face to be in substantial compliance with the
terms of such Letter of Credit.

(ii)

the Issuing Banks shall have the right, in their sole discretion, to decline to
accept documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit; and

(iii)

this sentence shall establish the standard of care to be exercised by the Banks
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof (and the parties hereto hereby waive, to
the extent permitted by applicable law, any standard of care inconsistent with
the foregoing).

3.07      Cash Collateral Pledge. Upon the request of Agent, (i) if an Issuing
Bank has honored any full or partial drawing request on any Letter of Credit and
such drawing has resulted in an L/C Borrowing hereunder, (ii) if, as of the
Maturity Date, any Letters of Credit may for any reason remain outstanding and
partially or wholly undrawn, or (iii) upon an Event of Default, the Borrower
shall immediately Cash Collateralize the L/C Obligations in an amount equal to
such L/C Obligations. Upon the occurrence of the circumstances described in
Section 2.05 requiring the Borrower to Cash Collateralize Letters of Credit,
then, the Borrower shall immediately Cash Collateralize the L/C Obligations in
an amount equal to the applicable excess.

3.08

Letter of Credit Fees.

(a)        The Borrower shall pay to Agent for the account of each of the Banks
a letter of credit fee with respect to each of the Letters of Credit Issued
hereunder equal to the greater of (i) $500 or (ii) the following per annum fees:

-

Performance L/Cs

1.50%

 

-

Transportation L/Cs

1.125%

-

Swap L/Cs

1.125%

-

Supply L/Cs

1.00%”

 

 

 

45

 

 

 

(b)        The Borrower shall pay to the Issuing Banks such other fees as
provided for in separate letter of credit fee letters.

(c)        Such letter of credit fees as described in sub-paragraphs (a) and (b)
above for each Letter of Credit, unless otherwise specified, shall be due and
payable monthly in arrears for the preceding month during which Letters of
Credit are outstanding, commencing on the first such monthly date to occur after
the Closing Date.

(d)        With reference to Letter of Credit fees for all Letters of Credit
denominated in Canadian Dollars, the Agent shall calculate their United States
Dollar Equivalents for each month in advance based upon the Canadian Dollar/US
Dollar exchange rate in effect, as determined by the Agent as of the first
calendar day of such month (without limiting the Agent's right to determine the
United States Dollar Equivalent at any time as provided in the definition of
"Effective Amount"). Such United States Dollar Equivalents shall be used for
calculating the amount of such fees. New Letters of Credit denominated in
Canadian Dollars shall be assigned United States Dollar Equivalents by the Agent
and such United States Dollar Equivalents shall apply until the next succeeding
United States Dollar Equivalents are calculated by the Agent.

3.09      Applicability of UCP. Unless otherwise expressly agreed by an Issuing
Bank and the Borrower, when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance (including
the ICC Decision published by the Commission on Banking Technique and Practice
on April 6, 1998, regarding the European single currency (euro)) shall apply to
each Letter of Credit.

3.10      Existing Letters of Credit. Borrower hereby acknowledges and agrees
that the Existing Letters of Credit shall be deemed to be Letters of Credit
Issued under this Agreement for all purposes.

ARTICLE IV

TAXES AND YIELD PROTECTION

4.01

Taxes.

(a)        Any and all payments by the Borrower to or for the account of Agent
or any Bank under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of Agent and each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which Agent or such Bank, as the case may
be, is organized or maintains a lending office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”). If the
Borrower shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to Agent or any Bank, (i) the sum
payable shall

 

46

 

 

be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
Agent and such Bank receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, the Borrower shall furnish to Agent
(which shall forward the same to such Bank) the original or a certified copy of
a receipt evidencing payment thereof.

(b)        In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).

(c)        If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to Agent or
any Bank, the Borrower shall also pay to Agent (for the account of such Bank) or
to such Bank, at the time interest is paid, such additional amount that such
Bank specifies as necessary to preserve the after-tax yield (after factoring in
all taxes, including taxes imposed on or measured by net income) such Bank would
have received if such Taxes or Other Taxes had not been imposed.

(d)        The Borrower agrees to indemnify Agent and each Bank for (i) the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section) paid by
Agent and such Bank, (ii) amounts payable under Subsection 4.01(c) and (iii) any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
the Bank or Agent makes a demand therefore.

4.02

Increased Costs and Reduced Return; Capital Adequacy.

(a)        If any Bank determines that as a result of the introduction of or any
change in or in the interpretation of any Law, after the Closing Date or such
Bank’s compliance therewith, there shall be any increase in the cost to such
Bank of issuing or participating in Letters of Credit or advancing Revolving
Loans, or a reduction in the amount received or receivable by such Bank in
connection with any of the foregoing (excluding for purposes of this subsection
(a) any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 4.01 shall govern), (ii) changes in the basis
of taxation of overall net income or overall gross income by the United States
or any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which such Bank is organized or has its Lending Office, and
(iii) reserve requirements), then from time to time upon demand of such Bank
(with a copy of such demand to Agent), the Borrower shall pay to such Bank such
additional amounts as will compensate such Bank for such increased cost or
reduction.

 

47

 

 

 

(b)        If any Bank determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, after
the Closing Date or compliance by such Bank (or its Lending Office) therewith,
has the effect of reducing the rate of return on the capital of such Bank or any
corporation controlling such Bank as a consequence of such Bank’s obligations
hereunder (taking into consideration its policies with respect to capital
adequacy and such Bank’s desired return on capital), then from time to time upon
demand of such Bank (with a copy of such demand to Agent), the Borrower shall
pay to such Bank such additional amounts as will compensate such Bank for such
reduction.

4.03      Matters Applicable to all Requests for Compensation. A certificate of
Agent or any Bank claiming compensation under this Article IV and setting forth
the additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount, Agent or such Bank
may use any reasonable averaging and attribution methods.

4.04      Survival. The agreements and Obligations of the Borrower in this
Article IV shall survive the payment of all other Obligations.

ARTICLE V

CONDITIONS PRECEDENT

5.01      Matters to be Satisfied Upon Execution of Agreement. At the time the
Banks execute this Agreement, unless otherwise waived by the Banks, Agent shall
have received all of the following, in form and substance satisfactory to Agent
and each Bank, and in sufficient copies for each Bank:

(a)        Loan Documents. This Agreement, the Notes, appropriate amendments to
the Security Agreements, financing statements and financing statement
amendments, and each other document or certificate executed in connection with
this Agreement, executed by each party thereto;

(b)        Incumbency. Certificate of the Secretary of the Borrower, certified
as of the Closing Date, and certifying the names and true signatures of the
officers of the Borrower authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered by the
Borrower hereunder;

(c)        Organization Documents; Existence; Good Standing. The articles or
certificate of incorporation and the bylaws of the Borrower as in effect on the
Closing Date, all certified by the Secretary of the Borrower as of the Closing
Date, together with certificates of existence for the Borrower and a good
standing certificate for the Borrower from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and each state
where the Borrower is qualified to do business as a foreign corporation,
certified as of, or reasonably close to, the Closing Date;

(d)        Legal Opinion. An opinion of counsel to the Borrower and addressed to
the Banks in form and substance acceptable to Agent and the Banks;

 

48

 

 

 

(e)        Payment of Fees. The fee letters executed by the Borrower and
evidence of payment by the Borrower of all accrued and unpaid fees, costs and
expenses to the extent then due and payable on the Closing Date, together with
Attorney Costs of Agent to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute Fortis’
reasonable estimate of Attorney Costs incurred or to be incurred by it through
the closing proceedings (provided, however, that such estimate shall not
thereafter preclude final settling of accounts between the Borrower and Agent);
including any such costs, fees and expenses arising under or referenced in
Sections 2.08 and 11.04(a) and all costs of the auditors and consultants
retained by the Banks in connection with the Obligations of the Borrower to
Agent;

(f)         Certificate. A certificate signed by a Responsible Officer of the
Borrower, dated as of the Closing Date, stating to the best of such officer’s
knowledge that:

(i)

The representations and warranties contained in Article VI of the Agreement are
true and correct in all material respects on and as of the date of this
certificate;

(ii)

No Default or Event of Default exists or would result from the Credit Extension;
and

(iii)

There has occurred no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(g)        Filings. Evidence that all filings needed to perfect the security
interests granted by the Security Agreements have been completed or due
provision has been made therefore;

(h)        Intercreditor Agreement. The Intercreditor Agreement executed by each
party thereto.

(i)

Responsible Officer List. The Responsible Officer List; and

(j)         Other Documents. Such other approvals, opinions, documents or
materials as Agent or any Bank may request.

