Exhibit 10.1

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

among

SPRAGUE OPERATING RESOURCES LLC,

as U.S. Borrower,

SPRAGUE RESOURCES ULC

and KILDAIR SERVICE LTD.

as Initial Canadian Borrowers,

and

The Several Lenders

from time to time Parties Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

and

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH

as Canadian Agent,

and

JPMORGAN CHASE BANK, N.A.

and BNP PARIBAS,

as Co-Collateral Agents

and

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

CITIZENS BANK, N.A.

NATIXIS,

SOCIÉTÉ GÉNÉRALE

and WELLS FARGO BANK, N.A.,

as Co-Syndication Agents

and

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

NEDERLAND”, NEW YORK BRANCH

and SANTANDER BANK, N.A.,

as Co-Documentation Agents

Dated as of December 9, 2014

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

J.P. MORGAN SECURITIES LLC,

BNP PARIBAS,

CITIZENS BANK, N.A.,

NATIXIS,

SOCIÉTÉ GÉNÉRALE

and WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

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TABLE OF CONTENTS

 

         Page  

SECTION 1

 

DEFINITIONS

     1   

1.1

 

Defined Terms

     1   

1.2

 

Other Definitional Provisions

     73   

1.3

 

Rounding

     74   

1.4

 

Quebec Matters

     74   

SECTION 2

 

AMOUNT AND TERMS OF THE LOANS AND COMMITMENTS

     75   

2.1

 

Working Capital Facility Loans

     75   

2.2

 

[Reserved]

     76   

2.3

 

Swing Line Loans

     76   

2.4

 

Acquisition Facility Loans

     77   

2.5

 

Procedure for Borrowing Loans

     77   

2.6

 

Refunding of Swing Line Loans

     79   

2.7

 

Foreign Exchange Rate

     82   

2.8

 

Commitment Fee

     82   

SECTION 3

 

LETTERS OF CREDIT

     83   

3.1

 

Working Capital Facility Letters of Credit

     83   

3.2

 

Acquisition Facility Letters of Credit

     83   

3.3

 

Procedure for the Issuance and Amendments of Letters of Credit

     84   

3.4

 

General Terms of Letters of Credit

     85   

3.5

 

Fees, Commissions and Other Charges

     87   

3.6

 

L/C Participations

     88   

3.7

 

Reimbursement Obligations of the Borrowers

     89   

3.8

 

Obligations Absolute

     90   

3.9

 

Role of the Issuing Lenders

     91   

3.10

 

Letter of Credit Request

     92   

SECTION 4

 

GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

     92   

4.1

 

Increase, Termination or Reduction of Commitments

     92   

4.2

 

Interest Rates and Payment Dates

     94   

4.3

 

Conversion and Continuation Options

     95   

4.4

 

Minimum Amounts of Tranches; Maximum Number of Tranches

     96   

4.5

 

Repayment of Loans; Evidence of Debt

     96   

4.6

 

Optional Prepayments

     97   

4.7

 

Mandatory Prepayments

     98   

4.8

 

Computation of Interest and Fees

     99   

4.9

 

Pro Rata Treatment and Payments

     100   

4.10

 

Requirements of Law

     101   

4.11

 

Taxes

     103   

4.12

 

Lending Offices

     106   

4.13

 

Credit Utilization Reporting

     106   

4.14

 

Indemnity

     106   

4.15

 

Market Disruption and Inability to Determine Interest Rate

     106   

4.16

 

Illegality

     107   

4.17

 

Replacement of Lenders

     108   

4.18

 

Defaulting Lender

     109   

 

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4.19

 

Interest Act (Canada)

     111   

4.20

 

Limitations on Interest

     111   

SECTION 5

 

REPRESENTATIONS AND WARRANTIES

     111   

5.1

 

Financial Condition

     111   

5.2

 

No Change

     112   

5.3

 

Existence; Compliance with Law

     112   

5.4

 

Power; Authorization; Enforceable Obligations

     112   

5.5

 

No Legal Bar

     113   

5.6

 

No Material Litigation

     113   

5.7

 

No Default

     113   

5.8

 

Ownership of Property; Liens

     114   

5.9

 

Intellectual Property

     114   

5.10

 

No Burdensome Restrictions

     114   

5.11

 

Taxes

     114   

5.12

 

Federal Regulations

     114   

5.13

 

ERISA

     114   

5.14

 

Investment Company Act; Other Regulations

     115   

5.15

 

Subsidiaries

     116   

5.16

 

Security Documents

     116   

5.17

 

Accuracy and Completeness of Information

     117   

5.18

 

Labor Relations

     117   

5.19

 

Insurance

     118   

5.20

 

Solvency

     118   

5.21

 

Use of Letters of Credit and Proceeds of Loans

     118   

5.22

 

Environmental Matters

     119   

5.23

 

Risk Management Policy

     120   

5.24

 

Anti-Corruption Laws and Sanctions

     120   

5.25

 

Canadian Pension Plan and Benefit Plans

     121   

5.26

 

Works Council

     121   

SECTION 6

 

CONDITIONS PRECEDENT

     121   

6.1

 

Conditions Precedent

     121   

6.2

 

Conditions to Each Credit Extension

     130   

SECTION 7

 

AFFIRMATIVE COVENANTS

     132   

7.1

 

Financial Statements

     132   

7.2

 

Certificates; Other Information

     134   

7.3

 

Payment of Obligations

     135   

7.4

 

Conduct of Business and Maintenance of Existence

     135   

7.5

 

Maintenance of Property; Insurance

     135   

7.6

 

Inspection of Property; Books and Records; Discussions

     136   

7.7

 

Notices

     136   

7.8

 

Environmental Laws

     137   

7.9

 

Periodic Audit of Borrowing Base Assets

     137   

7.10

 

Risk Management Policy

     138   

7.11

 

Collections of Accounts Receivable

     138   

7.12

 

Taxes

     138   

7.13

 

Additional Collateral; Further Actions

     138   

7.14

 

Use of Proceeds

     141   

7.15

 

Cash Management

     141   

 

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7.16

 

New Business Valuations of Approved Acquisition Assets

     141   

7.17

 

Post-Closing Matters

     141   

7.18

 

Additional Post-Closing Transactions

     143   

7.19

 

Canadian Pension Plans and Benefit Plans

     143   

7.20

 

Center of Main Interest

     144   

SECTION 8

 

NEGATIVE COVENANTS

     144   

8.1

 

Financial Condition Covenants

     144   

8.2

 

Limitation on Indebtedness

     144   

8.3

 

Limitation on Liens

     146   

8.4

 

Limitation on Fundamental Changes

     147   

8.5

 

Restricted Payments

     148   

8.6

 

Limitation on Sale of Assets

     149   

8.7

 

Limitation on Capital Expenditures

     150   

8.8

 

Limitation on Investments, Loans and Advances

     150   

8.9

 

Limitation on Payments or Modifications of Junior Debt Instruments

     151   

8.10

 

Limitation on Transactions with Affiliates

     151   

8.11

 

Accounting Changes

     152   

8.12

 

Limitation on Negative Pledge Clauses

     152   

8.13

 

Limitation on Lines of Business

     153   

8.14

 

Governing Documents

     153   

8.15

 

Limitations on Clauses Restricting Subsidiary Distributions

     153   

8.16

 

Canadian Pension Plan

     153   

8.17

 

Use of Proceeds

     154   

8.18

 

Loan Parties

     154   

SECTION 9

 

EVENTS OF DEFAULT

     154   

9.1

 

Events of Default

     154   

SECTION 10

 

THE AGENTS

     158   

10.1

 

Appointment

     158   

10.2

 

Delegation of Duties

     159   

10.3

 

Exculpatory Provisions

     159   

10.4

 

Reliance by Agents

     159   

10.5

 

Notice of Default

     159   

10.6

 

Non-Reliance on Agents and Other Lenders

     160   

10.7

 

Indemnification

     160   

10.8

 

Agents in Their Individual Capacity

     161   

10.9

 

Successor Agents

     161   

10.10

 

Collateral Matters

     163   

10.11

 

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

     163   

SECTION 11

 

MISCELLANEOUS

     164   

11.1

 

Amendments and Waivers

     164   

11.2

 

Notices

     165   

11.3

 

No Waiver; Cumulative Remedies

     167   

11.4

 

Survival of Representations and Warranties

     168   

11.5

 

Release of Collateral and Guarantee Obligations

     168   

11.6

 

Payment of Costs and Expenses

     168   

11.7

 

Successors and Assigns; Participations and Assignments

     169   

 

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11.8

 

Adjustments; Set-off

     173   

11.9

 

Counterparts

     174   

11.10

 

Severability

     174   

11.11

 

Integration

     174   

11.12

 

Governing Law

     174   

11.13

 

Submission to Jurisdiction

     174   

11.14

 

Acknowledgements

     175   

11.15

 

Waivers of Jury Trial

     175   

11.16

 

Confidentiality

     175   

11.17

 

Specified Laws

     176   

11.18

 

[Reserved]

     177   

11.19

 

Additional Borrowers

     177   

11.20

 

Joint and Several Liability

     178   

11.21

 

Contribution and Indemnification among the Borrower Parties; Subordination

     179   

11.22

 

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

     180   

11.23

 

Limitation on Obligations of Borrower Parties

     181   

11.24

 

Limitation of Obligations of Kildair

     181   

11.25

 

Judgment Currency

     181   

11.26

 

English Language

     182   

11.27

 

Amendment and Restatement

     182   

 

iv

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SCHEDULES  

Schedule 1.0

 

Lenders, Commitments, and Applicable Lending Offices

Schedule 1.1(A)

 

Approved Inventory Locations

Schedule 1.1(B)

 

Cash Management Banks

Schedule 1.1(C)

 

Eligible Foreign Counterparties

Schedule 1.1(D)

 

Independent Entity Schedule

Schedule 1.1(E)

 

Mortgaged Property

Schedule 1.1(F)

 

Specified Account Debtors

Schedule 2.2

 

Wire Instructions for Working Capital Facility Loans and Swing Line Loans

Schedule 3.1(a)

 

Existing Kildair Letters of Credit

Schedule 3.1(b)

 

Existing Sprague Letters of Credit

Schedule 3.2

 

Existing Acquisition Facility Letters of Credit

Schedule 5.1(c)

 

Liabilities

Schedule 5.1(f)

 

Acquisitions

Schedule 5.4

 

Consents and Authorizations

Schedule 5.9

 

Intellectual Property

Schedule 5.15

 

Subsidiaries

Schedule 5.16

 

Filing Jurisdictions

Schedule 5.19

 

Insurance

Schedule 5.22

 

Environmental Matters

Schedule 5.25

 

Canadian Pension Plans and Benefit Plans

Schedule 8.2

 

Existing Indebtedness

Schedule 8.3

 

Existing Liens

Schedule 8.8

 

Investments

Schedule 8.10

 

Transactions with Affiliates

EXHIBITS  

Exhibit A-1

 

Form of Dollar Working Capital Facility Note

Exhibit A-2

 

Form of Multicurrency Working Capital Facility Note

Exhibit A-3

 

Form of Dollar Swing Line Note

Exhibit A-4

 

Form of Multicurrency Swing Line Note

Exhibit A-5

 

Form of Acquisition Facility Note

Exhibit B-1

 

Form of U.S. Security Agreement

Exhibit B-2

 

Form of Canadian Security Agreement

Exhibit B-3

 

Form of Dutch Receivables Pledge Agreement

Exhibit C-1

 

Form of U.S. Pledge Agreement

Exhibit C-2

 

Form of Canadian Pledge Agreement

Exhibit C-3

 

Form of Dutch Membership Pledge Agreement

Exhibit D-1

 

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

Exhibit D-2

 

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

Exhibit D-3

 

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

Exhibit D-4

 

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

Exhibit E

 

Form of Secretary’s Certificate

Exhibit F

 

Form of Assignment and Acceptance

 

v

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Exhibit G

 

Form of Borrowing Base Report

Exhibit H-1

 

Form of Intercompany Subordination Agreement

Exhibit H-2

 

Form of Axel Johnson Subordination Agreement

Exhibit I

 

Risk Management Policy

Exhibit J

 

[Reserved]

Exhibit K

 

Cash Collateral Documentation

Exhibit L

 

Form of U.S. Mortgage and Security Agreement

Exhibit M

 

Form of Position Report

Exhibit N

 

Form of Guarantee

Exhibit O

 

Form of Compliance Certificate

Exhibit P

 

Form of Increase and New Lender Agreement

Exhibit Q

 

Form of Perfection Certificate

Exhibit R

 

Form of Marked-to-Market Report

Exhibit S

 

Form of Borrower’s Certificate

Exhibit T

 

Form of Hedging Agreement Qualification Notification

Exhibit U

 

Form of Joinder Agreement

Exhibit V

 

Form of Solvency Certificate

ANNEXES  

Annex I

 

Form of Borrowing Notice

Annex II

 

Form of Continuation/Conversion Notice

Annex III

 

Form of Notice of Prepayment

Annex IV

 

Form of Credit Utilization Summary

 

vi

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AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 9, 2014, among
SPRAGUE OPERATING RESOURCES LLC, a Delaware limited liability company (the “U.S.
Borrower”), Kildair Service Ltd., a corporation formed under the laws of Canada
and continued under the laws of British Columbia (“Kildair”), Sprague Resources
ULC, an unlimited liability company formed under the laws of British Columbia
(“AcquireCo” and, together with Kildair, the “Initial Canadian Borrowers”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement, as lenders (the “Lenders”), JPMORGAN CHASE BANK,
N.A., (“JPMorgan Chase Bank”), as administrative agent (together with any
successor Administrative Agent appointed pursuant to Section 10.9, in such
capacity the “Administrative Agent”), JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
as Canadian agent (together with any successor Canadian Agent appointed pursuant
to Section 10.9, in such capacity the “Canadian Agent”), JPMORGAN CHASE BANK and
BNP PARIBAS (“BNP Paribas”), as Co-Collateral agents (together with any
successor Co-Collateral Agent appointed pursuant to Section 10.9, in such
capacities the “Co-Collateral Agents”), THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
CITIZENS BANK, N.A., NATIXIS, SOCIÉTÉ GÉNÉRALE and WELLS FARGO BANK, N.A., as
co-syndication agents (in such capacities, the “Co-Syndication Agents”) and
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW
YORK BRANCH and SANTANDER BANK, N.A., as co-documentation agents (in such
capacities, the “Co-Documentation Agents”).

W I T N E S S E T H:

WHEREAS, the U.S. Borrower is party to the Existing Credit Agreement (as defined
below) with the several banks and other financial institutions parties thereto
and JPMorgan Chase Bank, N.A., as administrative agent;

WHEREAS, the U.S. Borrower, the Lenders and the Administrative Agent have,
subject to the terms and conditions set forth herein, agreed to amend and
restate the Existing Credit Agreement as provided in this Agreement;

WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence repayment of any such obligations and
liabilities and that this Agreement amend and restate in its entirety the
Existing Credit Agreement and re-evidence the obligations of the U.S. Borrower
outstanding thereunder;

NOW, THEREFORE, in consideration of the above premises, the U.S. Borrower, each
of the Initial Canadian Borrowers, each Lender and the Administrative Agent
agree that on the Restatement Effective Date (as defined below) the Existing
Credit Agreement shall be amended and restated in its entirety as follows:

 

  SECTION 1 DEFINITIONS

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

“Acceptable Investment Grade Credit Enhancement”: with respect to any Account
Receivable, (i) a letter of credit in form and substance reasonably acceptable
to the Administrative Agent issued by a bank which is Investment Grade and which
letter of credit does not terminate earlier than fifteen (15) days after the
expected payment date of such Account Receivable; provided, that, upon the

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request of the Administrative Agent during the continuance of an Event of
Default, with respect to each letter of credit described in this clause (i), the
applicable Loan Party shall (A) assign the proceeds of such letter of credit to
the Administrative Agent, (B) cause the issuing bank of such letter of credit to
consent to such assignment and (C) cause any such letter of credit issued to be
advised by the Administrative Agent, or (ii) a parent guarantee, insurance
policy, surety bond or other customary credit support, in each case,
(A) provided by any Person who is Investment Grade and (B) in form and substance
reasonably acceptable to the Administrative Agent.

“Account”: any “account” as defined in Section 9-102 of the New York Uniform
Commercial Code and any “account” as defined under the PPSA and any “Claim” for
purposes of the Civil Code of Quebec.

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

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

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

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

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

“Acquisition Assets”: all assets of the Loan Parties other than (a) assets of
any Exempt CFC or any Subsidiary thereof, (b) assets included in the U.S.
Borrowing Base or the Kildair Borrowing Base and (c) Excluded Assets (as defined
in the U.S. Security Agreement or the Canadian Security Agreement, as
applicable); provided that no such asset shall be an Acquisition Asset unless it
is subject to a Perfected First Lien and is free and clear of all Liens other
than Liens permitted hereunder. Notwithstanding anything to the contrary set
forth in clause (a) above, (i) the Capital Stock of Kildair directly owned by a
Loan Party that is a U.S. Person (other than voting Capital Stock in excess of
65% of the voting Capital Stock of Kildair) (“Pledged Kildair Stock”) shall
constitute an Acquisition Asset prior to the ULC Conversion and (ii) the assets
of each of Transit P.M. ULC and Wintergreen Transport Corporation ULC and the
Capital Stock of each such entity shall be deemed not to be Acquisition Assets
during the period prior to the Kildair Subsidiary Election.

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

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

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

 

2

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

“Acquisition Facility Commitment”: at any date, as to any Acquisition Facility
Lender, the obligation of such Acquisition Facility Lender to make Acquisition
Facility Loans to the Borrowers pursuant to Section 2.4 and to participate in
Acquisition Facility Letters of Credit in an aggregate principal and/or face
amount at any one time outstanding not to exceed the amount set forth opposite
such Acquisition Facility Lender’s name on Schedule 1.0 under the caption
“Acquisition Facility Commitment” or, as the case may be, in the Assignment and
Acceptance pursuant to which such Acquisition Facility Lender becomes a party
hereto, as such amount may be changed from time to time in accordance with the
terms of this Agreement. As of the Restatement Effective Date, the original
aggregate amount of the Acquisition Facility Commitments is $400,000,000.

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

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

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

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

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

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

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

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

 

3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

4

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

“Additional Borrower”: as defined in Section 11.19.

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

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

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

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

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

“Aggregate Borrowing Base Amount”: on any date, an amount equal to the sum of
the U.S. Borrowing Base and the Kildair Borrowing Base.

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

“Agreement”: this Amended and Restated Credit Agreement.

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

“Amalgamation”: the amalgamation of Kildair with AcquireCo, with the
post-amalgamation entity to be Kildair (the “Post-Amalgamation Entity”).

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

“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction
applicable to the U.S. Borrower, the Canadian Borrower or their respective
Affiliates from time to time concerning or relating to bribery or corruption.

 

5

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“Applicable Commitment Fee Rate”: on any day,

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

 

Dollar Working Capital Facility Utilization

   Applicable
Commitment Fee
Rate  

Category 1:

³ 75%

     0.50 % 

Category 2:

< 75%

     0.375 % 

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

 

Multicurrency Working Capital Facility Utilization

   Applicable
Commitment Fee
Rate  

Category 1:

³ 75%

     0.50 % 

Category 2:

< 75%

     0.375 % 

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

 

Consolidated Total Leverage Ratio

   Applicable
Commitment Fee Rate  

Category 1:

³ 3.0:1.0

     0.50 % 

Category 2:

< 3.0:1.0

     0.375 % 

For purposes of the foregoing, (i) the Applicable Commitment Fee Rate shall be
determined as of the end of each fiscal quarter of the U.S. Borrower, and (A) in
the case of any determination of the Applicable Commitment Fee Rate based on
Dollar Working Capital Facility Utilization or Multicurrency Working Capital
Facility Utilization, shall be based on the Borrowing Base Reports that are
delivered from time to time pursuant to Section 7.2 and the Applicable
Commitment Fee Rate so determined shall become effective as of the first day of
the month succeeding the applicable Borrowing Base Date of the last Borrowing
Base Report delivered for a date included in the applicable fiscal quarter and
(B) in the case of any determination of the Applicable Commitment Fee Rate based
on the Consolidated Total Leverage Ratio, based upon those monthly consolidated
financial statements of the MLP that are delivered after the end of each fiscal
quarter pursuant to Section 7.1(c) and (ii) each change in the

 

6

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Applicable Commitment Fee Rate resulting from a change in the Consolidated Total
Leverage Ratio shall be effective during the period commencing on the first day
of the month (the “Commitment Fee Adjustment Date”) succeeding the date of
delivery to the Administrative Agent of the last set of consolidated financial
statements for a period included in the applicable fiscal quarter and ending on
the date immediately preceding the next Commitment Fee Adjustment Date, provided
that (x) subject to clause (y) below, the Applicable Commitment Fee Rate
determined pursuant to each of clauses (a) and (b) shall be deemed to be
Category 2 until the delivery pursuant to Section 7.2 of the first Borrowing
Base Report delivered after the end of the first fiscal quarter ending after the
Restatement Effective Date (it being understood that the first determination of
the Applicable Commitment Fee Rate pursuant to clauses (a) and (b) in accordance
with this clause (x) shall be calculated with respect to Dollar Working Capital
Facility Utilization or Multicurrency Working Capital Facility Utilization, as
applicable, for the portion of the preceding fiscal quarter ended on and after
the Restatement Effective Date) and the Applicable Commitment Fee Rate
determined pursuant to clause (c) shall be deemed to be Category 2 until the
delivery pursuant to Section 7.1(c) of the first financial statements after the
end of the first fiscal quarter ending after the Restatement Effective Date and
(y) the Applicable Commitment Fee Rate determined pursuant to each of clauses
(a), (b) and (c) shall be deemed to be Category 1 (A) at any time that an Event
of Default has occurred and is continuing or (B) at the option of the
Administrative Agent or at the request of the Required Lenders if the U.S.
Borrower fails to deliver the consolidated financial statements required to be
delivered by it pursuant to Section 7.1(c) or any Borrowing Base Report required
to be delivered by it pursuant to Section 7.2, during the period from the
expiration of the time for delivery thereof specified in Section 7.1 or
Section 7.2, as applicable, until such consolidated financial statements or
Borrowing Base Report, as applicable, are delivered.

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

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

 

Dollar Working Capital Facility Utilization

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

Category 1:

³ 75%

     2.50 %      2.50 % 

Category 2:

< 75% but ³ 40%

     2.25 %      2.25 % 

Category 3:

< 40%

     2.00 %      2.00 % 

 

7

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

 

Multicurrency Working Capital Facility Utilization

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

Category 1:

³ 75%

     2.50 %      2.50 % 

Category 2:

< 75% but ³ 40%

     2.25 %      2.25 % 

Category 3:

< 40%

     2.00 %      2.00 % 

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

 

Consolidated Total Leverage Ratio

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

Category 1:

³ 3.0:1.0

     3.25 % 

Category 2:

< 3.0:1.0 and ³ 2.0:1.0

     3.125 % 

Category 3:

< 2.0:1.0

     3.00 % 

For purposes of the foregoing, (i) the Applicable L/C Fee Rate shall be
determined as of the end of each fiscal quarter of the U.S. Borrower, and (A) in
the case of any determination of the Applicable L/C Fee Rate based on Dollar
Working Capital Facility Utilization or Multicurrency Working Capital Facility
Utilization, shall be based on the Borrowing Base Reports that are delivered
from time to time pursuant to Section 7.2 and the Applicable L/C Fee Rate so
determined shall become effective as of the first day of the month succeeding
the applicable Borrowing Base Date of the last Borrowing Base Report delivered
for a date included in the applicable fiscal quarter and (B) in the case of any
determination of the Applicable L/C Fee Rate based on the Consolidated Total
Leverage Ratio, based upon those monthly consolidated financial statements of
the MLP that are delivered after the end of each fiscal quarter pursuant to
Section 7.1(c) and (ii) each change in the Applicable L/C Fee Rate resulting
from a change in the Consolidated Total Leverage Ratio shall be effective during
the period commencing on the first day of the month (the “L/C Fee Adjustment
Date”) succeeding the date of delivery to the Administrative Agent of the last
set of consolidated financial statements for a period included in the applicable
fiscal quarter and ending on the date immediately preceding the next L/C Fee
Adjustment Date, provided that (x) subject to clause (y) below, the Applicable
L/C Fee Rate determined pursuant to clause (a) shall be determined to be
Category 3 and the Applicable L/C Fee Rate determined pursuant to clause
(b) shall be

 

8

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deemed to be Category 2, in each case until the delivery pursuant to Section 7.2
of the first Borrowing Base Report delivered after the end of the first fiscal
quarter ending after the Restatement Effective Date (it being understood that
the first determination of the Applicable L/C Fee Rate pursuant to clauses
(a) and (b) in accordance with this clause (x) shall be calculated with respect
to Dollar Working Capital Facility Utilization or Multicurrency Working Capital
Facility Utilization, as applicable, for the portion of the preceding fiscal
quarter ended on and after the Restatement Effective Date) and the Applicable
L/C Fee Rate determined pursuant to clause (c) shall be deemed to be Category 3
until the delivery pursuant to Section 7.1(c) of the first financial statements
after the end of the first fiscal quarter ending after the Restatement Effective
Date and (y) the Applicable L/C Fee Rate determined pursuant to each of clauses
(a), (b) and (c) shall be deemed to be Category 1 (A) at any time that an Event
of Default has occurred and is continuing or (B) at the option of the
Administrative Agent or at the request of the Required Lenders if the U.S.
Borrower fails to deliver the consolidated financial statements required to be
delivered by it pursuant to Section 7.1(c) or any Borrowing Base Report required
to be delivered by it pursuant to Section 7.2, during the period from the
expiration of the time for delivery thereof specified in Section 7.1 or
Section 7.2, as applicable, until such consolidated financial statements or
Borrowing Base Report, as applicable, are delivered.

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

“Applicable Margin”: on any date:

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

 

Dollar Working Capital Facility Utilization

   Applicable Margin
(Base Rate Loans)     Applicable Margin
(Eurocurrency Loans)  

Category 1:

³ 75%

     1.50 %      2.50 % 

Category 2:

<75% but ³ 40%

     1.25 %      2.25 % 

Category 3:

< 40%

     1.00 %      2.00 % 

 

9

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

 

Multicurrency Working Capital Facility Utilization

   Applicable Margin
(Base Rate /Prime
Rate Loans)     Applicable Margin
(Eurocurrency Loans)  

Category 1:

³ 75%

     1.50 %      2.50 % 

Category 2:

<75% but ³ 40%

     1.25 %      2.25 % 

Category 3:

< 40%

     1.00 %      2.00 % 

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

 

Consolidated Total Leverage Ratio

   Applicable
Margin
(Base Rate Loans)     Applicable Margin
(Eurocurrency Loans)  

Category 1:

³ 3.0:1.0

     2.25 %      3.25 % 

Category 2:

<3.0:1.0 and ³ 2.0:1.0

     2.125 %      3.125 % 

Category 3:

< 2.0:1.0

     2.00 %      3.00 % 

For purposes of the foregoing, (i) the Applicable Margin shall be determined as
of the end of each fiscal quarter of the U.S. Borrower (A) in the case of any
determination of the Applicable Margin based on Dollar Working Capital Facility
Utilization or Multicurrency Working Capital Facility Utilization shall be based
on the Borrowing Base Reports that are delivered from time to time pursuant to
Section 7.2 and the Applicable Margin so determined shall become effective as of
the first day of the month succeeding the applicable Borrowing Base Date of the
last Borrowing Base Report delivered for a date included in the applicable
fiscal quarter and (B) in the case of any determination of the Applicable Margin
based on the Consolidated Total Leverage Ratio shall be based upon those monthly
consolidated financial statements of the MLP that are delivered after the end of
each fiscal quarter pursuant to Section 7.1(c) and (ii) each change in the
Applicable Margin resulting from a change in the Consolidated Total Leverage
Ratio shall be effective during the period commencing on the first day of the
month (the “Margin Adjustment Date”) succeeding the date of delivery to the
Administrative Agent of the last set of consolidated financial statements for a
period included in the applicable fiscal quarter and ending on the date
immediately preceding the next Margin Adjustment Date, provided that (x) subject
to clause (y) below, the Applicable Margin determined pursuant to clause
(a) shall be deemed to be Category 3 and the Applicable Margin determined
pursuant to clause (b) shall be deemed to be Category 2, in each case until the
delivery pursuant to Section 7.2 of the first Borrowing Base Report delivered
after the end of the first fiscal quarter ending after the Restatement Effective
Date (it being understood that the first determination of the Applicable Margin
pursuant to clauses (a) and (b) in accordance with this clause (x) shall be
calculated with respect to Dollar Working Capital Facility Utilization or
Multicurrency Working Capital Facility Utilization, as applicable, for the
portion of the preceding fiscal quarter ended on and after the

 

10

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Restatement Effective Date) and the Applicable Margin determined pursuant to
clause (c) shall be deemed to be Category 3 until the delivery pursuant to
Section 7.1(c) of the first financial statements after the end of the first
fiscal quarter ending after the Restatement Effective Date and (y) the
Applicable Margin determined pursuant to each of clauses (a), (b) and (c) shall
be deemed to be Category 1 (A) at any time that an Event of Default has occurred
and is continuing or (B) at the option of the Administrative Agent or at the
request of the Required Lenders if the U.S. Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 7.1(c) or any Borrowing Base Report required to be delivered by it
pursuant to Section 7.2, during the period from the expiration of the time for
delivery thereof specified in Section 7.1 or Section 7.2, as applicable, until
such consolidated financial statements or Borrowing Base Report, as applicable,
are delivered.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

11

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

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

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

“Arrangers”: the Lead Arranger, The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP
Paribas, Citizens Bank, N.A., Natixis, Société Générale and Wells Fargo
Securities, LLC.

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

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

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

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

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

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

 

12

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

“Available Commitment”: at any time as to any Lender, all or any of the
Available Dollar Working Capital Facility Commitment, the Available
Multicurrency Working Capital Facility Commitment and/or the Available
Acquisition Facility Commitment of such Lender at such time, as the context
requires.

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

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

“Axel Johnson Affiliate”: any Person that is directly or indirectly in control
of, controlled by, or under common control with, Axel Johnson Inc., excluding
any Loan Party and any other Person with respect to whom any Loan Party has the
power, directly or indirectly to (x) vote any of the securities having ordinary
voting power for the election of directors (or, if such Person is not a
corporation, similar governing Persons) of such Person or (y) direct or cause
the direction of the management and policies of such Person, whether by contract
or otherwise. For purposes of this definition, “control” of a Person (including,
with its correlative meanings, “controlled by” and “under common control with”)
means the power, directly or indirectly, either to (a) vote more than 50% of the
securities having ordinary voting power for the election of directors (or, if
such Person is not a corporation, similar governing Persons) of such Person or
(b) direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.

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

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

 

13

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

“Barrel”: forty-two U.S. gallons.

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

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

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

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

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

“Borrower Materials”: as defined in Section 11.2.

“Borrowers”: collectively, (i) the U.S. Borrower and (ii)(x) prior to the
Amalgamation, each Initial Canadian Borrower and (y) after the Amalgamation, the
Post-Amalgamation Entity.

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

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

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

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

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

 

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(ii) for each of the U.S. Borrowing Base and the Kildair Borrowing Base, for
Eligible Tier 1 Accounts Receivable, Eligible Tier 2 Accounts Receivable,
Eligible Unbilled Tier 1 Accounts Receivable, and Eligible Unbilled Tier 2
Accounts Receivable,

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

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

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

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

 

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reports supplied by 25% of the terminals owned by the Loan Parties (so that, in
one calendar year, reports with respect to each terminal owned by any Loan Party
shall have been delivered);

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

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

(vi) for each of the U.S. Borrowing Base and the Kildair Borrowing Base, for the
Eligible Short Term Unrealized Forward Gains and, solely with respect to the
U.S. Borrowing Base, for the Eligible Medium Term Unrealized Forward Gains and
Eligible Long Term Unrealized Forward Gains, a summary schedule thereof listing:

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

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

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

(vii) for each of the U.S. Borrowing Base and the Kildair Borrowing Base, for
Eligible Letters of Credit Issued for Commodities Not Yet Received, (A) a
schedule listing each Letter of Credit giving rise to Eligible Letters of Credit
Issued for Commodities Not Yet Received, together with the name of the
applicant, the expiration date of the related Letter of Credit and the face
value thereof (or, if applicable, the maximum value of such Letter of Credit
after giving effect to any tolerance included therein, and the amount of such
tolerance), (B) a calculation supporting the value of

 

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physical volume delivered and the liability owed by the applicable Loan Party to
the beneficiary of the Letter of Credit in connection therewith versus the face
amount of such Letters of Credit, and (C) a schedule of each of the offsets and
deductions used in determining the value of Eligible Letters of Credit Issued
for Commodities Not Yet Received, including the amounts and a calculation, by
type (i.e., mark-to-market loss, exchange payables and other type of liability
owed), supporting the value of any other liabilities owed by the applicable Loan
Party to the beneficiary of the Letter of Credit versus the face amount of such
Letters of Credit and any adjustments described in the definitions of U.S.
Borrowing Base or Kildair Borrowing Base, as applicable, to the extent
applicable;

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

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

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

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

(xii) for each of the U.S. Borrowing Base and the Kildair Borrowing Base, for
Swap Amounts due to Qualified Counterparties, a schedule listing the aggregate
net unrealized gains or losses with respect to each Commodity OTC Agreement with
a Qualified Counterparty and each Financial Hedging Agreement with a Qualified
Counterparty (whether or not the Swap Amounts due to Qualified Counterparties is
equal to or in excess of $20,000,000 (in the case of the U.S. Borrowing Base) or
$5,000,000 (in the case of the Kildair Borrowing Base));

 

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

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

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

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

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

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

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

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

“CAML”: the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) and other applicable anti-money laundering, anti-terrorist financing,
government sanction and “know your client” laws.

“Calculation Date”: the last Business Day of each calendar month (or any other
day selected by the Administrative Agent); provided that (a) the second Business
Day preceding (or such other Business Day as the Administrative Agent shall deem
applicable with respect to Canadian Dollars in accordance with rate-setting
convention for Canadian Dollars) (i) each Borrowing Date with respect to any
Loan denominated in Canadian Dollars or (ii) any date on which a Loan
denominated in Canadian Dollars is continued shall also be a “Calculation Date”,
(b) each Borrowing Date with respect to any other Loan made hereunder shall also
be a “Calculation Date” and (c) the date of issuance, amendment, renewal or
extension of a Letter of Credit shall also be a Calculation Date.

 

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

“Canadian Benefit Plans”: any plan, fund, program, or policy, whether oral or
written, formal or informal, funded or unfunded, insured or uninsured, providing
employee benefits, including medical, hospital care, dental, sickness, accident,
disability, life insurance, pension, retirement or savings benefits, under which
any Loan Party or any Subsidiary of any Loan Party that carries on business in
Canada, has any liability with respect to any employee or former employee, but
excluding any Canadian Pension Plans.

“Canadian Borrower”: collectively, (a) prior to the Amalgamation, each Initial
Canadian Borrower and (b) after the Amalgamation, the Post-Amalgamation Entity.

“Canadian Dollar Equivalent”: with respect to (i) an amount denominated in any
currency other than Canadian Dollars, the equivalent in Canadian Dollars of such
amount determined at the Exchange Rate on the most recent Calculation Date and
(ii) an amount denominated in Canadian Dollars, such amount.

“Canadian Dollars” and “C$”: dollars in lawful currency of Canada.

“Canadian Pension Plans”: each pension plan required to be registered under
Canadian federal or provincial law that is maintained or contributed to by a
Loan Party or any Subsidiary of any Loan Party for its employees or former
employees, but does not include the Canada Pension Plan or the Quebec Pension
Plan as administered by the Government of Canada or the Province of Quebec,
respectively.

“Canadian Pledge Agreement”: the Canadian Pledge Agreement, substantially in the
form of Exhibit C-2, to be executed and delivered by (a) each Loan Party
pledging Capital Stock of any Person organized under the laws of any
jurisdiction within Canada and (b) with respect to the pledge of Capital Stock
of any Person not organized under the laws of any jurisdiction within Canada,
any Loan Party organized under the laws of any jurisdiction within Canada or
having its chief executive office or domicile in any jurisdiction in Canada.

“Canadian Security Agreement”: the Canadian Security Agreement, substantially in
the form of Exhibit B-2, to be executed and delivered by the Loan Parties
organized under the laws of any jurisdiction within Canada, having its chief
executive office (or domicile) in any jurisdiction in Canada or having tangible
assets in any jurisdiction within Canada.

“Canadian Security Documents”: collectively, the Canadian Security Agreement,
the Canadian Pledge Agreement, the Quebec Security Documents and each Mortgage
and Security Agreement in respect of any real property located in Canada.

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

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

 

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

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

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

(c) any combination of the foregoing.

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

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

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

“Cash Equivalents”: (a) securities with maturities of twelve (12) months or less
from the date of acquisition or acceptance which are issued or fully guaranteed
or insured by the United States, Canada or any agency or instrumentality
thereof, (b) bankers’ acceptances, certificates of deposit and eurodollar time
deposits with maturities of nine (9) months or less from the date of acquisition
and overnight bank deposits, in each case, of any Lender or of any international
or national commercial bank with commercial paper rated, on the day of such
purchase, at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent
thereof by Moody’s, (c) commercial paper, variable rate or auction rate
securities, or any other short term, liquid investment having a rating, on the
date of purchase, of at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody’s and that matures or resets not more
than nine (9) months after the date of acquisition, (d) obligations of any U.S.
state, Canadian province or a division, public instrumentality or taxing
authority thereof, having on the date of purchase a rating of at least AA or the
equivalent thereof by S&P or at least Aa2 or the equivalent thereof by Moody’s
and (e) investments in money market funds, mutual funds or other pooled
investment vehicles, in each case acceptable to the Administrative Agent in its
sole discretion, the assets of which consist solely of the foregoing.

 

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

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

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

“CDOR Screen Rate”: with respect to any Interest Period, (i) the annual rate of
interest determined with reference to the arithmetic average of the discount
rate quotations of all institutions listed in respect of the relevant Interest
Period for Canadian Dollar-denominated bankers’ acceptances displayed and
identified as such on the CDOR page of the Reuters screen (or on any successor
or substitute page on such screen or service that displays such rate, or on the
appropriate page of such other information service that publishes such rate as
shall be selected by the Administrative Agent from time to time in its
reasonable discretion) as of the Specified Time on the Quotation Day for such
Interest Period (as adjusted by the Administrative Agent after the Specified
Time to reflect any error in the posted rate of interest or in the posted
average annual rate of interest); plus (ii) 0.10% per annum.

“Change of Control”: the occurrence of any of the following events: (a) the
Permitted Investors shall cease to own and control, of record and beneficially,
directly or indirectly, more than 50% of the total voting power of all classes
of Capital Stock of the General Partner entitled to vote generally in the
election of directors free and clear of all Liens, other than Liens of the type
permitted pursuant to Section 8.3 (as if Section 8.3 were applicable), (b) the
General Partner shall cease to own and control, of record and beneficially, 100%
of the general partnership interests of the MLP free and clear of all Liens,
other than Liens of the type permitted pursuant to Section 8.3 (as if
Section 8.3 were applicable) or (c) the MLP shall cease to own and control, of
record and beneficially, directly or indirectly, 100% of each class of
outstanding Capital Stock of each Borrower and each other Loan Party (other than
the MLP) free and clear of all Liens, other than Liens permitted pursuant to
Section 8.3.

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

“Closing Date”: the date on which the conditions precedent set forth in
Section 6.1 of the Existing Credit Agreement were satisfied, which date was
October 30, 2013.

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

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

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

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

 

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

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

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

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

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

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

“Commodity Account”: any “Commodity Account” as defined in Section 9-102 of the
New York Uniform Commercial Code, any “Futures Account” as defined under the
PPSA and any “securities account” as defined in the Quebec STA in which is held
“commodity futures contracts”, “security futures contracts”. “financial
instrument futures contracts” and other similar “futures contracts”, as such
terms are defined in the Quebec STA.

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

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

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

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

“Conduit Lender”: any special purpose entity organized and administered by any
Lender (or an affiliate of such Lender) for the purpose of making Loans required
to be made by such Lender or of funding such Lender’s participation in any
unpaid Reimbursement Obligation and designated as its Conduit Lender by such
Lender in a written instrument; provided, that the designation by any Lender of
a Conduit Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan or a participation in any unpaid Reimbursement
Obligation under this Agreement if, for any reason, its Conduit Lender fails to
fund any such Loan or participation in any unpaid Reimbursement Obligation, and
the designating Lender (and not the Conduit Lender) shall have the sole right
and responsibility to

 

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deliver all consents and waivers required or requested under this Agreement with
respect to its Conduit Lender; provided, further, that no Conduit Lender shall
(a) be entitled to receive any greater amount pursuant to Section 11.6 than the
designating Lender would have been entitled to receive in respect of the
extensions of credit made by such Conduit Lender or (b) be deemed to have any
commitment hereunder.