5.02      Matters to be Satisfied Prior to Each Request for Extension of Credit.
On any date on which Borrower requests that any Bank make any Loans or Issue any
Letter of Credit hereunder, unless otherwise waived by the Banks, each of the
following shall be true:

(a)        Representations and Warranties. Each of the representations and
warranties made by Borrower in or pursuant to this Agreement or the other Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date (except to the extent such
representations and warranties relate solely to an earlier date).

 

49

 

 

 

(b)        Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extension of credit
requested to be made on such date.

(c)        No Material Adverse Effect. Since the Closing Date, there shall have
been no Material Adverse Effect.

Notwithstanding the foregoing, nothing contained in this Section 5.02 shall be
construed to alter the UNCOMMITTED AND ABSOLUTELY DISCRETIONARY nature of this
facility; regardless of whether the above requirements have been satisfied, all
advances and Issuances of Letters of Credit are absolutely discretionary on the
part of the Banks in their sole and absolute discretion.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to Agent and each Bank that:

6.01

Existence and Power. The Borrower and each of its Subsidiaries:

(a)        is a corporation or partnership, as the case may be, duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization;

(b)        have the power and authority and all governmental licenses,
authorizations, consents and approvals that are necessary to own their assets,
carry on their business and to execute, deliver, and perform their respective
Obligations under the Loan Documents;

(c)        is duly qualified as a foreign corporation, and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and

(d)        to the best knowledge of the Borrower, is in compliance with all
Requirements of Law.

6.02      Authorization; No Contravention. The execution, delivery and
performance by the Borrower of this Agreement and each other Loan Document to
which the Borrower is party, have been duly authorized by its board of
directors, and if necessary, shareholder action, and do not and will not:

(a)        contravene the terms of the Organization Documents of the Borrower;

(b)        conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Borrower is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or

 

50

 

 

 

(c)        to the best knowledge of the Borrower, violate any Requirement of
Law.

6.03      Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any of its Subsidiaries, as applicable, of the Agreement or any other Loan
Document.

6.04      Binding Effect. This Agreement and each other Loan Document to which
the Borrower or any of its Subsidiaries is a party constitute the legal, valid
and binding obligations of such Person to the extent it is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity.

6.05      Litigation. Except as specifically disclosed in Schedule 6.05, there
are no actions, suits or proceedings, pending, or to the knowledge of the
Borrower, threatened at law, in equity, in arbitration or before any
Governmental Authority, against the Borrower, or any of its Subsidiaries or any
of their respective properties which purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby or thereby; and no injunction, writ, temporary restraining order or any
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

6.06      No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Borrower. As of the Closing Date,
neither the Borrower nor any of its Subsidiaries are in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect.

6.07

ERISA Compliance. Except as specifically disclosed in Schedule 6.07:

(a)        Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such qualification.
The Borrower and each ERISA Affiliate have made all required contributions to
any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.

(b)        There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which have resulted or could reasonably be expected to
result in a Material Adverse

 

51

 

 

Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c)        (i) To the Borrower’s best knowledge, no ERISA Event has occurred or
is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Section 4069 or 4212(c) or
ERISA.

6.08      Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely (a) to finance working capital requirements related to Product
marketing activities; (b) to provide for Letters of Credit as described
hereunder; and (c) to fund payments due to any Swap Bank under a Swap Contract.
Neither the Borrower nor any Subsidiary is generally engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.

6.09      Title to Properties. The Borrower and each of its Subsidiaries have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the property of the Borrower and its Subsidiaries is subject to no
Liens, other than Permitted Liens.

6.10      Taxes. The Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges shown thereon to be due and payable, and have paid all material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets as due and payable, except those which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any of its Subsidiaries that would, if made,
have a Material Adverse Effect.

6.11

Financial Condition.

(a)        The audited balance sheet of Borrower dated as of December 31, 2005:

(i)

fairly presents the financial condition of the Borrower as of the date thereof;
and

(ii)

shows all material indebtedness and other liabilities, direct or contingent, of
the Borrower as of the date thereof,

 

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including liabilities for taxes, material commitments and Contingent
Obligations.

(b)        Since December 31, 2005, there has been no Material Adverse Effect.

6.12      Environmental Matters. Except as previously specifically disclosed in
Schedule 6.12, such Environmental Laws and Environmental Claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

6.13      Regulated Entities. Neither the Borrower, nor any Person controlling
the Borrower, or any of its Subsidiaries, is an “Investment Company” within the
meaning of the Investment Company Act of 1940. The Borrower is not subject under
any Federal or state statute or regulation to restrictions limiting its ability
to incur the Obligations.

6.14      No Burdensome Restrictions. Neither the Borrower nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.

6.15      Copyrights, Patents, Trademarks and Licenses, etc. To the Borrower’s
best knowledge, the Borrower or its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks, service marks,
trade names, copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person. Except as specifically disclosed in Schedule 6.05, no claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Borrower,
proposed.

6.16      Subsidiaries. The Borrower has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.16 hereto and have no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.16.

6.17      Insurance. Except as specifically disclosed in Schedule 6.17, the
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or such Subsidiary operates.

6.18      Full Disclosure. To the Borrower’s best knowledge, none of the
representations or warranties made by the Borrower or any of its Subsidiaries in
the Loan Documents as of the date such representations and warranties are made
or deemed made, and none of the statements contained in any exhibit, report,
statement or certificate furnished by or on behalf of the Borrower or any of its
Subsidiaries in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of the Borrower to the

 

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Banks prior to the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.

ARTICLE VII

AFFIRMATIVE COVENANTS

So long as any Bank shall be continuing to consider making Revolving Loans or
Issuing Letters of Credit hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding:

7.01      Financial Statements. The Borrower shall deliver to the Banks, in form
and detail satisfactory to the Banks:

(a)        as soon as available, but not later than 120 days after the end of
each fiscal year, a copy of the audited financial statements of Borrower to
include a balance sheet as at the end of such year and the related statements of
income or operations, members’ equity and cash flows for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent public
accounting firm which report shall state that such financial statements present
fairly the financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion shall not be
qualified or limited because of a restricted or limited examination by the
public accounting firm of any material portion of Borrower’s records; and

(b)        as soon as available, but not later than 120 days after the end of
each fiscal year, a copy of the financial statements of Borrower to include a
balance sheet as at the end of such year and the related statements of income or
operations, members’ equity and cash flows for such year, in each case prepared
on an Economic Basis and accompanied by a special purpose report acceptable to
the Banks issued by a nationally-recognized independent accounting firm; and

(c)        as soon as available, but not later than forty-five (45) days after
the end of each month, Borrower-prepared financial statements prepared in
accordance with GAAP and on an Economic Basis and accompanied by an explanation
of any discrepancy between such statements resulting from the differing methods
of preparation.

7.02      Certificates; Other Information. The Borrower shall furnish to the
Agent and the Banks:

(a)        concurrently with the delivery of the financial statements referred
to in Subsections 7.01(a) and (b), a Compliance Certificate executed by a
Responsible Officer of the Borrower;

(b)        as of the 15th and last days of each month (or the next succeeding
Business Day after such date in the event that such date is not a Business Day),
delivered within

 

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seven (7) days of the reporting date, a Borrowing Base Collateral Position
Report, certified by a Responsible Officer of the Borrower;

(c)        as of the 15th and last days of each month (or the next succeeding
Business Day after such date in the event that such date is not a Business Day),
delivered within seven (7) days of the reporting date, a Net Position Report,
certified by a Responsible Officer of the Borrower;

(d)        on the tenth (10th) Business Day of each month a Transportation
Agreement Report, in form and substance acceptable to Banks, as of the last
calendar day of the preceding month, certified by a Responsible Officer of the
Borrower;

(e)        on the tenth (10th) Business Day of each month a forward position
report, in form and substance acceptable to the Banks, showing the marked to
market position of the Borrower’s forward book as of the last calendar day of
the preceding month, certified by a Responsible Officer of the Borrower;

(f)         promptly when available, such additional information regarding the
business, financial or corporate affairs of the Borrower or any Subsidiary as
the Agent, at the request of any Bank, may from time to time reasonably request;
and

(g)        a quarterly report of inventory storage locations at each quarter
end;

(h)        a quarterly report reflecting any advances made by Borrower to Parent
or any other Affiliates; and

(i)         by July 31, 2006, updated risk management policies which shall cover
Borrower’s trading activities in crude oil and distillates for crude blending,
such policies to be reasonably satisfactory to the Agent and the Banks.

7.03

Notices. The Borrower shall promptly notify Agent and each Bank:

(a)        of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;

(b)        the occurrence of any event which could reasonably be expected to
cause a material impairment of the Collateral Position;

(c)        the occurrence of any event which could reasonably be expected to
cause a Material Adverse Effect, including (i) breach or non-performance of, or
any default under, a material Contractual Obligation of the Borrower or any
Subsidiary; (ii) any material dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;

 

55

 

 

 

(d)        of the occurrence of any of the following events affecting the
Borrower or any ERISA Affiliate (but in no event more than 10 days after the
Borrower receives notice or becomes aware of such event), and deliver to Agent
and each Bank a copy of any notice with respect to such event that is filed with
a Governmental Authority and any notice delivered by a Governmental Authority to
the Borrower or any ERISA Affiliate with respect to such event:

(i)

an ERISA Event;

(ii)

a material increase in the Unfunded Pension Liability of any Pension Plan;

(iii)

the adoption of, or the commencement of contributions to, any Plan subject to
Section 412 of the Code by the Borrower or any ERISA Affiliate;

(iv)

the adoption of any amendment to a Plan subject to Section 412 of the Code, if
such amendment results in a material increase in contributions or Unfunded
Pension Liability;

(e)        of any material change in accounting policies or financial reporting
practices by the Borrower; and

(f)         of any intended relocation of inventory or any intended new location
of inventory owned by the Borrower, at least ten (10) Business Days prior to the
date such inventory is to be stored at such location.

Each notice under this Section shall be accompanied by a written statement by a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under Subsection 7.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been (or
reasonably could be expected to be) breached or violated as therein provided.

Each Swap Bank that has concluded a Swap Contract shall promptly notify the
Agent of the Early Termination, or its equivalent, of the Swap Contract and the
Agent shall promptly notify the Banks of the same.

7.04      Preservation of Corporate Existence, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to:

(a)        preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
organization;

(b)        preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business;

 

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(c)        use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and

(d)        preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

7.05      Maintenance of Property. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except in any case where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

7.06      Insurance. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons. Agent, for the
benefit of the Banks, shall be named as an additional insured and loss payee
under all such polices, without liability for premiums or club calls.

7.07      Payment of Obligations. The Borrower shall, and shall cause each of
its Subsidiaries to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:

(a)        all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary;

(b)        all lawful claims which, if unpaid, would by law become a Lien upon
its property, except for Permitted Liens, unless the same are being contested in
good faith by appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained by the Borrower or Subsidiary, and provided that at
such time the claim becomes a Lien (other than a lis pendens notice), it shall
be promptly paid; and

(c)        all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing or
relating to such Indebtedness.

7.08      Compliance with Laws. The Borrower shall comply, and shall cause each
of its Subsidiaries to comply, with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act).

7.09      Compliance with ERISA. The Borrower shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance with the applicable
provisions of ERISA, the Code and other federal or state law; (b) cause each
Plan which is qualified under

 

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Section 401(a) of the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the Code.

7.10      Inspection of Property and Books and Records. The Borrower shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and such Subsidiary.
The Borrower shall permit, and shall cause each of its Subsidiaries to permit
representatives and independent contractors of Agent or any Bank to visit and
inspect any of their respective properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of Agent or Bank causing such inspection and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided, however, when an Event
of Default exists Agent or any Bank may do any of the foregoing at the expense
of the Borrower at any time during normal business hours and without advance
notice.

7.11      Environmental Laws. The Borrower shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its property in
compliance in all material respects with all Environmental Laws.

7.12      Use of Proceeds. The Borrower shall use the proceeds of the Loans for
the uses described in this Agreement and not in contravention of any Requirement
of Law or of any Loan Document restrictions on use of loan proceeds. The
Borrower shall not use the proceeds of the Loan or any Letter of Credit to
acquire, directly or indirectly, any Margin Stock.

7.13

Collateral Position Audit

(a)        At such times as Agent deems advisable, the Borrower will allow Agent
or an entity satisfactory to Agent to conduct a thorough examination of the
Collateral Position, and the Borrower will fully cooperate in such examination.
The Borrower will pay the costs and expenses of each such examination. The
Borrower acknowledges that Agent will conduct a minimum of one such audit per
year. At the request of any Bank, the Agent will provide such Bank with the
results of such audit.

(b)        Within sixty (60) days of the Closing Date, the Borrower shall have
implemented all recommendations relating to risk management policies, procedures
and reporting resulting from the Collateral Position audits conducted in August,
2003 and December, 2003.

7.14      Payments to Bank Blocked Accounts. The Borrower shall (i) notify in
writing and otherwise take such reasonable steps to ensure that all Account
Debtors under any of its Accounts forward payment in the form of cash, checks,
drafts or other similar items of payment directly to the Bank Blocked Accounts
or directly by wire transfer to the Bank Blocked Accounts and shall, if
requested by Agent, provide Banks with reasonable evidence of such notification,
and (ii) deposit and cause its Subsidiaries to deposit or cause to be deposited
all

 

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payments under such Accounts to the Bank Blocked Accounts. In the event that any
Account Debtor does make any payment directly to the Bank Blocked Accounts,
Borrower shall promptly deposit such amounts into the Bank Blocked Accounts. If
Borrower desires that funds be transferred from the Bank Blocked Accounts into
Borrower’s operating account, Borrower shall request such a transfer by
facsimile transmission sent to Agent utilizing the form of Exhibit F. Although
Agent may from day to day authorize the transfer of proceeds from such accounts
into the Borrower’s operating account, or otherwise, Agent has absolutely no
duty to make any such authorization and at any time may refuse to authorize the
transfer of any funds until all Obligations have been satisfied. Agent at any
time may apply amounts contained in the Bank Blocked Accounts toward
satisfaction of the Obligations. Upon the written notice of Agent, US Bank shall
cease to transfer any funds from the Bank Blocked Accounts until further
notified in writing by Agent.

7.15

Financial Covenants. The Borrower shall at all times maintain:

(a)        minimum Net Working Capital equal to the greater of
(i) $18,000,000.00 or (ii) the amount of Net Working Capital then required under
the definition of Borrowing Base Sub-Cap.

(b)        minimum Tangible Net Worth equal to the greater of (i) $18,000,000.00
or (ii) the amount of Tangible Net Worth then required under the definition of
Borrowing Base Sub-Cap.

(c)        a ratio of Total Liabilities to Tangible Net Worth not to exceed
15.0:1.0.

In calculating the Net Working Capital coverages set forth above and the
Tangible Net Worth coverages set forth above, the amount of Subordinated Debt
excluded from liabilities in each such calculation shall not exceed 50% of the
resultant Net Working Capital or Tangible Net Worth, as applicable, provided,
however, that this limitation shall not apply in the event Subordinated Debt is
used to cure any violation under this Subsection 7.15.

7.16      Stop Loss Limit. The Borrower shall at all times maintain a Stop Loss
Limit of $750,000.00 on trading activities in crude oil and distillates for
crude blending (on a combined basis).

7.17      Security for Obligations. The Borrower shall at all times maintain
security interests in favor of the Banks so that the Banks shall have a first
priority perfected lien on all of assets of the Borrower and any of its
Subsidiaries, to secure the Borrower's Obligations hereunder, under the other
Loan Documents and with respect to Swap Contracts, and the Borrower's
Obligations under Swap Contracts shall be secured on a pari passu basis with the
Borrower's other Obligations.

 

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ARTICLE VIII

NEGATIVE COVENANTS

So long as any Loan or other Obligation shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, unless the Banks waive compliance
in writing:

8.01      Limitation on Liens. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following (“Permitted
Liens”):

(a)        any Lien existing on property of the Borrower or any of its
Subsidiaries on the Closing Date and set forth in Schedule 8.01 securing
Indebtedness;

(b)

any Lien created under any Loan Document or Swap Contract;

(c)        Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.07, provided that no notice
of lien has been filed or recorded under the Code;

(d)        carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s, First Purchaser Liens or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty and, with respect to any such warehousemen’s or landlord’s lien, such
liens only secure accrued rental charges;

(e)        Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation;

(f)         Liens on the property of the Borrower or its Subsidiaries securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;

(g)        Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such unstayed
liens in the aggregate at any time outstanding for the Borrower and its
Subsidiaries do not exceed $1,000,000.00;

(h)        easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially interfere with
the ordinary conduct of the business of the Borrower and its Subsidiaries; and

 

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(i)         purchase money security interests (including capital leases) on any
property acquired or held by the Borrower or its Subsidiaries in the ordinary
course of business, securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such property; provided,
however, that (i) any such Lien attaches to such property concurrently with or
within 20 days after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction, (iii) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such property, and
(iv) the principal amount of the Indebtedness secured by any and all such
purchase money security interests shall not at any time exceed $500,000.00.