“Confidential Information”: as defined in Section 11.16.

“Consolidated Current Assets”: as of any date of determination, all assets of
the Loan Parties that, in accordance with GAAP adjusted on an Economic Basis,
would be classified as current assets on a consolidated balance sheet of the
Loan Parties; provided, that amounts otherwise classified as current assets
which are due from any Affiliate (including shareholders (other than public
limited partners of the MLP)) or Subsidiary of any Loan Party shall not be
classified as current assets.

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

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

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

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

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

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

provided that (i) each of the foregoing items (1)-(4) shall be calculated in
accordance with GAAP adjusted on an Economic Basis, (ii) for the purposes of
this definition, with respect to a business or assets acquired by the Loan
Parties pursuant to an Acquisition permitted under this Agreement, Consolidated
EBITDA shall be calculated on a pro forma basis, using historical numbers, in
accordance with GAAP and such calculation shall be determined in good faith by a
financial officer of the U.S. Borrower (and the U.S. Borrower will provide to
the Administrative Agent such supporting information as Administrative Agent may
reasonably request), without giving effect to any anticipated or proposed change
in operations, revenues, expenses or other items included in the computation of
Consolidated EBITDA, and in a manner which is reasonably satisfactory to the
Administrative Agent in all respects, adjusted on an Economic Basis plus or
minus any Allowed Reserve, as if the acquisition had been consummated on the
first day of such period and (iii) for the purposes of this definition, with
respect to a business or assets disposed of by the Loan Parties pursuant to a
disposition permitted under this Agreement, Consolidated EBITDA shall be
calculated on a pro forma basis, using historical numbers, in accordance with
GAAP and such calculation shall be determined in good faith by a financial
officer of the U.S. Borrower (and the U.S. Borrower will provide to the
Administrative Agent such supporting information as Administrative Agent

 

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may reasonably request), without giving effect to any anticipated or proposed
change in operations, revenues, expenses or other items included in the
computation of Consolidated EBITDA, and in a manner which is reasonably
satisfactory to the Administrative Agent in all respects, as if such disposition
had been consummated on the first day of such period. Notwithstanding the
foregoing, but subject to clauses (ii) and (iii) of the proviso above,
Consolidated EBITDA shall be deemed to be (x) $51,912,000 with respect to the
fiscal quarter ending March 31, 2014, (y) $6,787,337 with respect to the fiscal
quarter ending June 30, 2014 and (z) $19,438,000 with respect to the fiscal
quarter ending September 30, 2014.

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

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

Notwithstanding the foregoing, but subject to causes (1) and (2) above,
Consolidated Fixed Charges shall be deemed to be (i) $10,039,998 with respect to
the fiscal quarter ending March 31, 2014, (ii) $7,615,358 with respect to the
fiscal quarter ending June 30, 2014 and (iii) $7,092,398 with respect to the
fiscal quarter ending September 30, 2014.

“Consolidated Interest Expense”: for any period with respect to the Loan
Parties, the amount which, in conformity with GAAP adjusted on an Economic Bases
plus or minus any Allowed

 

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

“Defaulting Lender”: at any time, any Lender that (a) within two (2) Business
Days of when due, has failed to fund any portion of any Working Capital Facility
Loan, Acquisition Facility Loan, Swing Line Loan, Refunded Swing Line Loan,
Dollar Swing Line Participation Amount, Multicurrency Swing Line Participation
Amount or L/C Participation Obligation (or any participation in the foregoing)
to, as applicable, any Borrower, the Administrative Agent, any Swing Line Lender
or any Issuing Lender required pursuant to the terms of this Agreement to be
funded by such Lender, or has notified the Administrative Agent that it does not
intend to do so unless such Lender notifies the Administrative Agent in writing
that such failure is the result of such Lender’s determination that one or more
conditions

 

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precedent to funding (each of which conditions precedent, together with any
applicable Default, shall be specifically identified in writing) has not been
satisfied; or (b) notified any Borrower, the Administrative Agent, any Issuing
Lender, or any Lender in writing that it does not intend to comply with any of
its funding obligations under this Agreement (unless such writing states that
such position is based on such Lender’s determination that a condition precedent
to funding (which condition precedent, together with any applicable Default,
shall be specifically identified in writing) cannot be satisfied) or has made a
public statement to the effect that it does not intend to comply with its
funding obligations under this Agreement or under other agreements generally in
which it commits to extend credit; or (c) failed, within three (3) Business Day
after request by the Administrative Agent or the U.S. Borrower, to confirm that
it will comply with the terms of this Agreement relating to any of its
obligations to fund prospective Working Capital Facility Loans, Acquisition
Facility Loans, Swing Line Loans, Refunded Swing Line Loans, Dollar Swing Line
Participation Amounts, Multicurrency Swing Line Participation Amounts or L/C
Participation Obligations; or (d) otherwise failed to pay over to the
Administrative Agent, any Issuing Lender, or any other Lender any other amount
required to be paid by it hereunder within one (1) Business Day of the date when
due, unless the subject of a good faith dispute; or (e) (i) has become or is
insolvent or has a parent company that has become or is insolvent or (ii) has
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

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

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

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

“Dollar Equivalent”: with respect to (i) an amount denominated in any currency
other than United States Dollars, the equivalent in United States Dollars of
such amount determined at the Exchange Rate on the most recent Calculation Date
and (ii) an amount denominated in United States Dollars, such amount.

“Dollar L/C Exposure”: at any time, the total L/C Obligations with respect to
Dollar Working Capital Facility Letters of Credit. The Dollar L/C Exposure of
any Dollar Working Capital Facility Lender at any time shall be its Dollar
Working Capital Facility Commitment Percentage of the total Dollar L/C Exposure
at such time.

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

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

“Dollar Swing Line Exposure”: at any time, the sum of the aggregate amount of
all outstanding Dollar Swing Line Loans at such time. The Dollar Swing Line
Exposure of any Dollar Working Capital Facility Lender at any time shall be the
sum of (a) its Dollar Working Capital Facility Commitment Percentage of the
total Dollar Swing Line Exposure at such time related to Dollar Swing Line Loans
other than any Dollar Swing Line Loans made by such Lender in its capacity as a
Dollar

 

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Swing Line Lender and (b) if such Lender shall be a Dollar Swing Line Lender,
the principal amount of all Dollar Swing Line Loans made by such Lender
outstanding at such time (to the extent that the other Dollar Working Capital
Facility Lenders shall not have funded their participations in such Swing Line
Loans).

“Dollar Swing Line Lenders”: JPMorgan Chase Bank and BNP Paribas and each other
Dollar Working Capital Facility Lender approved by the Administrative Agent and
the U.S. Borrower that has agreed to act as a “Dollar Swing Line Lender
hereunder”, in each case in its capacity as lender of Dollar Swing Line Loans
hereunder.

“Dollar Swing Line Loan Sub-Limit”: $70,000,000 at any time outstanding.

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

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

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

“Dollar Working Capital Facility Commitment”: at any date, as to any Dollar
Working Capital Facility Lender, the obligation of such Dollar Working Capital
Facility Lender to make Dollar Working Capital Facility Loans to the Borrowers
pursuant to Section 2.1(a) and to participate in Dollar Swing Line Loans and
Dollar Working Capital Facility Letters of Credit in an aggregate principal
and/or face amount at any one time outstanding not to exceed the amount set
forth opposite such Dollar Working Capital Facility Lender’s name on Schedule
1.0 under the caption “Dollar Working Capital Facility Commitment” or, as the
case may be, in the Assignment and Acceptance pursuant to which such Dollar
Working Capital Facility Lender becomes a party hereto, as such amount may be
changed from time to time in accordance with the terms of this Agreement. As of
the Restatement Effective Date, the original aggregate amount of the Dollar
Working Capital Facility Commitments is $1,000,000,000.

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

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

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

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

 

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

“Dollar Working Capital Facility Extensions of Credit”: at any date, as to any
Dollar Working Capital Facility Lender at any time, the aggregate outstanding
principal amount of Dollar Working Capital Facility Loans made by such Dollar
Working Capital Facility Lender, plus the amount of the undivided interest of
such Dollar Working Capital Facility Lender in any then-outstanding Dollar
Working Capital Facility L/C Obligations, plus such Dollar Working Capital
Facility Lender’s Dollar Swing Line Exposure.

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

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

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

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

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

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

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

“Dollar Working Capital Facility Letter of Credit Sub-Limit”: $300,000,000 at
any time outstanding.

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

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

 

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

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

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

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

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

“Dutch Guarantor”: Sprague Resources Coöperatief U.A.

“Dutch Membership Pledge Agreement”: the Deed of Disclosed Pledge over
Membership Rights for Sprague Resources Coöperatief U.A., substantially in the
form of Exhibit C-3, to be executed and delivered by the U.S. Borrower and
Sprague Co-op Member LLC, as pledgors, the Administrative Agent and Sprague
Resources Coöperatief U.A.

“Dutch Receivables Pledge Agreement”: the Deed of Pledge over Receivables (Bank
Accounts, Insurance Policies and Intercompany Claims), substantially in the form
of Exhibit B-3, to be executed and delivered by Sprague Resources Coöperatief
U.A. and the Administrative Agent.

“Dutch Security Documents”: collectively, the Dutch Membership Pledge Agreement
and the Dutch Receivables Pledge Agreement.

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

 

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

(a) such Account Receivable relates to a Materials Handling Contract, rail car
lease or sublease, transportation services agreement, Commodity Contract or
Financial Hedging Agreement;

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

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

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

(e) the amount of such Account Receivable included as an Eligible Account
Receivable shall have been reduced by any portion that is, or which any Loan
Party has a reasonable basis to believe may be, subject to any dispute, offset,
counterclaim or other claim or defense on the part of the Account Debtor
(including offset or netting relating to trade or any other payables, contra,
accrued liabilities, unrealized forward losses and net exchange payables
specific to such Account Debtor) or to any claim on the part of the Account
Debtor denying payment liability under such Account Receivable (provided that
any amount so deducted shall not be further deducted from the U.S. Borrowing
Base or Kildair Borrowing Base, as applicable);

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

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

(h) (i) such Account Receivable has been fully earned (or in the case of rail
car leases or subleases, invoiced no earlier than 30 days in advance of the
relevant lease period and earned as a result of the passage of time over the
course of such lease period) and such Account Receivable has been invoiced (if
the issuance of such an invoice is a condition precedent to the Account Debtor’s
obligation to pay) or is, as of such Borrowing Base Date, within four
(4) Business Days of being invoiced or (ii) payment of the Account Receivable is
otherwise due and payable; provided that such Account Receivable shall qualify
as an Eligible Account Receivable only (A) with respect to the U.S. Borrowing
Base, if such Account Receivable arises from the sale of wholesale Natural Gas
Products where it is customary industry practice for the payment for such
Natural Gas Product to be due on the 25th of each month, not more than 30 days
have elapsed after the due date specified in the original invoice; (B) if such
Account Receivable arises from a Financial Hedging Agreement and not more than
five (5) Business Days have elapsed after the date on which the payment of the
Account Receivable is required to be paid under the terms of such Financial
Hedging Agreement; and (C) for any other Account Receivable not covered by
clauses (A) or (B), not more than 60 days have elapsed after the due date
specified in the

 

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original invoice; provided, further, that an “Eligible Account Receivable” shall
not include any Account Receivable that is outstanding longer than 90 days after
the date such Account Receivable arose; provided, further, that the aggregate
amount of Eligible Accounts Receivable invoiced in advance in respect of rail
car leases or subleases shall not exceed $2,000,000;

(i) such Account Receivable complies with all applicable Laws (excluding any
prohibition, limitation or restriction in any agreement with a Governmental
Authority to the extent that such prohibition, limitation or restriction would
be ineffective under applicable Law (including as provided under Sections 9-406
and 9-408 of the Uniform Commercial Code or Section 40(4) of the PPSA (or the
corresponding Section of such other PPSA) as from time to time in effect in the
applicable jurisdiction)) to which the relevant Loan Party is subject;

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

(k) if the Account Debtor of such Account Receivable is a debtor under the
Bankruptcy Code or in respect of which a proceeding, petition, application or
plan of arrangement has commenced under Insolvency Laws (any of the foregoing, a
“Chapter 11 Debtor”), such Account Receivable arose after the commencement of
the bankruptcy case or such proceeding, petition, application or plan (the
“Petition Date”) of such Account Debtor or has been assumed by such Account
Debtor;

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

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

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

 

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case law, contract or otherwise; provided that at the Co-Collateral Agents’
discretion, exercised in good faith, any Accounts Receivable that would
otherwise be considered ineligible pursuant to this clause (n) shall not be
deemed ineligible solely as a result of this clause (n);

(o) if the Account Debtor of such Account Receivable is a Subsidiary or an
Affiliate of the U.S. Borrower, such Account Debtor is approved by the Required
Lenders in their sole discretion (exercised in good faith);

(p) if the Account Debtor of such Account Receivable is incorporated in, or
primarily conducts business in, any jurisdiction outside the United States or
Canada, such Account Debtor is an Eligible Foreign Counterparty;

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

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

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

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

(u) solely with respect to any Account Receivable of a Kildair Loan Party, such
Account Receivable is not an Excess Concentration Account Receivable.

“Eligible Acquisition Asset Value”: 70% multiplied by the aggregate Estimated
Going Concern Value of the Approved Acquisition Assets taken as a whole;
provided that the Eligible Acquisition Asset Value of the Pledged Kildair Stock
shall be the value thereof as reasonably determined by the U.S. Borrower and the
Administrative Agent.

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

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

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

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

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

 

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

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

“Eligible Forward Contract”: a Forward Contract of a Loan Party which
(a) conforms to the Risk Management Policy, (b) is evidenced by a written
agreement or a trade confirmation enforceable against the party thereto, (c) is
subject to a Perfected First Lien, subject only to Permitted Borrowing Base
Liens, (d) has not been terminated and is not subject to termination by reason
of an occurrence of a default or any other termination event having occurred
thereunder, (e) the Forward Contract Counterparty thereto is not a Subsidiary or
an Affiliate of any Loan Party, (f) has not been deemed ineligible as to its
form by the Co-Collateral Agents acting in their sole discretion, and (g) the
Forward Contract Counterparty thereto is not a Governmental Authority unless all
actions required under any applicable Assignment of Claims Act, Financial
Administration Act (Canada) and any other similar local, provincial, territorial
laws, rules or regulations, if any, applicable to such Forward Contract and such
Governmental Authority shall have been taken to approve and permit the
assignment of rights to payment thereunder or thereon to the Administrative
Agent, for the ratable benefit of the Secured Parties under the Security
Documents; provided that at the Co-Collateral Agents’ discretion, exercised in
good faith, any Forward Contract that would otherwise be considered ineligible
pursuant to this clause (g) shall not be deemed ineligible solely as a result of
this clause (g).

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

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

 

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

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

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

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

(c) all requirements set forth in Section 5(k) of the U.S. Security Agreement or
Section 5(k) of the Canadian Security Agreement, as applicable, applicable to
such inventory have been satisfied;

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

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

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

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

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

provided that (i) the value of Eligible Inventory shall be reduced by the Value
of any net volumetric balance owed by any Loan Party to a counterparty with whom
such Loan Party holds title to the inventory, and (ii) (A) line fill and tank
bottoms (other than any tank bottoms consisting of distillates, gasolines or
other light oil products or residual fuel oils acceptable to the Co-Collateral
Agents in their sole discretion) in transportation or storage facilities owned
by any Loan Party and (B) the portion of commodities held in third party
transportation or storage facilities (1) that are tank bottoms (other than any
tank bottoms consisting of distillates, gasolines or other light oil products or
residual fuel oils acceptable to the Co-Collateral Agents in their sole
discretion) or (2) line fill or working inventory (however designated) that is
not subject to an agreement recognizing such Loan Party’s ownership and/or the
withdrawal of which is subject to contractual restrictions (other than any tank
bottoms consisting of distillates, gasolines or other light oil products or
residual fuel oils acceptable to the Co-Collateral Agents in their sole
discretion), will not be considered “Eligible Inventory”. For the purposes of
this definition, “tank bottoms” with respect to asphalt shall be deemed to be
that portion of asphalt that is located at or below the suction point.

 

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

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

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

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

“Eligible Net Liquidity in Futures Accounts”: as of any Borrowing Base Date, the
Net Liquidation Value of any Commodity Account of any Loan Party as of such date
maintained with BNP Paribas Commodity Futures, Inc., Citigroup Global Markets
Inc., NewEdge USA, LLC or a reputable broker reasonably acceptable to the
Administrative Agent (each, so long as such Person remains qualified as such
pursuant to the next succeeding sentence, an “Eligible Broker”) with respect to
positions held by such Eligible Broker on a regulated exchange (including the
New York Mercantile Exchange, the Intercontinental Commodities Exchange and CME
ClearPort) that have been maintained at all times and in all respects in
accordance with the Risk Management Policy and this Agreement (including for the
avoidance of doubt, all transactions credited to such Commodity Account or
related thereto) which such Commodity Account is subject to (i) a Perfected
First Lien, subject only to Permitted Borrowing Base Liens and any Lien of such
Eligible Broker in connection with any indebtedness of such Loan Party to such
Eligible Broker permitted by the applicable Account Control Agreement
(including, but not limited to, if permitted, any right of the Eligible Broker
to close out open positions of such Loan Party without prior demand for
additional margin and without prior notice) (such amounts in a Commodity Account
subject to the liens and close-out rights of the Eligible Broker set forth in
this clause (i), the “Brokerage Account Deducts”), and (ii) an Account Control
Agreement among the Administrative Agent, such Loan

 

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Party holding such account and the Eligible Broker with which such account is
maintained. For the avoidance of doubt, a broker may, at any time, cease to
qualify as an “Eligible Broker” for all purposes hereunder upon two (2) Business
Days’ notice thereof by the Administrative Agent, acting in its reasonable
discretion, to the U.S. Borrower. Eligible Net Liquidity in Futures Accounts
shall include any discounted face value of any U.S. Treasury Securities held as
of such date in such account that are zero coupon securities issued by the
United States of America, minus any unearned interest on such U.S. Treasury
Securities as of such date; provided that the maturity date thereof is within
six (6) months of the relevant Borrowing Base Date; provided, further, that the
Eligible Net Liquidity in Futures Accounts as calculated pursuant to this
definition shall be net of any Brokerage Account Deducts.

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

“ESA”: as defined in Section 6.1(x).

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

“Eurocurrency Base Rate”: with respect to (a) any Eurocurrency Loan denominated
in United States Dollars for any Interest Period, the London interbank offered
rate as administered by the ICE Benchmark Administration (or any other Person
that takes over the administration of such rate) for United States Dollars for a
period equal in length to such Interest Period as displayed on pages LIBOR01 or
LIBOR02 of the Reuters Screen that displays such rate (or, in the event such
rate does not appear on either of such Reuters pages, on any successor or
substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate from time to
time as selected by the Administrative Agent in its reasonable discretion; in
each case, the “LIBOR Screen Rate”) as of the Specified Time on the Quotation
Day for such Interest Period; provided that if any LIBOR Screen Rate shall be
less than zero, such rate shall be deemed to be zero for purposes of this
Agreement and (b) any Eurocurrency Loan denominated in Canadian Dollars for any
Interest Period, the CDOR

 

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Screen Rate as of the Specified Time and on the Quotation Day for such Interest
Period; provided that if any CDOR Screen Rate shall be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement; provided, further, if
a LIBOR Screen Rate or CDOR Screen Rate, as applicable, shall not be available
at such time for such Interest Period (an “Impacted Interest Period”), then the
Eurocurrency Base Rate for such currency and Interest Period shall be the
Interpolated Rate at such time (provided that if the Interpolated Rate shall be
less than zero, such rate shall be deemed to be zero for purposes of this
Agreement); provided further that all of the foregoing shall be subject to
Section 4.15(a).

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

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

 

 

  Eurocurrency Base Rate

       1.00 - Eurocurrency Reserve Requirements       

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurocurrency
Loan in any currency, the aggregate of the maximum reserve, liquid asset or
similar percentages (including basic, supplemental, marginal and emergency
reserves) expressed as a decimal established by any Governmental Authority of
the jurisdiction of such currency (or by any other Person) to which banks in
such jurisdiction are subject for any category of deposits or liabilities
customarily used to fund loans in such currency or by reference to which
interest rates applicable to loans in such currency are determined. Such
reserve, liquid assets or similar percentages shall, in the case of United
States Dollars, include those imposed pursuant to Regulation D of the Board.
Eurocurrency Loans denominated in Canadian Dollars shall be deemed to be the
subject of such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under Regulation D or any other applicable law, rule or regulation. The
Eurocurrency Reserve Requirements shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

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

“Excess Concentration Accounts Receivable”: with respect to any Account Debtor,
to the extent the aggregate amount of Accounts Receivable owing from such
Account Debtor and its Affiliates to the Kildair Loan Parties exceeds 15% of the
aggregate Eligible Accounts Receivable for all Kildair Loan Parties, any
Accounts Receivable in excess of such threshold; provided that any Account
Receivable that is either (i) owing from an Account Debtor listed on Schedule
1.1(F) (as such schedule may be updated by the U.S. Borrower from time to time
with the approval of the Co-Collateral Agents), (ii) owing from an Account
Debtor who is Investment Grade or (iii) supported by an Acceptable Investment
Grade Credit Enhancement, shall be excluded from the aggregate amount of
Accounts Receivable owing from the applicable Account Debtor for purposes of the
above calculation.

“Exchange Rate”: with respect to any non-United States Dollar or non-Canadian
Dollar currency, as applicable, on any date, the rate at which such currency may
be exchanged into United States Dollars or Canadian Dollars, as applicable, as
set forth on such date on the relevant Reuters currency page at or about 11:00
A.M., London time, on such date. In the event that such rate does not appear on
any Reuters currency page, the “Exchange Rate” with respect to such non-United
States Dollar or non-Canadian Dollar currency, as applicable, shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the U.S.
Borrower or, in the absence of such agreement, such “Exchange Rate” shall
instead be the Administrative

 

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Agent’s spot rate of exchange in the interbank market where its foreign currency
exchange operations in respect of such non-United States Dollar or non-Canadian
Dollar currency, as applicable, are then being conducted, at or about 10:00
A.M., local time, on such date for the purchase of United States Dollars or
Canadian Dollars, as applicable, with such non-United States Dollar or
non-Canadian Dollar currency, as applicable, for delivery two Business Days
later; provided, that if at the time of any such determination, no such spot
rate can reasonably be quoted, the Administrative Agent may use any reasonable
method as it deems applicable to determine such rate, and such determination
shall be conclusive absent manifest error.

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

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

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

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

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

“Existing Acquisition Facility Loan”: each “Acquisition Facility Loan” (as
defined in the Existing Credit Agreement) that is outstanding immediately prior
to the Restatement Effective Date.

“Existing Credit Agreement”: that certain Credit Agreement, dated as of
October 30, 2013, among the U.S. Borrower, the lenders and agents party thereto,
and JPMorgan Chase Bank, N.A., as administrative agent

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

“Existing Lenders”: the “Lenders” (as defined in the Existing Credit Agreement)
immediately prior to the Restatement Effective Date.

“Existing Mortgaged Property”: each property that is currently covered by a
mortgage or deed of trust pursuant to the Existing Credit Agreement.

 

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

“Existing Working Capital Facility Loans”: each “Working Capital Facility Loan”
(as defined in the Existing Credit Agreement) that is outstanding immediately
prior to the Restatement Effective Date.

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

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

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

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

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

“Fee Letter”: the fee letter dated as of October 17, 2014, among J.P. Morgan
Securities LLC, JPMorgan Chase Bank and the U.S. Borrower, as amended.

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

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

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

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

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

 

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

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

“Foreign Lender”: a Lender that is not a U.S. Person.

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

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

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

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

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

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

“Governmental Authority”: any nation or government, any state, provincial,
municipal, territorial or other political subdivision thereof and any agency,
authority, instrumentality, court, central bank or other similar entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national body exercising such powers or functions, such as the European
Union or the European Central Bank).

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

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

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of an obligation for
which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of a third Person (the “primary obligor”) in any manner, whether directly or
indirectly, including any obligation of the

 

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

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

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

“Hydro-Québec Indemnity”: the indemnity provided by Kildair to Hydro-Québec
pursuant to the Offer to Purchase between Kildair and Hydro-Québec with respect
to potential environmental liability at the lands acquired pursuant thereto on
November 28, 2011 that are situated in the town of Sorel-Tracy, Province of
Québec and that are designated and known as lots 4 784 169 and 4 784 171,
Cadastre of Québec, registration division of Richelieu.

“Immaterial Subsidiary”: any Subsidiary that has no assets.

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

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

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

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

 

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

“Indemnified Liabilities”: as defined in Section 11.6.

“Indemnitee”: as defined in Section 11.6.

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

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

“Initial Canadian Borrowers”: as defined in the introductory paragraph of this
Agreement.

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

“Insolvency Laws”: each of the Bankruptcy and Insolvency Act (Canada), the
Companies’ Creditors Arrangement Act (Canada), and the Winding-Up and
Restructuring Act (Canada), each as now and hereafter in effect, any successors
to such statutes and any other applicable insolvency or other similar law of any
jurisdiction, including any corporate law of any jurisdiction permitting a
debtor to obtain a stay or a compromise of the claims of its creditors against
it.

“Insolvency Regulations”: the Council Regulation (EC) No. 1346/2000 29 May 200
on Insolvency Proceedings (as defined therein).

 

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“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: as defined in Section 5.9.

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

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

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

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

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

provided that:

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

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

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

 

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“Interpolated Rate”: at any time, for any Interest Period, the rate per annum
(rounded to the same number of decimal places as relevant Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the applicable Screen Rate (for the
longest period for which that Screen Rate is available in the applicable
currency) that is shorter than the Impacted Interest Period and (b) the
applicable Screen Rate (for the shortest period for which that Screen Rate is
available in the applicable currency) that exceeds the Impacted Interest Period,
in each case, as of the Specified Time on the Quotation Day for such Interest
Period.

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

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

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

“IRS”: the U.S. Internal Revenue Service.

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

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

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

“JPMorgan Chase Bank Toronto”: JPMorgan Chase Bank, N.A., Toronto Branch.

“Junior Indebtedness”: as defined in Section 8.9.

“Kildair”: (a) prior to the ULC Conversion, as defined in the introductory
paragraph of this Agreement and (b) after the ULC Conversion, Kildair Service
ULC, an unlimited liability company formed under the laws of British Columbia.

“Kildair Acquisition”: as defined in Section 6.1(bb).

“Kildair Acquisition Agreement”: the Purchase Agreement, dated December 9, 2014,
among Sprague Resources ULC, Sprague International Properties LLC, Sprague
Canadian Properties LLC and Axel Johnson Inc.

“Kildair Acquisition Documentation”: collectively, the Kildair Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith.

 

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

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

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

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

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

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

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

(vii) 80% of Eligible Petroleum Inventory; plus

(viii) [reserved]; plus

(ix) [reserved]; plus

(x) [reserved]; plus

(xi) 70% of Eligible Asphalt Inventory; plus

(xii) 75% of Kildair Prepaid Purchases; plus

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

(xiv) [reserved]; plus

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

(xvi) [reserved]; plus

(xvii) [reserved]; plus

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

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

(1) Reserves taken at the reasonable discretion of the Co-Collateral Agents;
less

(2) 100% of Product Taxes; less

(3) 110% of any Swap Amounts due to Qualified Counterparties solely to the
extent, and if, such Swap Amounts due to Qualified Counterparties are in excess
of $5,000,000; less

(4) 100% of the Overcollateralization Amount.

 

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Any amounts described in categories (i) through (xix) and (1) through (4) above
which may fall into more than one of such categories shall be counted only once
under the category with the highest applicable advance rate percentage, when
making the calculation under this definition. In addition, any deductions made
from the value of any asset included in the Kildair Borrowing Base in respect of
counterparty contra, offsets, counterclaims, unrealized forward losses and any
other similar charges or claims shall be without duplication. In calculating the
Kildair Borrowing Base, the following adjustments shall be made:

(A) [reserved];

(B) the value of that portion of the Kildair Borrowing Base described in clause
(xv) shall not exceed the lesser of (a) 40% of the Kildair Borrowing Base then
in effect and (b) $40,000,000;

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

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

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

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

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

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

 

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

“Kildair Election”: an election filed by Kildair pursuant to Treas. Reg. §
301.7701-3 to treat Kildair as an entity disregarded as separate from its owner
for U.S. federal income tax purposes effective as of the date of the ULC
Conversion.

“Kildair Loan Parties”: the Canadian Borrower and each Subsidiary of the
Canadian Borrower that is a Loan Party.

“Kildair Prepaid Purchases”: Eligible Commodities (consisting of Petroleum
Products) valued at the then current Value purchased and prepaid by the Kildair
Loan Parties from suppliers reasonably acceptable to the Co-Collateral Agents in
their sole discretion, with respect to which (w) title shall not have passed to
the any Loan Party, (x) such Eligible Commodities shall not have been delivered
to any Loan Party; provided that such products must be supported by an invoice
from said supplier (i) specifying the purpose of the applicable prepayment, and
(ii) including a copy of the underlying purchase contract; (y) with respect to
prepayment by any Loan Party under any agreement or arrangement, not more than
five (5) Business Days shall have elapsed since such prepayment was made and
(z) the Administrative Agent shall have a Perfected First Lien in the right of
such Loan Party to receive such Eligible Commodities (including that no
provision of any agreement between such supplier and such Loan Party shall
prohibit the assignment of a security interest by such Loan Party to the
Administrative Agent in such Loan Party’s right to receive such Eligible
Commodities).

“Kildair Subsidiary Election”: an election filed by Transit P.M. ULC pursuant to
Treas. Reg. § 301.7701-3 to treat Transit P.M. ULC as an entity disregarded as
separate from its owner for U.S. federal income tax purposes effective as of the
day after the date of the Kildair Election.

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

“Loan Parties”: each Borrower, the MLP and each Subsidiary Guarantor.

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

“Maine Dock Liability Obligations”: indebtedness of the U.S. Borrower with
respect to the State of Maine Port Authority dock liability in an aggregate
principal amount of $9,280,594 as of September 30, 2014 (which amount may be
reduced (but not increased) from time to time).

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

 

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Lenders, (b) with respect to the Dollar Working Capital Facility, Lenders having
Dollar Working Capital Facility Credit Exposure Percentages which aggregate more
than 50%; provided, that the Dollar Working Capital Facility Credit Exposure of
any Defaulting Lender shall be excluded from the calculation of Dollar Working
Capital Facility Credit Exposure Percentages in determining the Majority
Facility Lenders and (c) with respect to the Multicurrency Working Capital
Facility, Lenders having Multicurrency Working Capital Facility Credit Exposure
Percentages which aggregate more than 50%; provided, that the Multicurrency
Working Capital Facility Credit Exposure of any Defaulting Lender shall be
excluded from the calculation of Multicurrency Working Capital Facility Credit
Exposure Percentages in determining the Majority Facility Lenders.

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

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

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

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

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

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

 

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

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

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

“Materials of Environmental Concern”: any gasoline, natural gas, petroleum and
any other solid, liquid or gas hydrocarbon (including, without limitation, crude
oil or any fraction or derivative thereof) or any hydrocarbon-based products
(including, without limitation, any petroleum products) or any other pollutant,
contaminant, dangerous goods, hazardous or toxic substances, materials or
wastes, defined or regulated as such in or under, or which form the basis of
liability under, any Environmental Law or Environmental Permit, including
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation, medical
waste, radioactive materials and electromagnetic fields.

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

“Maximum Consolidated Senior Secured Leverage Ratio”: (a) for any fiscal quarter
ending on or prior to June 30, 2015, 4.5:1.0 and (b) thereafter, 3.75:1.0.

“Maximum Consolidated Total Leverage Ratio”: (a) for any fiscal quarter ending
on or prior to June 30, 2015, 5.5:1.0 and (b) thereafter, 4.75:1.0.

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

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

“MLP”: Sprague Resources LP.

“MLP Partnership Agreement”: that certain First Amended and Restated Agreement
of Limited Partnership of Sprague Resources LP, dated October 30, 2013, by and
among the General Partner and the limited partners from time to time parties
thereto.

 

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

“Mortgage and Security Agreement”: (i) each Quebec Security Document with
respect to Mortgaged Properties located in the Province of Quebec covering the
Mortgaged Properties owned on the Restatement Effective Date, (ii) each Mortgage
Security Agreement, Assignment of Leases and Rents and Fixture Filings covering
the Mortgaged Properties located in the United States owned on the Restatement
Effective Date and (iii) each Mortgage, Security Agreement, Assignment of Leases
and Rents and Fixture Filing (and such other instrument as required by the
applicable province of Canada), substantially in the form of Exhibit L (in the
case of real property located in the United States), substantially in the form
of the Quebec Security Documents (in the case of real or immovable property
located in the Province of Quebec) or in such form as reasonably acceptable to
the Administrative Agent (in the case of real property located in Canada (other
than in the Province of Quebec)), with respect to each Mortgaged Property
acquired after the Restatement Effective Date located in the United States or
Canada, respectively.

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

“Multicurrency L/C Exposure”: at any time, the total L/C Obligations with
respect to Multicurrency Working Capital Facility Letters of Credit. The
Multicurrency L/C Exposure of any Multicurrency Working Capital Facility Lender
at any time shall be its Multicurrency Working Capital Facility Commitment
Percentage of the total Multicurrency L/C Exposure at such time.

“Multicurrency Long Tenor Letter of Credit Sub-Limit”: $25,000,000 at any time
outstanding.

“Multicurrency Performance Letter of Credit Sub-Limit”: $5,000,000 at any time
outstanding.

“Multicurrency Swing Line Exposure”: at any time, the sum of the aggregate
amount of all outstanding Multicurrency Swing Line Loans at such time. The
Multicurrency Swing Line Exposure of any Multicurrency Working Capital Facility
Lender at any time shall be the sum of (a) its Multicurrency Working Capital
Facility Commitment Percentage of the total Multicurrency Swing Line Exposure at
such time related to Multicurrency Swing Line Loans other than any Multicurrency
Swing Line Loans made by such Lender in its capacity as a Multicurrency Swing
Line Lender and (b) if such Lender shall be a Multicurrency Swing Line Lender,
the principal amount of all Multicurrency Swing Line Loans made by such Lender
outstanding at such time (to the extent that the other Multicurrency Working
Capital Facility Lenders shall not have funded their participations in such
Swing Line Loans).

“Multicurrency Swing Line Lenders”: JPMorgan Chase Bank N.A., Toronto Branch and
each other Multicurrency Working Capital Facility Lender approved by the
Administrative Agent and the U.S. Borrower that has agreed to act as a
“Multicurrency Swing Line Lender hereunder”, in each case in its capacity as
lender of Multicurrency Swing Line Loans hereunder.

“Multicurrency Swing Line Loan Sub-Limit”: $20,000,000 at any time outstanding.

 

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

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

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

“Multicurrency Working Capital Facility Commitment”: at any date, as to any
Multicurrency Working Capital Facility Lender, the obligation of such
Multicurrency Working Capital Facility Lender to make Multicurrency Working
Capital Facility Loans to the Borrowers pursuant to Section 2.1(b) and to
participate in Multicurrency Swing Line Loans and Multicurrency Working Capital
Facility Letters of Credit in an aggregate principal and/or face amount at any
one time outstanding not to exceed the amount set forth opposite such
Multicurrency Working Capital Facility Lender’s name on Schedule 1.0 under the
caption “Multicurrency Working Capital Facility Commitment” or, as the case may
be, in the Assignment and Acceptance pursuant to which such Multicurrency
Working Capital Facility Lender becomes a party hereto, as such amount may be
changed from time to time in accordance with the terms of this Agreement. As of
the Restatement Effective Date, the original aggregate amount of the
Multicurrency Working Capital Facility Commitments is $120,000,000.

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

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

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

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

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

“Multicurrency Working Capital Facility Extensions of Credit”: at any date, as
to any Multicurrency Working Capital Facility Lender at any time, the aggregate
outstanding principal amount

 

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of Multicurrency Working Capital Facility Loans made by such Multicurrency
Working Capital Facility Lender, plus the amount of the undivided interest of
such Multicurrency Working Capital Facility Lender in any then-outstanding
Multicurrency Working Capital Facility L/C Obligations, plus such Multicurrency
Working Capital Facility Lender’s Multicurrency Swing Line Exposure.

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

“Multicurrency Working Capital Facility Issuing Lenders”: JPMorgan Chase Bank,
N.A., Toronto Branch and BNP Paribas, acting through its Canada branch, and each
other Multicurrency Working Capital Facility Lender from time to time designated
by the U.S. Borrower (and agreed to by such Lender) as a Multicurrency Working
Capital Facility Issuing Lender with the prior consent of the Administrative
Agent (such consent not to be unreasonably withheld, conditioned or delayed),
each in its capacity as issuer of any Multicurrency Working Capital Facility
Letter of Credit.

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

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

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

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

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

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

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

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

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

 

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

“Multicurrency Working Capital Facility Non-Maintenance Cap-Ex Sub-Limit”:
$7,500,000 at any time outstanding.

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

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

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

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

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

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

 

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

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

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

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

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

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

“Non-U.S. Subsidiary”: any Subsidiary that is not a U.S. Subsidiary.

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

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

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

 

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Party of any Excluded Swap Obligations of such Loan Party; provided further
that, (i) obligations of any Loan Party under any Commodity OTC Agreement to a
Qualified Counterparty, Financial Hedging Agreement to a Qualified Counterparty
or any Cash Management Bank Agreement to a Qualified Cash Management Bank (such
obligations, the “Hedging and Bank Product Obligations”), shall be secured
pursuant to the Security Documents and guaranteed pursuant to the Guarantee only
to the extent that, and for so long as, those obligations and liabilities of the
Loan Parties listed above not consisting of Hedging and Bank Product Obligations
(the “Other Obligations”) are so secured and guaranteed, unless the Other
Obligations cease to be so secured and guaranteed either (A) as a result of the
Administrative Agent undertaking an Enforcement Action (as defined in the U.S.
Security Agreement or the Canadian Security Agreement, as applicable) or the
Administrative Agent taking any actions permitted by the Dutch Security
Documents after the occurrence of an Event of Default or an Enforcement Event
(as defined in the Dutch Security Agreement), as applicable or (B) following an
Insolvency Proceeding (as defined in the U.S. Security Agreement or the Canadian
Security Agreement, as applicable) with respect to any Loan Party, in which
cases the Hedging and Bank Product Obligations shall continue to be secured
pursuant to the Security Documents and guaranteed pursuant to the Guarantee and
(ii) any release of Collateral or the MLP or Subsidiary Guarantors effected in
the manner permitted by this Agreement shall not require the consent of holders
of any Hedging and Bank Product Obligations. The Hedging and Bank Product
Obligations shall be subordinated to the Other Obligations pursuant to the terms
of the U.S. Security Agreement, Canadian Security Documents or Dutch Security
Documents, as applicable.

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

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

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

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

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

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

“Paid but Unexpired Letters of Credit”: as of any Borrowing Base Date, the sum
of (a) the amount of any payment made by any Loan Party within 45 calendar days
prior to such Borrowing Base Date to satisfy the obligation for which a Letter
of Credit was issued solely to the extent that such Letter of Credit has not
been reduced, cancelled or drawn upon and (b) for any Trade Letter of Credit
with respect to which no amount can be drawn with respect to mark-to-market
liability, an amount equal to

 

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20%, times, the lesser of (i) the then applicable undrawn portion of such Trade
Letter of Credit and (ii) the operational tolerance with respect to the
underlying purchase contract with respect to which such Trade Letter of Credit
was issued.

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

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

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

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

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

“Perfected First Lien”: any perfected, first priority Lien or security interest
(or its substantial equivalent under applicable Laws) granted by a Loan Party
pursuant to a Security Document in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties; provided that, in the case of inventory
that is not located in the United States or contracts, Accounts Receivable or
Payment Intangibles not governed by Laws of the United States of America or any
state or political subdivision thereof, the validity and, if customarily
available, priority of such Lien shall be confirmed by an opinion of special
local counsel, the form and substance of which shall be customary and reasonably
satisfactory to the Administrative Agent; provided further that no Lien or
security interest (or its substantial equivalent under applicable Laws) granted
by a Loan Party pursuant to a Security Document shall constitute a Perfected
First Lien, unless it secures all Obligations, including U.S. Obligations,
except that on or prior to the ULC Conversion (but in no event later than one
Business Day following the Restatement Effective Date), assets of Kildair (but
not of any Subsidiary of Kildair) that secure all Obligations other than U.S.
Obligations shall be deemed to be subject to a Perfected First Lien solely for
purposes of calculating the Kildair Borrowing Base (and references therein to
the component definitions of the Kildair Borrowing Base) in an amount not to
exceed any Working Capital Facility Loans made to Kildair.