(j)         any Lien in the form of Cash Collateral (which has not been Cash
Collateralized for the benefit of the Banks) which has been granted by the
Borrower to secure the margin requirements of a swap contract permitted under
Section 8.06(b), provided that such Cash Collateral has been deducted from the
Borrowing Base Advance Cap.

8.02      Consolidations and Mergers. The Borrower shall not suffer or permit
any of its Subsidiaries to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person except for the sale of
assets in the ordinary course of its business.

8.03      Limitation on Indebtedness. The Borrower shall not suffer or permit
any of its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

(a)        Indebtedness incurred pursuant to or in accordance with, this
Agreement;

(b)        Indebtedness consisting of trade payables in the ordinary course of
business;

(c)        Indebtedness existing on the Closing Date, and described on
Schedule 8.01;

(d)        Indebtedness in respect of purchase money security interests
permitted by Section 8.01 hereof;

(e)        Indebtedness in respect of Contingent Obligations permitted by
Section 8.06 hereof;

(f)

Subordinated Debt that has been approved by the Banks; and

(g)        Intercompany loans to the Borrower which are subordinated to the
Obligations on terms and conditions satisfactory to the Banks.

8.04      Transactions with Affiliates. The Borrower shall not suffer or permit
any of its Subsidiaries to, enter into any transaction with any Affiliate of the
Borrower, except upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary than would obtain

 

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in a comparable arm’s-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary.

8.05      Use of Proceeds. The Borrower shall not suffer or permit any of its
Subsidiaries to, use any portion of the Loan proceeds or any Letter of Credit,
directly or indirectly, (a) to purchase or carry Margin Stock, (b) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to purchase
or carry Margin Stock, (c) to extend credit for the purpose of purchasing or
carrying any Margin Stock, (d) to acquire any security in any transaction that
is subject to Section 13 or 14 of the Exchange Act, or (e) in a manner
inconsistent with this Agreement.

8.06      Contingent Obligations. The Borrower shall not suffer or permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Contingent
Obligations except:

(a)        endorsements for collection or deposit in the ordinary course of
business;

(b)        swap contracts entered into in the ordinary course of business as
bona fide hedging transactions (including Swap Contracts);

(c)        Contingent Obligations of the Borrower and its Subsidiaries existing
as of the Closing Date and described on Schedule 8.06; and

(d)        Contingent Obligations of the Borrower in favor of Fortis Capital
(Canada) Ltd. (“Fortis Canada”) pursuant to the terms of an Agency Agreement
between the Borrower and Fortis Canada. Specifically, the Borrower will
indemnify Fortis Canada for errors made by the Borrower in the execution of
transactions entered into on behalf of Fortis Canada. The Borrower will also
assume the risks of any disruption in the flow of natural gas from the initial
seller to Fortis Canada into and out of storage and to the final purchaser from
Fortis Canada.

8.07      Restricted Payments. The Borrower shall not declare or make, directly
or indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that:

(a)        each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests);

(b)        the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock of such
Person;

(c)        the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its common stock; and

 

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(d)        the Borrower may declare or pay cash dividends to its stockholders;
provided, however, that, immediately after giving effect to such proposed
action, no Default or Event of Default would exist.

8.08      ERISA. The Borrower shall not, nor suffer or permit any of its ERISA
Affiliates to: (a) engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan; or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

8.09      Change in Business. The Borrower shall not, nor suffer or permit any
of its Subsidiaries to, engage in any line of business different from the line
of business carried on by the Borrower and its Subsidiaries on the date hereof.

8.10      Accounting Changes. The Borrower shall not, nor suffer or permit any
of its Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary.

8.11      Net Position. At no time will the Borrower allow the Net Position with
respect to natural gas and crude oil/distillates exceed the amounts specified
below:

Borrowing Base
Sub-Cap in Effect

Net Position for Natural Gas May Not Exceed

Net Position for Crude Oil and Distillates for Crude Blending
May Not Exceed

$100,000,000

500,000 MMBtu

150,000 bbl

$150,000,000

1,250,000 MMBtu

250,000 bbl

$175,000,000

1,250,000 MMBtu

300,000 bbl

$200,000,000

1,500,000 MMBtu

400,000 bbl

$250,000,000

1,500,000 MMBtu

500,000 bbl

$260,000,000

1,500,000 MMBtu

600,000 bbl

 

 

 

8.12        Change of Management. Borrower shall notify the Agent prior to any
Change of Management. For purposes of this Section 8.12, “Change of Management”
shall mean an officer of the Borrower ceases to be an officer of the Borrower or
more than 50% of the Persons serving as directors of the Borrower on the Closing
Date cease to serve as directors.

8.13      Risk Management Policy. The Borrower will not materially change its
risk management policies without the prior written consent of Agent and all the
Banks. Borrower agrees that upon request by Agent, from time to time, the
Borrower and the Banks will review and evaluate Borrower’s risk management
policies.

 

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8.14      Capital Expenditures. Borrower will not make or commit to make any
capital expenditure if after such commitment or expenditure a Default or Event
of Default would exist under this Agreement.

8.15      Unhedged Transportation Exposure. At no time will the Borrower allow
its Unhedged Transportation Exposure to exceed the amounts specified below,
provided, however, that Borrower’s Unhedged Transportation Exposure may exceed
such amounts by one-third (1/3) of the amount by which its Net Working Capital
and Tangible Net Worth exceeds the minimum amount required under Section 7.15.

Borrowing Base
Sub-Cap in Effect

Unhedged Transportation
Exposure May Not Exceed

$100,000,000

$3,000,000

$150,000,000

$3,000,000

$175,000,000

$3,500,000

$200,000,000

$3,500,000

$250,000,000

$4,250,000

$260,000,000

$4,250,000

 

 

8.16        Loans and Investments. Borrower shall not purchase or acquire, or
make any commitment therefor, any equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
acquisitions, or make or commit to make any advance, loan, extension of credit
(other than pursuant to sales on open account in the ordinary course of
Borrower’s business) or capital contribution to or any other investment in, any
Person; provided, however, that Borrower may loan funds to Parent or any
Affiliate thereof, provided that after giving effect to such proposed action, no
Default or Event of Default would exist provided that at such time Parent has a
Standard & Poor’s rating of at least BBB- or Moody’s rating of at least Baa3.

8.17      Bank Blocked Accounts Investments. Borrower shall not purchase or
acquire any investments to be held in a Bank Blocked Accounts other than cash
equivalents and Marketable Securities.

ARTICLE IX

EVENTS OF DEFAULT

9.01      Event of Default. Any of the following shall constitute an “Event of
Default”:

(a)        Non-Payment. The Borrower fails to pay any amount due hereunder or
under any other Loan Document within one (1) Business Day after the same

 

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becomes due, including, without limitation, such amounts as may come due as a
result of a “demand” made by the Required Banks under the Notes; or

(b)        Representation or Warranty. Any representation or warranty made or
deemed made herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Borrower, or any
Responsible Officer furnished at any time under this Agreement, or in or under
any other Loan Document, is incorrect or incomplete in any material respect on
or as of the date made or deemed made; or

(c)        Covenant Defaults. The Borrower fails to perform or observe any other
term, covenant or agreement contained in any of the Loan Documents; or

(d)        Cross-Default. The Borrower or any Subsidiary of the Borrower
(i) fails to make any payment in respect of any Indebtedness or Contingent
Obligation having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $1,000,000.00 when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise); or (ii) fails to perform or observe any other material condition or
covenant, or any other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent Obligation, if,
after expiration of any grace or cure period therein provided, the effect of
such failure, event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Contingent Obligation to become payable or
cash collateral in respect thereof to be demanded; or

(e)        Swap Contracts. There shall have occurred with respect to any Swap
Contract to which the Borrower is a party an “Event of Default” or a
“Termination Event” (as defined in the applicable ISDA Master Agreement and any
related Credit Support Annex or Schedule) which entitles the applicable Swap
Bank to terminate the Swap Contract; or

(f)         Insolvency; Voluntary Proceedings. The Borrower or any Subsidiary of
the Borrower (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, whether at
stated maturity or otherwise; (ii) commences any Insolvency Proceeding with
respect to itself; or (iii) takes any action to effectuate or authorize any of
the foregoing; or

(g)        Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower or any Subsidiary of the Borrower, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the properties of Borrower, any
Subsidiary of the Borrower, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Borrower, any Subsidiary of the Borrower
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or

 

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(iii) the Borrower, any Subsidiary of the Borrower acquiesces in the appointment
of a receiver, trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefore), or other similar Person for itself or a
substantial portion of its property or business; or

(h)        ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000.00;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000.00; or (iii) the Borrower or any ERISA Affiliate
shall fail to pay when due, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $500,000.00, or the aggregate of (i), (ii) and
(iii) exceeds $1,000,000.00; or

(i)         Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Borrower or any Subsidiary of the Borrower, which such judgment, order, decree
or award is not effectively stayed pending appeal thereof, involving in the
aggregate a liability as to any single or related series of transactions,
incidents or conditions, to pay an amount of $1,000,000.00 or more; or

(j)         Non-Monetary Judgments. Any non-monetary judgment, order or decree
is entered against the Borrower or any Subsidiary of the Borrower which does or
would reasonably be expected to have a Material Adverse Effect; or

(k)        Change of Control. There occurs any Change of Control not previously
approved by all the Banks; or

(l)

Adverse Change. There occurs a Material Adverse Effect.

IN NO EVENT SHALL ANY PROVISION OF THIS AGREEMENT PROVIDING FOR SPECIFIC EVENTS
OF DEFAULT BE CONSTRUED TO WAIVE, LIMIT OR OTHERWISE MODIFY THE DEMAND NATURE OF
THE LOANS WHICH MAY BE MADE PURSUANT TO THIS AGREEMENT, AND THE BORROWER HEREBY
ACKNOWLEDGES AND AGREES THAT THE BANKS' RIGHT TO DEMAND PAYMENT (TO BE EXERCISED
BY THE REQUIRED BANKS) AT ANY TIME FOR ANY REASON OR FOR NO REASON IS ABSOLUTE
AND UNCONDITIONAL.

9.02      Remedies. If any Event of Default occurs, Agent may and shall, at the
request of the Required Banks:

(a)        declare an amount equal to the maximum aggregate amount that is or at
any time thereafter may become available for drawing by the beneficiary under
any outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and

 

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(b)        exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law
including, without limitation, seeking to lift the stay in effect under the
Insolvency Proceeding; provided, however, that upon the occurrence of any event
specified in subsection (f) or (g) of Section 9.01, the making of Loans and the
Issuance of Letters of Credit under this Agreement shall automatically terminate
and an amount equal to the maximum aggregate amount that is or at any time
thereafter may become available for drawing by the beneficiary under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) together with the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of Agent, any Issuing Bank or any Bank.

9.03      Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

9.04      Application of Payments. Except as expressly provided in this
Agreement, from and after the date of the occurrence of any Sharing Event, all
amounts thereafter received or recovered under this Agreement or any other Loan
Document whether as a result of a payment by the Borrower, the exercise of
remedies by the Agent under any of the Loan Documents, liquidation of collateral
or otherwise, shall be applied according to Section 2.01 of the Intercreditor
Agreement.

ARTICLE X

AGENT

10.01

Appointment and Authorization.

(a)        Each Bank hereby irrevocably (subject to Section 10.09) appoints,
designates and authorizes Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent. Without limiting the generality of
the foregoing sentence, the use of the term “agent” in this Agreement with
reference to Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

 

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(b)        Each Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as Agent and such Issuing Bank may agree at
the request of the Required Banks that Agent will act for such Issuing Bank with
respect thereto; provided, however, that such Issuing Bank shall have all of the
benefits and immunities (i) provided to Agent in this Article X with respect to
any acts taken or omissions suffered by such Issuing Bank in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Agent” as used in this Article X included such
Issuing Bank with respect to such acts or omissions, and (ii) as additionally
provided herein with respect to such Issuing Bank. Prior to the issuance of a
Letter of Credit or upon the payment of any drawing on a Letter of Credit by an
Issuing Bank other than Agent, such Issuing Bank shall provide written notice to
Agent of the dollar amount, the date of such issuance or payment and the expiry
date for such Letter of Credit. Such issuance shall be subject to the consent of
Agent. Such consent shall not result in the imposition of any liability upon
Agent.

10.02    Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

10.03    Liability of Agent. None of Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Borrower or any Subsidiary or
Affiliate of the Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or for the value of
or title to any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower or any of the Borrower’s Subsidiaries or
Affiliates.

10.04

Reliance by Agent.

(a)        Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it

 

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shall first receive such advice or concurrence of the Banks or Required Banks,
as applicable, as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Banks or Required Banks, as
applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.

(b)        For purposes of determining compliance with the conditions specified
in Sections 5.01 and 5.02, each Bank that has executed this Agreement shall,
unless it notifies the Agent to the contrary, be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
either sent by Agent to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Bank.

10.05    Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to Agent for the account of the Banks, unless Agent shall have received written
notice from a Bank or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”. Agent will notify the Banks of its receipt of any such notice. Agent
shall take such action with respect to such Default or Event of Default as may
be requested by the Banks or Required Banks, as applicable, in accordance with
Article IX; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Banks.

10.06    Credit Decision. Each Bank acknowledges that none of Agent-Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of the Borrower and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Bank. Each Bank represents to Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, the value of and title to any Collateral, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder. Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by Agent, Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other

 

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condition or creditworthiness of the Borrower which may come into the possession
of any of Agent-Related Persons.

10.07    Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Banks shall indemnify upon demand Agent-Related Persons (to
the extent not reimbursed by or on behalf of the Borrower and without limiting
the obligation of the Borrower to do so), pro rata in accordance with each
Bank’s Pro Rata Share, from and against any and all Indemnified Liabilities;
provided, however, that no Bank shall be liable for the payment to Agent-Related
Persons of any portion of such Indemnified Liabilities resulting from such
Person’s gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including Attorney Costs) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent. THE FORGOING INDEMNITY INCLUDES AN
INDEMNITY FOR THE NEGLIGENCE OF AGENT-RELATED PERSONS.

10.08    Agent in Individual Capacity. Fortis and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though Fortis were not Agent or an Issuing Bank
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, Fortis or its Affiliates may receive
information regarding the Borrower or its Affiliates (including information that
may be subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that Agent shall be under no obligation to provide
such information to them. With respect to its Loans, Fortis shall have the same
rights and powers under this Agreement as any other Bank and may exercise the
same as though it were not Agent or an Issuing Bank, and the terms “Bank” and
“Banks” include Fortis in its individual capacity.

10.09    Successor Agent. Agent may resign as Agent upon thirty (30) days’
notice to the Banks. If Agent resigns under this Agreement, the Banks shall
appoint, from among the Banks, a successor agent for the Banks. If no successor
agent is appointed prior to the effective date of the resignation of Agent,
Agent may appoint, after consulting with the Banks, and with the consent of the
Borrower, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term “Agent”
shall mean such successor agent and the retiring Agent’s appointment, powers and
duties as Agent shall be terminated. After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Article X and Sections 11.04 and
11.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is thirty (30) days following a
retiring Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become

 

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effective and the Banks shall perform all of the duties of Agent hereunder until
such time, if any, as the Banks appoint a successor agent as provided for above.

10.10    Foreign Banks. Each Bank that is a “foreign corporation, partnership or
trust” within the meaning of the Code (a “Foreign Bank”) shall deliver to Agent,
prior to receipt of any payment subject to withholding under the Code (or after
accepting an assignment of an interest herein), two duly signed completed copies
of either IRS Form W-8BEN or any successor thereto (relating to such Person and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Person by the Borrower pursuant to this Agreement)
or IRS Form W-8ECI or any successor thereto (relating to all payments to be made
to such Person by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and Agent that such Person is entitled to
an exemption from, or reduction of, U.S. withholding tax. Thereafter and from
time to time, each such Person shall (a) promptly submit to Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Person by
the Borrower pursuant to this Agreement, (b) promptly notify Agent of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction, and (c) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of such Bank, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Person. If such Person fails to deliver the above
forms or other documentation, then Agent may withhold from any interest payment
to such Person an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction. If any Governmental
Authority asserts that Agent did not properly withhold any tax or other amount
from payments made in respect of such Person, such Person shall indemnify Agent
therefore, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to Agent under this Section, and costs and
expenses (including Attorney Costs) of Agent. The obligation of the Banks under
this Section shall survive the payment of all Obligations and the resignation or
replacement of Agent.

10.11

Collateral Matters.

(a)        The Agent is authorized on behalf of all the Banks, without the
necessity of any notice to or further consent from the Banks, from time to time
to take any action with respect to any Collateral or the Loan Documents which
may be necessary to perfect and maintain perfected the security interest in and
Liens upon the Collateral granted pursuant to the Loan Documents.