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

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

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

 

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Civil Code of Quebec, (g) Prior Claims that are unregistered and that secure
amounts that are not yet due and payable and (h) netting and other offset rights
granted by any Loan Party to counterparties under Commodity Contracts and
Financial Hedging Agreements on or with respect to payment and other obligations
owed by such Loan Party to such counterparties.

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

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

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

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

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

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

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

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

“Platform”: as defined in Section 11.2.

“Pledge Agreements”: collectively, the Canadian Pledge Agreement, the U.S.
Pledge Agreement and the Dutch Membership Pledge Agreement.

 

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

“Pledged Collateral”: the “Pledged Collateral” as defined in the U.S. Pledge
Agreement or the Canadian Pledge Agreement or the “Collateral” as defined in the
Dutch Membership Pledge Agreement, as applicable.

“Pledged Kildair Stock”: as defined in the definition of “Acquisition Assets” in
this Section 1.1.

“Position Report”: a position report in form and substance substantially similar
to Exhibit M of either the U.S. Borrower or the Canadian Borrower, as
applicable, which shows in detail the calculations supporting, as applicable
(i) the U.S. Borrower’s certification of the compliance by the Loan Parties
(other than the Canadian Borrower and its Subsidiaries) with the position limits
in the Risk Management Policy that are applicable to such Loan Parties and
(ii) the Canadian Borrower’s certification of the compliance by the Canadian
Borrower and its Subsidiaries with the position limits in the Risk Management
Policy that are applicable to the Canadian Borrower and its Subsidiaries.

“Post-Amalgamation Entity”: as defined in the definition of “Amalgamation”.

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

“PPSA”: the Personal Property Security Act (Ontario), including the regulations
thereto, provided that, if perfection or the effect of perfection or
non-perfection or the priority of any Lien created hereunder on the Collateral
is governed by the personal property security legislation or other applicable
legislation with respect to personal property security in effect in a
jurisdiction other than Ontario, “PPSA” means the Personal Property Security Act
or such other applicable legislation in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.

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

“Prime Rate”: for any day, the rate per annum equal to the greater of (a) the
Canadian prime rate in effect on such day (rounded upward, if necessary, to the
next 1/16 of 1.00%) and (b) the one-month Eurocurrency Rate in effect on such
day for Loans denominated in Canadian Dollars plus 1.00%. For purposes hereof:
“Canadian prime rate” shall mean the rate of interest per annum established by
JPMorgan Chase Bank Toronto as its reference rate in effect for determining
interest rates for commercial loans denominated in Canadian Dollars (the
Canadian prime rate not being intended to be the lowest rate of interest charged
by JPMorgan Chase Bank Toronto in connection with extensions of credit to
debtors). Any change in the Prime Rate due to a change in the Canadian prime
rate or the Eurocurrency Rate shall be effective as of the opening of business
on the day such change in the Canadian prime rate or Eurocurrency Rate becomes
effective, respectively.

“Prime Rate Loan”: Loans the rate of interest of which is based upon the Prime
Rate.

“Prior Claims”: all Liens created by applicable law (in contrast with Liens
voluntarily granted) or interests similar thereto under applicable law which
rank or are capable of ranking prior or pari passu with the Liens created by the
Security Documents including for amounts owing for, or in

 

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respect of, employee source deductions, vacation pay, goods and services taxes,
sales taxes, harmonized sales taxes, municipal taxes, workers’ compensation,
Quebec corporate taxes, pension fund obligations and overdue rents.

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

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

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

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

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

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

“Public Lender”: as defined in Section 11.2.

“Qualified Cash Management Bank”: any Cash Management Bank that, at the time a
Cash Management Bank Agreement was entered into between a Loan Party and such
Cash Management Bank, was (i) a Lender (or an Affiliate thereof) or (ii) if such
Cash Management Bank Agreement was entered into prior to the Restatement
Effective Date, was a lender under the Previous Credit Agreement or the Existing
Credit Agreement at the time and is a Lender on the Restatement Effective Date.

“Qualified Counterparty”: any counterparty to any Financial Hedging Agreement or
Commodity OTC Agreement entered into between a Loan Party and a Person that,
(i) at the time such Financial Hedging Agreement or Commodity OTC Agreement was
entered into, was a Lender or (ii) if such Financial Hedging Agreement or
Commodity OTC Agreement was entered into prior to the Restatement Effective
Date, was a lender under the Previous Credit Agreement or the Existing Credit
Agreement at the time such Financial Hedging Agreement or Commodity OTC
Agreement was entered into and is a Lender on the Restatement Effective Date;
provided, that, with respect to either clause (i) or clause (ii), such
counterparty (other than any counterparty that is the Administrative Agent)
shall be a “Qualified Counterparty” with respect to any Financial Hedging
Agreement or Commodity OTC Agreement solely to the extent such counterparty has
delivered a Hedging Agreement Qualification Notification to the Administrative
Agent.

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

 

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“Quebec Security Documents”: a deed of hypothec to secure payment of debentures
(which hypothec shall include, without limitation, a charge on the universality
of immovable property) and any other related documents, bonds, debentures or
pledge agreements required to perfect a Lien in favor of the Administrative
Agent in the Province of Quebec to be executed from time to time by any Loan
Party organized under the laws of the Province of Quebec or having its chief
executive office (or domicile) located in the Province of Quebec or having
tangible assets located in the Province of Quebec.

“Quebec STA”: An Act respecting the transfer of securities and the establishment
of security entitlements, R.S.Q. c. T-11.002, as amended from time to time.

“Quotation Day”: with respect to any Eurocurrency Loan for any Interest Period,
(i) if the currency is United States Dollars, two Business Days prior to the
commencement of such Interest Period and (ii) if the currency is Canadian
Dollars, at approximately 10:00 a.m., Toronto time, on the first day of such
Interest Period; provided that if such day is not a Business Day, then on the
immediately preceding Business Day.

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

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

“Reference Bank Rate”: the arithmetic mean of the rates (rounded upwards to four
decimal places) supplied to the Administrative Agent at its request by the
Reference Banks (as the case may be) as of the Specified Time on the Quotation
Day for Loans in the applicable currency and the applicable Interest Period:

(i) in relation to Loans denominated in United States Dollars, as the rate at
which the relevant Reference Bank could borrow funds in the London interbank
market in United States Dollars and for the relevant period, were it to do so by
asking for and then accepting interbank offers in reasonable market size in
United States Dollars and for that period; and

(ii) in relation to Loans in Canadian Dollars, as the rate at which the relevant
Reference Bank is willing to extend credit by the purchase of bankers
acceptances which have been accepted by banks which are for the time being
customarily regarded as being of appropriate credit standing for such purpose
with a term to maturity equal to the relevant period.

“Reference Banks” means (a) with respect to Eurocurrency Loans denominated in
any United States Dollars, such banks as may be appointed by the Administrative
Agent in consultation with the U.S. Borrower and (b) with respect to
Eurocurrency Loans denominated in Canadian Dollars, Royal Bank of Canada and
Bank of Montreal or any bank named on Schedule I to the Bank Act (Canada) as
otherwise agreed by the Administrative Agent and the U.S. Borrower.

 

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“Refunded Dollar Swing Line Loan”: any Refunded Swing Line Loan made in respect
of a Dollar Swing Line Loan.

“Refunded Multicurrency Swing Line Loan”: any Refunded Swing Line Loan made in
respect of a Multicurrency Swing Line Loan.

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

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

“Regulation U”: Regulation U of the Board.

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

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

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

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

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

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

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

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

 

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“Release”: any release, threatened release, addition, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Material of
Environmental Concern into or through the environment.

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

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

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

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

“Relevant Swing Line Lenders”: with respect to the Dollar Working Capital
Facility, the Dollar Working Capital Facility Swing Line Lenders and with
respect to the Multicurrency Working Capital Facility, the Multicurrency Working
Capital Facility Swing Line Lenders.

“Relevant Working Capital Facility Issuing Lenders”: with respect to the Dollar
Working Capital Facility, the Dollar Working Capital Facility Issuing Lenders
and with respect to the Multicurrency Working Capital Facility, the
Multicurrency Working Capital Facility Issuing Lenders.

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

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

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

“Representatives”: as defined in Section 11.16.

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

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

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

 

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

“Reserves”: individually and collectively, and without duplication, reserves in
respect of inventory that is subject to the rights of suppliers under
Section 81.1 of the Bankruptcy and Insolvency Act (Canada), reserves in respect
of Prior Claims, any Wage Earner Protection Act Reserve and any other reserves
that the Co-Collateral Agents deem necessary in their reasonable discretion to
maintain with respect to the Collateral or any Loan Party.

“Reset Date”: as defined in Section 2.7(a).

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

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

“Restricted Payments”: as defined in Section 8.5.

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

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

“Sanctioned Country”: at any time, a country or territory which is itself the
subject or target of any Sanctions.

“Sanctioned Person”: at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by the Office of Foreign Assets Control of
the U.S. Department of the Treasury or the U.S. Department of State or by the
United Nations Security Council, the European Union or any EU member state,
(b) any Person operating, organized or resident in a Sanctioned Country or
(c) any Person owned or controlled by any such Person or Persons.

 

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“Sanctions”: economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, (b) the Canadian
government or (c) the United Nations Security Council, the European Union or Her
Majesty’s Treasury of the United Kingdom.

“Screen Rate”: the LIBOR Screen Rate and/or the CDOR Screen Rate, as the context
may require.

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

“SEC Filings”: as defined in Section 7.1.

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

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

“Securities Account”: any “Securities Account” as defined in Section 8-501 of
the New York Uniform Commercial Code, any “Securities Account” as defined under
the PPSA and any “securities account” as defined in the Quebec STA.

“Security Agreements”: the collective reference to the U.S. Security Agreement,
the Canadian Security Agreement, the Quebec Security Documents and the Dutch
Receivables Pledge Agreement.

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

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

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

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

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

“Specified Time”: (i) in relation to a Loan in United States Dollars, as of
11:00 a.m., London time and (ii) in relation to a Loan in Canadian Dollars, as
of 10:00 a.m. Toronto, Ontario time.

“Subsidiary”: as to any Person, a corporation, partnership or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other

 

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

“Subsidiary Guarantors”: (i) Sprague Energy Solutions Inc., Sprague Connecticut
Properties LLC, Sprague Terminal Services LLC, Sprague Resources Finance Corp.,
Sprague Resources Coöperatief U.A. and Sprague Co-op Member LLC, (ii) subject to
Section 11.24, Kildair, AcquireCo, Wintergreen Transport Corporation ULC and
Transit P.M. ULC and (iii) after the Restatement Effective Date, each other
Person executing and delivering the Guarantee, or becoming a party to the
Guarantee as a guarantor (by supplement or otherwise), pursuant to this
Agreement.

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

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

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

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

“Swing Line Lenders”: the Dollar Swing Line Lenders and/or the Multicurrency
Swing Line Lenders, as the context requires.

“Swing Line Loans”: the Dollar Swing Line Loans and/or the Multicurrency Swing
Line Loans, as the context requires.

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

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

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

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

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

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

 

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

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

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

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

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

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

“Total Working Capital Facility Extensions of Credit”: an amount equal to the
sum of (a) the Total Dollar Working Capital Facility Extensions of Credit at
such time plus (b) the Total Multicurrency Working Capital Facility Extensions
of Credit at such time.

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

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

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

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

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

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

 

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“ULC Conversion”: the conversion of Kildair from a limited company to an
unlimited liability company.

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

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

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

“U.S. Borrowing Base”: on any date, solely with respect to the assets of the
Loan Parties (other than the Kildair Loan Parties), an amount equal to:

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

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

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

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

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

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

(vii) 80% of Eligible Petroleum Inventory; plus

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

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

(x) 70% of Eligible Coal Inventory; plus

(xi) 70% of Eligible Asphalt Inventory; plus

(xii) 75% of U.S. Prepaid Purchases; plus

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

(xiv) 80% of Eligible Exchange Receivables; plus

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

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

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

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

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

 

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(xx) 70% of Eligible RINs; less

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

(2) 100% of Product Taxes; less

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

(4) 100% of the Overcollateralization Amount.

Any amounts described in categories (i) through (xx) and (1) through (5) above
which may fall into more than one of such categories shall be counted only once
under the category with the highest applicable advance rate percentage, when
making the calculation under this definition. In addition, any deductions made
from the value of any asset included in the U.S. Borrowing Base in respect of
counterparty contra, offsets, counterclaims, unrealized forward losses and any
other similar charges or claims shall be without duplication. In calculating the
U.S. Borrowing Base, the following adjustments shall be made:

(A) the value of Accounts Receivable to be included in clauses (ii) through
(v) shall not exceed $15,000,000 for Accounts Receivables the Account Debtors of
which are Eligible Foreign Counterparties;

(B) (i) the value of that portion of the U.S. Borrowing Base described in
clauses (xv) through (xvii) shall not exceed (1) in the aggregate, the lesser of
(a) 40% of the U.S. Borrowing Base then in effect and (b) $275,000,000,
(2) $175,000,000 from Forward Contracts relating to Petroleum Products, or
(3) $100,000,000 from Forward Contracts relating to Natural Gas Products and
(ii) the value of that portion of the U.S. Borrowing Base described in clause
(xvii) shall not exceed $15,000,000;

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

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

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

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

 

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

(H) the value of that portion of the U.S. Borrowing Base described in clause
(xviii) relating to Letters of Credit for the transportation of Eligible
Commodities shall not exceed $20,000,000; and

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

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

“U.S. Obligations”: any Obligations treated as Obligations of a U.S. Person for
U.S. federal income tax purposes.

“U.S. Person”: a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Pledge Agreement”: the Amended and Restated U.S. Pledge Agreement,
substantially in the form of Exhibit C-1 to be executed and delivered by (a) any
Loan Party organized under the laws of any jurisdiction within the United States
and (b) any Loan Party pledging Capital Stock of any Person organized under the
laws of any jurisdiction within the United States.

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

 

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“U.S. Security Agreement”: the Amended and Restated U.S. Security Agreement,
substantially in the form of Exhibit B-1, to be executed and delivered by the
Loan Parties organized under the laws of any jurisdiction within the United
States.

“U.S. Subsidiary”: any Subsidiary of the MLP organized under the laws of any
jurisdiction within the United States.

“USA PATRIOT Act”: Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the “Executive Order”), the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.

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

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

“Wage Earner Protection Act Reserve” on any date of determination, a reserve
established from time to time by Administrative Agent in such amount as
Administrative Agent determines reflects the amounts that may become due under
the Wage Earner Protection Program Act (Canada) with respect to the employees of
any Loan Party employed in Canada which would give rise to a Lien with priority
under applicable law over the Lien securing the Obligations.

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

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

“Working Capital Facility Commitments”: the Dollar Working Capital Facility
Commitments and/or the Multicurrency Working Capital Facility Commitments, as
the context requires.

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

“Working Capital Facility Lender”: any Dollar Working Capital Facility Lender
and any Multicurrency Working Capital Facility Lender.

“Working Capital Facility Loans”: collectively, the Dollar Working Capital
Facility Loans and the Multicurrency Working Capital Facility Loans.

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

 

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(b) As used herein and in any Notes, any other Loan Documents and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the MLP and its Subsidiaries not defined in
Section 1.1 and (subject to Section 1.2(c)) accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP (provided that all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to (i) any election
under Accounting Standards Codification 825-10-25 (previously referred to as
Statement of Financial Accounting Standards 159) (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result
or effect) to value any Indebtedness or other liabilities of the U.S. Borrower
or any Subsidiary at “fair value”, as defined therein and (ii) any treatment of
Indebtedness in respect of convertible debt instruments under Accounting
Standards Codification 470-20 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal
amount thereof).

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

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

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

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

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

1.4 Quebec Matters. For purposes of any assets, liabilities or entities located
in the Province of Québec and for all other purposes pursuant to which the
interpretation or construction of this Agreement may be subject to the laws of
the Province of Québec or a court or tribunal exercising jurisdiction in the
Province of Québec, (a) “personal property” shall include “movable property”,
(b) “real property” or “real estate” shall include “immovable property”,
(c) “tangible property” shall include “corporeal property”, (d) “intangible
property” shall include “incorporeal property”, (e) “security interest”,
“mortgage” and “lien” shall include a “hypothec”, “right of retention”, “prior
claim” and a resolutory clause, (f) all references to filing, perfection,
priority, remedies, registering or recording under the Uniform Commercial Code
or a Personal Property Security Act shall include publication under the

 

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Civil Code of Québec, (g) all references to “perfection” of or “perfected” liens
or security interest shall include a reference to an “opposable” or “set up”
lien or security interest as against third parties, (h) any “right of offset”,
“right of setoff” or similar expression shall include a “right of compensation”,
(i) “goods” shall include “corporeal movable property” other than chattel paper,
documents of title, instruments, money and securities, (j) an “agent” shall
include a “mandatary”, (k) “construction liens” shall include “legal hypothecs”;
(l) “joint and several” shall include “solidary”; (m) “gross negligence or
wilful misconduct” shall be deemed to be “intentional or gross fault”;
(n) “registered ownership held for a beneficial owner” shall include “ownership
on behalf of another as mandatary”; (o) “easement” shall include “servitude”;
(p) “priority” shall include “prior claim”; (q) “survey” shall include
“certificate of location and plan”; (r) “state” shall include “province”;
(s) “fee simple title” shall include “absolute ownership”; (t) “accounts” shall
include “claims”.

 

  SECTION 2 AMOUNT AND TERMS OF THE LOANS AND COMMITMENTS

2.1 Working Capital Facility Loans. (a) Subject to the terms and conditions
hereof, each Dollar Working Capital Facility Lender severally shall make
revolving credit loans under the Dollar Working Capital Facility Commitments
(the “Dollar Working Capital Facility Loans”) to the Borrowers in an amount
requested by the applicable Borrower from time to time during the Dollar Working
Capital Facility Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Dollar Working Capital Facility
Lender’s then outstanding Dollar Working Capital Facility Extensions of Credit
(after giving effect to any application of proceeds of such Dollar Working
Capital Facility Loans pursuant to Section 2.6), does not exceed such Lender’s
Dollar Working Capital Facility Commitment at such time; provided that, after
giving effect to any Dollar Working Capital Facility Loan requested by any
Borrower, each of the conditions set forth in Section 6.2 shall be satisfied or
waived. Dollar Working Capital Facility Loans may be denominated only in United
States Dollars and may from time to time be (i) Eurocurrency Loans, (ii) Base
Rate Loans or (iii) a combination thereof, in each case, as the applicable
Borrower shall notify the Administrative Agent in accordance with Sections 2.5
and 4.3. No Dollar Working Capital Facility Loan shall be made as a Eurocurrency
Loan after the day that is one (1) month prior to the Termination Date.

(b) Subject to the terms and conditions hereof, each Multicurrency Working
Capital Facility Lender severally shall make revolving credit loans under the
Multicurrency Working Capital Facility Commitments (the “Multicurrency Working
Capital Facility Loans”) to the Borrowers in an amount requested by the
applicable Borrower from time to time during the Multicurrency Working Capital
Facility Commitment Period in an aggregate principal amount at any one time
outstanding such that the Dollar Equivalent of such Multicurrency Working
Capital Facility Loan, when added to the Dollar Equivalent of such Multicurrency
Working Capital Facility Lender’s then outstanding Multicurrency Working Capital
Facility Extensions of Credit (after giving effect to any application of
proceeds of such Multicurrency Working Capital Facility Loans pursuant to
Section 2.6), does not exceed such Lender’s Multicurrency Working Capital
Facility Commitment at such time; provided that, after giving effect to any
Multicurrency Working Capital Facility Loan requested by any Borrower, each of
the conditions set forth in Section 6.2 shall be satisfied or waived.
Multicurrency Working Capital Facility Loans may be denominated in United States
Dollars or Canadian Dollars (as the applicable Borrower shall notify the
Administrative Agent or the Canadian Agent, as applicable in accordance with
Section 2.5) and may from time to time be (x) with respect to Multicurrency
Working Capital Facility Loans denominated in United States Dollars,
(i) Eurocurrency Loans, (ii) Base Rate Loans or (iii) a combination thereof and
(y) with respect to Multicurrency Working Capital Facility Loans denominated in
Canadian Dollars, (i) Eurocurrency Loans, (ii) Prime Rate Loans or (iii) a
combination thereof, in each case, as the applicable Borrower shall notify the
Administrative Agent or Canadian Agent, as applicable, in accordance with
Sections 2.5 and 4.3. No Multicurrency Working Capital Facility Loan shall be
made as a Eurocurrency Loan after the day that is one (1) month prior to the
Termination Date.

(c) During the Working Capital Facility Commitment Period, the Borrowers may
borrow, prepay the Working Capital Facility Loans in whole or in part, and
reborrow Working Capital Facility Loans, all in accordance with the terms and
conditions hereof.

 

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2.2 [Reserved].

2.3 Swing Line Loans. (a) Subject to the terms and conditions hereof, the Dollar
Swing Line Lenders shall make a portion of the credit under the Dollar Working
Capital Facility Commitments available to the Borrowers by making swing line
loans (individually, a “Dollar Swing Line Loan” and, collectively, the “Dollar
Swing Line Loans”) to the applicable Borrower from time to time in United States
Dollars during the Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the Dollar Swing Line Loan Sub-Limit then in
effect; provided that (i) the sum of (x) the Dollar Swing Line Exposure of such
Swing Line Lender, (y) the aggregate principal amount of outstanding Dollar
Working Capital Facility Loans made by such Swing Line Lender (in its capacity
as a Dollar Working Capital Facility Lender) and (z) the Dollar L/C Exposure of
such Swing Line Lender (in its capacity as a Dollar Working Capital Facility
Lender) may not exceed such Swing Line Lender’s Dollar Working Capital Facility
Commitment then in effect, (ii) the Borrowers shall not request, and no Dollar
Swing Line Lender shall make, any Dollar Swing Line Loan if, after giving effect
to the making of such Dollar Swing Line Loan, the aggregate amount of the
Available Dollar Working Capital Facility Commitments would be less than zero
and (iii) in no event shall any Dollar Swing Line Lender be required to make
Swing Line Loans in excess of $35,000,000 unless agreed by such Dollar Swing
Line Lender; provided further that, after giving effect to any Dollar Swing Line
Loan requested by any Borrower, each of the conditions set forth in Section 6.2
shall be satisfied or waived. During the Dollar Working Capital Facility
Commitment Period, the Borrowers may use the Dollar Swing Line Loan Sub-Limit by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof.

(b) Subject to the terms and conditions hereof, the Multicurrency Swing Line
Lenders shall make a portion of the credit under the Multicurrency Working
Capital Facility Commitments available to the Borrowers by making swing line
loans (individually, a “Multicurrency Swing Line Loan” and, collectively, the
“Multicurrency Swing Line Loans”) to the applicable Borrower from time to time
in United States Dollars or Canadian Dollars (as the applicable Borrower shall
notify the Administrative Agent or the Canadian Agent, as applicable, in
accordance with Section 2.5) during the Commitment Period in an aggregate
principal amount at any one time outstanding such that the Dollar Equivalent
thereof does not exceed the Multicurrency Swing Line Loan Sub-Limit then in
effect; provided that (i) the sum of (x) the Dollar Equivalent of the
Multicurrency Swing Line Exposure of such Swing Line Lender, (y) the Dollar
Equivalent of the aggregate principal amount of outstanding Multicurrency
Working Capital Facility Loans made by such Swing Line Lender (in its capacity
as a Multicurrency Working Capital Facility Lender) and (z) the Dollar
Equivalent of the Multicurrency L/C Exposure of such Swing Line Lender (in its
capacity as a Multicurrency Working Capital Facility Lender) may not exceed such
Swing Line Lender’s Multicurrency Working Capital Facility Commitment then in
effect and (ii) the Borrowers shall not request, and no Multicurrency Swing Line
Lender shall make, any Multicurrency Swing Line Loan if, after giving effect to
the making of such Multicurrency Swing Line Loan, the aggregate amount of the
Available Multicurrency Working Capital Facility Commitments would be less than
zero; provided further that, after giving effect to any Multicurrency Swing Line
Loan requested by any Borrower, each of the conditions set forth in Section 6.2
shall be satisfied or waived. During the Multicurrency Working Capital Facility
Commitment Period, the Borrowers may use the Multicurrency Swing Line Loan
Sub-Limit by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof.

(c) Swing Line Loans (i) denominated in United States Dollars shall be Base Rate
Loans and (ii) denominated in Canadian Dollars shall be Prime Rate Loans.

 

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

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

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

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

(ii) the amount to be borrowed;

(iii) the requested Borrowing Date;

(iv) in the case of a Multicurrency Working Capital Facility Loan or a
Multicurrency Swing Line Loan, whether such Loan is to be denominated in United
States Dollars or Canadian Dollars;

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

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

 

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

(viii) in the case of a Dollar Working Capital Facility Loan, a Multicurrency
Working Capital Facility Loan denominated in United States Dollars or an
Acquisition Facility Loan, whether the borrowing is to be a Base Rate Loan, a
Eurocurrency Loan or a combination thereof;

(ix) in the case of a Multicurrency Working Capital Facility Loan denominated in
Canadian Dollars, whether the borrowing is to be a Prime Rate Loan, a
Eurocurrency Loan or a combination thereof;

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

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

(c) Upon receipt of any notice from any Borrower pursuant to Section 2.5(a) with
respect to a requested borrowing of Acquisition Facility Loans, the
Administrative Agent shall promptly notify each Acquisition Facility Lender
thereof, upon receipt of any notice from any Borrower pursuant to Section 2.5(a)
with respect to a requested borrowing of Dollar Working Capital Facility Loans,
the Administrative Agent shall promptly notify each Dollar Working Capital
Facility Lender thereof and upon receipt of any notice from any Borrower
pursuant to Section 2.5(a) with respect to a requested borrowing of
Multicurrency Working Capital Facility Loans, the Administrative Agent or
Canadian Agent, as applicable, shall promptly notify each Multicurrency Working
Capital Facility Lender thereof. Subject to the satisfaction or waiver of the
conditions contained in Section 6.2, each Dollar Working Capital Facility Lender
shall make the amount of its Dollar Working Capital Facility Commitment
Percentage of each such borrowing of Dollar Working Capital Facility Loans, each
Multicurrency Working Capital Facility Lender shall make the amount of its
Multicurrency Working Capital Facility Commitment Percentage of each such
borrowing of Multicurrency Working Capital Facility Loans and each Acquisition
Facility Lender shall make the amount of its Acquisition Facility Commitment
Percentage of each such borrowing of Acquisition Facility Loans, available to
the Administrative Agent (in the case of Loans denominated in United States
Dollars) or the Canadian Agent (in the case of Loans denominated in Canadian
Dollars) for the account of the applicable Borrower at the office of the
Administrative Agent or Canadian Agent, as applicable, specified in Section 11.2
prior to 3:00 p.m. (New York City time) on the Borrowing Date requested by such
Borrower in funds immediately available to the Administrative Agent or the
Canadian Agent, as applicable. Each Loan so requested will then promptly, and
not later than 3:30 p.m. (New York City time), be made available on the
Borrowing Date to such Borrower by the Administrative Agent or the Canadian
Agent, as applicable, by wire transfer to the account of such Borrower set forth
on Schedule 2.2 or to such other account as may be specified by such Borrower in
like funds as received by the Administrative Agent or the Canadian Agent, as
applicable. Notwithstanding the foregoing, on the Restatement Effective Date,
(i) Existing Lenders shall not be required to advance any Dollar Working Capital
Facility Loans to the extent of their Existing Working Capital Facility Loans
(it being understood that on the Restatement Effective Date, such Existing
Working Capital Facility Loans shall be deemed to be Dollar Working Capital
Facility Loans and such

 

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portion of the Existing Working Capital Facility Loans that were Base Rate Loans
shall be Dollar Working Capital Facility Loans that are Base Rate Loans and such
portion of the Existing Working Capital Facility Loans that were Eurocurrency
Loans shall be Dollar Working Capital Facility Loans that are Eurocurrency Loans
(it being understood that for each tranche of Existing Working Capital Facility
Loans that were Eurocurrency Loans, the initial Interest Period for such tranche
shall be the Interest Period applicable to such tranche of Existing Working
Capital Facility Loans immediately prior to the Restatement Effective Date)) and
the Dollar Working Capital Facility Lenders (including, if applicable, the
Existing Lenders that are Dollar Working Capital Facility Lenders) shall advance
funds to the Administrative Agent no later than 3:00 p.m. (New York City time)
on the Restatement Effective Date as shall be required (and, if applicable, the
Dollar Working Capital Facility Loans of Existing Lenders shall be repaid as
required) such that each Lender’s share of outstanding Dollar Working Capital
Facility Loans on the Restatement Effective Date is equal to its Dollar Working
Capital Facility Commitment Percentage on the Restatement Effective Date and
(ii) Existing Lenders shall not be required to advance any Acquisition Facility
Loans to the extent of their Existing Acquisition Facility Loans (it being
understood that on the Restatement Effective Date, such Existing Acquisition
Facility Loans shall be deemed to be Acquisition Facility Loans and such portion
of the Existing Acquisition Facility Loans that were Base Rate Loans shall be
Acquisition Facility Loans that are Base Rate Loans and such portion of the
Existing Acquisition Facility Loans that were Eurocurrency Loans shall be
Acquisition Facility Loans that are Eurocurrency Loans (it being understood that
for each tranche of Existing Acquisition Facility Loans that were Eurocurrency
Loans, the initial Interest Period for such tranche shall be the Interest Period
applicable to such tranche of Existing Acquisition Facility Loans immediately
prior to the Restatement Effective Date)) and the Acquisition Facility Lenders
(including, if applicable, the Existing Lenders that are Acquisition Facility
Lenders) shall advance funds to the Administrative Agent no later than 3:00 p.m.
(New York City time) on the Restatement Effective Date as shall be required (and
the Acquisition Facility Loans of Existing Lenders shall be repaid as required)
such that each Acquisition Facility Lender’s share of outstanding Acquisition
Facility Loans on the Restatement Effective Date is equal to its Acquisition
Facility Commitment Percentage on the Restatement Effective Date.

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

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

(f) The failure of any Dollar Swing Line Lender or Multicurrency Swing Line
Lender to make its ratable portion of a Swing Line Loan shall not relieve any
other Dollar Swing Line Lender or Multicurrency Swing Line Lender, as
applicable, of its obligation hereunder to make its ratable portion of such
Swing Line Loan on the date of such Swing Line Loan, but no Swing Line Lender
shall be responsible for the failure of any other Swing Line Lender to make the
ratable portion of a Swing Line Loan to be made by such other Swing Line Lender
on the date of any Swing Line Loan.

2.6 Refunding of Swing Line Loans. (a) Each Borrower unconditionally promises to
pay each Swing Line Loan made to it on or before 1:00 p.m. (New York City time)
on the fifth

 

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

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

 

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

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

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

(d) Each Working Capital Facility Lender’s obligation to make Dollar Working
Capital Facility Loans or Multicurrency Working Capital Facility Loans, as
applicable, referred to in Section 2.6(a) and to purchase participation
interests pursuant to Section 2.6(b) shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Working Capital
Facility Lender may have against any Swing Line Lender, any Borrower, or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of an
Event of Default, (iii) any failure to satisfy any condition precedent to the
applicable extension of credit set forth in Section 6, (iv) any adverse change
in the condition (financial or otherwise) of any Loan Party, (v) any breach of
this Agreement or any Loan Document by any Loan Party or any other Lender or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

 

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

2.7 Foreign Exchange Rate. (a) No later than 1:00 P.M. (New York City time) on
each Calculation Date, the Administrative Agent shall determine the Exchange
Rate as of such Calculation Date with respect to Canadian Dollars, provided
that, upon receipt of a Borrowing Notice with respect to a Working Capital
Facility Loan or Swing Line Loan pursuant to Section 2.5, the Administrative
Agent shall determine the Exchange Rate with respect to Canadian Dollars on the
related Calculation Date (it being acknowledged and agreed that the
Administrative Agent shall use such Exchange Rate for the purposes of
determining compliance with Section 2.1(a), Section 2.1(b) or Section 2.3, as
applicable, with respect to such Borrowing Notice). The Exchange Rates so
determined shall become effective on the relevant Calculation Date (a “Reset
Date”), shall remain effective until the next succeeding Reset Date and shall
for all purposes of this Agreement (other than Section 11.25 and any other
provision expressly requiring the use of a current Exchange Rate) be the
Exchange Rates employed in converting any amounts between United States Dollars
and Canadian Dollars.

(b) No later than 5:00 P.M. (New York City time) on each Reset Date, the
Administrative Agent shall determine the aggregate amount of the Dollar
Equivalents of (i) the principal amounts of Loans denominated in Canadian
Dollars then outstanding (after giving effect to any Loans to be made or repaid
on such date), (ii) the aggregate then undrawn and unexpired amount of the then
outstanding Multicurrency Working Capital Facility Letters of Credit denominated
in Canadian Dollars and (iii) the aggregate amount of drawings under
Multicurrency Working Capital Facility Letters of Credit denominated in Canadian
Dollars that have not then been reimbursed or converted to a Multicurrency
Working Capital Facility Loan.

(c) The Administrative Agent shall promptly notify the Borrowers and the Working
Capital Facility Lenders of each determination of an Exchange Rate hereunder.

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

 

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  SECTION 3 LETTERS OF CREDIT

3.1 Working Capital Facility Letters of Credit. On the Restatement Effective
Date, upon the satisfaction of the conditions specified in Section 6.1, (a) each
of the Existing Sprague Letters of Credit shall automatically be deemed to be
Dollar Working Capital Facility Letters of Credit outstanding under this
Agreement and (b) each of the Existing Kildair Letters of Credit shall
automatically be deemed to be Multicurrency Working Capital Facility Letters of
Credit outstanding under this Agreement. Subject to the terms and conditions
hereof, (x) each Dollar Working Capital Facility Issuing Lender severally agrees
to issue letters of credit (“Dollar Working Capital Facility Letters of
Credit”), for the account of the Borrower requesting the applicable Dollar
Working Capital Facility Letter of Credit, for use by the U.S. Borrower, the
Canadian Borrower or any other Loan Party from time to time during the Dollar
Working Capital Facility Commitment Period in an aggregate amount not to exceed
(unless otherwise agreed by such Dollar Working Capital Facility Issuing Lender)
$100,000,000 at any time outstanding and (y) each Multicurrency Working Capital
Facility Issuing Lender severally agrees to issue letters of credit
(“Multicurrency Working Capital Facility Letters of Credit”), for the account of
the Borrower requesting the applicable Multicurrency Working Capital Facility
Letter of Credit, for use by the U.S. Borrower, the Canadian Borrower or any
other Loan Party from time to time during the Multicurrency Working Capital
Facility Commitment Period in an aggregate amount not to exceed (unless
otherwise agreed by such Multicurrency Working Capital Facility Issuing Lender)
$25,000,000 at any time outstanding; provided that, after giving effect to any
Working Capital Facility Letter of Credit requested by any Borrower:

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

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

Each Borrower acknowledges and agrees that, for the avoidance of doubt, (i) each
Letter of Credit designated as a Dollar Working Capital Facility Letter of
Credit shall be entirely a Dollar Working Capital Facility Letter of Credit and
no portion thereof will be an Acquisition Facility Letter of Credit or a
Multicurrency Working Capital Facility Letter of Credit and (ii) each Letter of
Credit designated as a Multicurrency Working Capital Facility Letter of Credit
shall be entirely a Multicurrency Working Capital Facility Letter of Credit and
no portion thereof will be an Acquisition Facility Letter of Credit or a Dollar
Working Capital Facility Letter of Credit.

3.2 Acquisition Facility Letters of Credit. On the Restatement Effective Date,
upon the satisfaction of the conditions specified in Section 6.1, each of the
Existing Acquisition Facility Letters of Credit shall automatically be deemed to
be Acquisition Facility Letters of Credit outstanding under this Agreement.
Subject to the terms and conditions hereof, each Acquisition Facility Issuing
Lender severally agrees to issue letters of credit (“Acquisition Facility
Letters of Credit”), for the account of the Borrower requesting the applicable
Acquisition Facility Letter of Credit, from time to time during the Acquisition
Facility Commitment Period in an aggregate amount not to exceed (unless
otherwise agreed by such Acquisition Facility Issuing Lender) $12,500,000 at any
time outstanding; provided that, after giving effect to any Acquisition Facility
Letter of Credit requested by any Borrower:

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

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

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

 

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

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

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

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

(iii) in the case of a Multicurrency Working Capital Facility Letter of Credit,
whether such Letter of Credit is to be denominated in United States Dollars or
Canadian Dollars;

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

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

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

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

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

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

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

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

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

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

(i) the Letter of Credit to be amended;

 

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(ii) the requested date of the proposed amendment;

(iii) the nature of the proposed amendment; and

(iv) the delivery instructions for such amendment.

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

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

3.4 General Terms of Letters of Credit. (a) Each Acquisition Facility Letter of
Credit and each Dollar Working Capital Facility Letter of Credit is to be
denominated only in United States Dollars. Each Multicurrency Working Capital
Facility Letter of Credit is to be denominated only in United States Dollars or
Canadian Dollars (as the applicable Borrower shall notify the applicable Agent
and the applicable Issuing Lender in accordance with Section 3.3(a)).

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

 

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

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

 

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

(i) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such Issuing Lender from
issuing, renewing, extending or amending such Letter of Credit, or any
Requirement of Law applicable to such Issuing Lender or any request or directive
(whether or not having the force of Law) from any Governmental Authority with
jurisdiction over such Issuing Lender shall prohibit, or request that such
Issuing Lender refrain from, the issuance, renewal, extension or amending of a
Letter of Credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital requirement (in the case of an amendment of a
Letter of Credit, for which such Issuing Lender is not otherwise compensated
hereunder) not in effect on the Restatement Effective Date, or shall impose upon
such Issuing Lender any unreimbursed loss, cost or expense which was not
applicable on the Restatement Effective Date and which such Issuing Lender in
good faith deems material to it; or

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

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

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

3.5 Fees, Commissions and Other Charges.

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

 

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

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

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

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

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

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

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

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

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

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

(b) If the applicable Borrower fails to fully reimburse any Issuing Lender
pursuant to Section 3.7(a) at the time and on the due date specified in such
Section (the “Reimbursement Date”),

 

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such Issuing Lender shall so notify the Administrative Agent or (with respect to
Letters of Credit denominated in Canadian Dollars) the Canadian Agent (with a
copy to the applicable Borrower), which notice shall be provided on a Business
Day, and specify in such notice the amount (and currency) of the Unreimbursed
Amount. Immediately upon receipt of such notice from such Issuing Lender, the
Administrative Agent or Canadian Agent, as applicable, shall notify each
Relevant L/C Participant of the Reimbursement Date, the Unreimbursed Amount, and
the amount (and currency) of such Relevant L/C Participant’s Commitment
Percentage thereof.

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

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

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

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

(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of any Issuing Lender shall be liable to any Lender
for: (i) any action taken or omitted in connection herewith in respect of any
Letter of Credit at the request or with the approval or deemed approved of the
Required Lenders; (ii) any action taken or omitted in respect of any Letter of
Credit in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any Letter of Credit
or any document delivered in connection with the issuance or payment of such
Letter of Credit.

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

 

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

 

  SECTION 4 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

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

(b) At any time during the Increase Period, (x) (i) the aggregate Dollar Working
Capital Facility Commitments may be increased to an amount not to exceed
$1,200,000,000 (a “Dollar Working Capital Facility Increase”) and (ii) the
aggregate Multicurrency Working Capital Facility Commitments may be increased to
an amount not to exceed $320,000,000 (a “Multicurrency Working Capital Facility
Increase”); provided that the aggregate increases under clauses (x)(i) and
(x)(ii) shall not exceed $200,000,000 and (y) the aggregate Acquisition Facility
Commitments may be increased to an amount not to exceed $600,000,000 (an
“Acquisition Facility Increase”; a Dollar Working Capital Facility Increase,
Multicurrency Working Capital Facility Increase and an Acquisition Facility
Increase, each being a “Facility Increase”) pursuant to the following procedure:

(i) The U.S. Borrower may make a written request for such Facility Increase to
the Administrative Agent, who shall forward a copy of any such request to the
Lenders under such Facility. Each request by the U.S. Borrower pursuant to the
immediately preceding sentence shall specify a proposed effective date of such
increase (the “Requested Increase Effective Date”), the aggregate amount of such
requested increase (the “Requested Increase Amount”), and shall constitute an
invitation to each of the Lenders under such Facility to increase its Commitment
under such Facility by its Commitment Percentage of such Requested Increase
Amount.