(b)        The Banks irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon payment in full of all Loans and all other Obligations known
to the Agent and payable under this Agreement, any other Loan Document or any
Swap Contract; (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder;

 

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(iii) constituting property in which the Borrower or any Subsidiary owned no
interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to the Borrower or any Subsidiary under a
lease which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
the Borrower or such Subsidiary to be, renewed or extended; (v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; (vi) upon transfers of funds out of a
Bank Blocked Accounts, or (vii) if approved, authorized or ratified in writing
by all the Banks. Upon request by the Agent at any time, the Banks will confirm
in writing the Agent’s authority to release particular types or items of
Collateral pursuant to this Subsection 10.11(b); provided, however, that the
absence of any such confirmation for whatever reason shall not affect the
Agent’s rights under this Section 10.11.

(c)        Each Bank agrees with and in favor of each other that the Borrower’s
obligations to such Bank under this Agreement and the other Loan Documents is
not and shall not be secured by any real property collateral.

10.12    Monitoring Responsibility. Each Bank will make its own credit decisions
hereunder, including the decision whether or not to make advances or consent to
the Issuance of Letters of Credit, thus the Agent shall have no duty to monitor
the Collateral Position, the amounts outstanding under sub-lines or the
reporting requirements or the contents of reports delivered by the Borrower.
Each Bank assumes the responsibility of keeping itself informed at all times.

ARTICLE XI

MISCELLANEOUS

11.01    Amendments and Waivers. (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by all the Required Banks and the Borrower and acknowledged by
Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that:

(i)

no amendment, waiver or consent shall, unless in writing and signed by each
Issuing Bank in addition to all the Banks, affect the rights or duties of any
Issuing Bank under this Agreement or any Letter of Credit application relating
to any Letter of Credit issued or to be issued by it;

(ii)

no amendment, waiver or consent shall, unless in writing and signed by Agent in
addition to all the Banks: (a) affect the rights or duties of Agent under this
Agreement or any other Loan Document, (b) reduce the amount or extend the
scheduled date of maturity of any Loan or of any installment thereof, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of

 

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any payment thereof or increase the amount or extend the expiration date of any
Bank’s Uncommitted Line Portion or amend the Expiration Date or the Maturity
Date, (c) result in a Credit Extension in excess of the Borrowing Base Advance
Cap, (d) amend, modify or waive any provision of this Section 11.01, any
provision of this Agreement which requires the consent or approval of all the
Banks or the Banks, or reduce the percentage specified in the definition of
Required Banks, (e) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
(f) release any of the Collateral (except as otherwise permitted by
Section 10.11(b)(i)-(vi)), (g) amend or modify the definitions of “Advance Line
Limit,” “Borrowing Base Advance Cap,” “Borrowing Base Sub-Cap,” “Close-out
Amount,” “Elected Ninety (90) Day Swap L/C Cap,” “Elected Performance L/C Cap,”
“L/C Sub-limit Cap,” or “Pro Rata Share,” or (h) amend or modify the Borrower’s
Second Amended and Restated Security Agreement;

(iii)

no amendment, waiver or consent shall, unless in writing and signed by Agent and
each Bank that is a Swap Bank at the time of such amendment, waiver or consent:
(a) amend, modify or waive Sections 7.17, 9.04 or 11.22, or (b) amend, modify or
waive any other Section of this Agreement which amendment, modification or
waiver would affect the rights and duties of the Swap Banks hereunder; and

(iv)

the fee letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto.

(b)        From each Conversion to Reduced Funding Banks Date forward (or until
the next Conversion to Reduced Funding Banks Date, if any, at which time one or
more Banks that had been Approving Banks may become a Declining Bank),

(i)

all amendments to any Letter of Credit that is issued after such Conversion to
Reduced Funding Banks Date that increase the face amount of such Letter of
Credit or extend the term of such Letter of Credit shall be made unilaterally by
the Approving Banks in respect of such Conversion to Reduced Funding Banks Date,
and

(ii)

there shall be no amendments to any Letter of Credit that was issued before such
Conversion to Reduced Funding Banks Date that increases the face amount of such
Letter of Credit or extends the term of such Letter of Credit.

 

 

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(c)        Any Bank that elects to discontinue funding pursuant to Section 2.13
is considered a Bank for purposes of approvals or consents that require the
approval or consent of all the Banks or Required Banks, as applicable,
notwithstanding such Bank’s election to discontinue funding. Notwithstanding
anything to the contrary herein, any Bank that has failed to fund any portion of
any Loans, or participations in L/C Obligations required to be funded by it
hereunder shall not have any right to approve or disapprove any amendment,
waiver or consent hereunder; provided, however, except as a result of the
implementation of Section 2.13, the Pro Rata Share of such Bank may not be
increased without the consent of such Bank, no payment to such Bank shall be
decreased or postponed without the consent of such Bank, and the Applicable
Margin may not be decreased without the consent of such Bank. In addition to any
other requirements set forth herein with respect to amendments, consents or
waivers, any amendment of, or waiver or consent under any Loan Document that
affects the rights and obligations of a Swap Bank requires the consent of such
Swap Bank.

11.02

Notices.

(a)        General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 11.02; or, in the case of the Borrower, Agent,
or the Issuing Banks, to such other address as shall be designated by such party
in a notice to the other parties, and in the case of any other party, to such
other address as shall be designated by such party in a notice to the Borrower,
Agent and the Issuing Banks. All such notices and other communications shall be
deemed to be given or made upon the earlier to occur of (i) actual receipt by
the intended recipient and (ii) (A) if delivered by hand or by courier, when
signed for by the intended recipient; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
subsection (c) below), when delivered; provided, however, that notices and other
communications to Agent and the Issuing Banks pursuant to Article II shall not
be effective until actually received by such Person. Any notice or other
communication permitted to be given, made or confirmed by telephone hereunder
shall be given, made or confirmed by means of a telephone call to the intended
recipient at the number specified on Schedule 11.02, it being understood and
agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.

(b)        Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, Agent and the Banks. Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

(c)        Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial

 

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statements and other information, and to distribute Loan Documents for execution
by the parties thereto, and may not be used for any other purpose.

(d)        Reliance by Agent and Banks. Agent and the Banks shall be entitled to
rely and act upon any notices (including telephonic notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent-Related Person and each Bank from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with Agent may be recorded by Agent, and each of the
parties hereto hereby consents to such recording.

11.03    No Waiver; Cumulative Remedies. No failure by any Bank or Agent to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein or therein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

11.04    Costs and Expenses. The Borrower agrees (a) to pay or reimburse Agent
for all reasonable costs and expenses incurred by Agent in connection with the
development, preparation, negotiation and execution of this Agreement and the
other Loan Documents and any amendment, waiver, consent or other modification of
the provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (b) to pay or reimburse Agent and each Bank for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any “workout”
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by Agent and the cost of independent public
accountants and other outside experts retained by Agent or any Bank. The
agreements in this Section shall survive the termination of this Agreement and
repayment of all the other Obligations.

11.05    Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to indemnify, save and hold harmless each
Agent-Related Person, each Issuing Bank, each Bank and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) from and against: (a) any and
all claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than Agent or any Bank) relating directly or
indirectly to a claim, demand, action or cause of action that such Person
asserts or may assert against any Loan Party, any Affiliate of any Loan Party or
any of their respective officers or directors; (b) any and

 

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all claims, demands, actions or causes of action that may at any time (including
at any time following repayment of the Obligations and the resignation or
removal of Agent or the replacement of any Bank) be asserted or imposed against
any Indemnitee, arising out of or relating to, the Loan Documents, any
predecessor loan documents, the use or contemplated use of the proceeds of any
Credit Extension, or the relationship of any Loan Party, Agent and the Banks
under this Agreement or any other Loan Document; (c) any administrative or
investigative proceeding by any Governmental Authority arising out of or related
to a claim, demand, action or cause of action described in subsection (a) or
(b) above; and (d) any and all liabilities (including liabilities under
indemnities), losses, costs or expenses (including Attorney Costs) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,
action, cause of action or proceeding, in all cases, WHETHER OR NOT ARISING OUT
OF THE NEGLIGENCE OF AN INDEMNITEE, and whether or not an Indemnitee is a party
to such claim, demand, action, cause of action or proceeding (all the foregoing,
collectively, the “Indemnified Liabilities”); provided, however, that no
Indemnitee shall be entitled to indemnification for any claim caused by its own
gross negligence or willful misconduct or for any loss asserted against it by
another Indemnitee. The agreements in this Section shall survive the termination
of this Agreement and repayment of all the other Obligations.

11.06    Payments Set Aside. To the extent that the Borrower makes a payment to
Agent or any Bank, or Agent or any Bank exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and
(b) each Bank severally agrees to pay to Agent upon demand its applicable share
of any amount so recovered from or repaid by Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.

11.07

Successors and Assigns.