(ii) Each Lender under such Facility, acting in its sole discretion and with no
obligations to increase its Commitment under such Facility pursuant to this
Section 4.1(b), shall by written notice to the U.S. Borrower and the
Administrative Agent advise the U.S. Borrower and the Administrative Agent
whether or not such Lender agrees to all or any portion of such increase in its
Commitment under such Facility within ten (10) days after the U.S. Borrower’s
request. Any such Lender may accept all of its Commitment Percentage of such
increase, a portion of such increase, or decline to accept

 

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any of such increase in its Commitment under such Facility. If any such Lender
shall not have responded affirmatively within such ten (10) day period, such
Lender shall be deemed to have rejected the U.S. Borrower’s request for an
increase in such Commitment in full. Promptly following the conclusion of such
ten (10) day period, the Administrative Agent shall notify the U.S. Borrower of
the results of the request for the applicable Facility Increase.

(iii) If the aggregate amount of the increases in the Commitments under any
Facility which the Lenders under such Facility have accepted in accordance with
Section 4.1(b)(ii) shall be less than the Requested Increase Amount, the
Administrative Agent (subject to the approval of the Administrative Agent and
the Issuing Lenders under such Facility, such approvals not to be unreasonably
withheld, delayed or conditioned) may offer to such additional Persons
(including the Lenders under such Facility), as may be agreed by the U.S.
Borrower and the Administrative Agent, the opportunity to make available such
amount of new Commitments under such Facility as may be required so that the
aggregate increases in the Commitments under such Facility by the existing
Lenders thereunder together with such new Commitments by such other Persons (the
“New Lenders”) shall equal the Requested Increase Amount (the aggregate Facility
Increase provided by such existing Lenders and the New Lenders, the “Increase
Amount”). Such Increase Amount shall be in an amount equal to $5,000,000 or a
whole multiple thereof. The effectiveness of all such increases in the
Commitments under such Facility are subject to the satisfaction of the following
conditions: (A) each Lender that so elects to increase its Commitment under such
Facility (each an “Increasing Lender”), each New Lender, the Administrative
Agent and the U.S. Borrower shall have executed and delivered an agreement,
substantially in the form attached hereto as Exhibit P (an “Increase and New
Lender Agreement”); (B) (i) (x) with respect to the Dollar Working Capital
Facility, the aggregate Dollar Working Capital Facility Commitment after giving
effect to such increases shall not exceed $1,200,000,000 and (y) with respect to
the Multicurrency Working Capital Facility, the aggregate Multicurrency Working
Capital Facility Commitment after giving effect to such increases shall not
exceed $320,000,000; provided that the aggregate increases under clauses (i)(x)
and (i)(y) shall not exceed $200,000,000 and (ii) with respect to the
Acquisition Facility, the aggregate Acquisition Facility Commitments after
giving effect to such increase shall not exceed $600,000,000; (C) any fees and
other amounts (including pursuant to Section 11.6) payable by the U.S. Borrower
in connection with such increase and accession shall have been paid; (D) no
Default or Event of Default has occurred and is continuing or would result from
such increase in the Commitments; (E) delivery of an Availability Certification
dated as of the date of such increase and (F) with respect to each Mortgaged
Property, the Administrative Agent shall have received (1) such amendments to
the Mortgage and Security Agreements or new Mortgage and Security Agreements as
are in form and substance reasonably satisfactory to the Administrative Agent,
in each case, executed and delivered by a duly authorized officer of the
relevant Loan Party to the extent necessary to reflect the increase in the
applicable Facility (it being understood that, unless requested by the
Administrative Agent, no amendment shall increase the amount secured thereby if
the same will result in the payment of additional mortgage recording tax) and
(2) with respect to each such Mortgage and Security Agreement, a date-down
endorsement to the title insurance policy covering such Mortgage and Security
Agreement (or if a date-down is not available for a particular jurisdiction, a
new title insurance policy in the same insured amount as originally issued or
marked up unconditional title commitment, pro forma policy or binder for such
insurance) in each case in form and substance not materially less favorable to
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or marked up unconditional title commitments, pro forma policies or binders
delivered on or prior to the Restatement Effective Date, (3) evidence
satisfactory to it that all premiums in respect of a related date-down
endorsement or title policy (or policies) have been paid and (4) to the extent
required by applicable Law, a standard flood hazard determination for each
Mortgaged Property located in the United States, and with respect to any
Mortgaged Property in the United States that is located in a special flood
hazard area and with respect to any Mortgaged Property located in Canada in a
flood plain, evidence of flood insurance in form and substance reasonably
satisfactory to the Administrative Agent. For the avoidance of doubt, Extensions
of Credit made under any Facility Increase shall bear interest at the rate
otherwise applicable to corresponding Extensions of Credit under the applicable
Facility.

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

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

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

(b) Each Base Rate Loan (including Dollar Swing Line Loans and Multicurrency
Swing Line Loans denominated in United States Dollars) shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin. Each Prime
Rate Loan (including Multicurrency Swing Line Loans denominated in Canadian
Dollars) shall bear interest at a rate per annum equal to the Prime Rate plus
the Applicable Margin.

 

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

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

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

(b) Any Eurocurrency Loans may be Continued as such upon the expiration of the
then current Interest Period with respect thereto by the applicable Borrower
giving the Administrative Agent (in the case of Loans denominated in United
States Dollars) or the Canadian Agent (in the case of Loans denominated in
Canadian Dollars) irrevocable notice (in the form of a Continuation/Conversion
Notice) prior to 1:00 p.m. (New York City time), at its New York office, in each
case, three (3) Business Days before the date such Eurocurrency Loans are to be
Continued, in accordance with the applicable

 

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provisions of the term “Interest Period” set forth in Section 1.1, of the length
of the next Interest Period to be applicable to such Loans. If the applicable
Borrower fails to give timely notice requesting a Continuation, then the
applicable Loans shall be converted to Base Rate Loans (in the case of any Loans
denominated in United States Dollars) or Prime Rate Loans (in the case of any
Loans denominated in Canadian Dollars). Any automatic Conversion to Base Rate
Loans or Prime Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurocurrency Loans.

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

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

(b) No more than (i) an aggregate of twenty (20) Tranches of Eurocurrency Loans
shall be outstanding at any one time under the Acquisition Facility and the
Dollar Working Capital Facility, (ii) five (5) Tranches of Eurocurrency Loans
denominated in United States Dollars shall be outstanding at any one time under
the Multicurrency Working Capital Facility and (iii) five (5) Tranches of
Eurocurrency Loans denominated in Canadian Dollars shall be outstanding at any
one time under the Multicurrency Working Capital Facility; provided that for
each Facility Increase in an aggregate principal amount of $50,000,000, two
(2) additional Tranches of Eurocurrency Loans may be outstanding under the
relevant Facility (up to a maximum of thirty-five (35) Tranches of Eurocurrency
Loans for all Facilities) at any one time.

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

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

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

 

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

(e) Each Borrower agrees that, upon the request to the Administrative Agent by
any Lender, such Borrower will execute and deliver to such Lender a promissory
note evidencing the Dollar Working Capital Facility Loans, the Multicurrency
Working Capital Facility Loans, the Dollar Swing Line Loans, the Multicurrency
Swing Line Loans or the Acquisition Facility Loans, as applicable, of such
Lender, substantially in the form of Exhibit A-1, A-2, A-3, A-4 or A-5, as
applicable, with appropriate insertions as to date and principal amount
(individually, a “Note” and, collectively, the “Notes”).

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

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

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

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

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

 

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the Prime Rate Loans), ninth, to the prepayment of Working Capital Facility
Loans that are Eurocurrency Loans (ratably among the Working Capital
Facilities), and tenth, to the Cash Collateralization of the Working Capital
Facility Letters of Credit (ratably among the Working Capital Facilities).

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

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

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

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

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

 

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

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

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

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

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

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

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

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

(iii) does or shall impose on such Lender any other condition, cost or expense
(provided, however, that the foregoing shall not apply to (x) any U.S. federal
or Canadian withholding Tax or Other Taxes, as to which Section 4.11 shall
govern, or (y) any Tax imposed on or measured by a Lender’s net income (to the
extent it does not change the basis of taxation), including any changes in the
rate of net income Taxes (or franchise Taxes in lieu thereof) imposed on a
Lender); and the result of any of the foregoing is to increase the cost to such
Lender, the Administrative Agent or the Canadian Agent of making, Converting
into, Continuing or maintaining this Agreement or any other Loan Document, any
Loan or issuing, providing and maintaining any Letter of Credit or holding an
interest in any Issuing Lender’s obligations thereunder, or to

 

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reduce any amount receivable by the Lender, the Administrative Agent or the
Canadian Agent in respect thereof, then the Lender, the Administrative Agent or
the Canadian Agent shall use reasonable efforts to designate a different
Applicable Lending Office for funding or booking Loans or issuing Letters of
Credit if, in the judgment of such Lender, the Administrative Agent or the
Canadian Agent, as applicable, such designation (x) would eliminate or reduce
amounts payable pursuant to this Section 4.10 or eliminate the need to provide
the notice specified in clause (c) of this Section 4.10 and (y) would not
subject such Lender, the Administrative Agent or the Canadian Agent to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender, the Administrative Agent or the Canadian Agent;

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

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

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

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

 

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4.11 Taxes. (a) Any and all payments by or on behalf of each Loan Party or any
Agent under or in respect of this Agreement or any other Loan Documents to which
such Loan Party is a party shall, unless otherwise required by law, be made free
and clear of, and without deduction or withholding for or on account of, any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities (including penalties, interest and additions
to tax) with respect thereto, whether now or hereafter imposed, levied,
collected, withheld or assessed by any taxation authority or other Governmental
Authority (collectively, “Taxes”). If any Loan Party or the Agent shall be
required under any Requirement of Law to deduct or withhold any Taxes from or in
respect of any sum payable under or in respect of this Agreement, the Loans, the
Letters of Credit or any of the other Loan Documents to any Agent or Lender
(including for purposes of this Section 4.11 and Section 4.10 any assignee,
successor or participant), as determined in good faith by the applicable Loan
Party or Agent, (i) such Loan Party or Agent shall make all such deductions and
withholdings in respect of Taxes, (ii) such Loan Party or Agent shall pay the
full amount deducted or withheld in respect of Taxes to the relevant taxation
authority or other Governmental Authority in accordance with any Requirement of
Law, and (iii) in the case of any Non-Excluded Taxes, the sum payable by such
Loan Party shall be increased as may be necessary so that after such Loan Party
or Agent has made all required deductions and withholdings (including deductions
and withholdings applicable to additional amounts payable under this
Section 4.11) such Lender or Agent receives an amount equal to the sum it would
have received had no such deductions or withholdings been made or required in
respect of Non-Excluded Taxes. For purposes of this Agreement the term
“Non-Excluded Taxes” are Taxes other than, (i) in the case of a Lender or Agent,
Taxes that are imposed on it by the jurisdiction (or political subdivision
thereof) under the laws of which such Lender or Agent is organized or has its
applicable lending office, (ii) net income, franchise or branch profit taxes
imposed on a Lender or an Agent (A) by the jurisdiction (or political
subdivision thereof) under the laws of which such Lender or Agent is organized
or has its principal office or applicable lending office or (B) that are Other
Connection Taxes, (iii) any U.S. federal or Canadian withholding Tax imposed on
any payment under the law as of the Restatement Effective Date, (iv) any Tax
imposed on a Transferee (other than an assignee pursuant to a request by the
U.S. Borrower under Section 4.17) or successor Agent to the extent that, under
applicable Law in effect on the date of the transfer to such Transferee or such
successor Agent, the amount of such Tax exceeds the Non-Excluded Taxes, if any,
that were imposed on payments to the transferring Lender or predecessor Agent,
(v) Taxes attributable to such Lender’s or Agent’s failure to comply with
Section 4.11(e) or Section 4.11(h) or (vi) any U.S. federal or Canadian
withholding Tax imposed under FATCA. For the avoidance of doubt, the exclusions
described in the preceding sentence will apply to the same effect to direct or
indirect beneficial owners of a Lender that is fiscally transparent.

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

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

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

(e) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the applicable Borrower, Administrative Agent or Canadian Agent, at
the time or times reasonably requested by the applicable Borrower, the
Administrative Agent or Canadian Agent, such properly completed and executed
documentation reasonably requested by the applicable Borrower, Administrative
Agent or Canadian Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by the applicable Borrower, Administrative Agent or
Canadian Agent, shall deliver such other documentation prescribed by applicable
law or reasonably requested by the applicable Borrower, Administrative Agent or
Canadian Agent as will enable the applicable Borrower, Administrative Agent or
Canadian Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements. Notwithstanding anything to
the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
Section 4.11(e)(ii)(A), (ii)(B) and (ii)(D) below and any documentation required
for Canadian withholding Tax purposes) shall not be required if in the Lender’s
reasonable judgment such completion, execution or submission would subject such
Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing:

(A) any Lender that is a U.S. Person shall deliver to the applicable Borrower,
Administrative Agent and Canadian Agent on or prior to the date on which such
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the applicable Borrower, Administrative Agent or
Canadian Agent), executed copies of IRS Form W-9 certifying that such Lender is
exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the applicable Borrower, Administrative Agent and Canadian Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the applicable
Borrower, Administrative Agent or Canadian Agent), whichever of the following is
applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

 

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(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit D-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the applicable Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “Section 4.11 Certificate”) and
(y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable); or

(4) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form
W-8BEN-E, a Section 4.11 Certificate substantially in the form of Exhibit D-2 or
Exhibit D-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
Section 4.11 Certificate substantially in the form of Exhibit D-4 on behalf of
each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the applicable Borrower, Administrative Agent and Canadian Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the applicable
Borrower, Administrative Agent or Canadian Agent), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
applicable Borrower, Administrative Agent or Canadian Agent to determine the
withholding or deduction required to be made; and

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

Each Lender, Administrative Agent and Canadian Agent agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the applicable Borrower, Administrative Agent and Canadian Agent in writing of
its legal inability to do so.

 

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

(g) For purposes of determining withholding Taxes imposed under FATCA, from and
after the Restatement Effective Date, the Borrowers, the Administrative Agent
and the Canadian Agent shall treat (and the Lenders hereby authorize the
Administrative Agent and the Canadian Agent to treat) the Existing Credit
Agreement as not qualifying as a “grandfathered obligation” within the meaning
of Treasury Regulation Section 1.1471-2(b)(2)(i).

(h) On the Restatement Effective Date, the Administrative Agent and Canadian
Agent (or, on any date thereafter, any successor or replacement Administrative
Agent or Canadian Agent) shall deliver to the applicable Borrower two duly
executed originals of either (i) IRS Form W-9 or IRS Form W-8BEN-E, or (ii) such
other documentation as the applicable Borrower may reasonably request for
purposes of establishing that the applicable Borrower can make payments to the
Administrative Agent and Canadian Agent without deduction or withholding of any
Taxes imposed by the United States or Canada.

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

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

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

4.15 Market Disruption and Inability to Determine Interest Rate. (a) If, at the
time that the Administrative Agent shall seek to determine the relevant Screen
Rate on the Quotation Day for any Interest Period for a Eurocurrency Loan, the
applicable Screen Rate shall not be available for such Interest Period and/or
for the applicable currency with respect to such Eurocurrency Loan for any
reason

 

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and the Administrative Agent shall determine that it is not possible to
determine the Interpolated Rate (which conclusion shall be conclusive and
binding absent manifest error), then the applicable Reference Bank Rate shall be
the Eurocurrency Rate for such Interest Period for such Eurocurrency Loan;
provided that if any Reference Bank Rate shall be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement; provided, further,
however, that if less than two Reference Banks shall supply a rate to the
Administrative Agent for purposes of determining the Eurocurrency Rate for such
Eurocurrency Loan, the Administrative Agent shall be deemed to have determined
that adequate and reasonable means do not exist for ascertaining the
Eurocurrency Rate for such Eurocurrency Loan and Section 4.15(b)(i) shall apply.

(b) If prior to the first day of any Interest Period for a Eurocurrency Loan:

(i) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurocurrency Base Rate or the Eurocurrency Rate, as applicable,
for a Loan in the applicable currency for such Interest Period; or

(ii) the Administrative Agent shall have received notice from the Majority
Facility Lenders in respect of any Facility that the Eurocurrency Base Rate or
the Eurocurrency Rate, as applicable, for a Loan in the applicable currency or
for the applicable Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their affected Eurocurrency Loans
under such Facility during such Interest Period;

then the Administrative Agent shall give telecopy or telephonic notice thereof
to the U.S. Borrower and the relevant Lenders as soon as practicable thereafter.
If such notice is given with respect to the Eurocurrency Base Rate or
Eurocurrency Rate applicable to Eurocurrency Loans under any Facility, (x) any
such Eurocurrency Loan requested to be made under such Facility on the first day
of such Interest Period shall be made as a Base Rate Loan (in the case of a Loan
denominated in United States Dollars) or a Prime Rate Loan (in the case of a
Loan denominated in Canadian Dollars), (y) any Base Rate Loans or Prime Rate
Loans under such Facility that were to have been Converted on the first day of
such Interest Period to Eurocurrency Loans shall not be so Converted and shall
continue as Base Rate Loans or Prime Rate Loans, as applicable, and (z) any
outstanding Eurocurrency Loans under such Facility shall be Converted on the
first day of such Interest Period to Base Rate Loans (in the case of Loans
denominated in United States Dollars) or Prime Rate Loans (in the case of Loans
denominated in Canadian Dollars). Until such notice has been revoked by the
Administrative Agent, no further Eurocurrency Loans under such Facility shall be
made or Continued as such, nor shall the Borrowers have the right to Convert
Loans under such Facility into such Type.

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

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

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

 

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

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

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

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

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

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

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

 

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Lender, repay the non-reallocated amount of each Multicurrency Swing Line Loan
for so long as such Refunded Swing Line Loan and Multicurrency Swing Line
Participation Amount are outstanding;

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

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

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

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

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

 

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4.19 Interest Act (Canada). For purposes of disclosure pursuant to the Interest
Act (Canada), the annual rates of interest or fees to which the rates of
interest or fees provided in this Agreement and the other Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of 360 days
or any other period of time less than a calendar year) are equivalent are the
rates so determined multiplied by the actual number of days in the applicable
calendar year and divided by 360 or such other period of time, respectively.

4.20 Limitations on Interest. If any provision of this Agreement or of any of
the other Loan Documents would obligate any Loan Party to make any payment of
interest or other amount payable to the Lenders in an amount or calculated at a
rate which would be prohibited by law or would result in a receipt by the
Lenders of interest at a criminal rate (as such terms are construed under the
Criminal Code (Canada)) then, notwithstanding such provisions, such amount or
rate shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by the Lenders of interest at a
criminal rate, such adjustment to be effected, to the extent necessary, as
follows: (1) firstly, by reducing the amount or rate of interest required to be
paid to the Lenders under Section 4.2, and (2) thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid to the Lenders which
would constitute “interest” for purposes of Section 347 of the Criminal Code
(Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if the Lenders shall have received an amount
in excess of the maximum permitted by that section of the Criminal Code
(Canada), the Loan Parties shall be entitled, by notice in writing to the
Administrative Agent, to obtain reimbursement from the Lenders in an amount
equal to such excess and, pending such reimbursement, such amount shall be
deemed to be an amount payable by the Lenders to the Borrowers. Any amount or
rate of interest referred to in this Section 4.20 shall be determined in
accordance with generally accepted actuarial practices and principles as an
effective annual rate of interest over the term that the applicable Loan remains
outstanding on the assumption that any charges, fees or expenses that fall
within the meaning of “interest” (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro-rated over that
period of time and otherwise be pro-rated over the period from the Restatement
Effective Date to the Maturity Date and, in the event of a dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Administrative Agent shall be conclusive for the purposes of such determination

 

  SECTION 5 REPRESENTATIONS AND WARRANTIES

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

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

(b) The Annual Budgets and the Operating Forecasts have been prepared in good
faith under the direction of a Responsible Person of the General Partner. The
Annual Budgets and the

 

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Operating Forecasts were based upon good faith estimates and assumptions
believed by the Loan Parties to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.

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

(d) The Pro Forma Financial Statements have been prepared giving effect (as if
such events had occurred on such date) to (i) the Extensions of Credit to be
made on the Restatement Effective Date and the use of proceeds thereof, (ii) the
consummation of the Kildair Acquisition and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Financial Statements
have been prepared based on the best information available to the U.S. Borrower
as of the date of delivery thereof, and present fairly on a pro forma basis the
estimated financial position of the U.S. Borrower and its consolidated
Subsidiaries as at September 30, 2014, assuming that the events specified in the
preceding sentence had actually occurred at such date

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

(f) During the period from December 31, 2013 to and including the Restatement
Effective Date, there has been no sale, transfer or other disposition by any
Loan Party or any of their respective consolidated Subsidiaries of any material
part of their respective business or property and no purchase or other
acquisition of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
such Loan Party and its consolidated Subsidiaries at December 31, 2013, other
than those sales, transfers, dispositions and acquisitions listed on Schedule
5.1(f).

5.2 No Change. Since December 31, 2013, there has been no Material Adverse
Effect.

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

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

5.5 No Legal Bar. The execution, delivery and performance of the Loan Documents
to which any of the Loan Parties is a party, the borrowings hereunder and the
use of the proceeds thereof (i) will not violate any Requirement of Law,
including any rules or regulations promulgated by the FERC, in any material
respect or where a waiver has not been obtained, in each case to the extent
applicable to or binding upon such Loan Party or its Properties, (ii) will not
violate a material Contractual Obligation (including, for the avoidance of
doubt, Governing Documents) of any of the Loan Parties, except where such
violation could not reasonably be expected to have a Material Adverse Effect and
(iii) will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any such Requirement
of Law or Contractual Obligation (other than Liens created by the Security
Documents in favor of the Administrative Agent and Liens permitted by
Section 8.3).

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

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

 

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

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

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

5.11 Taxes. (a) Each Loan Party and each of its Subsidiaries has timely filed or
caused to be filed all material Tax returns required to be filed and has timely
paid all material Taxes due and payable by it or imposed with respect to any of
its property and all other material fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any Taxes the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Loan Parties). Each Loan Party and each of its
Subsidiaries has withheld all employee withholdings and has made all employer
contributions required to be withheld and made by it pursuant to applicable law
on account of the Canada and Quebec pension plans, employment insurance and
employee income taxes.

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

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

5.13 ERISA. Neither a Reportable Event nor a failure to satisfy the minimum
funding requirements of Section 412 or 430 of the Code has occurred during the
six-year period prior to the date on which this representation is made or deemed
made or is reasonably expected to occur with respect to any Single Employer
Plan, no Plan is reasonably expected to be in “at risk” status within the
meaning of Section 430 of the Code and each Plan (including, to the knowledge of
the Loan Parties, a Multiemployer Plan or a multiemployer welfare plan
maintained pursuant to a collective bargaining agreement) has

 

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complied in all respects with the applicable provisions of ERISA, the Code and
the constituent documents of such Plan, except for instances of non-compliance
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. No termination of a Single Employer Plan has occurred during
such six-year period or is reasonably expected to occur (other than a
termination described in Section 4041(b) of ERISA), and no Lien in favor of the
PBGC or a Plan has arisen during such six-year period or is reasonably expected
to arise. Except to the extent that any such excess could not reasonably be
expected to have a Material Adverse Effect, the present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits. Except to the extent
that such liability could not reasonably be expected to have a Material Adverse
Effect, (i) neither the Loan Parties nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan, and (ii) the Loan
Parties would not become subject to any liability under ERISA if a Loan Party or
any Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. To the knowledge of the Loan
Parties, no such Multiemployer Plan is in Reorganization, Insolvent or
terminating or is reasonably expected to be in Reorganization, become Insolvent
or be terminated or is, or is reasonably expected to be in endangered, seriously
endangered or critical status, in each case within the meaning of Section 432 of
the Code. Except to the extent that any such excess could not reasonably be
expected to have a Material Adverse Effect, the present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the aggregate liabilities of the
Loan Parties and each Commonly Controlled Entity for the provision of
post-retirement benefits to their current and former employees under Plans which
are welfare benefit plans (as defined in Section 3(1) of ERISA) do not, in the
aggregate, exceed the total assets under all such Plans allocable to such
benefits except as disclosed in the financial statements of the Loan Parties.
Neither the Loan Parties nor any Commonly Controlled Entity has engaged in a
prohibited transaction under Section 406 of ERISA and/or Section 4975 of the
Code in connection with any Plan that would subject any Loan Party to liability
under ERISA and/or Section 4975 of the Code that could reasonably be expected to
have a Material Adverse Effect. Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect: (1) Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS covering such plan’s most recently
completed five-year remedial amendment cycle in accordance with Revenue
Procedure 2007-44, I.R.B. 2007-28, indicating that such Plan is so qualified and
the trust related thereto has been determined by the Internal Revenue Service to
be exempt from federal income tax under Section 501(a) of the Code or an
application for such a determination is currently pending before the Internal
Revenue Service and, to the knowledge of the Borrowers, nothing has occurred
subsequent to the issuance of the most recent determination letter which would
cause such Plan to lose its qualified status; (2) no liability to the PBGC
(other than required premium payments) or the IRS with respect to any Plan, any
Plan or Single Employer Plan or any trust established under Title IV of ERISA
has been or is expected to be incurred by any Loan Party or any Commonly
Controlled Entity; (3) no Event of Default under Section 9.1(h) hereof has
occurred and neither the Borrowers nor any Commonly Controlled Entity is aware
of any fact, event or circumstance that could reasonably be expected to
constitute or result in an Event of Default; and (4) each of the Loan Parties’
Commonly Controlled Entities have complied with the requirements of Section 515
of ERISA with respect to each Multiemployer Plan and are not in “default” (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan.

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

 

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

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

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

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

(d) When the duly executed Dutch Security Documents in respect of the Pledged
Collateral are delivered to the Administrative Agent, and the proper
registration of the Dutch Receivables Pledge Agreement with the tax authorities
in the Netherlands has been completed and the proper entries into the members’
register in respect of the Dutch Membership Pledge Agreement have been
completed, the Dutch Security Documents shall constitute a perfected first Lien
on, and security interest in, all right, title and interest of each Person party
thereto in the “Collateral” described therein, subject to any Liens permitted by
Section 8.3.

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

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

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

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

(i) When proper financing statements or other applicable filings listed in
Schedule 5.16 have been filed in the offices in the jurisdictions listed in
Schedule 5.16, the Canadian Security Documents shall constitute a perfected
first Lien on, and security interest in, all right, title and interest of the
Loan Party thereto in the portion of the “Collateral” described therein that
consists of Pledged Accounts consisting of Deposit Accounts maintained with a
financial institution in Canada, prior and superior in right to any other
Person, subject to any Permitted Cash Management Liens.

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

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

 

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

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

5.21 Use of Letters of Credit and Proceeds of Loans. (a) The proceeds of the
Loans shall be used (1) on the Restatement Effective Date, to consummate the
Kildair Acquisition, to refinance outstanding obligations under the Existing
Credit Agreement and to repay outstanding obligations under the Kildair Credit
Agreement, the notes referred to in Section 8.10(e) and certain other
Indebtedness of Kildair and (2) thereafter only (i) to finance the Loan Parties’
purchase, storage and sale of Petroleum Products, Natural Gas Products, Coal
Products, carbon credits, RINs, wood pellets, asphalt and such other energy
products as the Required Lenders may approve from time to time (such approval
not to be unreasonably withheld) (collectively, “Product”), (ii) to finance
(w) maintenance Capital Expenditures, (x) solely with respect to Acquisition
Facility Acquisition Extensions of Credit, the acquisition of Acquisition
Assets, the repayment or refinancing of all or any portion of any outstanding
Acquisition Facility Acquisition Extensions of Credit and for general corporate
purposes of the Loan Parties, distinct and separate from the general working
capital purposes described in clause (iv) below, (y) solely with respect to the
Dollar Working Capital Facility, and in an aggregate amount not to exceed
$10,000,000 expended for such purpose outstanding at any time (as to all
extensions of credit under the Dollar Working Capital Facility), non-maintenance
Capital Expenditures and (z) solely with respect to the Multicurrency Working
Capital Facility, and in an aggregate amount not to exceed $7,500,000 expended
for such purpose outstanding at any time (as to all extensions of credit under
the Multicurrency Working Capital Facility), non-maintenance Capital
Expenditures, (iii) for hedging related to the purchase, storage and sale of
Product, (iv) for the general working capital purposes of the Loan Parties,
(v) to finance the carrying of accounts receivable, (vi) for the payment of
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exchange-traded contracts, over-the-counter contracts and otherwise) or
establishment of reserves in connection therewith, (vii) for the making of
Restricted Payments to the extent permitted by Section 8.5 below, (viii) to
support certain working capital requirements related to the Loan Parties’
marketing activities and (ix) to pay any fees and expenses payable to the
Lenders, the Agents and any other Secured Parties, and not for any other
purpose.

(b) Letters of Credit shall be used only (i) for the general working capital
purposes of the Loan Parties, (ii) to facilitate and finance the purchase of
Product for resale or storage, (iii) to secure the obligations of any Loan Party
under any contract or agreement or in connection with any legal requirement or
governmental permit, such as transportation obligations, bonding obligations,
performance and margin-related obligations related to hedging of Product and
(iv) to support (w) maintenance Capital Expenditures, (x) solely with respect to
Acquisition Facility Acquisition Extensions of Credit, the acquisition of
Acquisition Assets and for general corporate purposes of the Loan Parties,
distinct and separate from the general working capital purposes described in
clause (i) above, (y) solely with respect to the Dollar Working Capital
Facility, and in an aggregate amount not to exceed $10,000,000 for such purpose
outstanding at any time (with respect to all Dollar Working Capital Facility
Loans, Dollar Swing Line Loans and Dollar Letters of Credit), non-maintenance
Capital Expenditures, and not for any other purpose and (z) ) solely with
respect to the Multicurrency Working Capital Facility, and in an aggregate
amount not to exceed $7,500,000 for such purpose outstanding at any time (with
respect to all Multicurrency Working Capital Facility Loans, Multicurrency Swing
Line Loans and Multicurrency Letters of Credit), non-maintenance Capital
Expenditures, and not for any other purpose.

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

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

(b) To the best of each Loan Party’s knowledge and belief, such knowledge and
belief being that of a reasonable person who had conducted due diligence and
good faith inquiry, (i) except where the failure to be in compliance could not
reasonably be expected to have a Material Adverse Effect, the Properties and all
operations at the Properties are in compliance, and have, for the lesser of the
last five years or for the duration of their ownership, lease, or operation by
Loan Parties, been in compliance in all material respects with all applicable
Environmental Laws and Environmental Permits, and (ii) there is no contamination
at, under or about the Properties or violation of any Environmental Law or
Environmental Permit with respect to the Properties or the business at the
Properties operated by Loan Parties (the “Business”) which could materially
interfere with the continued operation of the Properties or materially impair
the fair saleable value thereof. All Environmental Permits necessary in
connection with the ownership and operation of each Loan Party’s business have
been obtained and are in full force and effect, except where any such failure to
obtain and maintain in full force and effect (individually or in the aggregate)
has not had and is not reasonably likely to result in a Material Adverse Effect.
Without limiting the foregoing, all material permits, registrations, licenses or
similar authorizations or notifications required to construct and operate bulk
storage tanks and other bulk storage facilities at the Properties are in effect.

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

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

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

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

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

5.24 Anti-Corruption Laws and Sanctions. (a) The U.S. Borrower has implemented
and maintains in effect policies and procedures designed to ensure compliance by
the U.S. Borrower, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
U.S. Borrower, its Subsidiaries and their respective officers and employees, and
to the knowledge of the U.S. Borrower its Affiliates, directors and agents, are
in compliance with Anti-Corruption Laws, applicable Requirements of Law relating
to money laundering and applicable Sanctions in all material respects and are
not knowingly engaged in any activity that would reasonably be expected to
result in the U.S. Borrower or the Canadian Borrower being designated as a
Sanctioned Person. None of (a) the U.S. Borrower, any Subsidiary or to the
knowledge of the U.S. Borrower or such Subsidiary any of their respective
directors, officers, employees or Affiliates, or (b) to the knowledge of the
U.S. Borrower, any agent of the U.S. Borrower or any Subsidiary that will act in
any capacity in connection with or benefit from the credit facility established
hereby, is a Sanctioned Person. No Loan or Letter of Credit, use of proceeds or
other transaction contemplated by this Agreement will violate Anti- Corruption
Laws, applicable Requirements of Law relating to money laundering or applicable
Sanctions.

 

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5.25 Canadian Pension Plan and Benefit Plans. Schedule 5.25 lists all Canadian
Benefit Plans and Canadian Pension Plans currently maintained or contributed to
the Loan Parties and their Subsidiaries. The Canadian Pension Plans are duly
registered under the ITA and all other applicable laws which require
registration. Each Loan Party and each of their Subsidiaries has in all material
respects complied with and performed its obligations under and in respect of the
Canadian Pension Plans and Canadian Benefit Plans under the terms thereof, any
funding agreements and all applicable laws (including any fiduciary, funding,
investment and administration obligations). All employer and employee payments,
contributions or premiums to be remitted, paid to or in respect of each Canadian
Pension Plan or Canadian Benefit Plan have been paid in a timely fashion in
compliance in all material respects with the terms thereof, any funding
agreement and all applicable laws. There have been no withdrawals or
applications of the assets of the Canadian Pension Plans or the Canadian Benefit
Plans contrary to the terms of the Canadian Pension Plans or the Canadian
Benefit Plans, respectively, or applicable law. No promises of benefit
improvements under the Canadian Pension Plans or the Canadian Benefit Plans have
been made except where such improvement could not be reasonably expected to have
a Material Adverse Effect and, in any event, no such improvements will result in
a solvency deficiency or going concern unfunded liability in the affected
Canadian Pension Plans. The pension fund under each Canadian Pension Plan is
exempt from the payment of any income tax and there are no taxes, penalties or
interest owing in respect of any such pension fund. All material reports and
disclosures relating to the Canadian Pension Plans required by such plans and
any Requirement of Law to be filed or distributed have been filed or
distributed. There has been no partial termination of any Canadian Pension Plan
and no facts or circumstances have occurred or existed that could result, or be
reasonably anticipated to result, in the declaration by a regulatory authority
of a partial termination of any Canadian Pension Plan under Requirements of Law.
Except as set forth on Schedule 5.25, there are no outstanding disputes
concerning the assets of the Canadian Pension Plans or the Canadian Benefit
Plans. Except as set forth on Schedule 5.25, each of the Canadian Pension Plans
is fully funded on both a going concern and on a solvency basis (using actuarial
methods and assumptions which are consistent with the valuations last filed with
the applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles). The Loan Parties that are Non-U.S. Subsidiaries
do not have employees or own any assets located outside of Canada.

5.26 Works Council. The Administrative Agent shall have received from the Dutch
Guarantor a confirmation by an authorized signatory of the Dutch Guarantor that
there is no works council with jurisdiction over the transactions as envisaged
by any Loan Document to which it is a party and that there is no obligation for
the Dutch Guarantor to establish a works council pursuant to the Works Council
Act (Wet op de Ondernemingsraden).

 

  SECTION 6 CONDITIONS PRECEDENT

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

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

(i) this Agreement, executed and delivered by a duly authorized officer of each
Borrower, each Agent, the Co-Syndication Agents, the Co-Documentation Agents and
each Lender set forth on Schedule 1.0 (which Lenders constitute the “Required
Lenders” as defined under the Existing Credit Agreement);

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

 

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

(iv) the Canadian Security Agreement and the Quebec Security Documents, executed
and delivered by a duly authorized officer of each party thereto;

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

(vi) the U.S. Pledge Agreement, executed and delivered by a duly authorized
officer of each party thereto;

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

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

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

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

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

(xii) for each Multicurrency Working Capital Facility Lender requesting the
same, a Note of the Borrowers substantially in the form of Exhibit A-2 and
conforming to the requirements hereof and executed by a duly authorized officer
of each Borrower;

(xiii) for each Dollar Swing Line Lender requesting the same, a Note of the
Borrowers substantially in the form of Exhibit A-3 and conforming to the
requirements hereof and executed by a duly authorized officer of each Borrower;

(xiv) for each Multicurrency Swing Line Lender requesting the same, a Note of
the Borrowers substantially in the form of Exhibit A-4 and conforming to the
requirements hereof and executed by a duly authorized officer of each Borrower;

(xv) for each Acquisition Facility Lender requesting the same, a Note of the
Borrowers substantially in the form of Exhibit A-5 and conforming to the
requirements hereof and executed by an authorized officer of each Borrower; and

 

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(xvi) each of the Account Control Agreements, executed and delivered by a duly
authorized officer of each party thereto; provided that (i) to the extent an
Account Control Agreement was executed and delivered under the Existing Credit
Agreement and remains in full force and effect after giving effect to the
Restatement Effective Date, a new Account Control Agreement shall not be
required (provided that to the extent any amendment to an existing Account
Control Agreement is required in order for it to remain in full force and effect
after giving effect to the Restatement Effective Date, such amendment shall be
executed and delivered on the Restatement Effective Date or if it cannot be so
delivered, shall be delivered in accordance with Section 7.17) and (ii) to the
extent an Account Control Agreement cannot be delivered with respect to any
Pledged Account on the Restatement Effective Date, such Account Control
Agreement shall be delivered in accordance with Section 7.17.

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

(c) Borrowing Base Report; Marked-to-Market Report; Position Report. The
Co-Collateral Agents shall have received a Borrowing Base Report showing the
Aggregate Borrowing Base Amount, the U.S. Borrowing Base and the Kildair
Borrowing Base, in each case as of a date not greater than 20 calendar days
prior to the Restatement Effective Date, and the latest Marked-to-Market Report
and Position Report required to be delivered pursuant to each of the Existing
Credit Agreement and the Kildair Credit Agreement as of the Restatement
Effective Date, in each case, with appropriate insertions and supporting
schedules and dated the Restatement Effective Date, reasonably satisfactory in
form and substance to the Co-Collateral Agents, and executed by a Responsible
Person of the U.S. Borrower.

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

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

 

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Agent, and shall be executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Person, or, if applicable, of the
general partner or managing member or members of such Person, on behalf of such
Person.

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

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

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

(ii) All governmental and material non-governmental third party approvals
necessary in connection with the Kildair Acquisition shall have been obtained
and be in full force and effect and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose adverse conditions on the
Kildair Acquisition or the financing contemplated hereby.

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

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

(ii) No Default or Event of Default exists; and

(iii) There has not occurred since December 31, 2013 (x) a Material Adverse
Effect or (y) a development or an event that has resulted in a material adverse
change in the operations, business, assets, properties or condition (financial
or other condition) of Kildair and its Subsidiaries taken as a whole.

(j) Fees. The Administrative Agent, the Co-Collateral Agents, the Arrangers and
the Lenders shall have received the fees (including reasonable fees,
disbursements and other charges of counsel to the Agents) to be received on the
Restatement Effective Date referred to herein and in the Fee

 

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Letter and, to the extent invoiced at least two Business Days prior to the
Restatement Effective Date (or such lesser time as agreed by the U.S. Borrower)
all reasonable out-of-pocket costs and expenses incurred by the Agents and the
Lead Arranger in connection with the negotiation of the Loan Documents and due
diligence with respect thereto.

(k) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:

(i) the executed legal opinion(s) of Vinson & Elkins LLP, counsel to the Loan
Parties, in form and substance reasonably satisfactory to the Administrative
Agent and in accordance with customary opinion practice;

(ii) the executed legal opinion of the General Counsel of the U.S. Borrower, in
form and substance reasonably satisfactory to the Administrative Agent and in
accordance with customary opinion practice;

(iii) the executed legal opinion of Pillsbury Winthrop Shaw Pittman LLP with
respect to the Mortgaged Properties (other than the Existing Mortgaged
Properties) located in New York, in form and substance reasonably satisfactory
to the Administrative Agent and in accordance with customary opinion practice;

(iv) the executed (i) legal opinion of Osler, Hoskin & Harcourt LLP, Canadian
counsel to the Loan Parties, in form and substance reasonably satisfactory to
the Administrative Agent and in accordance with customary opinion practice,
which opinion shall cover, inter alia, the validity, perfection and priority of
the security interests in each Mortgaged Property located in Canada and
(ii) legal opinion of Farris, Vaughan, Wills & Murphy LLP, British Columbia
counsel to the Loan Parties, in form and substance reasonably satisfactory to
the Administrative Agent and in accordance with customary opinion practice,
which opinion shall cover, inter alia, corporate law matters concerning the Loan
Parties organized in Canada; and

(v) the executed legal opinion of Loyens & Loeff N.V., Dutch counsel to the Loan
Parties, in form and substance reasonably satisfactory to the Administrative
Agent and in accordance with customary opinion practice; and

(vi) an executed legal opinion of local counsel to the Loan Parties with respect
to each Mortgaged Property (other than Existing Mortgaged Properties and other
than properties located in Canada that are covered in the opinion provided
pursuant to Section 6.1(k)(iv)), in form and substance reasonably satisfactory
to the Administrative Agent and in accordance with customary opinion practice.

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require in accordance with customary opinion practice.

(l) [Reserved].

(m) Risk Management Policy. The Administrative Agent and the Lenders shall have
received a copy of the Risk Management Policy, including position and other
limits, which shall be satisfactory in content and form to the Administrative
Agent.

 

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(n) Lien Searches. The Administrative Agent shall have received the results of a
recent search by a Person reasonably satisfactory to the Administrative Agent,
under the Uniform Commercial Code, PPSA, Civil Code of Quebec and equivalent
legislation in all relevant jurisdictions and all customary judgment and tax
Lien searches for financing transactions of this nature in all applicable
jurisdictions, which may have been filed with respect to personal property of
the Loan Parties, and the results of such search shall be reasonably
satisfactory to the Administrative Agent.

(o) Actions to Perfect Liens. Subject to the limitations provided in
Section 11.24, all filings, recordings, registrations and other actions,
including the filing of financing statements on form UCC-1 and PPSA financing
statements, necessary or, in the opinion of the Administrative Agent, desirable
to perfect the Liens created by the Security Documents, shall have been filed,
registered or recorded or shall have been delivered to the Administrative Agent
or the title insurance company issuing the policy referred to in Section 6.1(u)
(the “Title Insurance Company”) in proper form for filing, registration or
recordation.

(p) Pledged Collateral; Stock Powers; Pledged Interests; Pledged Notes; Pledged
Chattel Paper. The Administrative Agent shall have received:

(i) the certificates representing the shares or other equity interests (to the
extent such equity interests are certificated) pledged pursuant to any Pledge
Agreement, together with an undated stock power for each such certificate,
executed in blank by a duly authorized officer of the pledgor thereof;

(ii) all promissory notes, if any, and other instruments, in each case, in a
principal amount in excess of $2,500,000 and pledged pursuant to any Pledge
Agreement, each endorsed in blank by a duly authorized officer of the pledgor
thereof; and

(iii) the original counterpart of all chattel paper, if any, in a principal
amount in excess of $2,500,000 and pledged pursuant to any Security Agreement,
duly endorsed in a manner satisfactory to the Administrative Agent and
containing a legend, if required by the Administrative Agent, that it is the
original counterpart of such chattel paper.

(q) Issuer Consent. Each Issuer (as defined in the U.S. Pledge Agreement)
referred to in the U.S. Pledge Agreement shall have delivered an acknowledgement
of and consent to such U.S. Pledge Agreement, executed by a duly authorized
officer of such Issuer, in substantially the form appended to such U.S. Pledge
Agreement. Each Issuer (as defined in the Canadian Pledge Agreement) referred to
in the Canadian Pledge Agreement shall have delivered an acknowledgement of and
consent to such Canadian Pledge Agreement, executed by a duly authorized officer
of such Issuer, in substantially the form appended to such Canadian Pledge
Agreement.

(r) Financial Statements. The Administrative Agent and the Lenders shall have
received each of the following:

(i) (x) the audited consolidated balance sheet of the U.S. Borrower and its
Subsidiaries for each of the Fiscal Years ended December 31, 2011 and
December 31, 2012 and the related consolidated statements of income,
stockholders’ equity and cash flows for the applicable Fiscal Year ended on each
such date, audited by Ernst & Young LLP, prepared in accordance with GAAP, in
each case applied consistently throughout the periods involved (except as
approved by such accountants and as disclosed therein) and (y) the audited
consolidated balance sheet of the MLP and its Subsidiaries for the Fiscal Year
ended December 31, 2013 and the related consolidated statements of income,

 

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stockholders’ equity and cash flows for such Fiscal Year ended on each such
date, audited by Ernst & Young LLP, prepared in accordance with GAAP, in each
case applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein);

(ii) the audited consolidated balance sheet of Kildair and its Subsidiaries for
each of the fiscal years ended April 30, 2011, April 30, 2012, December 31, 2012
and December 31, 2013 and the related consolidated statements of income,
stockholders’ equity and cash flows for the applicable fiscal year ended on each
such date, audited by KPMG LLP (with respect to the financial statements for the
fiscal years ended April 30, 2011 and April 30, 2012) or Ernst & Young LLP (with
respect to the financial statements for the Fiscal Years ended December 31, 2012
and December 31, 2013), prepared in accordance with Canadian accounting
standards for private enterprises, in each case applied consistently throughout
the periods involved (except as approved by such accountants and as disclosed
therein);

(iii) the unaudited consolidated balance sheet of (x) the U.S. Borrower and its
Subsidiaries and (y) Kildair and its Subsidiaries, in each case as at March 31,
2014, June 30, 2014 and September 30, 2014 and the related unaudited
consolidated statements of income, stockholders’ equity and cash flows for the
portion of the Fiscal Year ended on each such date, in each case prepared in
accordance with GAAP adjusted on an Economic Basis plus or minus any Allowed
Reserve, as applicable, certified by a Responsible Person of the U.S. Borrower,
as being fairly presented in all material respects (subject to normal year end
audit adjustments and the absence of footnotes);

(iv) the unaudited consolidated balance sheet of (x) the U.S. Borrower and its
Subsidiaries and (y) Kildair and its Subsidiaries, in each case as of the last
date of each calendar month ended subsequent to September 30, 2014 and at least
30 days prior to the Restatement Effective Date, and the related unaudited
consolidated statements of income, stockholders’ equity and cash flows for each
such month and the portion of the Fiscal Year ending on each such date in each
case prepared in accordance with GAAP adjusted on an Economic Basis plus or
minus any Allowed Reserve, as applicable, certified by a Responsible Person of
the U.S. Borrower, as being fairly presented in all material respects (subject
to normal year end audit adjustments and the absence of footnotes);

(v) a projected income statement and balance sheet (the “Projections”) for the
MLP and its consolidated Subsidiaries for each Fiscal Year beginning after the
Restatement Effective Date and ending on or prior to December 31, 2019, in each
case prepared in accordance with GAAP adjusted on an Economic Basis plus or
minus any Allowed Reserve, and accompanied by such information as the Agent may
reasonably request to confirm the tax, legal and business assumptions made in
such projections (it being understood that such projections have been prepared
taking into account the announced acquisition of Castle Oil Corporation); and

(vi) a pro forma consolidated balance sheet and related pro forma consolidated
statement of income (the “Pro Forma Financial Statements”) of the MLP and its
consolidated Subsidiaries for the twelve (12) month period ending on
September 30, 2014, after giving effect to the Kildair Acquisition and any
Extensions of Credit to be made on the Restatement Effective Date (as if such
transactions had occurred as of September 30, 2014 (in the case of the balance
sheet) or at the beginning of such period (in the case of the statement of
income)), in each case (A) prepared in accordance with GAAP adjusted on an
Economic Basis plus or minus any Allowed Reserve and (B) satisfactory in content
and form to the Administrative Agent.

 

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(s) Insurance. The Administrative Agent shall have received (i) evidence in form
and substance reasonably satisfactory to it that all of the insurance-related
requirements of Section 7.5 hereof and Section 5(q) of the U.S. Security
Agreement and Section 5(p) of the Canadian Security Agreement, as applicable,
shall have been satisfied and (ii) evidence that the premiums then due and
payable on each insurance policy have been paid, and with respect to flood
insurance policies, (A) they shall be endorsed or otherwise amended to include a
“standard” or “New York” lender’s loss payable or mortgagee endorsement (as
applicable), (B) shall name the Co-Collateral Agents as additional insured or
loss payee, as applicable, (C) shall (x) identify the addresses of each property
located in a special flood hazard area or, in the case of Mortgaged Property
located in Canada, a flood plain, (y) indicate the applicable flood zone
designation, the flood insurance coverage and the deductible relating thereto
and (z) provide that the insurer will give the Collateral Agent 45 days written
notice of cancellation or non-renewal.

(t) Appraisals; Surveys. The Administrative Agent shall have received (i) real
property appraisals with respect to each Mortgaged Property (other than any
Existing Mortgaged Property) located in Canada from an appraiser reasonably
acceptable to the Administrative Agent and (ii) current or existing ALTA/ACSM
surveys with respect to each Mortgaged Property (other than any Existing
Mortgaged Property) located in Canada reasonably acceptable to the
Administrative Agent and which is sufficient for the title insurance company to
remove the survey exception for each Mortgage Policy and to issue such survey
dependent endorsements as are requested by the Administrative Agent.

(u) Title Insurance Policy. The Administrative Agent shall have received, with
respect to each Mortgage and Security Agreement intended to encumber Mortgaged
Property (other than any Existing Mortgaged Property) located in Canada, a
policy or policies of title insurance insuring the Lien of the Mortgage and
Security Agreement on such Mortgaged Property, in an amount equal to, for any
fee mortgage policy, the aggregate of the land value and insurable building and
improvements value of such Mortgaged Property (or such lesser amount as may be
acceptable to Administrative Agent), and for any leasehold mortgage policy, an
agreed upon value of the leasehold estate reasonably acceptable to
Administrative Agent (the “Mortgage Policies”), issued by a nationally
recognized title insurance company insuring the Lien of such Mortgage and
Security Agreement as a valid first Lien on the Mortgaged Property described
therein, free of all other Liens that are not expressly permitted under this
Agreement, containing no general survey exception or mechanics lien exception
and issued together with such endorsements and affirmative coverage as the
Administrative Agent may reasonably request.

(v) Solvency. The Administrative Agent shall have received a solvency
certificate substantially in the form of Exhibit V from either the chief
financial officer of the MLP or the General Partner.

(w) Copies of Recorded Documents. The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in Section 6.1(u).

(x) Environmental Reports. The Administrative Agent shall have received: (i) for
each Mortgaged Property located in Canada (other than any Mortgaged Property
located in the provinces of Ontario or Quebec), a Phase I ESA compliant with
Canadian Standards Association Z768-01 (R2012); (ii) for each Mortgaged Property
located in the Province of Quebec, a Phase I ESA compliant with Canadian
Standards Association Z768-01 (R2012) and the Ministère du Développement
durable, de l’Environnement et des Parcs “Guide de caractérisation des
terrains”, as amended, and (iii) for each

 

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Mortgaged Property located in the Province of Ontario, a Phase I ESA complaint
with O.Reg. 153/04, as amended, in each case prepared by an environmental
consultant reasonably acceptable to the Administrative Agent, in form, scope,
and substance reasonably satisfactory to the Administrative Agent, together with
a letter from the environmental consultant permitting the Agents and the Lenders
to rely on the environmental assessment as if addressed to and prepared for each
of them.

(y) PATRIOT Act; CAML. The Administrative Agent shall have received, no later
than five (5) days prior to the Restatement Effective Date, all documentation
and other information requested by the Administrative Agent no later than ten
(10) days prior to the Restatement Effective Date that are required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act and CAML.

(z) Flood Determination. The Administrative Agent and Lenders shall have
received, in form and substance reasonably acceptable to the Administrative
Agent, (i) a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination with respect to each Mortgaged Property located in the
United States, (ii) for each Mortgaged Property located in the United States
that is located in a special flood hazard area, a notice about special flood
hazard area status and flood disaster assistance duly executed by the U.S.
Borrower, (iii) for each Mortgaged Property located in the United States that is
located in a special flood hazard area and for each Mortgaged Property located
in Canada that is located in a flood plain, (A) flood insurance, in an amount
reasonably satisfactory to the Administrative Agent, (1) maintained with a
financially sound and reputable insurer, (2) covering buildings and contents for
such Mortgaged Property and (3) otherwise complying with Section 6.1(s).

(aa) [Reserved].

(bb) Concurrent Transactions. (i) The acquisition by AcquireCo, a Wholly Owned
Subsidiary of the U.S. Borrower, of 100% of the Capital Stock of Sprague
Canadian Properties LLC, the entity that owns 100% of the Capital Stock of
Kildair (the “Kildair Acquisition”) shall have been, or shall be concurrently
with the effectiveness hereof, consummated pursuant to the Kildair Acquisition
Documentation and no provision thereof shall have been amended or waived, and no
consent shall have been given thereunder, in any manner materially adverse to
the interests of the Arrangers or the Lenders without the prior written consent
of the Administrative Agent.

(ii) The Indebtedness outstanding under the Kildair Credit Agreement shall have
been, or shall be concurrently with the effectiveness hereof, paid in full (and
any letters of credit outstanding thereunder shall have becomes Letters of
Credit hereunder), the Administrative Agent shall have received a payoff letter
in respect thereof and any Liens in respect thereof shall have been, or shall be
concurrently with the effectiveness hereof, terminated.

(iii) The Existing Credit Agreement shall be, concurrently with the
effectiveness hereof, refinanced, amended and restated pursuant to this
Agreement and the U.S. Borrower shall have prepaid all Loans outstanding under
(and as defined in) the Existing Credit Agreement (and all accrued and unpaid
interest thereon) and all accrued and unpaid commitment fees and letter of
credit fees under the Existing Credit Agreement, accrued to (but not including)
the Restatement Effective Date.

(cc) Additional Matters. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal opinions
in respect of any aspect or consequence of the transactions contemplated hereby
or thereby as it shall reasonably request.

 

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6.2 Conditions to Each Credit Extension. The obligation of each Lender to make
any Loan requested to be made by it on any date (including its initial Loan, if
any) and the agreement of the Issuing Lenders to issue or provide any Letter of
Credit (including the initial Letters of Credit, if any) is subject to the
satisfaction or waiver of the following conditions precedent:

(a) Borrowing Notice. The Administrative Agent shall have received a Borrowing
Notice or Letter of Credit Request pursuant to Section 2.5 or Section 3.3, as
the case may be.

(b) Representations and Warranties. Each of the representations and warranties
made by the U.S. Borrower and the other Loan Parties in or pursuant to the Loan
Documents shall be true and correct in all material respects (except that any
representation and warranty that is qualified by “materiality” or “Material
Adverse Effect” shall be true and correct in all respects as so qualified) on
and as of such date as if such representation and warranty was made on and as of
such date, except to the extent any such representation and warranty relates
solely to a specified prior date, in which case such representation and warranty
shall have been true and correct in all material respects as of such specified
date.

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

(d) Borrowing Base Report. The Co-Collateral Agents shall have timely received a
Borrowing Base Report for the most recent period for which such Borrowing Base
Report is required to be delivered in accordance with Section 6.1(c) or
Section 7.2(c), as applicable.

(e) Borrowing Availability. After giving effect to such extension of credit
requested to be made on such date,

(i) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Aggregate Borrowing Base Amount as of such date,

(ii) the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value,

(iii) the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments,

(iv) the Total Dollar Working Capital Facility Extensions of Credit shall not
exceed the aggregate Dollar Working Capital Facility Commitments,

(v) the Total Multicurrency Working Capital Facility Extensions of Credit shall
not exceed the aggregate Multicurrency Working Capital Facility Commitments,

(vi) such extension of credit shall not result in any Applicable Sub-Limit (with
each Applicable Sub-Limit calculated including the Dollar Equivalent of any
included Extensions of Credit denominated in Canadian Dollars) being exceeded,

 

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(vii) with respect to any such extension of credit under the Acquisition
Facility, the Loan Parties shall be in compliance with the covenants set forth
in Section 8.1 calculated on a Pro Forma Basis, and

(viii) the Administrative Agent shall have received a certificate of a
Responsible Person of the U.S. Borrower (such certificate, the “Availability
Certification”) certifying as to the satisfaction of each of the specific
conditions set forth in Sections 6.2(b) and (c) and clauses (i)-(vii) of
Section 6.2(e) as of such date.

(f) Working Capital Facility Extensions of Credit. If, at the time any Borrower
requests any extension of credit under any Working Capital Facility, the then
outstanding principal balance of the Total Working Capital Facility Extensions
of Credit (including the Dollar Equivalent of the face amount of all Working
Capital Facility Letters of Credit) is less than $12,316,316 (such requested
extension of credit, a “Working Capital Taxable Advance”), then, with respect to
any Mortgage covering real property located in the State of New York which has a
Secured Amount (as defined in each such Mortgage) allocated to the Total Working
Capital Facility Extensions of Credit which is more than the then outstanding
principal balance of the Total Working Capital Facility Extensions of Credit
(prior to giving effect to the Working Capital Taxable Advance and calculated
including the Dollar Equivalent of the face amount of all Working Capital
Facility Letters of Credit), the U.S. Borrower shall cause to be recorded in the
appropriate land records in which such Mortgage is recorded a supplemental
instrument in form and substance satisfactory to the Administrative Agent which
evidences that each such Mortgage secures such Working Capital Taxable Advance,
and the Borrowers shall pay all applicable mortgage recording tax on that
portion of the Working Capital Taxable Advance which equals the lesser of
(i) (A) the excess of the Secured Amount (as defined in each such Mortgage) of
each such Mortgage which is allocated to the Total Working Capital Extensions of
Credit over (B) the then outstanding principal balance of the Total Working
Capital Extensions of Credit (including the Dollar Equivalent of the face amount
of all Working Capital Facility Letters of Credit) allocated to such Mortgage
without giving effect to such Working Capital Taxable Advance and (ii) (A) the
excess of the outstanding principal balance of the Total Working Capital
Facility Extensions of Credit (including the Dollar Equivalent of the face
amount of all Working Capital Facility Letters of Credit) allocated to such
Mortgage after giving effect to the Working Capital Taxable Advance over (B) the
outstanding principal balance of the Total Working Capital Facility Extensions
of Credit (including the Dollar Equivalent of the face amount of all Working
Capital Facility Letters of Credit) allocated to such Mortgage prior to the
Working Capital Taxable Advance. Before such Working Capital Taxable Advance is
made, the U.S. Borrower shall furnish the Administrative Agent with a recorded,
stamped copy of such supplemental instrument(s) and evidence satisfactory to the
Administrative Agent that all applicable mortgage recording tax due in
connection with such Working Capital Taxable Advance (and the recording of such
supplemental instrument(s) has been paid.

(g) Acquisition Facility Extensions of Credit. If, at the time any Borrower
requests any extension of credit under the Acquisition Facility, the then
outstanding principal balance of the Total Acquisition Facility Extensions of
Credit (including the face amount of all Acquisition Facility Letters of Credit)
is less than $4,398,684 (such requested extension of credit, an “Acquisition
Taxable Advance”), then, with respect to any Mortgage covering real property
located in the State of New York which has a Secured Amount (as defined in each
such Mortgage) allocated to the Acquisition Facility Extensions of Credit which
is more than the then outstanding principal balance of the Total Acquisition
Facility Extensions of Credit (prior to giving effect to the Acquisition Taxable
Advance and calculated including the face amount of all Acquisition Facility
Letters of Credit), the U.S. Borrower shall cause to be recorded in the
appropriate land records in which such Mortgage is recorded a supplemental
instrument in form and substance satisfactory to the Administrative Agent which
evidences that each such Mortgage secures such Acquisition Taxable Advance, and
the Borrowers shall pay all applicable mortgage recording tax on

 

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that portion of the Acquisition Taxable Advance which equals the lesser of
(i) (A) the excess of the Secured Amount (as defined in each such Mortgage) of
each such Mortgage which is allocated to the Total Acquisition Facility
Extensions of Credit over (B) the then outstanding principal balance of the
Total Acquisition Facility Extensions of Credit (including the face amount of
all Acquisition Facility Letters of Credit) allocated to such Mortgage without
giving effect to such Acquisition Taxable Advance and (ii) (A) the excess of the
outstanding principal balance of the Total Acquisition Facility Extensions of
Credit (including the face amount of all Acquisition Facility Letters of Credit)
allocated to such Mortgage after giving effect to the Acquisition Taxable
Advance over (B) the outstanding principal balance of the Total Acquisition
Facility Extensions of Credit (including the face amount of all Acquisition
Facility Letters of Credit) allocated to such Mortgage prior to the Acquisition
Taxable Advance. Before such Acquisition Taxable Advance is made, the U.S.
Borrower shall furnish the Administrative Agent with a recorded, stamped copy of
such supplemental instrument(s) and evidence satisfactory to the Administrative
Agent that all applicable mortgage recording tax due in connection with such
Acquisition Taxable Advance (and the recording of such supplemental
instrument(s) has been paid.

 

  SECTION 7 AFFIRMATIVE COVENANTS

Each of the Borrowers hereby jointly and severally agrees that, commencing on
the Restatement Effective Date and continuing so long as any of the Commitments
remain in effect or any amount is owing to any Lender or the Agents hereunder or
under any other Loan Document (except contingent indemnification and expense
reimbursement obligations for which no claim has been made), each Loan Party
shall:

7.1 Financial Statements. Furnish to the Administrative Agent (for distribution
to each Lender):

(a) as soon as available, but in any event within one hundred twenty (120) days
after the end of each Fiscal Year of the MLP commencing with the Fiscal Year
ending on December 31, 2014, a copy of (i) the audited consolidated balance
sheet of the MLP and its consolidated Subsidiaries as at the end of such year,
and (ii) the audited consolidated balance sheet of Kildair and its consolidated
Subsidiaries as at the end of such year, in each case with the related
consolidated statements of income and retained earnings and cash flows for such
year, prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous year, reported on without a “going
concern” or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing;

(b) as soon as available, but in any event not later than 45 days after the end
of each fiscal quarter of the MLP (except for the fourth fiscal quarter of each
Fiscal Year of the MLP), the unaudited consolidated balance sheet of the MLP and
its consolidated Subsidiaries as at the end of such fiscal quarter and the
related unaudited consolidated statements of income and retained earnings and
cash flows for such quarter and the portion of the Fiscal Year through the end
of such quarter, prepared in accordance with GAAP and setting forth, in each
case in comparative form the figures for the previous year, certified by a
Responsible Person of the U.S. Borrower as being fairly presented in all
material respects (subject to normal year end audit adjustments and the absence
of footnotes);

(c) as soon as available, but in any event not later than 30 days after the end
of each calendar month, the unaudited consolidated and consolidating balance
sheet of the MLP and its consolidated Subsidiaries as at the end of such
calendar month and the related unaudited consolidated and consolidating
statements of income and the unaudited consolidated retained

 

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earnings and cash flows for such month and the portion of the Fiscal Year
through the end of such month, prepared in accordance with GAAP adjusted on an
Economic Basis plus or minus any Allowed Reserve, as applicable, and setting
forth, beginning with the first calendar month ending after the Restatement
Effective Date, in each case in comparative form the figures for the previous
year, certified by a Responsible Person of the U.S. Borrower, as being fairly
presented in all material respects (subject to normal year-end audit adjustments
and the absence of footnotes);

(d) as soon as available, but in any event not later than 60 days after the
commencement of each Fiscal Year of the U.S. Borrower, the Annual Budget for
such Fiscal Year;

(e) as soon as available, but in any event not later than 30 days after the end
of each calendar month, (i) the Operating Forecast for the next succeeding
calendar month and (ii) a comparison of actual performance (as to income) of the
MLP and its consolidated Subsidiaries against the Operating Forecast for such
calendar month;

(f) concurrently with the delivery of the financial statements referred to in
Section 7.1(a), a Reconciliation Summary for the annual financial statements
delivered pursuant to Section 7.1(a); and

(g) concurrently with the delivery of the financial statements referred to in
Section 7.1(c), a Reconciliation Summary for the monthly financial statements
delivered pursuant to Section 7.1(c).

All such financial statements (other than the Annual Budgets and the Operating
Forecasts) shall present fairly in all material respects the financial condition
of the Persons covered by such financial statements as at such date and shall be
prepared in reasonable detail and, except as noted herein, in accordance with
GAAP or GAAP adjusted on an Economic Basis plus or minus any Allowed Reserve, as
applicable, applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein and, with regard to the non-annual financial
statements, subject to normal year-end adjustments and the absence of
footnotes). The Annual Budgets and the Operating Forecasts shall have been
prepared in good faith under the direction of a Responsible Person of the
General Partner and based upon good faith estimates and assumptions believed by
the Loan Parties to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. Information required to be delivered pursuant to
this Section 7.1 shall be deemed to have been delivered if such information, or
one or more annual or quarterly or other reports or proxy statements containing
such information, shall have been posted and shall remain available on a website
maintained by the SEC (such reports or proxy statements, the “SEC Filings”),
provided that the U.S. Borrower shall have notified (which may be made by
facsimile or electronic mail) the Administrative Agent of the posting of any
such information pursuant to Section 7.7(l). In addition, and notwithstanding
any other provision of this Section 7.1, to the extent any SEC Filing shall have
been certified by a Responsible Officer of the MLP, no further certification by
the U.S. Borrower shall be required under this Section 7.1 with respect to the
information contained in such SEC Filing; provided, that the MLP hereby allows
the Administrative Agent and the Lenders to rely upon such certification as if
such certification had been made to the Administrative Agent and the Lenders.

 

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7.2 Certificates; Other Information. Furnish to the Administrative Agent (for
distribution to the Lenders, including, if requested by a Lender, through
posting on Intralinks or other web site in use to distribute information to the
Lenders):

(a) concurrently with the delivery of the financial statements referred to in
Section 7.1(a), a certificate of the independent certified public accountants
reporting on such financial statements, if such accountants are willing to
provide such certificate (provided that if such independent certified public
accountants are unwilling to provide such certificate and such certificate is
customarily given by independent certified public accountants of nationally
recognized standing in the market, the Loan Parties shall engage another
certified public accountant willing to provide such certificate), stating in
substance that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default arising out of the financial
covenants in Section 8.1, except as specified in such certificate;

(b) concurrently with the delivery of the financial statements referred to in
Section 7.1(c), a certificate of a Responsible Person of the U.S. Borrower
substantially in the form of Exhibit O (such a certificate, a “Compliance
Certificate”) (A) stating that such Responsible Person has obtained no knowledge
of any Default or Event of Default, in each case except as specified in such
certificate, (B) stating the Loan Parties are in material compliance with the
Risk Management Policy and (C) showing in detail the calculations supporting
such Person’s certification of the Loan Parties’ compliance with the
requirements of Sections 8.1(a) and 8.7 and, if such period ends on a date which
is also the end date of a fiscal quarter, the requirements of Sections 8.1(b),
(c) and (d);

(c) (w) within seven (7) Business Days after the last day of each calendar
month, a Borrowing Base Report for the Loan Parties dated the last day of such
calendar month, (x) within seven (7) Business Days after each Semi-Monthly
Reporting Date at any time that (i) either (A) the Borrowing Base Availability
or (B) the Acquisition Facility Working Capital Sub-Limit, plus, the aggregate
Working Capital Facility Commitments, minus, the Total Working Capital Facility
Extensions of Credit, minus, the Total Acquisition Facility Working Capital
Extensions of Credit is less than or equal to $50,000,000, (ii) both (A) the sum
of the Total Working Capital Facility Extensions of Credit and the Total
Acquisition Facility Working Capital Extensions of Credit exceeds $1,095,000,000
(or if a Dollar Working Capital Facility Increase or Multicurrency Working
Capital Facility Increase has been effected, the aggregate Working Capital
Facility Commitments less $25,000,000) and (B) the Borrowing Base Availability
is less than or equal to $75,000,000 or (iii) an Event of Default shall have
occurred and be continuing, a Borrowing Base Report dated as of the applicable
Semi-Monthly Reporting Date, (y) within seven (7) Business Days following any
request by the Co-Collateral Agents, a Borrowing Base Report for the Loan
Parties dated the date of such request and (z) at any time and from time to
time, as the U.S. Borrower may determine in its sole, absolute discretion, a
Borrowing Base Report for the Loan Parties dated as of a date within the
seven (7) Business Days preceding delivery thereof to the Co-Collateral Agents;

(d) as soon as available, but in any event not later than seven (7) Business
Days after each Semi-Monthly Reporting Date, a Marked-to-Market Report and
Position Report, as of the applicable Semi-Monthly Reporting Date, in form
reasonably acceptable to the Co-Collateral Agents, certified by the U.S.
Borrower;

(e) if any such report described in clauses (b), (c) or (d) above is not
reasonably satisfactory in form and substance to the Administrative Agent or the
Co-Collateral Agents, as applicable, the U.S. Borrower shall promptly deliver
such information supplementing such report as the Administrative Agent or the
Co-Collateral Agents, as applicable, may reasonably request;

(f) concurrently with the delivery of the financial statements referred to in
Section 7.1, a written briefing on any material overdue Account Receivables or
any other material impairment in the value of the assets of the Loan Parties;

 

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(g) upon request by the Administrative Agent, copies of any Employee Benefit
Plan, Plan, Canadian Benefit Plan, or Canadian Pension Plan and related
documents, reports and correspondence;

(h) [reserved];

(i) promptly, and at least one (1) Business Day after the initial execution and
delivery thereof by the parties thereto, (i) notice of the entrance into any
document or agreement governing any Indebtedness incurred by any Loan Party
pursuant to Section 8.2(h) having a principal amount equal to or in excess of
$10,000,000 or that is a note (other than a promissory note evidencing
commercial Indebtedness), debenture, bond or other like obligation, together
with a certificate of a Responsible Person of the U.S. Borrower stating that
such Indebtedness complies with the terms of Section 8.2(h), and (ii) true,
correct and complete copies of any material documents and agreements governing
any Indebtedness incurred by any Loan Party pursuant to Section 8.2(h) having a
principal amount in excess of $50,000,000 or that is a note (other than a
promissory note evidencing commercial Indebtedness), debenture, bond or other
like obligation; and

(j) promptly, such additional financial and other information regarding the Loan
Parties as any Lender may from time to time reasonably request.

7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on its books.

7.4 Conduct of Business and Maintenance of Existence. (i) Continue to engage in
business of the same general type as now conducted by it or as described in
Section 8.13 and preserve, renew and keep in full force and effect its existence
and take all reasonable action to maintain all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to Section 8.4 or where the failure to do so
could not reasonably be expected to have a Material Adverse Effect; (ii) comply
with all Contractual Obligations and Requirements of Law, except to the extent
that failure to comply therewith could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect and (iii) maintain in effect and
enforce policies and procedures designed to ensure compliance by the Borrowers,
their respective Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions.

7.5 Maintenance of Property; Insurance. (i) Keep substantially all its property
useful and necessary in its business in good working order and condition in all
material respects (excepting ordinary wear and tear and the effect of events or
circumstances as to which such property is covered by insurance or as to which
funds have been reserved); (ii) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business,
which insurance shall name the Administrative Agent for the ratable benefit of
the Secured Parties as lender loss payee, in the case of property insurance, as
an additional insured, in the case of liability insurance, and as an additional
insured and recipient of a mortgagee endorsement, in the case of environmental
liability insurance, as its interests may appear; (iii) furnish to the
Administrative Agent (for distribution to the Lenders through posting on
Intralinks or other web site in use to distribute information to the Lenders),
upon request, full information as to the insurance carried, evidence of the
underlying policy, the related cover note and all addenda thereto; and
(iv) promptly pay all insurance premiums.

 

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7.6 Inspection of Property; Books and Records; Discussions. At the sole expense
of the Loan Parties: (i) keep books of records and accounts in conformity with
GAAP that present fairly the financial condition of the MLP and its consolidated
Subsidiaries covered thereby and (ii) within three (3) Business Days of the date
agreed or requested therefor, permit representatives of the Agents to (x) visit
and inspect any of its properties and examine and make abstracts from any of its
books and records upon reasonable notice during normal business hours once
during each twelve (12) month period following the Restatement Effective Date
(or more often at the Co-Collateral Agents’ discretion exercised in good faith);
provided that, during the continuance of an Event of Default, such visits and
inspections may occur at any time, and (y) discuss the business, operations,
properties and financial and other condition of the Loan Parties with officers
and employees of the Loan Parties and with its independent certified public
accountants to the extent consistent with the national policies of such
independent certified public accountants, upon reasonable notice during normal
business hours. Information obtained by the Agents pursuant to this Section 7.6
shall be shared with a Lender upon the request of such Lender.

7.7 Notices. Promptly give notice to the Administrative Agent (for distribution
to the Lenders, including, if requested by a Lender, through posting on
Intralinks or other web site in use to distribute information to the Lenders)
of:

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

(b) any (i) default or event of default under any Contractual Obligation of any
Loan Party or (ii) litigation, investigation or proceeding which may exist at
any time between any Loan Party and any Governmental Authority, which in either
case could reasonably be expected to have a Material Adverse Effect;

(c) (i) any litigation or administrative or arbitration proceeding to which any
Loan Party is a party in which the amount involved is $5,000,000 or more and not
covered by insurance, segregated cash reserves or bonds, or in which injunctive
or similar relief is sought or (ii) any Lien on any of the Collateral (other
than Liens created hereby or Liens permitted on Collateral pursuant to
Section 8.3);

(d) the following events: (i) the occurrence of any Reportable Event with
respect to any Single Employer Plan, a determination that a plan is in “at risk”
status within the meaning of Section 430 of the Code, a failure to make any
required contribution to a Plan when such contributions have become due, the
creation of any Lien in favor of the PBGC or a Plan, a determination that a
Multiemployer Plan is in endangered, seriously endangered or critical status, in
each case within the meaning of Section 432 of the Code, or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan in
which any Borrower or any other Loan Party is reasonably expected to have a
liability in excess of $5,000,000 or (ii) the institution of proceedings or the
taking of any other action by the PBGC to terminate any Single Employer Plan;

(e) the Borrowing Base Availability becoming less than or equal to $50,000,000;

(f) the Acquisition Facility Working Capital Sub-Limit, plus, the aggregate
Working Capital Facility Commitments, minus, the Total Working Capital Facility
Extensions of Credit, minus, the Total Acquisition Facility Working Capital
Extensions of Credit becoming less than or equal to $50,000,000;

(g) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit exceeding the
Aggregate Borrowing Base Amount;

 

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(h) the Total Acquisition Facility Acquisition Extensions of Credit exceeding
the Eligible Acquisition Asset Value;

(i) both (1) the sum of the Total Working Capital Facility Extensions of Credit
and the Total Acquisition Facility Working Capital Extensions of Credit
exceeding $1,095,000,000 (or if a Dollar Working Capital Facility Increase or
Multicurrency Working Capital Facility Increase has been effected, the aggregate
Working Capital Facility Commitments less $25,000,000) and (2) the Borrowing
Base Availability becoming less than or equal to $75,000,000;

(j) the occurrence of any event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral;

(k) a Material Adverse Effect; and

(l) any filing made by any Borrower or any other Loan Party with the SEC of any
annual, regular, periodic or special report or registration statement which any
Borrower or any other Loan Party files with the SEC under Section 13 or 15(d) of
the Securities Exchange Act of 1934.

Each notice pursuant to this Section 7.7 shall be accompanied by a statement of
a Responsible Person setting forth details of the occurrence referred to therein
and stating what action the Loan Parties propose to take with respect thereto.

7.8 Environmental Laws. (a)(i) With respect to properties and assets located in
Canada, obtain and maintain and comply with all Environmental Permits required
by applicable Environmental Laws in all material respects, (ii) direct or obtain
agreement, to the extent that any lease existing as of the Restatement Effective
Date allows and in all cases pursuant to terms that shall be contained in all
leases renewed or entered into after the Restatement Effective Date, compliance
by all tenants and subtenants, if any, with, any and all applicable
Environmental Laws, and direct all tenants and subtenants to obtain and comply
with and maintain, any and all Environmental Permits required by applicable
Environmental Laws, except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect and (iii) without limiting
the foregoing, comply in all material respects with all material permits,
registrations, licenses or similar authorizations or notifications required to
construct and operate bulk storage tanks and other bulk storage facilities at
the Properties.

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal, compliance and other actions, required under
Environmental Laws, except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and promptly comply
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings could
not be reasonably expected to have a Material Adverse Effect.

7.9 Periodic Audit of Borrowing Base Assets. Permit the Co-Collateral Agents or
any other designee of the Co-Collateral Agents to perform, or to have an
independent inspector mutually reasonably acceptable to the U.S. Borrower and
the Required Lenders perform, a periodic due diligence inspection, test and
review of all of the assets of the Loan Parties that comprise each asset
category set forth in the definitions of “U.S. Borrowing Base” and “Kildair
Borrowing Base” and the Borrowers’ internal controls, credit and risk practices
and trading book on a mutually convenient Business Day once during each twelve
(12) month period following the Restatement Effective Date (or more often at the
Co-Collateral Agents’ discretion exercised in good faith), the results of which
shall be reasonably satisfactory to the Co-Collateral Agents in all material
respects and provided by the Co-Collateral Agents to each

 

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Lender; provided, however, the Co-Collateral Agents or any other designee of the
Co-Collateral Agents shall be entitled to perform additional due diligence
inspections, tests and reviews of such inventory and accounts receivable on
Business Days at any time and/or frequency that the Co-Collateral Agents or the
Required Lenders deem necessary at any time during the occurrence and
continuance of an Event of Default; provided, further, that the expense of all
such due diligence inspections, tests and reviews shall be borne exclusively by
the Borrowers.

7.10 Risk Management Policy. (a) Keep the Risk Management Policy in full force
and effect and conduct its business in compliance with the Risk Management
Policy.

(b) The U.S. Borrower shall provide at least ten (10) Business Days’ prior
written notice to the Administrative Agent (for distribution to the Lenders
through posting on Intralinks) of any proposed amendment, modification,
supplement or other change to such Risk Management Policy, which proposed
amendment, modification, supplement or other change must be approved by the
Administrative Agent (which may require the approval of the Supermajority
Lenders at its reasonable discretion; provided, that (i) subject to the
following clause (ii), failure of a Lender to respond to any request by the
Administrative Agent for approval within ten (10) Business Days after receipt of
such request shall be deemed an approval of such proposed amendment,
modification, supplement or other change and (ii) the Administrative Agent may,
in its sole discretion, extend such ten (10) Business Day period if the
Administrative Agent determines that any such proposed amendment, modification,
supplement or other change requires additional review by any Lender) if it
relates to modifications to stop loss position limits, or contract or commodity
traded limits (including outright position limits). The U.S. Borrower shall
provide to the Administrative Agent (for distribution to the Lenders, including,
if requested by a Lender, through posting on Intralinks or other web site in use
to distribute information to the Lenders), within ten (10) days of the
effectiveness of any such amendment, modification, supplement or other change,
such revised Risk Management Policy in its entirety.

7.11 Collections of Accounts Receivable. (a) Pursuant to and in accordance with
Section 3(c) of the U.S. Security Agreement or Section 3(c) of the Canadian
Security Agreement, as applicable, (i) instruct each Account Debtor of an
Account Receivable to make all payments to the applicable Loan Party in respect
of such Account Receivable to a Controlled Account and (ii) with respect to any
items sent directly to a Loan Party by an Account Debtor, hold such items in
trust for the Secured Parties and promptly deposit such items into a Controlled
Account and (b) otherwise comply with Section 3 of the U.S. Security Agreement,
Section 3 of the Canadian Security Agreement or Section 5 of the Dutch
Receivables Pledge Agreement, as applicable.

7.12 Taxes. Each Loan Party and each of its Subsidiaries shall timely file or
cause to be filed all material Tax returns required to be filed by it and shall
timely pay all material Taxes due and payable by it or imposed with respect to
any of its property and all other material fees or other charges imposed on it
or any of its property by any Governmental Authority (other than any Taxes, fees
or other charges, the amount or validity of which is being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Loan Party). Each
Loan Party and each of its Subsidiaries shall withhold all employee withholdings
required to be withheld and shall make all employer contributions required to be
made by it pursuant to applicable law on account of the Canada and Quebec
pension plans, employment insurance and employee income taxes.