(a)        The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Bank (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b)        Any Bank may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its

 

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Uncommitted Line Portion and the Loans (including for purposes of this
subsection (b) and participations in L/C Obligations) at the time owing to it);
provided, however, that (i) except in the case of an assignment of the entire
remaining amount of the assigning Bank’s Uncommitted Line Portion and the Loans
at the time owing to it, or in the case of an assignment to a Bank or an
Affiliate of a Bank, the aggregate amount of the Uncommitted Line Portion (which
for this purpose includes Loans outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to Agent, shall not be less than $5,000,000,
unless each of Agent, the Issuing Banks, and, so long as no Event of Default has
occurred and is continuing, the Borrower (except an assignment by a Bank to an
Affiliate of such Bank which such assignment shall not require the consent of
Borrower) otherwise consents (each such consent not to be unreasonably withheld
or delayed), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Bank’s rights and obligations under this
Agreement with respect to the Loans or the Uncommitted Line Portion assigned,
and (iii) the parties to each assignment shall execute and deliver to Agent an
Assignment and Acceptance, such Assignment and Acceptance to be in the form
attached hereto as Exhibit C, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the Eligible Assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Bank under this Agreement, and
the assigning Bank thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Bank’s rights and obligations under this Agreement, such Bank shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 4.07, 11.04 and 11.05). Upon request, the Borrower (at its expense)
shall execute and deliver new or replacement Notes to the assigning Bank and the
assignee Bank provided the replaced Notes are simultaneously returned to the
Borrower. Any assignment or transfer by a Bank of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Bank of a participation in such
rights and obligations in accordance with subsection (d) of this Section.

(c)        Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain at Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Banks, and the Uncommitted Line Portions of, and principal amount of the
Loans and L/C Obligations owing to, each Bank pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be conclusive,
and the Borrower, Agent and the Banks may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Bank hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Bank, at any
reasonable time and from time to time upon reasonable prior notice.

(d)        Any Bank may, without the consent of, or notice to, the Borrower or
Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Bank’s rights and/or obligations
under this Agreement (including all or a portion of its Uncommitted Line Portion
and/or the Loans (including such Bank’s participations in L/C

 

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Obligations) owing to it); provided, however, that (i) such Bank’s obligations
under this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, Agent and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Bank sells such a participation shall provide that such Bank shall retain the
sole right to enforce this Agreement and to approve any amendment, modification
or waiver of any provision of this Agreement; provided, however, that such
agreement or instrument may provide that such Bank will not, without the consent
of the Participant, agree to any amendment, waiver or other modification that
would (i) postpone any date upon which any payment of money is scheduled to be
paid to such Participant, or (ii) reduce the principal, interest, fees or other
amounts payable to such Participant. Subject to subsection (e) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 4.01 and 4.02 to the same extent as if it were a Bank and had acquired
its interest by assignment pursuant to subsection (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 11.09 as though it were a Bank, provided, however, that such
Participant agrees to be subject to Section 2.12 as though it were a Bank.

(e)        A Participant shall not be entitled to receive any greater payment
under Section 4.01 or 4.02 than the applicable Bank would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Bank if it were a Bank
shall not be entitled to the benefits of Section 4.01 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 11.08 as though
it were a Bank.

(f)         Any Bank may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Bank, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided, however, that no such
pledge or assignment shall release a Bank from any of its obligations hereunder
or substitute any such pledgee or assignee for such Bank as a party hereto.

(g)        If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Subsection 11.07(b)), the Borrower shall be deemed to
have given its consent five Business Days after the date notice thereof has been
delivered by the assigning Bank (through Agent) unless such consent is expressly
refused by the Borrower prior to such fifth Business Day.

(h)        Notwithstanding anything to the contrary contained herein, if at any
time any Issuing Bank assigns all of its Uncommitted Line Portion and Loans
pursuant to subsection (b) above, such Bank shall, (i) upon 30 days’ notice to
the Borrower and the Banks, resign as an Issuing Bank. In the event of any such
resignation as an Issuing Bank, the Borrower shall be entitled to appoint from
among the Banks a successor Issuing Bank to such Issuing Bank hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of such Bank as an Issuing Bank. The resigning
Issuing Bank shall

 

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retain all the rights and obligations of an Issuing Bank hereunder with respect
to all Letters of Credit outstanding as of the effective date of each of its
resignation as an Issuing Bank and all L/C Obligations with respect thereto
(including the right to require the Banks to make Loans or fund participations
in L/C Obligations pursuant to Section 3.03).

11.08    Confidentiality. Each of Agent and the Banks agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder; (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any Eligible Assignee of or Participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative
transaction relating to obligations of the Borrower; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
Agent or any Bank on a nonconfidential basis from a source other than the
Borrower; or (i) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that
requires access to information about a Bank’s or its Affiliates’ investment
portfolio in connection with ratings issued with respect to such Bank or its
Affiliates. For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to Agent or any Bank on a
nonconfidential basis prior to disclosure by the Borrower; provided, however,
that, in the case of Information received from the Borrower after the date
hereof, such Information is clearly identified in writing at the time of
delivery as confidential. The foregoing is not intended to limit the Banks’
obligations to maintain confidential information received from the Borrower
under applicable laws. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

Each Bank agrees that it and its respective Affiliates, directors, officers,
employees and agents (collectively, “Representatives”) will not use any of the
Information for any reason or purpose other than in connection with its or any
of its Affiliates’ business relationship with Borrower. Each of the Banks
specifically agrees that the Information will not be utilized to evaluate the
current or prospective banking relationship between such Bank and any person or
entity that is not a party to this Agreement. Each Bank agrees that it will not
disclose to any person (other than a person to whom Information is otherwise
permitted to be disclosed under this Section 11.08) the fact that Information
has been disclosed to it or its Representatives. Each Bank shall be responsible
for enforcing this Section 11.08 as to its Representatives.

 

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11.09    Set-off. In addition to any rights and remedies of the Banks provided
by law, upon the occurrence and during the continuance of any Event of Default,
each Bank is authorized at any time and from time to time, without prior notice
to the Borrower or any other Loan Party, any such notice being waived by the
Borrower (on its own behalf and on behalf of each Loan Party) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the respective Loan Parties against any and all Obligations owing to such
Bank, now or hereafter existing, irrespective of whether or not Agent or such
Bank shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Borrower and Agent after any such set-off and application
made by such Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.

11.10    Interest Rate Limitations. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If Agent or any Bank shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by Agent or a Bank exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations.

11.11    Automatic Debits of Fees. With respect to any fee, commission, interest
or any other cost or expense or other payment due hereunder (including Attorney
Costs) due and payable to the Agent or any Bank under the Loan Documents, the
Borrower hereby irrevocably authorizes US Bank to debit from the Bank Blocked
Accounts an amount such that the aggregate amount debited from all such deposit
accounts does not exceed such fee, commission, interest or other cost or expense
and to transfer such amount to the Agent to be applied to any such payment due
hereunder, provided, however, that Agent shall promptly notify Borrower of any
such debit. If there are insufficient funds in the Bank Blocked Accounts to
cover the amount of the fee, commission, interest or other cost or expense then
due, such debits will be reversed (in whole or in part, in the Agent’s sole
discretion) and such amount not debited shall be deemed to be unpaid. No such
debit under this Section shall be deemed a set-off.

11.12    Notification of Addresses, Lending Offices, Etc. Each Bank shall notify
Agent in writing of any changes in the address to which notices to the Bank
should be directed, of addresses of any Lending Office, of payment instructions
in respect of all payments to be made to it hereunder and of such other
administrative information as Agent shall reasonably request.

11.13    Bank Blocked Accounts Charges and Procedures. US Bank is hereby
authorized to (a) charge the Bank Blocked Accounts for all returned checks,
service charges, and other fees and charges associated with the deposits by the
Borrower to and withdrawals by the

 

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Borrower from the Bank Blocked Accounts; (b) follow its usual procedures in the
event the Bank Blocked Accounts or any check, draft or other order for payment
of money should be or become the subject of any writ, levy, order or other
similar judicial or regulatory order or process; and (c) upon receipt of
authorization from the Agent, transfer any collected and available balances
relating to the Borrower in the Bank Blocked Accounts each day by wire transfer
to the Borrower’s operating account number 175080130024 maintained with U.S.
Bank; provided, however, that such authorizations may be terminated at any time
by Agent. Funds are not available if, in the reasonable determination of Agent,
they are subject to a hold, dispute or legal process preventing their
withdrawal. If the available balances in the Bank Blocked Accounts relating to
the Borrower are not sufficient to pay US Bank for any returned check, draft or
order for the payment of money relating to the Borrower, or to compensate US
Bank for any charges or fees due US Bank with respect to the deposits by the
Borrower to and withdrawals by the Borrower from the Bank Blocked Accounts, the
Borrower agrees to pay on demand the amount due US Bank. The Borrower agrees
that it cannot, and will not, withdraw any monies from the Bank Blocked Accounts
until such time as the Agent authorizes such withdrawal and it will not permit
the Bank Blocked Accounts to become subject to any other pledge, assignment,
lien, charge or encumbrance of any kind, nature or description, other than
Agent’s security interest.