7.13 Additional Collateral; Further Actions.

(a) In the event that any such Loan Party acquires or forms any additional
Subsidiary (other than an Exempt CFC or any Subsidiary thereof or an Immaterial
Subsidiary) (it being

 

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understood that the acquisition of any additional Subsidiary shall include, for
purposes of this clause (a), any existing Subsidiary that ceases to be an Exempt
CFC (and any Subsidiary thereof that is not an Exempt CFC or a Subsidiary of an
Exempt CFC) and any existing Subsidiary that ceases to be an Immaterial
Subsidiary), shall:

(i) cause such additional Subsidiary to become a party to the applicable
Security Documents and Guarantee;

(ii) if such additional Subsidiary holds any Capital Stock of any Subsidiary,
cause such additional Subsidiary to execute such pledge agreements or addenda to
the applicable Pledge Agreement, each in form and substance satisfactory to the
Administrative Agent, and take such other action as shall be necessary or
advisable (including the filing of financing statements on Form UCC-1, PPSA
financing statements and financing change statements and the delivery of pledge
agreements) in order to perfect the pledge of all of the Capital Stock of such
Subsidiary in favor of the Administrative Agent for the benefit of the Secured
Parties; provided that in the case of a pledge of Capital Stock of any
Subsidiary that is an Exempt CFC, no more than 65% of the voting Capital Stock
of such Subsidiary shall be pledged;

(iii) cause such additional Subsidiary to deliver to the Administrative Agent
and the Lenders all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations; including the USA PATRIOT Act and CAML;

(iv) if effective to perfect a Lien on such accounts in the applicable
jurisdiction in respect of such accounts in any jurisdiction in the United
States or Canada or otherwise requested by the Administrative Agent in its sole
discretion, cause an Account Control Agreement for each Deposit Account (other
than any Excluded Account), Securities Account and Commodity Account of such
additional Subsidiary to be executed and delivered by such Subsidiary and the
bank, broker or other Person maintaining such Deposit Account, Securities
Account or Commodity Account to the extent required by the U.S. Security
Agreement, the Canadian Security Documents or the Dutch Receivables Pledge
Agreement, as applicable;

(v) at the request of the Administrative Agent, solely with respect to any real
property having a value equal to or in excess of $500,000, (A) cause any such
additional Subsidiary that owns a fee simple or material leasehold estate in
real property located in the United States or Canada to (i) prepare, execute and
deliver a mortgage, deed of trust or deed of hypothec, as applicable, (if and to
the extent permissible under the terms of the lease) in substantially the same
form as the Mortgage and Security Agreement together with any Form UCC-1
financing statements and PPSA financing statements required by the
Administrative Agent and (ii) for any real property located in the United
States, deliver a “Life-of-Loan” Federal Emergency Management Agency Standard
Flood Hazard Determination and with respect to each such real property that is
located in a flood zone, flood acknowledgements executed by the U.S. Borrower
and, with respect to any such real property and any Mortgaged Property located
in Canada in a flood plain, flood insurance and evidence of the payment of
premiums then due and payable for such flood insurance, in each case in form and
substance reasonably satisfactory to the Administrative Agent and subject to the
requirements set forth in Section 6.1(z), (B) cause any such Subsidiary that
owns a fee simple or material leasehold estate in such real property located
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mortgage or security documentation determined by the Administrative Agent to be
sufficient to create and/or perfect a Lien in favor of the Administrative Agent
on such real property, and to take such other actions as the Administrative
Agent shall request in order to create and/or perfect a Lien in favor of the
Administrative Agent on such real property of such Subsidiary and (C) cause such
Subsidiary to deliver a mortgage title insurance policy (only for such real
property located in the United States or Canada), survey (only for such real
property located in the United States or Canada) and appraisal of the real
property, in each case in form and substance reasonably satisfactory to the
Administrative Agent subject to the matters and in the form required by Sections
6.1(t) and (u); and

(vi) take any other action as shall be necessary or advisable (including the
filing of financing statements on Form UCC-1 and PPSA financing statements and
any other filing necessary to maintain the perfection of the security interest
in the applicable jurisdiction) to cause such Lien described in this
Section 7.13(a) to be a Perfected First Lien on all right, title and interest of
such Collateral.

(b) The Administrative Agent shall be entitled to receive legal opinions of one
or more counsel to the Borrowers and such additional Subsidiary addressing such
matters as the Administrative Agent may reasonably request and as is customary
opinion practice, including the enforceability of each Security Document to
which such additional Subsidiary becomes a party and the pledge of the Capital
Stock of such Subsidiary, and the creation, validity and perfection of the Liens
so granted by such Subsidiary and the U.S. Borrower and/or other Loan Parties to
the Administrative Agent for the benefit of the Lenders.

(c) (i) With respect to any fee simple or material leasehold estate in real
property having a value equal to or in excess of $500,000 of any of the Loan
Parties located in the United States or Canada which were not Mortgaged
Properties on the Restatement Effective Date, including pipelines, identified by
the Administrative Agent or with respect to any such property acquired by any
Loan Party after the Restatement Effective Date, the applicable Loan Party
shall, upon the request of the Administrative Agent, prepare, execute and
deliver a mortgage, deed of trust or deed of hypothec, as applicable (if and to
the extent permissible under the terms of the lease), in substantially the same
form as the Mortgage and Security Agreement (or Quebec Security Documents in the
case of real property located in the Province of Quebec) together with any Form
UCC-1 financing statements and PPSA financing statements required by the
Administrative Agent, and with respect to any fee simple or leasehold estate in
real property of any of the Loan Parties (other than an Exempt CFC or any
Subsidiary thereof) located outside the United States and Canada, the applicable
Loan Party shall prepare, execute and deliver all mortgage or security
documentation determined by the Administrative Agent to be sufficient to create
and/or perfect a Lien in favor of the Administrative Agent on such real
property, and take such other actions as the Administrative Agent shall request
in order to create and/or perfect a Lien in favor of the Administrative Agent on
any Mortgaged Property of such Loan Party; and (ii) with respect to any
Mortgaged Property having a value equal to or in excess of $500,000 of any Loan
Party (whether or not mortgaged on the Restatement Effective Date or
thereafter), the applicable Loan Party shall, upon the request of the
Administrative Agent, cause such Loan Party to deliver a mortgagee’s title
insurance policy (only for a Mortgaged Property located in the United States or
Canada), survey (only for a Mortgaged Property located in the United States or
Canada) and appraisal of such Mortgaged Property, in each case in form and
substance reasonably satisfactory to the Administrative Agent subject to the
matters and in the form required by Sections 6.1(t) and (u) hereof, (iii) upon
the request of the Administrative Agent, the U.S. Borrower shall deliver legal
opinions of one or more counsel to the applicable Loan Party with respect to
each Mortgage and Security Agreement and each non-United States or non-Canadian
mortgage and collateral document (in each case, covering real property having a
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$500,000), addressing such matters as the Administrative Agent may reasonably
request and is customary opinion practice, including the enforceability of such
Security Documents, and the creation, validity and perfection of the Liens so
granted by the applicable Loan Party and (iv) with respect to any Mortgaged
Property located in the United States and having a value equal to or in excess
of $500,000 of any Loan Party (whether or not mortgaged on the Restatement
Effective Date or thereafter), the applicable Loan Party shall deliver, upon the
request of the Administrative Agent, a “Life-of-Loan” Federal Emergency
Management Agency Standard Flood Hazard Determination and if such Mortgaged
Property is located in a flood zone, flood acknowledgements executed by the U.S.
Borrower, and with respect to any such property and any Mortgaged Property
located in Canada, flood insurance and evidence of the payment of premiums then
due and payable for such flood insurance, in each case in form and substance
reasonably satisfactory to the Administrative Agent and subject to the
requirements set forth in Section 6.1(z).

(d) Upon request of the Administrative Agent (which request shall not be made
unless the Administrative Agent has a reasonable basis to make such request with
respect to one or more Mortgaged Properties), the Loan Parties shall promptly
order and, upon completion, provide the Administrative Agent with an
Environmental Report as described under Section 6.1(x). The Administrative Agent
may, upon the receipt of a Phase I ESA and after consultation with the U.S.
Borrower regarding the results of such Phase I ESA and the recommendations
therein, require the delivery of further environmental assessments or reports to
the extent such further assessments or reports are recommended in the Phase I
ESA or the Administrative Agent has a reasonable basis to require such further
assessments or reports.

7.14 Use of Proceeds. Use the entire amount of the proceeds of the Loans and the
Letters of Credit as set forth in Section 5.21.

7.15 Cash Management. Maintain all of the Pledged Accounts of the Loan Parties
at a Cash Management Bank.

7.16 New Business Valuations of Approved Acquisition Assets. If at any time any
Approved Acquisition Asset has been destroyed or damaged in any material respect
or any other event or condition has occurred that results in a material adverse
change in the value of any Approved Acquisition Asset, (a) the U.S. Borrower
shall promptly notify the Administrative Agent thereof, and permit the
Administrative Agent, in its sole discretion, and at sole expense of the
Borrowers and the other Loan Parties, to obtain a new Business Valuation of such
Approved Acquisition Asset and (b) without derogating from the U.S. Borrower’s
obligations to provide notification pursuant to clause (a) above, if the
Administrative Agent otherwise becomes aware of any such destruction, damage,
event or condition without notification from the U.S. Borrower, the
Administrative Agent shall be permitted, in its sole discretion, upon notice to
and at the sole expense of the Borrowers and the other Loan Parties, to obtain a
new Business Valuation of such Approved Acquisition Asset, provided that in the
case of clause (a) or (b), a new Business Valuation shall not be required if the
U.S. Borrower has agreed to remove the affected Approved Acquisition Asset from
the calculation of the Eligible Acquisition Asset Value.

7.17 Post-Closing Matters. (a) Within 60 days after the Restatement Effective
Date (or such longer time as may be agreed by the Administrative Agent), deliver
duly executed Account Control Agreements (and, if applicable, amendments to any
Account Control Agreements executed under the Existing Credit Agreement that are
necessary in order for such Account Control Agreements to be in full force and
effect after giving effect to the Restatement Effective Date) with respect to
each Pledged Account in existence on the Restatement Effective Date.

(b) With respect to each Existing Mortgaged Property, deliver to the
Administrative Agent within 60 days after the Restatement Effective Date (or
such longer time as may be agreed by the Administrative Agent), the following in
form and substance reasonably satisfactory to the Administrative Agent:

(i) an amendment to the Mortgage and Security Agreement encumbering such
Mortgaged Property, duly executed and acknowledged by the applicable Loan Party
(each, a “Mortgage Amendment”);

 

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(ii) a date-down endorsement to the title insurance policy covering the Mortgage
and Security Agreement encumbering such Mortgaged Property (or if a date-down is
not available for a particular jurisdiction, a new title insurance policy in the
same insured amount as originally issued or marked up unconditional title
commitment, pro forma policy or binder for such insurance), in the same insured
amount as originally issued, if applicable, and in form and substance not
materially less favorable to the Administrative Agent or the Lenders as such
title policies or marked up unconditional title commitments, pro forma policies
or binders delivered on or prior to the Restatement Effective Date in connection
with delivery of the existing Mortgage and Security Agreements;

(iii) evidence of payment of all applicable filing, documentary, stamp,
intangible, mortgage and recording taxes, recording and filing fees, and title
insurance premiums and fees in connection with the matters set forth in clauses
(i), (ii) and (iii) above; and

(iv) customary legal opinions with respect to each Mortgage Amendment, addressed
to the Administrative Agent and the other Secured Parties, as to such matters
the Administrative Agent may reasonably request.

(c) With respect to each Mortgaged Property (other than Existing Mortgaged
Properties and other than properties located in Canada), deliver to the
Administrative Agent within 60 days (or 120 days with respect to any Mortgaged
Property that is a leasehold estate) after the Restatement Effective Date (or
such longer time as may be agreed by the Administrative Agent), the following in
form and substance reasonably satisfactory to the Administrative Agent; provided
that with respect to any such Mortgaged Property that is a leasehold estate, the
Loan Parties shall be required to comply with the following only if the relevant
lease permits the mortgaging of such leasehold or the landlord thereof has
otherwise consented to the mortgaging of such leasehold (and the applicable
Borrower shall use reasonable efforts to obtain such consent and a recorded
memorandum of such lease):

(i) real property appraisals from an appraiser reasonably acceptable to the
Administrative Agent;

(ii) current or existing ALTA/ACSM surveys reasonably acceptable to the
Administrative Agent and which are sufficient for the title insurance company to
remove the survey exception for each Mortgage Policy and to issue such
survey-dependent endorsements as are requested by the Administrative Agent.

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

(iv) with respect to each Mortgage and Security Agreement intended to cover such
Mortgaged Property, a policy or policies of title insurance insuring the Lien of
the Mortgage and

 

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Security Agreement on such Mortgaged Property, in an amount equal to, for any
fee mortgage policy, the aggregate of the land value and insurable building and
improvements value of such Mortgaged Property (or such lesser amount as may be
acceptable to Administrative Agent), and for any leasehold mortgage policy, an
agreed upon value of the leasehold estate reasonably acceptable to the
Administrative Agent, issued by a nationally recognized title insurance company
insuring the Lien of such Mortgage and Security Agreement as a valid first Lien
on the Mortgaged Property described therein, free of all other Liens that are
not expressly permitted under this Agreement, containing no general survey
exception or mechanics lien exception and issued together with such endorsements
and affirmative coverage as the Administrative Agent may reasonably request;

(v) an American Society for Testing & Materials E1527-05 compliant Phase I
Environmental Site Assessment (“ESA”), inclusive of 40 CFR 312 representations
for each Mortgaged Property, prepared by an environmental consultant reasonably
acceptable to the Administrative Agent in form, scope and substance reasonably
satisfactory to the Administrative Agent, together with a letter from the
environmental consultant permitting the Agents and the Lenders to rely on the
ESA as if addressed to and prepared for each of them; and

(vi) customary legal opinions with respect to each such Mortgaged Property,
addressed to the Administrative Agent and the other Secured Parties, as to such
matters the Administrative Agent may reasonably request.

7.18 Additional Post-Closing Transactions. No later than (i) one Business Day
after the Restatement Effective Date, effectuate the ULC Conversion, (ii) three
Business Days after the Restatement Effective Date, file the Kildair Election
with the IRS, (iii) four Business Days after the Restatement Effective Date,
file the Kildair Subsidiary Election with the IRS and (iv) January 2, 2015,
effect the Amalgamation.

7.19 Canadian Pension Plans and Benefit Plans. (a) For each existing, or
hereafter adopted, Canadian Pension Plan and Canadian Benefit Plan, in a timely
fashion comply with and perform in all material respects all of its obligations
under and in respect of such Canadian Pension Plan or Canadian Benefit Plan,
including under any funding agreements and all applicable laws (including any
fiduciary, funding, investment and administration obligations).

(b) Remit, withhold or pay (and cause each of its Subsidiaries to remit ,
withhold or pay) all employer or employee payments, contributions or premiums
required to be remitted, withheld or paid to or in respect of each Canadian
Pension Plan or Canadian Benefit Plan, in each case in a timely fashion in
compliance in all material respects with the terms thereof, any funding
agreements and all applicable laws.

(c) Deliver to the Administrative Agent (i) if requested by the Administrative
Agent, copies of each annual and other return, report or valuation with respect
to each Canadian Pension Plan as filed with any applicable Governmental
Authority; (ii) promptly after receipt thereof, a copy of any material
direction, order, notice, ruling or opinion that any Loan Party or any
Subsidiary of any Loan Party may receive from any applicable Governmental
Authority with respect to any Canadian Pension Plan; (iii) notification with 30
days of any increases having a cost to one or more of the Loan Parties and their
Subsidiaries in excess of $500,000 per annum in the aggregate, in the benefits
of any existing Canadian Pension Plan or Canadian Benefit Plan, or the
establishment of any new Canadian Pension Plan or Canadian Benefit Plan, or the
commencement of contributions to any such plan to which any Loan Party was not
previously contributing; and (iv) notification within 30 days of any voluntary
or involuntary termination of, or participation in, a Canadian Pension Plan or a
Canadian Benefit Plan.

 

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7.20 Center of Main Interest. Each Loan Party organized under the laws of the
Netherlands shall maintain its center of main interests in the Netherlands for
the purposes of the Insolvency Regulation.

 

  SECTION 8 NEGATIVE COVENANTS

Each of the Borrowers hereby jointly and severally agrees that, commencing on
the Restatement Effective Date and continuing so long as any of the Commitments
remain in effect or any amount is owing to any Lender or any Agent hereunder or
under any other Loan Document (except contingent indemnification and expense
reimbursement obligations for which no claim has been made), no Loan Party
shall, directly or indirectly:

8.1 Financial Condition Covenants.

(a) Minimum Consolidated Net Working Capital. Permit, as of the last day of any
calendar month, the Consolidated Net Working Capital to be less than the Minimum
Consolidated Net Working Capital Amount applicable as of such day in accordance
with the definitions thereof.

(b) Minimum Consolidated Fixed Charge Coverage Ratio. Permit, as of the last day
of any fiscal quarter (commencing with the fiscal quarter ending December 31,
2014), for the twelve (12) month period ending on such day, the Consolidated
Fixed Charge Coverage Ratio to be less than the Minimum Consolidated Fixed
Charge Coverage Ratio.

(c) Maximum Consolidated Senior Secured Leverage Ratio. Permit, as of the last
day of any fiscal quarter (commencing with the fiscal quarter ending
December 31, 2014), for the twelve (12) month period ending on such day, the
Consolidated Senior Secured Leverage Ratio to exceed the Maximum Consolidated
Senior Secured Leverage Ratio applicable as of such day in accordance with the
definition thereof.

(d) Maximum Consolidated Total Leverage Ratio. Permit, as of the last day of any
fiscal quarter (commencing with the fiscal quarter ending December 31, 2014),
for the twelve (12) month period ending on such day, the Consolidated Total
Leverage Ratio to exceed the Maximum Consolidated Total Leverage Ratio
applicable as of such day in accordance with the definition thereof.

8.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any preferred stock to be issued or outstanding, except:

(a) Indebtedness of such Loan Party under this Agreement and the other Loan
Documents;

(b) (i) any Intercompany Subordinated Indebtedness and (ii) any Axel Johnson
Subordinated Indebtedness;

(c) Indebtedness in respect of purchase money security interests, Financing
Leases or Synthetic Leases; provided that the aggregate amount of Indebtedness
incurred pursuant to this Section 8.2(c) in any Fiscal Year shall not exceed
$50,000,000;

(d) Indebtedness outstanding on the Restatement Effective Date and listed on
Schedule 8.2, or any refinancings, refundings, renewals or extensions thereof
(such refinanced, refunded, renewed or extended Indebtedness, “Permitted
Refinancing Indebtedness”); provided that (i) the stated amount of such
Indebtedness is not increased at the time of such refinancing, refunding,
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extension (except to the extent of non-cash interest), (ii) such refinancing,
refunding, renewal or extended Indebtedness shall (A) not have a stated final
maturity prior to the final maturity date of the Indebtedness being refinanced,
refunded, renewed or extended and (B) have an average life to maturity equal to
or greater than such Indebtedness, (iii) the terms of such refinancing,
refunding, renewal or extension, taken as a whole, shall not be more restrictive
than the terms of such Indebtedness, (iv) any guarantee entered into in
connection with such refinancing, refunding, renewal or extension that is not a
refinancing of an existing guarantee of such Indebtedness shall not be permitted
under this Section 8.2(d) and (v) if the Indebtedness being refinanced,
refunded, renewed or extended is subordinated, such Permitted Refinancing
Indebtedness shall be subordinated to at least the same extent, and on terms at
least as favorable to the Lenders, as the Indebtedness being refinanced,
refunded, renewed or extended;

(e) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business or other cash management services in
the ordinary course of business; provided that such Indebtedness (other than
credit or purchase cards) is extinguished within one (1) Business Day after
notification to any Loan Party of its incurrence;

(f) Indebtedness under one or more Contango Facilities in an amount outstanding
at any time not to exceed $125,000,000 in the aggregate;

(g) limited recourse Indebtedness of any Borrower or any other Loan Party to any
Governmental Authority in respect of a capital project financing provided by
such Governmental Authority, but only so long as (i) such funding accounts for
100% of the capital costs of such project in excess of any Investment by such
Borrower or such Loan Party, (ii) the recourse to such Borrower or such Loan
Party, as applicable, with respect to such Indebtedness is limited to its
interest in the project financed by such Indebtedness and proceeds from the
operation of such project, (iii) the aggregate principal amount of all such
Indebtedness at any time outstanding shall not exceed $20,000,000 and (iv) the
terms of such Indebtedness are reasonably satisfactory to the Administrative
Agent; and

(h) additional unsecured Indebtedness of the Loan Parties in an aggregate
principal amount (for all Loan Parties) not to exceed $500,000,000 at any one
time outstanding; provided, that (i) the terms of such unsecured Indebtedness
shall not be more restrictive, in the aggregate to the Loan Parties, than the
terms, conditions, covenants and defaults contained in the Loan Documents,
(ii) the terms of such unsecured Indebtedness shall permit Obligations under the
Loan Documents in a principal amount at least equal to 115% of the combined
aggregate amount of the Working Capital Facility Commitments in effect as of the
date the documentation for any such unsecured Indebtedness is entered into and
the Acquisition Facility Commitments in effect as of the date the documentation
for any such unsecured Indebtedness is entered into without meeting any
financial ratio test (including any incurrence test) contained in the
documentation for such unsecured Indebtedness, (iii) the Weighted Average Life
to Maturity of such unsecured Indebtedness shall be at least ninety-one
(91) days after the Maturity Date, (iv) the maturity date of such unsecured
Indebtedness shall be at least six (6) months after the Maturity Date, (v) such
unsecured Indebtedness shall not be guaranteed by any Subsidiary of the MLP that
is not a Loan Party; and (vi) no Default or Event of Default shall have occurred
and be continuing as of the date of incurrence or refinancing of such unsecured
Indebtedness (or would occur as a result thereof) and as of such date, the Loan
Parties would be in compliance with the covenants set forth in Section 8.1
calculated on a Pro Forma Basis as of such date assuming the incurrence of such
unsecured Indebtedness.

Notwithstanding the foregoing, in no event shall any Indebtedness of (i) any
Loan Party, on the one hand, owing to (ii) the MLP or any Subsidiary or any
Affiliate of the MLP, on the other hand, be permitted hereunder other than
pursuant to Section 8.2(b).

 

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8.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:

(a) Liens for taxes, assessments or governmental charges or levies not yet due
and payable or which are being contested in good faith by appropriate
proceedings; provided that adequate reserves with respect thereto are maintained
on the books of such Loan Party, in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s Liens, or other similar Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings or which have been
bonded over or otherwise adequately secured against;

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation or in connection with casualty
insurance;

(d) deposits or bonds to secure (i) the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds and (ii) indemnities, performance and similar bonds and other
obligations of a like nature incurred in the ordinary course of business;

(e) Permitted Cash Management Liens;

(f) easements, rights-of-way, restrictions and other similar title exceptions
and encumbrances, landlords’ and lessors’ Liens on rented premises and
restrictions on transfers of leases, each incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount, secure
obligations that do not constitute Indebtedness, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Loan Parties;

(g) Liens arising from precautionary or unauthorized Uniform Commercial Code or
PPSA financing statements or applications for registration of a hypothec under
the Register of Personal and Movable Real Rights (Quebec) under the Civil Code
of Quebec;

(h) Liens created pursuant to the Security Documents and the other Loan
Documents;

(i) First Purchaser Liens;

(j) netting and other offset rights granted by any Loan Party to counterparties
under Commodity Contracts and Financial Hedging Agreements on or with respect to
payment and other obligations owed by such Loan Party to such counterparties;

(k) Liens in existence on the Restatement Effective Date that are listed, and
the property subject thereto described, on Schedule 8.3;

(l) Liens on cash and short-term investments deposited as collateral by a Loan
Party under any Commodity Contract or Financial Hedging Agreement with the
counterparty (or counterparties) thereto;

(m) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 9.1(i) or securing appeal or other surety bonds related
to such judgments;

 

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(n) Liens of the account bank on currency, Cash Equivalents, commodities or
Commodities Contracts of the Loan Parties deposited in, or credited to, any
Controlled Account that are subject to an Account Control Agreement; provided
that, such Liens are specifically permitted by such Account Control Agreement or
arise by operation of law;

(o) Liens securing Indebtedness of the Loan Parties permitted by Section 8.2(f);
provided that such Liens do not at any time encumber any property other than the
inventory, forward contracts and receivables related to the Cash and Carry
Transactions financed by such Indebtedness;

(p) Liens securing Indebtedness of the Loan Parties permitted by Section 8.2(g)
on the property being financed by such Indebtedness and proceeds of such
property;

(q) restrictions under federal, provincial, territorial and state securities
laws on the transfer of securities;

(r) Liens constituting purchase money security interests (including mortgages,
conditional sales, Financing Leases and any other title retention or deferred
purchase devices) in real property, interests in leases or personal property
existing or created on the date on which such property is acquired; provided,
however, that (i) each such security interest shall attach solely to the
particular item of property so acquired, and the principal amount of
Indebtedness secured thereby shall not exceed the cost (including all such
Indebtedness secured thereby, whether or not assumed) of such item of property;
and (ii) the Indebtedness secured thereby was incurred, and permitted, pursuant
to Section 8.2(c);

(s) Liens securing the Maine Dock Liability Obligations in connection with the
incurrence of such liability; provided, however, that such Lien shall attach
solely to the property acquired; and

(t) Liens on assets not included in the U.S. Borrowing Base or the Kildair
Borrowing Base securing obligations of the Loan Parties in an amount not to
exceed $2,500,000 in the aggregate at any one time outstanding.

Notwithstanding anything to the contrary contained in this Agreement or any
Security Document (including any provision for, reference to, or acknowledgement
of, any Lien or Permitted Borrowing Base Lien or Permitted Cash Management
Lien), nothing herein and no approval by the Administrative Agent or Lenders of
any Lien, Permitted Borrowing Base Lien or Permitted Cash Management Lien
(whether such approval is oral or in writing) shall be construed as or deemed to
constitute a subordination by the Administrative Agent or the Lenders of any
security interest or other right, interest or Lien in or to the Collateral or
any part thereof in favor of any Lien, Permitted Borrowing Base Lien or
Permitted Cash Management Lien or any holder of any Lien, Permitted Borrowing
Base Lien or Permitted Cash Management Lien.

8.4 Limitation on Fundamental Changes. Other than the Amalgamation, enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets of such Loan Party, except for the following, in
each case so long as, at the time thereof and immediately after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing:

(a) (x) the merger, consolidation, amalgamation or liquidation of any Subsidiary
into the U.S. Borrower in a transaction in which the U.S. Borrower is the
surviving or resulting entity and (y) at any time after the Amalgamation, the
merger, consolidation, amalgamation or liquidation of any Subsidiary of the
Canadian Borrower into the Canadian Borrower in a transaction in which the
Canadian Borrower is the surviving or resulting entity;

 

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(b) the merger, consolidation, amalgamation or liquidation of any Wholly-Owned
Subsidiary (including the liquidation of Sprague Canadian Properties LLC
immediately after the consummation of the Kildair Acquisition but excluding any
Borrower) into or with a Wholly-Owned Subsidiary or the merger, consolidation,
amalgamation or liquidation of any Person into a Wholly-Owned Subsidiary (other
than any Borrower) or pursuant to which such Person will become a Wholly-Owned
Subsidiary (other than any Borrower) in a transaction in which the resulting or
surviving entity is a Wholly-Owned Subsidiary (it being understood that if any
Person involved is a Loan Party, the surviving entity shall be a Loan Party);

(c) the conveyance, sale, lease, assignment, transfer or disposal of all, or
substantially all, of the property, business or assets of a Loan Party to
another Loan Party;

(d) sales or other Dispositions permitted under Section 8.6 (other than Section
8.6(h)); and

(e) any inactive Subsidiary (other than the Canadian Borrower) may be
liquidated;

provided that, notwithstanding anything to the contrary herein, prior to the
Amalgamation, no Initial Canadian Borrower may enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, other than the Amalgamation and the liquidation of Sprague Canadian
Properties LLC.

8.5 Restricted Payments. Declare or pay any dividend (other than distributions
payable solely in common Capital Stock of the MLP) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of any Loan Party or any warrants or options to
purchase any such Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or Property or in obligations of any Loan Party (such declarations, payments,
setting apart, purchases, redemptions, defeasances, retirements, acquisitions
and distributions, being herein called “Restricted Payments”); provided that:

(a) the MLP at any time may make Restricted Payments payable solely in common
Capital Stock of the MLP;

(b) any Loan Party that is a Subsidiary of the MLP may make Restricted Payments
to the MLP or any other Loan Party that owns Capital Stock of such Loan Party;

(c) [reserved];

(d) the MLP may (i) redeem, repurchase or otherwise acquire or retire for value
its Capital Stock or (ii) pay, settle, exercise, redeem, repurchase, or exchange
any other award constituting a Restricted Payment, in the case of clauses
(i) and (ii), that is held or received by current or former officers, directors
or employees (or their estates or beneficiaries under their estates or their
immediate family members), of the General Partner and the MLP or any of its
Subsidiaries pursuant to any equity subscription agreement, equity plan, equity
option agreement, unitholders’ agreement, incentive plan or similar agreement
under which such Capital Stock was issued or such award made; provided that the
aggregate cash consideration paid therefor in any calendar year (commencing with
the 2014 calendar year) does not exceed an aggregate amount of $2,500,000 (with
unused amounts in any calendar year being permitted to be carried over for the
two succeeding calendar years);

 

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(e) the following shall be permitted: (i) any repurchase of Capital Stock deemed
to occur upon the exercise of units, options or other rights to the extent such
Capital Stock represents a portion of the exercise price of those units, options
or other rights; (ii) any repurchase or other acquisition of Capital Stock made
in lieu of withholding taxes in connection with any exercise or exchange of
equity options, warrants, incentives or other rights to acquire Capital Stock;
and (iii) any payment of cash made in lieu of the issuance of fractional units
upon the exercise of units, options, or other rights or the conversion or
exchange of Capital Stock of any such Person; provided that the aggregate cash
consideration paid pursuant to this clause (e) in any calendar year (commencing
with the 2014 calendar year) does not exceed an aggregate amount of $2,500,000;
and

(f) the MLP may make Restricted Payments (including quarterly distributions
contemplated under the MLP Partnership Agreement) if at the time of such
Restricted Payment and after giving effect thereto, no Event of Default has
occurred and is continuing and the Loan Parties are in compliance with the
covenants set forth in Section 8.1 calculated on a Pro Forma Basis after giving
effect to such Restricted Payment.

8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including Accounts
Receivable and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell or permit the issuance or sale
of any shares of such Subsidiary’s Capital Stock to any Person other than any
Loan Party or any Wholly-Owned Subsidiary, except:

(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business;

(b) the sale or other disposition of any property in the ordinary course of
business;

(c) the sale of Eligible Commodities and Eligible RINs in the ordinary course of
business;

(d) sales or other dispositions of Investments permitted under Section 8.8 in
the ordinary course of business;

(e) leases or subleases of real property not material to the business of any
Loan Party entered into in the ordinary course of business;

(f) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;

(g) any Disposition of Acquisition Assets so long as at the time of and after
giving effect to such Disposition, Total Acquisition Facility Acquisition
Extensions of Credit (after giving effect to any repayment of the Acquisition
Facility occurring in connection with such Disposition) do not exceed the
Eligible Acquisition Asset Value, and no Default or Event of Default shall have
occurred and be continuing;

(h) sales or other Dispositions permitted under Section 8.4 (other than Section
8.4(d));

 

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(i) any Disposition by a Loan Party to another Loan Party;

(j) any Disposition occurring on the Restatement Effective Date pursuant to any
agreement listed on Schedule 8.10;

(k) any Restricted Payment permitted by Section 8.5 and any Investment permitted
by Section 8.8; and

(l) any of the following: (i) the termination or unwinding of any Financial
Hedging Agreement or Commodity OTC Agreement; (ii) the surrender, modification,
release or waiver of contract rights; or (iii) the settlement, release,
modification, waiver or surrender of contract, tort or other claims of any kind.

8.7 Limitation on Capital Expenditures. Make or commit to make (by way of the
acquisition of securities of a Person or otherwise): (i) Capital Expenditures
made with respect to the maintenance or improvement of assets or property then
owned by any Loan Party in excess of $25,000,000 in the aggregate in any Fiscal
Year; or (ii) Capital Expenditures made with respect to any acquisition of any
additional assets or property in a single transaction in excess of $60,000,000,
provided that the aggregate amount of such Capital Expenditures for all such
acquisitions of additional assets or property in any Fiscal Year shall not
exceed $100,000,000.

8.8 Limitation on Investments, Loans and Advances. Other than as required in
connection with the Amalgamation, make any Investment in any Person, except:

(a) extensions of trade credit in the ordinary course of business (including,
for the avoidance of doubt, ordinary course extensions of credit under Commodity
Contracts and Financial Hedging Agreements made in accordance with the Risk
Management Policy);

(b) Investments in Cash Equivalents;

(c) Investments by any Loan Party in any other Loan Party;

(d) Investments consisting of cash and Cash Equivalents posted as collateral to
satisfy margin requirements with counterparties of Commodity Contracts or
Financial Hedging Agreements of any Loan Party;

(e) Investments (including debt obligations and equity securities) received in
connection with the bankruptcy, insolvency, arrangement or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business;

(f) Investments in existence on the Restatement Effective Date and listed on
Schedule 8.8, together with any renewals and extensions thereof, so long as the
principal amount of such renewal or extension does not exceed the original
principal amount of such Investment;

(g) payroll, travel and other loans or advances to, or Guarantee Obligations
issued to support the obligations of, current or former officers, directors, and
employees of the General Partner, the MLP or any Subsidiary, in each case in the
ordinary course of business in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding;

(h) any Investment resulting from pledges and deposits permitted by
Section 8.3(c), (d), (l) and (m);

 

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(i) any Investment using the proceeds of any issuance of common Capital Stock of
the MLP; and

(j) any other Investment if at the time of such Investment and after giving
effect thereto, no Event of Default has occurred and is continuing and the Loan
Parties are in compliance with the covenants set forth in Section 8.1 calculated
on a Pro Forma Basis.

8.9 Limitation on Payments or Modifications of Junior Debt Instruments.
(a) Except as provided in clause (b) of this Section 8.9, amend, modify or
change, or consent or agree to any material amendment, modification or change to
any of the terms of any Intercompany Subordinated Indebtedness, any Axel Johnson
Subordinated Indebtedness, or any other Indebtedness that is subordinated in
right of payment to the Obligations, is secured on a junior Lien basis on the
Collateral or is unsecured (the foregoing Indebtedness, “Junior Indebtedness”)
(other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate, increase the non-cash portion of the rate or extend the date
for payment of interest thereon or that would relax or waive any covenant
therein or (in the case of any Intercompany Subordinated Indebtedness or Axel
Johnson Subordinated Indebtedness) which would modify any term relating to such
Indebtedness not addressed in Exhibit H-1 or Exhibit H-2, as applicable, that
could not reasonably be expected to be adverse to the interests of the Lenders),
(b) amend the subordination provisions of any Intercompany Subordinated
Indebtedness, Axel Johnson Subordinated Indebtedness or any other Junior
Indebtedness that is subordinated in right of payment to the Obligations without
the consent of the Required Lenders, (c) make any voluntary payment, prepayment,
repurchase or redemption of, or otherwise optionally or voluntarily defease or
segregate funds with respect to, any Junior Indebtedness, provided that (i) such
payments shall be permitted (subject to clause (d) of this Section 8.9) so long
as no Default or Event of Default has occurred and is continuing and the Loan
Parties are in compliance with the covenants set forth in Section 8.1 calculated
on a Pro Forma Basis and (ii) the notes referred to in Section 8.10(e) shall be
permitted to be paid by Kildair on the Restatement Effective Date or (d) make
any payment on any Junior Indebtedness in violation of any subordination
provisions applicable thereto.

8.10 Limitation on Transactions with Affiliates. Engage in any transaction with
any Affiliate or Subsidiary unless such transaction is (i) otherwise permitted
under this Agreement and (ii) on terms no less favorable in all material
respects to such Loan Party than it would obtain in a comparable arm’s-length
transaction with a Person which is not an Affiliate or Subsidiary; provided,
however, that this Section 8.10 shall not apply to:

(a) any payment or other transaction pursuant to any agreement in effect on the
Restatement Effective Date and listed on Schedule 8.10 (or any renewal thereof
that is not materially adverse to the Lenders);

(b) [reserved];

(c) any payment or transaction by one Loan Party with one or more other Loan
Parties;

(d) any Restricted Payment that is permitted to be made pursuant to Section 8.5;

(e) the payment in full by Kildair on the Restatement Effective Date of (i) the
Promissory Note, dated October 30, 2013, made by Kildair in favor of Axel
Johnson Inc. having an

 

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outstanding principal amount of $17,500,000 and (ii) the Promissory Note, dated
October 1, 2012, and amended on September 27, 2013 and October 30, 2013, made by
Kildair in favor of Sprague International Properties LLC having an outstanding
principal amount of $14,535,247.65;

(f) any issuance of common Capital Stock of the MLP;

(g) any Axel Johnson Subordinated Indebtedness and any payment with respect
thereto permitted hereunder; or

(h) each of (i) the liquidation of Sprague Canadian Properties LLC immediately
after the consummation of the Kildair Acquisition and (ii) the Amalgamation.

8.11 Accounting Changes. Make any significant change in its accounting treatment
or reporting practices, except as required by GAAP, or change its Fiscal Year
without the consent of the Required Lenders (such consent not to be unreasonably
withheld, conditioned or delayed). At the end of any calendar year during which
any such change has occurred, the affected Loan Party shall prepare and deliver
to the Administrative Agent (for distribution to the Lenders through posting on
Intralinks or other web site in use to distribute information to the Lenders) an
explanatory statement, in form and substance reasonably satisfactory to the
Administrative Agent, reconciling the previous treatment or practice with the
new treatment or practice.

8.12 Limitation on Negative Pledge Clauses. Enter into, or permit to exist, with
any Person any agreement which effectively prohibits or limits the ability of a
Loan Party to create, incur, assume or suffer to exist any Lien upon or
otherwise transfer any interest in any of its property, assets or revenues as
Collateral, whether now owned or hereafter acquired, other than:

(a) this Agreement;

(b) the Loan Documents;

(c) agreements evidencing Indebtedness permitted to be incurred under Section
8.2(c) and (g), any industrial revenue bonds, purchase money security interests
or Financing Leases permitted by this Agreement, and agreements relating to the
Maine Dock Liability Obligations (in which cases, any prohibition or limitation
shall only be effective against the assets financed thereby);

(d) leases, contracts and agreements containing restrictions on assignment
entered into in the ordinary course of business;

(e) licensing agreements or management agreements with customary provisions
restricting assignment, entered into in the ordinary course of business;

(f) joint venture agreements containing customary and standard provisions
regarding ownership and distribution of the assets or equity interests of such
joint venture;

(g) agreements that neither restrict the Agents’ or any Secured Party’s ability
to obtain first priority liens on Collateral included in the U.S. Borrowing Base
or the Kildair Borrowing Base or in the calculation of Eligible Acquisition
Asset Value nor restrict in any material respect the Agents’ or any Secured
Party’s ability to exercise the remedies available to them under applicable Law
and the Security Documents, subject to Liens permitted hereunder; provided that
in no event shall such agreements restrict the payment of the Loans and other
Obligations;

 

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(h) agreements entered into by a Loan Party with a third party customer or
supplier of such Loan Party in the ordinary course of business with respect to a
transaction that places restrictions on a portion of the cash of such Loan Party
in an amount reasonably related to the amount of such transaction on terms
consistent with the past practice of such Loan Party;

(i) Materials Handling Contracts and other agreements entered into in the
ordinary course of business with commodity storage, transportation and/or
processing facilities that prohibit Liens on the commodities that are the
subject thereof and which shall not be included in the U.S. Borrowing Base or
the Kildair Borrowing Base;

(j) Commodity Contracts and Financial Hedging Agreements not included in the
U.S. Borrowing Base or the Kildair Borrowing Base and containing restrictions on
the assignment thereof; provided that, for the avoidance of doubt, to the extent
any such prohibition, restriction or limitation is ineffective as a matter of
law, the account receivable deriving from or the proceeds of such contract or
agreement may be included in the U.S. Borrowing Base or the Kildair Borrowing
Base;

(k) agreements purporting to prohibit the existence of any Liens upon, or
transferring of any interest in, any Excluded Asset (as such term is defined in
the U.S. Security Agreement or the Canadian Security Agreement, as applicable);
provided that such prohibition is entered into in the ordinary course and not in
contemplation of such asset becoming an Excluded Asset (as such term is defined
in the U.S. Security Agreement or the Canadian Security Agreement, as
applicable); and

(l) agreements with respect to assets not included in the U.S. Borrowing Base or
the Kildair Borrowing Base, the aggregate value of such assets at any one time
outstanding not to exceed $7,500,000.

8.13 Limitation on Lines of Business. Enter into any business except for those
lines of business in which the Loan Parties are engaged on the Restatement
Effective Date, and any activities reasonably related, complementary or
incidental thereto.

8.14 Governing Documents. Amend its Governing Documents in any manner that could
reasonably be expected to be materially adverse to the interests of the Lenders
and the Agents without the prior written consent of the Required Lenders, which
shall not be unreasonably withheld, conditioned or delayed.

8.15 Limitations on Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the U.S. Borrower to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the U.S. Borrower or any other Subsidiary of the U.S.
Borrower or (b) make loans or advances to, or other Investments in, the U.S.
Borrower or any other Subsidiary of the U.S. Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under this Agreement, (ii) any restrictions existing under the other
Loan Documents and (iii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.

8.16 Canadian Pension Plan. Except with the written consent of the Required
Lenders: (i) establish, maintain, administer, sponsor, contribute to,
participate in or assume or incur any liability in respect of any new defined
benefit Canadian Pension Plan, or acquire an interest in any Person if such
Person sponsors, administers, contributes to, participates in or has any
liability in respect of, any defined benefit Canadian Pension Plan; (ii) permit
its Canadian unfunded pension fund and other employee benefit plan obligations
and liabilities to remain unfunded other than in accordance with applicable law;
or (iii) terminate or wind-up any defined benefit Canadian Pension Plan.