11.14    Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.

11.15    Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

11.16    No Third Parties Benefited. This Agreement is made and entered into for
the sole protection and legal benefit of the Borrower, the Banks, Agent and
Agent-Related Persons, and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents.

11.17    Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided, however, that the inclusion of supplemental
rights or remedies in favor of Agent or the Banks in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

11.18    Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied

 

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upon by Agent and each Bank, regardless of any investigation made by Agent or
any Bank or on their behalf and notwithstanding that Agent or any Bank may have
had notice or knowledge of any Default or Event of Default at the time of any
Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation shall remain unpaid or unsatisfied or any Letter of
Credit shall remain outstanding.

11.19

Governing Law and Jurisdiction.

(a)        THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED, HOWEVER, THAT AGENT AND EACH
BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b)        ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE STATE COURTS LOCATED IN NEW YORK
COUNTY, CITY OF NEW YORK, STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER, AGENT AND EACH BANK CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWER, AGENT AND EACH BANK IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, AGENT AND EACH BANK WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, UPON ITSELF AND HAVE
IRREVOCABLY APPOINTED CT CORPORATION SYSTEM, 111 EIGHTH AVENUE, NEW YORK, NEW
YORK 10011, AS REGISTERED AGENT FOR PURPOSE OF ACCEPTING SERVICE OF PROCESS
WITHIN THE STATE OF NEW YORK.

11.20    Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY

 

82

 

 

COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.

11.21    Discretionary Facility. THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT PROVIDES FOR A CREDIT FACILITY THAT IS COMPLETELY DISCRETIONARY ON THE
PART OF THE BANKS AND THAT THE BANKS HAVE ABSOLUTELY NO DUTY OR OBLIGATION TO
ADVANCE ANY REVOLVING LOANS OR TO ISSUE ANY LETTER OF CREDIT. THE BORROWER
UNDERSTANDS THAT WITHOUT REASON, CAUSE OR PRIOR NOTICE, THE BANKS MAY CEASE
ADVANCING REVOLVING LOANS AND ISSUING LETTERS OF CREDIT AND EACH BANK MAKE
DEMAND FOR PAYMENT OF ALL OBLIGATIONS OF BORROWER TO IT AT ANY TIME. BORROWER
REPRESENTS AND WARRANTS TO THE BANKS THAT BORROWER IS AWARE OF THE RISKS
ASSOCIATED WITH CONDUCTING BUSINESS UTILIZING AN UNCOMMITTED FACILITY.

11.22    Intercreditor Agreement. Each Bank hereby agrees that it shall take no
action to terminate its obligations under the Intercreditor Agreement and will
otherwise be bound by and take no actions contrary to the Intercreditor
Agreement.

11.23    Amendment and Restatement. As of the Closing Date, this Agreement
amends and restates in its entirety the Existing Credit Agreement. Borrower
hereby agrees that (a) the loans outstanding under the Existing Credit Agreement
and all accrued and unpaid interest thereon, (b) all Letters of Credit issued
and outstanding under the Existing Credit Agreement, and (c) all accrued and
unpaid fees under the Existing Credit Agreement shall be deemed to be
outstanding under and payable by this Agreement.

11.24    Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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83

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

ENSERCO ENERGY INC.,

a South Dakota corporation

 

 

 

By: /s/ Mark T. Thies

 

Mark T. Thies

 

Executive Vice President

 

and Chief Financial Officer

 

 

350 Indiana Street, Suite 400

 

Golden, Colorado 80401

 

Attention: Thomas M. Ohlmacher

 

Telephone: (303) 568-3261

 

Facsimile: (303) 568-3250

 

 

 

FORTIS CAPITAL CORP.,

 

as Agent

 

 

 

 

 

By: /s/ Irene C. Rummel

 

Name :Irene C. Rummel

 

Title: Senior Vice President

 

 

 

By: /s/ Leonard Russo

 

Name: Leonard Russo

 

Title: Director

 

 

 

15455 North Dallas Parkway

 

Suite 1400

 

Addison, TX 75001

 

Attention: Irene C. Rummel

 

Telephone: (214) 953-9313

 

Facsimile: (214) 969-9332

 

84

 

 

 

 

 

FORTIS CAPITAL CORP.,

 

as a Bank and an Issuing Bank

 

 

 

 

 

By: /s/ Irene C. Rummel

 

Name :Irene C. Rummel

 

Title: Senior Vice President

 

 

 

By: /s/ Leonard Russo

 

Name: Leonard Russo

 

Title: Director

 

 

 

15455 North Dallas Parkway

 

Suite 1400

 

Addison, TX 75001

 

Attention: Irene C. Rummel

 

Telephone: (214) 953-9313

 

Facsimile: (214) 969-9332

 

 

BNP PARIBAS,

 

as an Issuing Bank and a Bank

 

 

 

 

 

By: /s/ Keith Cox

 

Name:Keith Cox

 

Title: Managing Director

 

 

 

By: /s/ Jordan Nenoff

 

Name: Jordon Nenoff

 

Title: Director

 

 

 

787 Seventh Avenue

 

New York, NY 10019

 

Attention: Keith Cox

 

Telephone: (212) 841-2575

 

Facsimile: (212) 841-2536

 

 

85

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as a Bank

 

 

 

 

 

By: /s/ Monte E. Deckerd

 

Name: Monte E. Deckerd

 

Title: Vice President

 

 

 

918 17th Street

 

DNCOBB3E

 

Attention: Monte Deckerd

 

Telephone: (303) 585-4212

 

Facsimile: (303) 585-4362

 

 

SOCIETE GENERALE,

 

as a Bank

 

 

 

 

 

By: /s/ Barbara Paulsen      /s/ Emmanuel Chesneau

 

Name: Barbara Paulsen      Emmanuel Chesneau

 

Title: Director                    Managing Director

 

 

 

1221 Avenue of the Americas

 

New York, NY 10020

 

Attention: Barbara Paulsen

 

Telephone: (212) 278-6496

 

Facsimile: (212) 278-7953

 

 

86

 

 

 

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

 

as a Bank

 

 

 

 

 

By: /s/ Chan K. Park

 

Name: Chan K. Park

 

Title: SVP & Manager

 

 

 

1221 Avenue of the Americas

 

New York, NY 10020-1104

 

Attention:  Commodities and Structured Trade

Finance Group--Chan Park

 

Telephone: (212) 782-5512

 

Facsimile: (212) 782-5871

 

87

 

 

 

SCHEDULES*

Schedule 2.01

Uncommitted Line and Uncommitted Line Portion

Schedule 6.05

Litigation, and Patent, Trademark, etc. Claims

 

Schedule 6.07

ERISA Matters

 

Schedule 6.12

Environmental Matters

 

Schedule 6.16

Subsidiaries and Equity Investments

 

Schedule 6.17

Insurance Matters

 

Schedule 8.01

Permitted Indebtedness and Liens

 

Schedule 8.06

Contingent Obligations

 

Schedule 11.02

Lending Offices and Addresses for Notices

 

EXHIBITS*

Exhibit A-1

Form of Notice of Borrowing

 

Exhibit A-2

Form of Notice of Conversion/Continuation

 

Exhibit B

Form of Compliance Certificate

 

Exhibit C

Form of Assignment and Acceptance

 

Exhibit D

Form of Borrowing Base Collateral Position Report

 

Exhibit E

Form of Net Position Report

 

Exhibit F

Form of Notice To Transfer Funds From Bank Blocked Accounts

Exhibit G

Form of Notice Of Disapproval of Further Advances and Letters

 

 

of Credit

 

Exhibit H

Subordination Agreement

 

Exhibit I

Form of Notice of Borrowing Base Sub-Cap Election

 

Exhibit J

Form of Notice of Performance L/C Cap Election

 

Exhibit K

Form of Notice of Ninety (90) Day Swap L/C Cap Election

 

Exhibit L

Form of Assignment of Hedging Account

 

 

*The above schedules and exhibits have been omitted from this filing. The
registrant agrees to furnish supplementally, a copy of any omitted schedule or
exhibit to the Commission upon request.