 

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8.17 Use of Proceeds. Request any Loan or Letter of Credit, and the Borrowers
shall not use, and each shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Loan or Letter of Credit (A) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws, (B) for the
purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or
(C) in any manner that would result in the violation of any Sanctions applicable
to any party hereto.

8.18 Loan Parties. Permit any Loan Party to become an Exempt CFC.

 

  SECTION 9 EVENTS OF DEFAULT

9.1 Events of Default. If any of the following events shall occur and be
continuing:

(a) (i) Any Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms thereof or
hereof, or (ii) any Loan Party shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under any of
the other Loan Documents, when such interest or other amount becomes due in
accordance with the terms thereof or hereof, and in the case of this clause
(ii), the same shall remain unremedied for a period of three (3) Business Days;
or

(b) Any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or which is identified as such and contained in
any certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or

(c) Any Loan Party shall (i) default in the observance or performance of any
covenant contained in any of Sections 7.1(a) (annual financial statements),
(c) (monthly financial statements), (f) (annual Reconciliation Summary) and
(g) (monthly Reconciliation Summary), 7.2 (other than Sections 7.2(e), (g) and
(i)), 7.4, 7.6, 7.7(a), (b), (e)-(h), 7.18 or 8 of the Agreement, Sections 5(a),
(c), (d), (g), (h), (i), (j), (n)(i), (n)(iii), (p) or (t) of the U.S. Security
Agreement, Sections 5(a), (d), (g), (h), (i), (j), (m)(i), m(iii), (o) or (s) of
the Canadian Security Agreement or Section 4.4 of the Dutch Receivables Pledge
Agreement or (ii) default in the observance or performance, in any material
respect, of any covenant contained in Section 5(q) of the U.S. Security
Agreement or Section 5(p) of the Canadian Security Agreement; or

(d) Any Loan Party shall default in the observance or performance of any
covenant contained in Section 7.10 for a period of four (4) Business Days; or

(e) Any Loan Party shall default in the observance or performance of any other
obligation applicable to it contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a), (b), (c) and (d) of this
Section 9), and such default shall continue unremedied for a period of thirty
(30) days after the earlier of (x) such Loan Party having knowledge of such
default or (y) notice thereof from the Administrative Agent to any Borrower; or

 

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(f) Any Loan Party shall (A) default in any payment of principal of or interest
on any Indebtedness (other than the Loans or Reimbursement Obligations) or in
the payment of any Guarantee Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations of any Loan Party in respect of which such default
or defaults shall have occurred is at least $10,000,000; (B) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or such Guarantee Obligation (in each case involving the
amounts specified in clause (A) above) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to become due prior to
its stated maturity (other than with respect to Indebtedness that is, by its
terms, callable upon demand) or such Guarantee Obligation to become payable; or
(C) default in the observance or performance of any obligation (payment or
otherwise) under a Financial Hedging Agreement or a Commodity OTC Contract that
would allow the counterparty thereof to exercise a right to terminate its
position under such Financial Hedging Agreement or Commodity OTC Contract, if
the aggregate net exposure with regard to all such positions is in excess of
$10,000,000; or

(g) (i) Any Loan Party shall commence any case, proceeding or other action
(A) under any existing or future Law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, arrangement, liquidation,
winding-up or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, interim receiver, receiver and manager,
trustee, custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or any Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Loan Party any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or (iii) there shall be commenced
against any Loan Party any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief with regard to all or any substantial part of its assets, which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within forty-five (45) days from the entry thereof; or (iv) any Loan Party shall
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) any Loan Party shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or

(h) (i) Any Person that is a fiduciary, party-in-interest or disqualified person
with respect to a Plan shall engage in any non-exempt “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving such
Plan; (ii) any failure to satisfy the minimum funding requirements of
Section 412 or 430 of the Code, whether or not waived, shall occur with respect
to any Plan, a Plan shall be determined to be “at risk” status within the
meaning of Section 430 of the Code or any Lien in favor of the PBGC or a Plan
shall arise on the assets of any Loan Party or any Commonly Controlled Entity;
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (iv) any Single Employer Plan shall
terminate pursuant to Section 4041(c) or 4042 of ERISA; (v) the Loan Parties or
any Commonly Controlled Entity incur any liability in connection with a complete
or partial withdrawal from, or the Insolvency, Reorganization or termination

 

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of, a Multiemployer Plan or a determination that any Multiemployer Plan is or is
expected to be endangered, seriously endangered or in critical status, in each
case within the meaning of Sections 431 or 432 of the Code or Sections 304 or
305 of ERISA, or any Loan Party or any Commonly Controlled Entity fails to make
any required contributions to a Multiemployer Plan pursuant to Sections 431 or
432 of the Code; (vi) the failure of any Plan to comply with any material
provisions of ERISA and/or the Code (and applicable regulations under either) or
with the material terms of such Plan; (vii) the failure by any Loan Party or any
of its Commonly Controlled Entities to pay when due (after expiration of any
applicable grace period) any installment payment with respect to Withdrawal
Liability under Section 4201 of ERISA; (viii) the withdrawal by any Loan Party
or any of their respective Commonly Controlled Entities from any Single Employer
Plan with two or more contributing sponsors or the termination of any such
Single Employer Plan resulting in liability to any Loan Party or any of their
respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (ix) the
imposition of liability on any Loan Party or any of their respective Commonly
Controlled Entities pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (x) the occurrence of an act or
omission which could give rise to the imposition on any Loan Party or any of
their respective Commonly Controlled Entities of fines, penalties, taxes or
related charges under Chapter 43 of the Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Plan;
(xi) the assertion of a material claim (other than routine claims for benefits)
against any Plan other than a Multiemployer Plan or the assets thereof, or
against any Loan Party or any of their respective Commonly Controlled Entities
in connection with any Plan; (xii) receipt from the IRS of notice of the failure
of any Single Employer Plan (or any other Plan intended to be qualified under
Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the
failure of any trust forming part of any Single Employer Plan (or any other
Plan) to qualify for exemption from taxation under Section 501(a) of the Code;
(xiii) the imposition of a Lien pursuant to Section 430(k) of the Code or
pursuant to ERISA with respect to any Single Employer Plan; or (xiv) any other
event or condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (xiv) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or

(i) One or more judgments or decrees shall be entered against any Loan Party
involving in the aggregate a liability (to the extent not paid or covered by
insurance) of $10,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or

(j) (i) Any of the Security Documents shall cease, for any reason, to be in full
force and effect, or any Loan Party shall so assert or (ii) the Lien created by
any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby with respect to Collateral
having an aggregate fair market value in excess of $10,000,000 (other than, in
each case, by reason of the express release thereof pursuant to Section 11.5);
or

(k) The Guarantee shall cease, for any reason (other than by reason of the
express release thereof pursuant to Section 11.5), to be in full force and
effect or any Loan Party shall so assert; or

(l) (i) Any Loan Party shall, directly or indirectly, terminate or cause to
terminate, in whole or in part, or initiate the termination of, in whole or in
part, any Canadian Pension Plan so as to result in any liability which could
reasonably be expected to have a Material Adverse Effect; (ii) a going concern
unfunded liability or the solvency deficiency (calculated using actuarial
methods and assumptions which are consistent with the valuations last filed with
the applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles) exists under any Canadian Pension Plan; (iii) any
Loan Party or any of its Subsidiaries shall fail to make minimum required
contributions to amortize any funding deficiencies under a Canadian Pension Plan
within the time period set out in Requirements of Laws or fail to make a
required contribution under any Canadian

 

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Pension Plan or Canadian Benefit Plan which could result in the imposition of a
Lien upon the assets of such Loan Party or any of its Subsidiaries; or (iv) any
Loan Party or any of its Subsidiaries makes any withdrawals or applications of
assets of a Canadian Pension Plan or Canadian Benefit Plan contrary to the terms
of the Canadian Pension Plan or Canadian Benefit Plan, respectively, or
applicable laws;

(m) Any agreement or provision pertaining to the subordination of any Axel
Johnson Subordinated Indebtedness or Intercompany Subordinated Indebtedness
under a subordination agreement shall cease, for any reason, to be in full force
and effect, while such Indebtedness is outstanding; or

(n) Any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) of this Section 9 with respect to any
Borrower, the Commitments shall immediately and automatically terminate and the
Loans and Reimbursement Obligations (except as provided in the following
paragraph) hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the U.S. Borrower, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the U.S. Borrower, declare the Loans and, except as provided in the following
paragraph, Reimbursement Obligations hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement (including all amounts of L/C
Obligations) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.

With respect to all outstanding Letters of Credit with respect to which demand
for payment shall not have occurred at the time of an acceleration pursuant to
the preceding paragraph, the Borrowers shall at such time Cash Collateralize the
aggregate then-undrawn and unexpired amount of such Letters of Credit. The
Borrowers hereby grant to the Administrative Agent, for the benefit of the
Issuing Lenders, the Lenders, the L/C Participants and the other Secured
Parties, a security interest in such Cash Collateral to secure all obligations
of the Borrowers under this Agreement and the other Loan Documents and all other
Obligations. Cash Collateralized amounts shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and fees
owing with respect to such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrowers hereunder and
under the Notes and any other Obligations. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied and all other obligations of the Borrowers hereunder and
under the Notes and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrowers. The Borrowers shall execute and deliver to the Administrative Agent,
for the account of the Issuing Lenders, the Lenders, the L/C Participants and
the other Secured Parties, such further documents and instruments as the
Administrative Agent may reasonably request to evidence the creation and
perfection of the security interest in such Cash Collateral account.

The Secured Parties shall have rights and remedies as provided in the Loan
Documents, provided that for purposes of clarification, the parties acknowledge
that the net proceeds from the exercise of remedies against any Collateral and
any disposition thereof or the use of funds in any Cash Management Account shall
be applied first to pay outstanding Obligations or, as provided in the Loan
Documents, to prepay Obligations or as Cash Collateral for certain Obligations,
with any amounts in excess thereof, subject to applicable Requirements of Law,
being returned to the Loan Parties or whomever else may be lawfully entitled to
receive the same.

 

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  SECTION 10 THE AGENTS

10.1 Appointment. (a) Each Lender hereby irrevocably designates and appoints the
Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.

(b) Each Qualified Counterparty and each Qualified Cash Management Bank,
pursuant to the terms of the applicable Hedging Agreement Qualification
Notification and/or by accepting the grant by the Loan Parties of the security
interest in the Collateral pursuant to the Security Documents, hereby
irrevocably designates and appoints the Agents as the agents of such Qualified
Counterparty or Qualified Cash Management Bank under this Agreement and the
other Loan Documents, and each such Qualified Counterparty and Qualified Cash
Management Bank irrevocably authorizes each Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Qualified
Counterparty or Qualified Cash Management Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against any
Agent.

(c) For the purposes of holding any security granted by the Canadian Borrower or
any other Loan Party pursuant to the laws of the Province of Quebec to secure
payment of any bond issued by the Canadian Borrower or any Loan Party, each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
act as the person holding the power of attorney (i.e. “fondé de pouvoir”) (in
such capacity, the “Attorney”) of the Lenders as contemplated under Article 2692
of the Civil Code of Québec, and to enter into, to take and to hold on its
behalf, and for its benefit, any hypothec, and to exercise such powers and
duties that are conferred upon the Attorney under any hypothec. Moreover,
without prejudice to such appointment and authorization to act as the person
holding the power of attorney as aforesaid, each Lender hereby irrevocably
appoints and authorizes the Administrative Agent (in such capacity, the
“Custodian”) to act as agent and custodian for and on behalf of the Lenders to
hold and be the sole registered holder of any bond which may be issued under any
hypothec, the whole notwithstanding Section 32 of An Act respecting the special
powers of legal persons (Quebec) or any other applicable law, and to execute all
related documents. Each of the Attorney and the Custodian shall: (a) have the
sole and exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to
the Attorney and the Custodian (as applicable) pursuant to any hypothec, bond,
pledge, applicable laws or otherwise, (b) benefit from and be subject to all
provisions hereof with respect to the Administrative Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the liability
or responsibility to and indemnification by the Lenders, and (c) be entitled to
delegate from time to time any of its powers or duties under any hypothec, bond,
or pledge on such terms and conditions as it may determine from time to time.
Any

 

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person who becomes a Lender shall, by its execution of an Assignment and
Acceptance, be deemed to have consented to and confirmed: (i) the Attorney as
the person holding the power of attorney as aforesaid and to have ratified, as
of the date it becomes a Lender, all actions taken by the Attorney in such
capacity, and (ii) the Custodian as the agent and custodian as aforesaid and to
have ratified, as of the date it becomes a Lender, all actions taken by the
Custodian in such capacity. The substitution of the Administrative Agent
pursuant to the provisions of this Article 10 shall also constitute the
substitution of the Attorney and the Custodian.

10.2 Delegation of Duties. Each Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. No Agent shall be responsible for the negligence or misconduct of
any agents or attorneys in-fact selected by it with reasonable care.

10.3 Exculpatory Provisions. No Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates (each, an
“Agent-Related Person”) shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except for its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by such Agent under or in connection
with, this Agreement or any other Loan Document (including in any audit prepared
by the Administrative Agent’s internal auditor pursuant to Section 6.1(l)) or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

10.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
the U.S. Borrower, the Canadian Borrower or any other Loan Party), independent
accountants and other experts selected by such Agent with reasonable care. The
Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless a notice of assignment, negotiation or transfer thereof shall
have been filed with such Agent. Each Agent shall be fully justified in failing
or refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or such greater percentage of Lenders as shall be required therefor under
Section 11.1) as it deems appropriate or as otherwise required by Section 11.1
or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or
such greater percentage of Lenders as shall be required therefor under
Section 11.1) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders and all future holders of the
Loans and all other Obligations.

10.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless such Agent
has received notice from a Lender, or any Borrower or any other Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
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Agent receives such a notice, the Administrative Agent shall give notice thereof
to the Lenders. The Agents shall take such action with respect to such Default
or Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until an Agent shall have received such directions,
such Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

10.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that none of the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of any Borrower or any
other Loan Party or any audit performed by the Administrative Agent’s internal
auditor pursuant to Section 6.1(l), shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and the other Loan Parties and made its own decision to extend credit
to the Borrowers hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or
any other Lender, and 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 investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers and other Loan Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent, the Canadian Agent or the Co-Collateral
Agents hereunder or under any of the other Loan Documents, no Agent shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrowers or any other Loan
Party which may come into the possession of such Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates. Without limiting the generality of the foregoing, no
Agent shall have any duty to monitor the Collateral used to calculate the U.S.
Borrowing Base or the Kildair Borrowing Base or the reporting requirements or
the contents of reports delivered by any Borrower. Each Lender assumes the
responsibility of keeping itself informed at all times.

10.7 Indemnification. The Lenders agree to indemnify each Agent and each other
Agent-Related Person on an after-Tax basis in its capacity as such (to the
extent not reimbursed by the Borrowers and without limiting the obligation of
the Borrowers to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including at any time following the payment of
the Loans and Reimbursement Obligations and the cash collateralization of the
L/C Obligations) be imposed on, incurred by or asserted against such Agent or
such Agent-Related Person in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent’s or such Agent-Related Person’s
gross negligence or willful misconduct. The agreements in this Section 10.7
shall survive the payment of the Loans, Reimbursement Obligations and all
amounts payable hereunder and the cash collateralization of the L/C Obligations.

 

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10.8 Agents in Their Individual Capacity. Each Agent and its Subsidiaries and
Affiliates may make loans and other extensions of credit to, accept deposits
from and generally engage in any kind of business with the Borrowers and the
other Loan Parties and their Subsidiaries and Affiliates as though such Agent
were not an Agent hereunder and under the other Loan Documents. With respect to
the Loans and other extensions of credit made by it hereunder, each Agent shall
have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms “Lender” and “Lenders” shall include each Agent in its
individual capacity.

10.9 Successor Agents. (a) (i) The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Canadian Agent, the
Co-Collateral Agents, the U.S. Borrower and the Lenders (or, if the
Administrative Agent has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment, the
Administrative Agent may be removed at any time thereafter by an instrument or
concurrent instruments in writing delivered to the Borrower and the
Administrative Agent and signed by the Required Lenders). If the Administrative
Agent shall resign (or be removed) as the Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders (unless no Lender is willing to act as the Administrative
Agent, in which case the Administrative Agent may be any Person approved by the
Required Lenders) a successor Administrative Agent for the Lenders, which
successor Administrative Agent shall be approved by the U.S. Borrower and the
Canadian Agent (which approval shall, in each case, not be unreasonably withheld
and shall not be required during the continuance of an Event of Default),
whereupon such successor Administrative Agent shall succeed to the rights,
powers and duties of the Administrative Agent and the term “Administrative
Agent” shall mean such successor Administrative Agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans or other Obligations.
After any retiring Administrative Agent’s resignation (or removal) as
Administrative Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents. If no
successor Administrative Agent has accepted appointment as Administrative Agent
by the date which is thirty (30) days following a retiring Administrative
Agent’s notice of resignation, the retiring Administrative Agent’s resignation
shall nevertheless thereupon become effective and the Lenders shall perform all
of the duties of such Administrative Agent hereunder and under the other Loan
Documents until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.

(ii) The Canadian Agent may resign as the Canadian Agent upon thirty (30) days’
notice to the Administrative Agent, the Co-Collateral Agents, the U.S. Borrower
and the Lenders (or, if the Canadian Agent has become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee
or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company that has become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee or
custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment, the Canadian Agent may be removed at any time thereafter by an
instrument or concurrent instruments in writing delivered to the Borrower, the
Administrative Agent and the Canadian Agent and signed by the Required Lenders).
If the Canadian Agent shall resign (or be removed) as the Canadian Agent under
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Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders (unless no Lender is willing to act as the Canadian
Agent, in which case the Canadian Agent may be any Person approved by the
Required Lenders) a successor Canadian Agent for the Lenders, which successor
Canadian Agent shall be approved by the U.S. Borrower and the Administrative
Agent (which approval, in each case, shall not be unreasonably withheld and
shall not be required during the continuance of an Event of Default), whereupon
such successor Canadian Agent shall succeed to the rights, powers and duties of
the Canadian Agent and the term “Canadian Agent” shall mean such successor
Canadian Agent effective upon such appointment and approval, and the former
Canadian Agent’s rights, powers and duties as Canadian Agent shall be
terminated, without any other or further act or deed on the part of such former
Canadian Agent or any of the parties to this Agreement or any holders of the
Loans or other Obligations. After any retiring Canadian Agent’s resignation (or
removal) as Canadian Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Canadian Agent under this Agreement and the other Loan Documents. If no
successor Canadian Agent has accepted appointment as Canadian Agent by the date
which is thirty (30) days following a retiring Canadian Agent’s notice of
resignation, the retiring Canadian Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
such Canadian Agent hereunder and under the other Loan Documents until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above.

(b) Either or both Co-Collateral Agents may resign as a Co-Collateral Agent upon
thirty (30) days’ notice to the Administrative Agent, the other Co-Collateral
Agent (if any), the U.S. Borrower and the Lenders. Upon any such resignation,
the remaining Co-Collateral Agent (the “Sole Remaining Co-Collateral Agent”)
shall perform all of the functions of the Co-Collateral Agents and the retiring
Co-Collateral Agent shall be discharged from its duties and obligations
hereunder. If both Co-Collateral Agents shall resign substantially
simultaneously or the Sole Remaining Co-Collateral Agent shall resign, then the
Required Lenders shall appoint from among the Lenders (unless no Lender is
willing to act as a Co-Collateral Agent, in which case the Co-Collateral Agent
may be any Person approved by the Required Lenders) a successor Co-Collateral
Agent for the Lenders, who shall be the sole successor Co-Collateral Agent
hereunder (the “Sole Successor Co-Collateral Agent”) and which Sole Successor
Co-Collateral Agent shall be approved by the U.S. Borrower (which approval shall
not be unreasonably withheld and shall not be required during the continuance of
an Event of Default), whereupon such Sole Successor Co-Collateral Agent shall
succeed to the rights, powers and duties of the Co-Collateral Agents and the
term “Co-Collateral Agents” shall mean such Sole Successor Co-Collateral Agent
effective upon such appointment and approval, and the former Co-Collateral
Agents’ rights, powers and duties as Co-Collateral Agents shall be terminated,
without any other or further act or deed on the part of such former
Co-Collateral Agents or any of the parties to this Agreement or any holders of
the Loans or other Obligations. After any retiring Co-Collateral Agent’s
resignation as Co-Collateral Agent, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Co-Collateral Agent under this Agreement and the other Loan Documents. If
no successor Co-Collateral Agent has accepted appointment as Co-Collateral Agent
by the date which is thirty (30) days following a retiring Sole Remaining
Co-Collateral Agent’s notice of resignation or the substantially simultaneous
retiring of both Co-Collateral Agents, the resignation of the retiring
Co-Collateral Agent(s) shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of such Co-Collateral Agent(s) hereunder
and under the other Loan Documents until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

(c) The parties hereto acknowledge and agree that, for purposes of any right of
pledge governed by Netherlands law, any resignation by the Administrative Agent
is not effective with respect to its rights under the Parallel Debt (as defined
in the Guarantee) until such rights are assigned to the successor agent. The
Administrative Agent will reasonably cooperate in assigning its rights under the
Parallel Debt to any such successor agent and will reasonably cooperate in
transferring all rights under any security document governed by Netherlands law
(as the case may be) to such successor agent.

 

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

(b) The Lenders, and each Qualified Counterparty and each Qualified Cash
Management Bank (pursuant to the terms of the applicable Hedging Agreement
Qualification Notification and/or by accepting the grant by the Loan Parties of
the security interest in the Collateral pursuant to the Security Documents),
irrevocably authorize the Administrative Agent, at its option and in its
discretion, to release any Lien granted to or held by the Administrative Agent
upon any Collateral (i) upon termination of the Commitments, and payment in full
of all Loans and all other Obligations known to the Administrative Agent and
payable under this Agreement or any other Loan Document (except indemnification
obligations for which no claim has been made and of which no Responsible Person
of any Loan Party has knowledge or any obligations owed under a Commodity OTC
Agreement with a Qualified Counterparty, any Financial Hedging Agreement with a
Qualified Counterparty or any Cash Management Bank Agreement with a Qualified
Cash Management Bank); (ii) constituting property sold or to be sold or disposed
of as part of or in connection with any sale, transfer or other disposition
permitted hereunder; (iii) constituting property in which the Loan Parties owned
no interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to any Loan Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement or is
about to expire and which has not been, and is not intended by a Loan Party to
be, renewed or extended; (v) consisting of an instrument evidencing Indebtedness
or other debt instrument, if the indebtedness evidenced thereby has been paid in
full; or (vi) if approved, authorized or ratified in writing by the portion of
the Lenders required by Section 11.1. Upon request by the Administrative Agent
at any time, the Lenders will confirm in writing the Administrative Agent’s
authority to release particular types or items of Collateral pursuant to this
Section 10.10; provided that the absence of any such confirmation for whatever
reason shall not affect the Administrative Agent’s rights under this
Section 10.10.

(c) The Administrative Agent may execute any of its duties under this Agreement
and the other Loan Documents by or through agents or attorneys in fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in fact selected by it with reasonable
care.

10.11 The Co-Collateral Agents; Co-Documentation Agents and the Co-Syndication
Agents. (a) Notwithstanding anything to the contrary set forth herein, all
determinations of the Co-Collateral Agents under the Loan Documents shall be
made jointly by the Co-Collateral Agents, provided that, in the event that the
Co-Collateral Agents cannot agree on any matter to be determined by the
Co-Collateral Agents, the determination shall be made by the individual
Co-Collateral Agent asserting, in its discretion exercised in good faith, the
more conservative credit judgment or declining to permit the requested action
for which consent is being sought by the applicable Loan Party. This provision
shall be binding upon any successor to a Co-Collateral Agent.

(b) None of any Co-Documentation Agent or any Co-Syndication Agent, in their
respective capacities as such, shall have any duties or responsibilities, nor
shall any such Person in such capacity incur any liability under this Agreement
or the other Loan Documents.

 

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  SECTION 11 MISCELLANEOUS

11.1 Amendments and Waivers. Neither this Agreement nor any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 11.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the Administrative
Agent may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents with the Loan Parties party
thereto for the purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights and obligations of the
Lenders or of the Loan Parties party thereto hereunder or thereunder or
(b) waive or consent to any departure from, prospectively, concurrently or
retrospectively, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver or
consent and no such amendment, supplement or modification shall:

(i) reduce the amount or extend the scheduled date of maturity of any Loan or
payment Obligation hereunder or any installment thereof (other than any such
Obligation to pay any interest or letter of credit commission at the rate set
forth in Section 4.2(c)), or extend the due date for any Reimbursement
Obligation, or reduce the stated rate of any interest or fee payable hereunder
(other than the rates of interest or fees set forth in Section 4.2(c)) or extend
the scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender’s Commitment, in each case without the additional
written consent of each Lender affected thereby; or

(ii) increase any percentage in the definitions of “U.S. Borrowing Base” or
“Kildair Borrowing Base” or otherwise amend or modify the definitions of “U.S.
Borrowing Base”, “Kildair Borrowing Base” or “Aggregate Borrowing Base Amount”
or any direct or indirect component definition of the foregoing that has the
effect of increasing the Borrowing Base Availability, in each case without the
written consent of the Supermajority Lenders; or

(iii) amend or modify the definition of “Eligible Commodities” or any component
definition thereof that has the effect of adding commodities thereto without the
written consent of the Supermajority Lenders; or

(iv) consent to any changes to the Risk Management Policy which are materially
adverse to the Lenders without the written consent of the Supermajority Lenders;
or

(v) amend, modify or waive any provision of this Section 11.1 or change the
percentage specified in the definition of Required Lenders, Majority Facility
Lenders or Supermajority Lenders, or consent to the assignment or transfer by
any Loan Party of any of their rights and obligations under this Agreement and
the other Loan Documents, in each case without the written consent of all of the
Lenders; or

(vi) consent to the release by the Administrative Agent of all or substantially
all of the Collateral or release any Loan Party from its Guarantee Obligations
under the Guarantee or provide for the Collateral or the Guarantee to no longer
secure or guarantee all Obligations ratably, without the written consent of all
of the Lenders, except to the extent such release is permitted or required under
this Agreement; or

(vii) amend, modify or waive any provision of Section 4.7(d) or (e),
Section 4.9(a) or (b) or Section 11.8, or Section 8(b) of the U.S. Security
Agreement, Section 8(b) of the Canadian Security Agreement, Section 14 of the
Dutch Receivables Pledge Agreement or Section 14 of the Dutch Membership Pledge
Agreement, without the written consent of all the Lenders affected thereby; or

 

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(viii) amend, modify or waive any provision of Section 10, or any other
provision affecting the rights, duties or obligations of any Agent, without the
written consent of any Agent directly affected thereby; or

(ix) amend, modify or waive any provision of Section 3, or any provision of
Section 11.7(c) affecting the right of the Issuing Lenders to consent to certain
assignments thereunder, without the written consent of the Issuing Lenders or
any other provision affecting the rights, duties or obligations of any Issuing
Lenders, without the additional written consent of any Issuing Lender directly
affected thereby; or

(x) amend, modify or waive any provision affecting the rights, duties or
obligations of any Swing Line Lender, without the written consent of any Swing
Line Lender directly affected thereby.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans and other Obligations.
In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be
restored to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.

Notwithstanding the foregoing, (a) the Administrative Agent, with the consent of
the U.S. Borrower, may amend, modify or supplement any Loan Document without the
consent of any Lender or the Required Lenders in order to correct, amend or cure
any ambiguity, inconsistency or defect or correct any typographical error or
other manifest error in any Loan Document and (b) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender that
by its terms affects any Defaulting Lender disproportionately adversely relative
to other affected Lenders shall require the consent of such Defaulting Lender.

11.2 Notices.

(a) General. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by overnight courier or delivery
by hand, when delivered, (b) in the case of delivery by mail, three (3) Business
Days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been
electronically confirmed, addressed as follows in the case of the U.S. Borrower,
the Canadian Borrower, the Administrative Agent, the Canadian Agent and the
Co-Collateral Agents, and as set forth in Schedule 1.0 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:

 

U.S. Borrower:    Sprague Operating Resources LLC    185 International Drive   
Portsmouth, New Hampshire 03801    Attention: Paul Scoff, Esq.    Fax: (603)
430-5324 Canadian Borrower:    Kildair Service Ltd.    92, chemin Delangis   
St-Paul de Joliette (QC) J0K 3E0        Attn: Jacques Ferraro    Fax : 450
756-4783

 

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   With a copy to:    Sprague Operating Resources LLC    185 International Drive
   Portsmouth, New Hampshire 03801    Attention: Paul Scoff, Esq.    Fax: (603)
430-5324 The Administrative Agent:    JPMorgan Chase Bank, N.A., as   
Administrative Agent    277 Park Avenue, 22nd Floor    New York, New York 10172
   Attention: Dan Bueno The Canadian Agent:    JPMorgan Chase Bank, N.A.,
Toronto    Branch, as Canadian Agent    277 Park Avenue, 22nd Floor    New York,
New York 10172    Attention: Dan Bueno The Co-Collateral Agents:    If to
JPMorgan Chase Bank, N.A., as Co-Collateral Agent:    JPMorgan Chase Bank, N.A.,
as Co-Collateral Agent    277 Park Avenue, 22nd Floor    New York, New York
10172    Attention: Dan Bueno    If to BNP Paribas, as Co-Collateral Agent:   
BNP Paribas, as Co-Collateral Agent    787 Seventh Avenue, 9th Floor    New
York, NY 10019    Attention: Anne-Catherine Mathiot

provided that any notice, request or demand to or upon any Agent, the Issuing
Lenders or the Lenders pursuant to Section 2.5, 2.6, 3.3, 3.6, 3.7, 4.1, 4.3,
4.6, 4.7, or 4.9 shall not be effective until received.

(b) Limited Use of Electronic Mail. Electronic mail and internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used to deliver any notice
hereunder.

(c) The Platform. EACH BORROWER HEREBY ACKNOWLEDGES THAT THE ADMINISTRATIVE
AGENT WILL MAKE AVAILABLE TO THE LENDERS MATERIALS AND/OR INFORMATION PROVIDED
BY OR ON BEHALF OF THE BORROWERS HEREUNDER (COLLECTIVELY, “BORROWER MATERIALS”)
BY POSTING THE BORROWER MATERIALS

 

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ON INTRALINKS OR ANOTHER SIMILAR ELECTRONIC SYSTEM (THE “PLATFORM”). THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT-RELATED PERSONS DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE
ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT-RELATED PERSON IN CONNECTION
WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall any Agent or any
other Agent-Related Person have any liability to any Loan Party, any Lender or
any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any Borrower’s or
any Agent’s transmission of Borrower Materials through the internet, except to
the extent that such losses, claims, damages, liabilities or expenses are
determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent-Related Person; provided, however, that in no event shall any
Agent-Related Person have any liability to any Loan Party, any Lender or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages). Certain of the Lenders (each,
a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrowers, the other Loan Parties or
their respective Affiliates, or the respective securities of any of the
foregoing, and who may be engaged in investment and other market-related
activities with respect to such Persons’ securities. Each Public Lender agrees
to cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable Law, including United States Federal and state securities Laws
and Canadian federal and provincial securities Laws, to make reference to
Borrower Materials that are not made available through the “Public Side
Information” portion of the Platform and that may contain material non-public
information with respect to any Loan Party or its securities for purposes of
United States Federal or state securities laws and Canadian federal and
provincial securities Laws.

(d) Reliance by Agents and Lenders. The Agents and the Lenders shall be entitled
to rely and act upon any notices (including telephonic notices) purportedly and
in good faith believed to be given by or on behalf of any 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 Borrowers jointly and severally indemnify each Agent
and each Lender from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly and believed in good
faith to be given by or on behalf of any Borrower. All telephonic notices to and
other communications with any Agent may be recorded by such Agent, and each of
the parties hereto hereby consents to such recording.

11.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein and in the other
Loan Documents provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law.

 

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11.4 Survival of Representations and Warranties. All representations and
warranties made herein, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

11.5 Release of Collateral and Guarantee Obligations. (a) Upon any sale or other
transfer of any Collateral that is permitted under the Loan Documents by any
Loan Party or a sale of all of the assets of, or all of the Capital Stock of, a
Subsidiary in a transaction that is permitted under the Loan Documents (other
than a sale, transfer or other disposition to another Loan Party), or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 10.10 hereof, the security
interest in such Collateral shall automatically terminate and the Administrative
Agent shall execute and a deliver a termination or satisfaction of any Mortgage
and Security Agreement affecting such Collateral, in proper form for recording.

(b) Upon any sale or other transfer of all of the Capital Stock of any Loan
Party that is permitted or consented to under the Loan Documents (other than a
sale or transfer to another Loan Party), the Guarantee of such Loan Party shall
automatically be released and terminated.

(c) Upon termination of the Commitments and payment in full of the Loans and all
other Obligations payable under this Agreement or any other Loan Document
(except indemnification obligations for which no claim has been made and of
which no Responsible Person of any Loan Party has knowledge) and the termination
or expiration of all Letters of Credit, the pledge and security interest granted
pursuant to this Agreement and the other Loan Documents shall automatically
terminate and all rights to the Collateral shall revert to the applicable Loan
Party. Upon any such termination or pursuant to any termination or release as
described in Section 11.5(a), the Administrative Agent will, at the applicable
Loan Party’s expense, execute and deliver to such Loan Party such documents as
such Loan Party shall reasonably request to evidence such termination.

11.6 Payment of Costs and Expenses. Each Borrower, jointly and severally, agrees
(a) to pay or reimburse each Agent and the Lead Arranger for all its reasonable
and documented out-of-pocket costs and expenses incurred in connection with the
syndication of the Facilities and the development, preparation, negotiation,
execution, delivery and administration of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable and documented fees and disbursements of one firm of counsel to
the Agents and the Lead Arranger, one regulatory counsel to the Agents and the
Lead Arranger and a single firm of local counsel in each applicable
jurisdiction, (b) to pay or reimburse each Lender, the Swing Line Lender, each
Issuing Lender, each Agent and the Lead Arranger, for all its documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the documented fees and disbursements of counsel to each
Lender, the Lead Arranger, the Swing Line Lender and each Issuing Lender and of
counsel to the Agents, (c) to pay or reimburse the Agents and the Lead Arranger
for their documented costs and expenses incurred in connection with inspections
performed pursuant to Section 7.9 and audits performed pursuant to
Section 6.1(l), and any other due diligence performed in connection with this
Agreement and the other Loan Documents, including the reasonable and documented
fees and disbursements of counsel to the Agents (including the fees and expenses
of Simpson Thacher & Bartlett LLP), (d) to pay, indemnify, and hold each Lender,
the Swing Line Lender, the Issuing Lenders, each Agent and the Lead Arranger
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes (except to the extent the Borrowers have otherwise indemnified
such Person for such taxes under Section 4.11(b)), if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or
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administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent (including the
determination of whether or not any such waiver or consent is required) under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (e) on a net after-Tax basis, to pay, indemnify, and hold each
Lender, the Issuing Lenders, the Agents and the Arrangers, and each of their
respective officers, employees, directors, trustees, agents, advisors,
affiliates, partners and controlling persons (each, an “Indemnitee”), harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including the reasonable and documented fees and
expenses of one firm of counsel for all Indemnitees, taken as a whole, and if
necessary, one regulatory counsel and a single firm of local counsel in each
appropriate jurisdiction for all Indemnitees, taken as a whole (and in the case
of an actual or perceived conflict of interest, by another firm of counsel for
the affected Indemnitee)) other than Taxes (as to which Section 4.10 and
Section 4.11 shall govern) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents, and
any such other documents or the use or proposed use of proceeds of the
Facilities, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Loan Parties and any of their Subsidiaries, or any of the
Properties, or any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto
(all the foregoing in this clause (e), collectively, the “Indemnified
Liabilities”); provided that the Borrowers shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities (x) are found by a final, non-appealable judgment of a
court of competent jurisdiction to have resulted from the bad faith, gross
negligence or willful misconduct of such Indemnitee or any Related Person
thereof, (y) are found by a final, non-appealable judgment of a court of
competent jurisdiction to have resulted from a material breach of the
obligations of such Indemnitee or any Related Person thereof or (z) result from
any proceeding that is solely among Indemnitees (other than any proceeding
against any Agent or Arranger or Person fulfilling a similar role in respect of
the Facilities in its capacity or in fulfilling its role as such) and does not
involve an act or omission by the U.S. Borrower or any of its Affiliates. The
agreements in this Section 11.6 shall survive repayment of the Loans,
Reimbursement Obligations and all other amounts payable hereunder.

11.7 Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrowers, the Lenders,
the Agents and their respective successors and assigns, except that no Borrower
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender (and any purported such
assignment or transfer by any Borrower without such consent of each Lender shall
be null and void).

(b) Any Lender may, in accordance with applicable Law, at any time sell to one
or more banks, financial institutions or other entities (other than the U.S.
Borrower or any of its Subsidiaries or Affiliates or any natural person)
(individually, a “Participant” and, collectively, the “Participants”) (so long
as no Default or Event of Default has occurred and is continuing, only to a
Person other than an Ineligible Participant) participating interests in any Loan
or Reimbursement Obligation owing to such Lender, any Commitment of such Lender
or any other interest of such Lender hereunder and under the other Loan
Documents (a “Participation”). In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan, Reimbursement Obligation or other
interest for all purposes under this Agreement and the other Loan Documents, and
the Borrowers and the Agents shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents, except with respect to Section 4.10 and
4.11, under which the Participant has certain rights with respect thereto. In no
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Participant under any such Participation have any right to approve any amendment
to or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or the stated rate of interest
on, the Loans, Reimbursement Obligation or any fees payable hereunder, or
postpone the date of the final maturity of the Loans or Reimbursement
Obligations, in each case to the extent subject to such Participation (and, for
the avoidance of doubt, each Borrower may exercise any rights granted to them in
Section 4.17 with respect to the Lender that sold a Participation to such
Participant to the extent that the direction by such Participant to such Lender
to not consent to any such amendment would cause the applicable Lender to be
subject to the provisions of Section 4.17). The Borrowers agree that if amounts
outstanding under this Agreement are due or unpaid during an Event of Default,
or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable Law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement; provided that in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 11.8(a) as fully as if it
were a Lender hereunder. The Borrowers also agree that each Participant shall be
entitled to the benefits of, and be bound by the obligations imposed on the
Lenders in, Sections 4.10, 4.11 and 4.14 with respect to its Participation in
the Commitments and the Loans and other extensions of credit hereunder
outstanding from time to time as if it were a Lender; provided, that no
Participant shall be entitled to receive any greater payments under Sections
4.10, 4.11 and 4.14, with respect to its participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from change in Law that occurs
after the Participant acquired the applicable participation and the Participant
agrees to be subject to the provisions of Section 4.17, as if it were an
assignee under paragraph (c) of this Section. Each Lender that sells a
participation agrees to use reasonable efforts to cooperate with the Borrowers
to effectuate the provisions of Section 4.17 with respect to any Participant.
Each Lender that sells a participation shall, acting solely for this purpose as
non-fiduciary agent of the Borrowers, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(c) Any Lender may, in accordance with applicable Law, at any time and from time
to time assign to any Lender or any Subsidiary, Affiliate or Approved Fund
thereof, or, with the consent of the Administrative Agent, and, in the case of
an assignment of the Acquisition Facility Commitments, the Acquisition Facility
Issuing Lenders, and, in the case of an assignment of any Working Capital
Facility Commitment, the Relevant Working Capital Facility Issuing Lenders and
the Relevant Swing Line Lenders, and, so long as no Event of Default has
occurred and is continuing, the U.S. Borrower (which consent shall not be
unreasonably withheld or delayed), to any other Person (other than the U.S.
Borrower or any of its Subsidiaries or Affiliates, any natural person or any
Defaulting Lender) (the “Assignee”), all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
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appropriately completed (an “Assignment and Acceptance”), executed by such
Assignee, such assigning Lender (and, in the case of an Assignee that is not
then a Lender or any Subsidiary, Affiliate or Approved Fund thereof, by the
Administrative Agent, and, in the case of an assignment of the Acquisition
Facility Commitments, the Acquisition Facility Issuing Lenders, and, in the case
of an Assignment of any Working Capital Facility Commitment, the Relevant
Working Capital Facility Issuing Lenders and the Relevant Swing Line Lenders,
and, so long as no Event of Default has occurred and is continuing and the U.S.
Borrower is not deemed to consent to such assignment, the U.S. Borrower) and
attaching the Assignee’s relevant tax forms, administrative details and wiring
instructions, and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that (i) each such assignment to an Assignee
(other than any Lender) shall be in an aggregate principal amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof (other than in the case of
(A) an assignment of all of a Lender’s interests under this Agreement or (B) an
assignment to another Lender, a Subsidiary, an Affiliate or an Approved Fund of
such assigning Lender), unless otherwise agreed by the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the U.S. Borrower
(such amount to be aggregated in respect of assignments by to any Lender and the
affiliates or Approved Funds thereof), (ii) in the case of an assignment by a
Lender to a Bank CLO managed by such Lender or an affiliate of such Lender,
unless such assignment to such Bank CLO has been consented to by the
Administrative Agent, and in the case of an assignment of the Acquisition
Facility Commitments, the Acquisition Facility Issuing Lenders, and, in the case
of an Assignment of any Working Capital Facility Commitment, the Relevant
Working Capital Facility Issuing Lenders, and the Relevant Swing Line Lenders,
and, so long as no Event of Default has occurred and is continuing and the U.S.
Borrower is not deemed to consent to such assignment, the U.S. Borrower (such
consent not to be unreasonably withheld or delayed), the assigning Lender shall
retain the sole right to approve any amendment, waiver or other modification of
this Agreement or any other Loan Document; provided that the Assignment and
Acceptance between such Lender and such Bank CLO may provide that such Lender
will not, without the consent of such Bank CLO, agree to any amendment,
modification or waiver that requires the consent of each Lender directly
affected thereby pursuant to Section 11.2, and (iii) each Assignee shall comply
with the provisions of Section 4.11(e). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Commitments as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section 11.7, (x) the consent of the U.S. Borrower shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrowers, for any
assignment which occurs at any time when any of the events described in
Section 9.1(g) shall have occurred and be continuing and (y) the U.S. Borrower
shall be deemed to have consented to any assignment that requires consent of the
U.S. Borrower pursuant to the terms hereof unless it shall object thereto by
written notice to the Administrative Agent within five (5) Business Days after
having received notice thereof. Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this Section 11.7
shall be treated for purposes of this Agreement as a sale by such Lender of a
Participation in such rights and obligations in accordance with Section 11.7(b).

(d) The Administrative Agent, on behalf of the Borrowers, shall maintain at the
address of the Administrative Agent referred to in Section 11.2 a copy of each
Assignment and Acceptance delivered to it and a register (the “Register”) for
the recordation of the names and addresses of the Lenders (including all
Assignees and successors) and the Commitments of, and principal amounts (and
stated interest) of the Loans and other Obligations owing to, each Lender from
time to time. The

 

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entries made in the Register shall, to the extent permitted by applicable Law,
be prima facie evidence of the existence and amounts of the obligations of the
Borrowers therein recorded (absent manifest error), and the Borrowers, the
Administrative Agent and the Lenders may (and, in the case of any Loan or other
Obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other Obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary; provided, however,
that the failure of the Administrative Agent to maintain the Register, or any
error therein, shall not in any manner affect the obligation of the Borrowers to
repay (with applicable interest) the Loans and other extensions of credit
hereunder made to any Borrower by such Lender in accordance with the terms of
this Agreement. Any assignment of any Loan or other Obligation hereunder,
whether or not evidenced by a Note, shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice. The parties intend for the
Loans or other Obligations to be in registered form for tax purposes and this
provision shall be construed in accordance with that intent.

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Assignee (and, in the case of an Assignee that is not then a
Lender (or any Subsidiary, Affiliate or Approved Fund thereof), by the
Administrative Agent, and, in the case of an assignment of the Acquisition
Facility Commitments, the Acquisition Facility Issuing Lenders, and, in the case
of an assignment of any Working Capital Facility Commitment, the Relevant
Working Capital Facility Issuing Lenders and the Relevant Swing Line Lenders
and, so long as no Event of Default has occurred and is continuing and the U.S.
Borrower is not deemed to consent to such assignment, the U.S. Borrower),
together with payment to the Administrative Agent by the assigning Lender of a
registration and processing fee of $3,500, the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on the effective
date determined pursuant thereto record the information contained therein in the
applicable Register and give notice of such acceptance and recordation to the
Lenders and the U.S. Borrower.

(f) Each Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a “Transferee”) and any prospective Transferee (so long as no
Default or Event of Default has occurred and is continuing, other than an
Ineligible Participant) in each case, any and all financial information in such
Lender’s possession concerning the Borrowers, the other Loan Parties and their
Subsidiaries and Affiliates which has been delivered to such Lender by or on
behalf of any Borrower or the other Loan Parties pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of any Borrower or other
Loan Parties in connection with such Lender’s credit evaluation of the
Borrowers, the other the Loan Parties and their Subsidiaries or Affiliates prior
to becoming a party to this Agreement; provided that such Transferee or
prospective Transferee shall have agreed to be bound by the provisions of
Section 11.16 hereof.

(g) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 11.7 concerning assignments of Loans and other
extensions of credit hereunder and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security interests,
including (i) any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank (including the Bank of Canada) or any central bank having
jurisdiction over such Lender in accordance with applicable Law and (ii) any
pledge or assignment by a Lender which is a fund to its trustee for the benefit
of such trustee and/or its investors to secure its obligations under any
indenture or Governing Documents to which it is a party; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
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(h) Notwithstanding the foregoing, any Lender may, with notice to, but without
consent of, any Borrower and the Administrative Agent, and in accordance with
the definition of “Conduit Lender” set forth in Section 1.1 hereof and the terms
of this Section 11.7(h), designate a Conduit Lender and fund any of the Loans or
Unreimbursed Amounts which such Lender is obligated to make or pay hereunder by
causing such Conduit Lender to fund such Loans or Unreimbursed Amounts on behalf
of such Lender. Any Conduit Lender may assign any or all of the Loans or
Unreimbursed Amounts it may have funded hereunder to its designating Lender
without the consent of any Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 11.7(c). Each Borrower, each
Lender and each Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy, insolvency or similar Law in connection
with any obligation of such Conduit Lender under the Loan Documents, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance. In addition, notwithstanding the foregoing,
any Conduit Lender may (i) with notice to, but without the prior written consent
of, any Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans or
Reimbursement Obligations to any financial institutions (consented to by the
U.S. Borrower and the Administrative Agent) providing liquidity and/or credit
support to or for the account of such Conduit Lender to support the funding or
maintenance of Loans or Reimbursement Obligations by such Conduit Lender and
(ii) disclose on a confidential basis any non-public information relating to its
Loans and its Reimbursement Obligations to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity enhancement
to such Conduit Lender. This clause (h) may not be amended without the written
consent of any Conduit Lender directly affected thereby.

11.8 Adjustments; Set-off. (a) If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of its Loans or Reimbursement
Obligations with regards to either Facility, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9.1(g),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender under such Facility, if any, in respect of such
other Lender’s Loans or Reimbursement Obligations under such Facility, or
interest thereon, except to the extent specifically provided hereunder, such
Benefited Lender shall purchase for cash from the other Lenders under such
Facility a participating interest in such portion of each such other Lender’s
Loans or Reimbursement Obligations under such Facility, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders
under such Facility; except that with respect to any Lender that is a Defaulting
Lender by virtue of such Lender failing to fund its Commitment Percentage of any
Loan or Participation Obligation, such Defaulting Lender’s pro rata share of the
excess payment shall be allocated to the Lender (or the Lenders, pro rata) that
funded such Defaulting Lender’s Commitment Percentage thereof; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest; provided further, that to the extent prohibited
by applicable law as described in the definition of “Excluded Swap Obligation,”
no amounts received from, or set off with respect to, any Loan Party shall be
applied to any Excluded Swap Obligations of such Loan Party. Each Borrower
agrees that each Lender so purchasing a portion of another Lender’s Loans or
Reimbursement Obligations may exercise all rights of payment (including rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.

 

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(b) In addition to any rights and remedies of the Lenders provided by Law, each
Lender shall have the right, without prior notice to any Borrower, any such
notice being expressly waived by each Borrower to the extent permitted by
applicable Law, during the existence of an Event of Default, upon any amount
becoming due and payable by any Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
applicable Borrower. Each Lender agrees to promptly notify the U.S. Borrower and
the Administrative Agent after any such set-off and application made by such
Lender; provided that the failure to give such notice shall not affect the
validity of such set-off or application.

11.9 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
transmission or electronic mail transmission in portable document format of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission or by electronic mail
in portable document format shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the U.S. Borrower and the Administrative Agent.

11.10 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

11.11 Integration. This Agreement and the other Loan Documents represent the
agreement of the parties hereto with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

11.12 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

11.13 Submission to Jurisdiction. Each Loan Party hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Loan Parties as the
case may be, at their address set forth in Section 11.2 or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;

 

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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by Law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by Law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

11.14 Acknowledgements. Each Loan Party hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

(b) none of the Agents nor any Lender has any fiduciary relationship with or
duty to the Loan Parties arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Borrowers and
the other Loan Parties, on one hand, and Agents and Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Loan Parties and the Lenders.

11.15 Waivers of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

11.16 Confidentiality. (a) Each Lender Party shall use its best efforts to
(i) keep confidential (and shall cause its directors, officers, employees,
representatives, agents, professional advisors or auditors (collectively,
“Representatives”) to keep confidential) all information that such Lender Party
receives from or on behalf of the Loan Parties other than information that is
identified by any of the Loan Parties as being non-confidential information (all
such information that is not so identified being “Confidential Information”);
provided that nothing in this Section 11.16 shall prevent any Lender Party from
(A) disclosing, subject to the terms and requirements of this Section 11.16,
such information to a Subsidiary or an Affiliate or its or their
Representatives, (B) disclosing Confidential Information in connection with the
exercise of any remedy hereunder, (C) using Confidential Information solely for
purposes of evaluating and administering the Loans and the Loan Documents,
(D) disclosing Confidential Information to a Participant, an Assignee or a
potential Transferee, in each case in accordance with Section 11.7(f) or (E) to
the National Association of Insurance Commissioners, any title or credit
insurance company or any similar organizations and (ii) subject to
Section 11.16(d), not disclose Confidential Information to Representatives of
its Trading Business. Any Person required to maintain the confidentiality of
Confidential Information as provided in this Section 11.16 shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Confidential
Information as such Person would accord to its own confidential information.

(b) Notwithstanding anything in this Section 11.16 to the contrary, any
Confidential Information may be disclosed by any Lender Party or any
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Lender Party or Representative being the “Disclosing Party”) if the Disclosing
Party is compelled by judicial process or is required by Law or regulation or is
requested to do so by any examiner or any other regulatory authority or
recognized self-regulatory organization including the New York Stock Exchange,
the Federal Reserve Board, the New York State Banking Department and the
Securities & Exchange Commission, in each case having or asserting jurisdiction
over the Disclosing Party.

(c) The obligations of each Lender Party and its Representatives under this
Section 11.16 with respect to Confidential Information shall not apply to
(i) any Confidential Information which, as of the date of disclosure by such
Lender Party or its Representatives, is in the public domain or subsequently
comes into the public domain other than as a result of a breach of the
obligations of such Lender Party or its Representatives hereunder, or (ii) any
Confidential Information that was or becomes available to such Lender Party or
its Representatives from a person or source that is or was not, to the knowledge
of such Lender Party or its Representatives, bound by a confidentiality
agreement with any Loan Party or otherwise prohibited from transferring such
information to any other Person, or (iii) any Confidential Information which was
or becomes available to such Lender Party or its Representatives without any
obligation of confidentiality prior to its disclosure by or on behalf of the
Loan Parties or (iv) any Confidential Information that was developed by such
Lender Party or its Representative without the use of information provided by
any Loan Party.

(d) Notwithstanding anything herein to the contrary, any Lender Party may
disclose Confidential Information to those Representatives of its Trading
Business, solely to the extent (i) such disclosure is (A) advisable, in the good
faith discretion of such Lender Party, to assist such Lender Party in protecting
and enforcing its rights under any Loan Document and other credit facilities
which such Lender Party or any of its Subsidiaries or Affiliates has with the
applicable Loan Party (or any of its Subsidiaries or Affiliates) and
(B) relevant to such assistance, (ii) such Representatives have been advised of,
and agree to, the confidential nature, and restrictions on use, of such
Confidential Information and need to know same in connection with providing such
assistance, and (iii) such Confidential Information is not used for any purpose
other than that set forth in this Section 11.16.

(e) Each of the Lender Parties acknowledges that (a) the Confidential
Information may include material non-public information concerning the Loan
Parties and their related parties or their respective securities, (b) it has
developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including United States Federal and state
securities Laws, Canadian securities laws and Dutch securities laws.

(f) The Administrative Agent agrees (i) to keep confidential the rates to be
used in the calculation of the Reference Bank Rate supplied by each Reference
Bank pursuant to or in connection with this Agreement and (ii) that it has
developed procedures to ensure that such rates are not submitted by the
Reference Banks to, or shared with, any individual who is formally designated as
being involved in the ICE LIBOR submission process; provided that such rates may
be shared with the Borrowers and any of their respective employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of their respective affiliates that have a commercially reasonable business need
to know such rates, subject to an agreement by the recipient thereof to comply
with the provisions of this Section as if it were the Administrative Agent;
provided further that, for the avoidance of doubt, the Reference Bank Rate shall
be disclosed to Lenders in accordance with Section 4.15(a).

11.17 Specified Laws. Each Lender and each Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the Specified Laws, it is required to obtain, verify and record information
that identifies the Loan Parties, which information includes the names and
addresses of the Loan Parties and other information that will allow such Lender
or Agent, as applicable, to identify the Loan Parties in accordance with the
Specified Laws.

 

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11.18 [Reserved].

11.19 Additional Borrowers. At any time and from time-to-time after the
Restatement Effective Date, the U.S. Borrower may request that any of its
Subsidiaries (other than an Exempt CFC or a direct or indirect Subsidiary of an
Exempt CFC) become a borrower under this Agreement (each Subsidiary which
becomes a borrower pursuant to the terms of this Section 11.19, an “Additional
Borrower”). Such Subsidiary shall become an Additional Borrower with effect on
and from the date on which the Administrative Agent notifies the U.S. Borrower
that each of the following has been satisfied (which date shall be within ten
(10) Business Days after each Lender has received the documents referred to in
Section 11.19(e):

(a) the Administrative Agent receives a duly completed and executed Joinder
Agreement, substantially in the form of Exhibit U;

(b) each Lender has approved of such Additional Borrower;

(c) the U.S. Borrower confirms that no Default or Event of Default is continuing
or would occur as a result of that Subsidiary becoming an Additional Borrower
and each of the representations and warranties relating to the Additional
Borrower and the Loan Parties (other than the representations and warranties set
forth in Sections 5.1, 5.4, 5.6, 5.7, 5.17 and 5.20) is true and not misleading
in any material respect (except that any representation and warranty that is
qualified by “materiality” or “Material Adverse Effect” shall be true and
correct in all respects as so qualified) as if made on date of accession of
Additional Borrower;

(d) the Subsidiary is incorporated, organized or formed in the United States of
America, Canada or another jurisdiction approved by the Supermajority Lenders;

(e) the Administrative Agent has received all of the documents and other
evidence referred to in Section 6.1(b) and Sections 6.1(d) through 6.1(g) in
relation to that Additional Borrower together with a legal opinion in respect of
the Additional Borrower from a law firm qualified to issue legal opinions with
respect to the jurisdiction of incorporation, organization or formation and
(with respect to any Additional Borrower organized under the laws of any
jurisdiction of Canada) the jurisdiction of the chief executive office and
domicile (within the meaning of the Civil Code of Quebec) and each jurisdiction
in which material tangible assets are located, each in form and substance
reasonably satisfactory to the Administrative Agent;

(f) the Administrative Agent shall have received the results of a recent search
by a Person reasonably satisfactory to the Administrative Agent, of the Uniform
Commercial Code and PPSA (if relevant), judgment and tax Lien filings, and all
customary searches for financing transactions of this nature in all applicable
jurisdictions, which may have been filed with respect to personal property of
such Additional Borrower, and the results of such search shall be reasonably
satisfactory to the Administrative Agent;

(g) the Co-Collateral Agents and each Lender shall have received copies of a
collateral and risk management review (the “Additional Borrower Collateral Risk
Review”), in form and substance satisfactory to the Co-Collateral Agents, of all
of the assets of such Additional Borrower that would comprise each asset
category set forth in the definition of “U.S. Borrowing Base” or “Kildair
Borrowing Base”, as applicable, prepared by Co-Collateral Agents’ internal or
external collateral and risk manager; provided, however, that (i) the Additional

 

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Borrower Collateral Risk Review shall be completed (or in the event it is not
completed, be deemed completed) by a date no later than the date twenty-one
(21) calendar days following the U.S. Borrower’s request that a Subsidiary
become an Additional Borrower, which such request may not be made more than
sixty (60) calendar days prior to the date such Subsidiary shall become an
Additional Borrower and (ii) prior to the completion of the Additional Borrower
Collateral Risk Review, the Co-Collateral Agents may, in their sole discretion,
count the assets of such Additional Borrower in the calculation of the U.S.
Borrowing Base or Kildair Borrowing Base, as applicable;

(h) the Administrative Agent shall have received evidence in form and substance
reasonably satisfactory to it that all of the requirements of Section 7.5
hereof, Section 5(q) of the U.S. Security Agreement and Section 5(p) of the
Canadian Security Agreement, in each case to the extent applicable, shall have
been satisfied with respect to such Additional Borrower;

(i) each Lender shall have received all of the documents referred to in
Section 6.1(y) with respect to that Additional Borrower and has confirmed to the
Administrative Agent that such documents are in form and substance reasonably
satisfactory to such Lender;

(j) such Additional Borrower becomes a Grantor; and

(k) such Additional Borrower appoints the U.S. Borrower to act on its behalf as
the agent for such Additional Borrower hereunder and under the other Loan
Documents and authorizes the U.S. Borrower to take such actions on its behalf
and to exercise such powers as are delegated to the U.S. Borrower by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto, and the U.S. Borrower accepts such appointment (which
appointment shall not be terminated or revoked without the consent of the
Administrative Agent and the Required Lenders).

The Agents, the Borrowers and any Additional Borrowers shall be permitted to
amend this Agreement and the other Loan Documents solely as necessary or
advisable to permit the Additional Borrower to borrow hereunder and as otherwise
required or advisable in connection therewith.

11.20 Joint and Several Liability. Subject to Section 11.24, (a) all Loans, upon
funding, shall be deemed to be jointly funded to and received by the Borrower
Parties, (b) each Borrower Party jointly and severally agrees to pay, and shall
be jointly and severally liable under this Agreement for, all Obligations,
regardless of the manner or amount in which proceeds of Loans are used,
allocated, shared, or disbursed by or among the Borrower Parties themselves, or
the manner in which an Agent and/or any Lender accounts for such Loans or other
extensions of credit on its books and records, (c) each Borrower Party shall be
liable for all amounts due to an Agent and/or any Lender under this Agreement,
regardless of which Borrower Party actually receives Loans or other Extensions
of Credit hereunder or the amount of such Loans and Extensions of Credit
received or the manner in which such Agent and/or such Lender accounts for such
Loans or other Extensions of Credit on its books and records, and (d) each
Borrower Party’s Obligations with respect to Loans and other Extensions of
Credit made to it, and such Borrower Party’s Obligations arising as a result of
the joint and several liability of such Borrower Party hereunder, with respect
to Loans and other Extensions of Credit made to the other Borrower Parties
hereunder, shall be separate and distinct obligations, but all such Obligations
shall be primary obligations of such Borrower Party. The Borrower Parties
acknowledge and expressly agree with the Agents and each Lender that the joint
and several liability of each Borrower Party is required solely as a condition
to, and is given solely as inducement for and in consideration of, credit or
accommodations extended or to be extended under the Loan Documents to any or all
of the other Borrower Parties and is not required or given as a condition of
Extensions of Credit to such Borrower Party. Each Borrower Party’s obligations
under this

 

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Agreement shall be separate and distinct obligations. Each Borrower Party’s
obligations under this Agreement shall, to the fullest extent permitted by Law,
be unconditional irrespective of (i) the validity or enforceability, avoidance,
or subordination of the Obligations of any other Borrower Party or of any Note
or other document evidencing all or any part of the Obligations of any other
Borrower Party, (ii) the absence of any attempt to collect the Obligations from
any other Borrower Party, any other Loan Party, or any other security therefor,
or the absence of any other action to enforce the same, (iii) the waiver,
consent, extension, forbearance, or granting of any indulgence by an Agent
and/or any Lender with respect to any provision of any instrument evidencing the
Obligations of any other Borrower Party or any other Loan Party, or any part
thereof, or any other agreement now or hereafter executed by any other Borrower
Party or any other Loan Party and delivered to an Agent and/or any Lender,
(iv) the failure by an Agent and/or any Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Borrower Party or any other Loan
Party, (v) an Agent’s and/or any Lender’s election, in any proceeding instituted
under the Bankruptcy Code or Insolvency Laws, of the application of
Section 1111(b)(2) of the Bankruptcy Code or corresponding provisions of
Insolvency Laws, (vi) any borrowing or grant of a security interest by any other
Borrower Party, as debtor-in-possession under Section 364 of the Bankruptcy Code
or under Insolvency Laws, (vii) the disallowance of all or any portion of an
Agent’s and/or any Lender’s claim(s) for the repayment of the Obligations of any
other Borrower Party under Section 502 of the Bankruptcy Code or under
Insolvency Laws, or (viii) any other circumstances which might constitute a
legal or equitable discharge or defense of a guarantor or of any other Borrower
Party. With respect to any Borrower Party’s Obligations arising as a result of
the joint and several liability of the Borrower Parties hereunder with respect
to Loans or other Extensions of Credit made to any of the other Borrower Parties
hereunder, such Borrower Party waives, until the Obligations shall have been
paid in full and this Agreement shall have been terminated, any right to enforce
any right of subrogation or any remedy which an Agent and/or any Lender now has
or may hereafter have against any other Borrower Party, any endorser or any
guarantor of all or any part of the Obligations, and any benefit of, and any
right to participate in, any security or collateral given to an Agent and/or any
Lender to secure payment of the Obligations or any other liability of any
Borrower Party to an Agent and/or any Lender. Upon any Event of Default, the
Agents may proceed directly and at once, without notice, against any Borrower
Party to collect and recover the full amount, or any portion of the Obligations,
without first proceeding against any other Borrower Party or any other Person,
or against any security or collateral for the Obligations. Each Borrower Party
consents and agrees that the Agents shall be under no obligation to marshal any
assets in favor of any Borrower Party or against or in payment of any or all of
the Obligations. Each Borrower Party further acknowledges that credit extended
to each Borrower Party hereunder will directly or indirectly benefit each other
Borrower Party.

11.21 Contribution and Indemnification among the Borrower Parties;
Subordination. Subject to Section 11.24, each Borrower Party is obligated to
repay the Obligations as joint and several obligor under this Agreement. To the
extent that any Borrower Party shall, under this Agreement as a joint and
several obligor, repay any of the Obligations constituting Loans made to another
Borrower Party hereunder or other Obligations incurred directly and primarily by
any other Borrower Party (an “Accommodation Payment”), then the Borrower Party
making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Borrower Parties
in an amount, for each of such other Borrower Parties, equal to a fraction of
such Accommodation Payment, the numerator of which fraction is such other
Borrower Party’s Allocable Amount (as defined below) and the denominator of
which is the sum of the Allocable Amounts of all of the Borrower Parties. As of
any date of determination, the “Allocable Amount” of each Borrower Party shall
be equal to the maximum amount of liability for Accommodation Payments which
could be asserted against such Borrower Party hereunder without (a) rendering
such Borrower Party “insolvent” within the meaning of Section 101(31) of the
Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or
Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such
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unreasonably small capital or assets, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving
such Borrower Party unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or
Section 5 of the UFCA. All rights and claims of contribution, indemnification,
and reimbursement under this Section 11.21 shall be subordinate in right of
payment to the prior payment in full of the Obligations. The provisions of this
Section 11.21 shall, to the extent expressly inconsistent with any provision in
any Loan Document, supersede such inconsistent provision.

11.22 Express Waivers by Borrower Parties in Respect of Cross Guaranties and
Cross Collateralization. Each Borrower Party agrees as follows:

(a) Each Borrower Party hereby waives: (i) notice of acceptance of this
Agreement; (ii) notice of the making of any Loans, the issuance of any Letter of
Credit or any other financial accommodations made or extended under the Loan
Documents or the creation or existence of any Obligations; (iii) notice of the
amount of the Obligations, subject, however, to such Borrower Party’s right to
make inquiry of the Administrative Agent to ascertain the amount of the
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of any other Borrower Party or of any other fact that might
increase such Borrower Party’s risk with respect to such other Borrower Party
under the Loan Documents; (v) notice of presentment for payment, demand,
protest, and notice thereof as to any promissory notes or other instruments
among the Loan Documents; and (vi) all other notices (except if such notice is
specifically required to be given to such Borrower Party hereunder or under any
of the other Loan Documents to which such Borrower Party is a party) and demands
to which such Borrower Party might otherwise be entitled.

(b) Each Borrower Party hereby waives the right by statute or otherwise to
require an Agent or any other Secured Party to institute suit against any other
Borrower Party or to exhaust any rights and remedies which an Agent or any other
Secured Party has or may have against any other Borrower Party. Each Borrower
Party further waives any defense arising by reason of any disability or other
defense of any other Borrower Party (other than the defense that the Obligations
shall have been fully and finally performed and paid) or by reason of the
cessation from any cause whatsoever of the liability of any such Borrower Party
in respect thereof.

(c) Each Borrower Party hereby waives and agrees not to assert against an Agent
or any Lender: (i) any defense (legal or equitable), set-off, counterclaim, or
claim which such Borrower Party may now or at any time hereafter have against
any other Borrower Party or any other party liable under the Loan Documents;
(ii) any defense, set-off, counterclaim, or claim of any kind or nature
available to any other Borrower Party against an Agent or any Lender, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Obligations or any security
therefor; (iii) any right or defense arising by reason of any claim or defense
based upon an election of remedies by an Agent or any Lender under any
applicable law; and (iv) the benefit of any statute of limitations affecting any
other Borrower Party’s liability hereunder.

(d) Each Borrower Party consents and agrees that, without notice to or by such
Borrower Party and without affecting or impairing the obligations of such
Borrower Party hereunder, the Agents may (subject to any requirement for consent
of any of the Lenders to the extent required by this Agreement), by action or
inaction: (i) compromise, settle, extend the duration or the time for the
payment of, or discharge the performance of, or may refuse to or otherwise not
enforce the Loan Documents; (ii) release all or any one or more parties to any
one or more of the Loan Documents or grant other indulgences to any other
Borrower Party in respect thereof; (iii) amend or modify in any manner and at
any time (or from time to time) any of the Loan Documents; or (iv) release or
substitute any Person liable for payment of the Obligations, or enforce,
exchange, release, or waive any security for the Obligations or any Guarantee of
the Obligations.

 

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(e) Each Borrower Party represents and warrants to the Agents and the Lenders
that, as of the date of entry of any Additional Borrower into this Agreement,
such Borrower Party is currently informed of the financial condition of all
other Borrower Parties and all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower Party further represents and warrants that, as of the date of entry of
such Borrower Party into this Agreement, such Borrower Party has read and
understands the terms and conditions of the Loan Documents. Each Borrower Party
agrees that none of the Agents or any Lender has any responsibility to inform
any Borrower Party of the financial condition of any other Borrower Party or of
any other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.

11.23 Limitation on Obligations of Borrower Parties. In the event that in any
action or proceeding involving any state, provincial, territorial or foreign
corporate law, or any state, federal, provincial, territorial or foreign
bankruptcy, insolvency, reorganization or other Law affecting the rights of
creditors generally, the obligations of any Borrower Party, including for the
obligations of any other Borrower Party, under this Agreement shall be held or
determined to be void, avoidable, invalid or unenforceable (including because of
Section 548 of the Bankruptcy Code or any applicable Insolvency Laws or any
applicable state, provincial, territorial or federal Law relating to fraudulent
conveyances or transfers), then, notwithstanding any other provision of this
Agreement to the contrary, the amount of such liability of a Borrower Party
shall, without any further action by any Loan Party, Agent or Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable (such highest amount determined hereunder being the relevant
Borrower’s “Maximum Liability”); provided that nothing contained in this
Section 11.23 shall limit the liability of any Borrower Party to repay Loans
made directly or indirectly to or for the benefit of that Borrower Party or any
Subsidiary of that Borrower Party (including Loans advanced to any other
Borrower Party and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower Party or any of its Subsidiaries), Obligations
relating to Letters of Credit issued for the direct or indirect benefit of such
Borrower Party or any of its Subsidiaries, and all interest, fees, expenses and
other related Obligations under the Loan Documents with respect thereto, for
which such Borrower Party shall be primarily liable for all purposes hereunder.
This Section 11.23 with respect to the Maximum Liability of each Borrower Party
is intended solely to preserve the rights of the Agents and the Lenders to the
maximum extent not subject to avoidance under applicable Law, and no Loan Party
nor any other person or entity shall have any right or claim under this
Section 11.23 with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Borrower Party hereunder shall not be
rendered void, voidable, invalid or unenforceable under applicable Law.

11.24 Limitation of Obligations of Kildair and its Subsidiares. Notwithstanding
anything to the contrary in this Agreement or any other Loan Document, (i) at
any time prior to the ULC Conversion, Kildair shall not be jointly and severally
liable for, or be required to guarantee, or provide any collateral for, any U.S.
Obligations and no Lien granted by Kildair and no Lien on more than 65% of the
voting Capital Stock of Kildair, granted pursuant to the Security Documents,
shall secure or be required to secure any U.S. Obligations and (ii) at any time
prior to the Kildair Subsidiary Election, neither Transit P.M. ULC nor
Wintergreen Transport Corporation ULC shall be jointly and severally liable for,
or be required to guarantee, or provide any collateral for, any Obligations and
no Lien granted by any such entity and no Lien on the Capital Stock of any such
entity granted pursuant to the Security Documents, shall secure or be required
to secure any Obligations.

11.25 Judgment Currency. (a) The Loan Parties’ obligations hereunder and under
the other Loan Documents to make payments in United States Dollars or Canadian
Dollars, as applicable, shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than United States Dollars or Canadian Dollars, as applicable, except to

 

181

--------------------------------------------------------------------------------

the extent that such tender or recovery results in the effective receipt by the
Administrative Agent or Canadian Agent, as applicable, or the respective Lender
or Issuing Lender of the full amount of United States Dollars or Canadian
Dollars, as applicable, expressed to be payable to the Administrative Agent or
the Canadian Agent or such Lender or Issuing Lender under this Agreement or the
other Loan Documents. If, for the purpose of obtaining or enforcing judgment
against any Loan Party in any court or in any jurisdiction, it becomes necessary
to convert into or from any currency other than United States Dollars or
Canadian Dollars, as applicable, (such other currency being hereinafter referred
to as the “Judgment Currency”) an amount due in United States Dollars or
Canadian Dollars, as applicable, the conversion shall be made at the Dollar
Equivalent or Canadian Dollar Equivalent, as applicable, determined as of the
Business Day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the “Judgment Currency Conversion
Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Loan Parties shall pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of United States
Dollars or Canadian Dollars, as applicable, which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial award at
the rate of exchange prevailing on the Judgment Currency Conversion Date.

(c) For purposes of determining the Dollar Equivalent or Canadian Dollar
Equivalent or any other rate of exchange for this Section 11.25, such amounts
shall include any premium and costs payable in connection with the purchase of
United States Dollars or Canadian Dollars, as applicable.

11.26 English Language. The parties hereto confirm that it is their wish that
this Agreement and any other document executed in connection with the
transactions contemplated herein be drawn up in the English language only and
that all other documents contemplated thereunder or relating thereto, including
notices, may also be drawn up in the English language only. Les parties aux
présentes confirment que c’est leur volonté que cette convention et les autres
documents de crédit y afférents soient rédigés en anglais seulement et que tous
les documents, y compris tous avis, envisagés par cette convention soient
rédigés en anglais seulement.

11.27 Amendment and Restatement. This Agreement amends and restates the Existing
Credit Agreement. All indebtedness, obligations and Liens created by the
Existing Credit Agreement and the Loan Documents referred to therein remain
outstanding and in effect and are continued by this Agreement and the other Loan
Documents with such modifications as are set forth herein and therein.

[Signature Pages Follow]

 

182

--------------------------------------------------------------------------------

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

 

SPRAGUE OPERATING RESOURCES LLC, as U.S. Borrower By:   LOGO
[g836858ex10_1pg183a.jpg]  

 

  Name:   Paul A. Scoff   Title:   Vice President, General Counsel, Chief
Compliance Officer and Secretary

SPRAGUE RESOURCES ULC,

as Initial Canadian Borrower

By:   LOGO [g836858ex10_1pg183b.jpg]  

 

  Name:   Jacques Ferraro   Title:   Vice President, Finance and Administration

KILDAIR SERVICE LTD.,

as Initial Canadian Borrower

By:   LOGO [g836858ex10_1pg183c.jpg]  

 

  Name:   Jacques Ferraro   Title:   Vice President, Finance and Administration

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

AGENTS AND LENDERS: JPMORGAN CHASE BANK, N.A., as Administrative Agent,
Co-Collateral Agent, Dollar Working Capital Facility Issuing Lender, Acquisition
Facility Issuing Lender, Dollar Swing Line Lender and Lender By:   LOGO
[g836858ex10_1pg184.jpg]  

 

  Name:   Dan Bueno   Title:   Authorized Officer JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, as Canadian Agent and Lender By:  

 

  Name:   Auggie Marchetti   Title:   Authorized Officer

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

AGENTS AND LENDERS:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Co-Collateral Agent, Dollar Working Capital Facility
Issuing Lender, Acquisition Facility Issuing Lender, Dollar Swing Line Lender
and Lender

By:  

 

  Name:     Title:  

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,

as Canadian Agent, Multicurrency Swing Line Lender and Lender

By:   LOGO [g836858ex10_1pg185.jpg]  

 

  Name:   Auggie Marchetti   Title:   Authorized Officer

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

CITIZENS BANK, N.A., as a Co-Syndication and Co-Documentation Agent and a Lender
By:   LOGO [g836858ex10_1pg186.jpg]  

 

  Name:   Jason Upham   Title:   Assistant Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

BNP PARIBAS as Co-Collateral Agent and as Lender under the Dollar Working
Capital Facility and Acquisition Facility By:   LOGO [g836858ex10_1pg187a.jpg]  

 

  Name:   Keith Richards   Title:   Director By:   LOGO
[g836858ex10_1pg187b.jpg]  

 

  Name:   DELPHINE GAUDIOT   Title:   Vice President

BNP PARIBAS, acting through its Canada Branch

as Lender under the Multicurrency Working Capital Facility

By:   LOGO [g836858ex10_1pg187c.jpg]  

 

  Name:   Luc Laliberté   Title:   Director By:   LOGO [g836858ex10_1pg187d.jpg]
 

 

  Name:   Jacques Blais   Title:  

Managing Director

Credit Risks

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Natixis, New York Branch By:   LOGO [g836858ex10_1pg188a.jpg]  

 

  Name:   Severine Pardo   Title:   Executive Director By:   LOGO
[g836858ex10_1pg188b.jpg]  

 

  Name:   Arnaud Stevens   Title:   Managing Director & Group Head

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Wells Fargo Bank, N.A., as a Co-Syndication Agent and as a Lender By:   LOGO
[g836858ex10_1pg189.jpg]  

 

  Name:   David M. Crane   Title:   Senior Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

SOCIÉTÉ GÉNÉRALE,

as Co-Syndication Agent, and as a Lender

By:   LOGO [g836858ex10_1pg190.jpg]  

 

  Name:   Michiel van der Voort   Title:   Managing Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Bank of Tokyo Mitsubishi UFJ, as a Co-Syndication Agent and a Lender By:   LOGO
[g836858ex10_1pg191.jpg]  

 

  Name:   Marcie Weiss   Title:   Managing Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Bank of Tokyo-Mitsubishi UFJ (Canada), as a Multicurrency Working Capital
Facility Lender By:   LOGO [g836858ex10_1pg192.jpg]  

 

  Name:   Amos Simpson   Title:   Managing Director and General Manager

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.,

“Rabobank Nederland”, New York Branch,

as a Co-Documentation Agent and a Lender

By:   LOGO [g836858ex10_1pg193a.jpg]  

 

  Name:   Chan K. Park   Title:   Managing Director By:   LOGO
[g836858ex10_1pg193b.jpg]  

 

  Name:   Lionel Autret   Title:   Executive Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Santander Bank, N.A., as a Co-Documentation Agent and a Lender By:   LOGO
[g836858ex10_1pg194.jpg]  

 

  Name:   Marcelo Castro   Title:   MD

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Bank of America, N.A.,

as a Lender

By:   LOGO [g836858ex10_1pg195.jpg]  

 

  Name:   Bryan Heller   Title:   Director

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Bank of America, N.A. (Canada branch),

as a Lender

By:   LOGO [g836858ex10_1pg196.jpg]  

 

  Name:   Medina Sales de Andrade   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

BMO Harris Bank N.A.,

as a Lender

By:   LOGO [g836858ex10_1pg197a.jpg]  

 

  Name:   Melissa Guzmann   Title:   Vice President

Bank of Montreal,

as a Lender

By:   LOGO [g836858ex10_1pg197b.jpg]  

 

  Name:   Melissa Guzmann   Title:   Vice President

--------------------------------------------------------------------------------

Credit Agricole Corporate and Investment Bank,

as a Lender

By:   LOGO [g836858ex10_1pg198a.jpg]  

 

  Name:   Rosa Santini   Title:   Vice President By:   LOGO
[g836858ex10_1pg198b.jpg]  

 

  Name:   William Purdy   Title:   Senior Associate

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

ROYAL BANK OF CANADA,

as a Lender

By:   LOGO [g836858ex10_1pg199.jpg]  

 

  Name:   Emmanuel Athanassiadis   Title:   Vice President, National Client
Group - Finance

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

BARCLAYS BANK PLC,

as a Lender

By:   LOGO [g836858ex10_1pg200.jpg]  

 

  Name:   Marguerite Sutton   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

RB INTERNATIONAL FINANCE (USA) LLC,

as a Lender

By:   LOGO [g836858ex10_1pg201a.jpg]  

 

  Name:   Astrid Wilke   Title:   Group Vice President By:   LOGO
[g836858ex10_1pg201b.jpg]  

 

  Name:   PEARL GEFFERS   Title:   FIRST VICE PRESIDENT

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

TD Bank, N.A., as a Lender By:   LOGO [g836858ex10_1pg202.jpg]  

 

  Name:   Vijay Prasad   Title:   Senior Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

People’s United Bank,

as a Lender

By   LOGO [g836858ex10_1pg203.jpg]  

 

  Name:   Kim Lane   Title:   SVP

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Raymond James Bank, N.A.,

as a Lender

By  

LOGO [g836858ex10_1pg204.jpg]

 

 

  Name:   Michael G. Pelletier   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Webster Bank, NA

as a Lender

By:   LOGO [g836858ex10_1pg205.jpg]  

 

  Name:   Carolyn Morrison   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Israel Discount Bank of New York,

as a Lender

By:  

LOGO [g836858ex10_1pg206a.jpg]

 

 

  Name:   James M. Morton   Title:   Senior Vice President By:   LOGO
[g836858ex10_1pg206b.jpg]  

 

  Name:   Alfred J. Franco   Title:   First Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Blue Hills Bank, as a Lender By:   LOGO [g836858ex10_1pg207.jpg]  

 

  Name:   Kelley Keefe   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Customers Bank,

as a Lender

By:   LOGO [g836858ex10_1pg208.jpg]  

 

  Name:   James B. Daley   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

The Huntington National Bank,

as Lender

By:  

LOGO [g836858ex10_1pg209.jpg]

 

 

  Name:   Jared Shaner   Title:   Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Commerce Bank & Trust Company,

as a Lender

By:   LOGO [g836858ex10_1pg210.jpg]  

 

  Name:   Debra A. DeVenne   Title:   Senior Vice President

 

[Signature Page to Credit Agreement]

--------------------------------------------------------------------------------

Schedule 1.0

to Credit Agreement

LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES

Provided to Administrative Agent.

--------------------------------------------------------------------------------

Schedule 1.1(A)

to Credit Agreement

APPROVED INVENTORY LOCATIONS

 

New Bedford Terminal    TRT Terminal 30 Pine Street    740 Washington Street New
Bedford, MA 02740    Quincy, MA 02169 Portland Terminal    92 Cassidy Point
Drive    Portland, Maine 04102   

Throughput Locations

 

Legal Name

  

Physical Address

  

Office Address

121 Point Breeze Management Corporation   

6310 West Passyunk Avenue,

Philadelphia, PA 19153

  

6310 West Passyunk

Avenue, Philadelphia, PA

19153

Arc Terminals Holding LLC (former Motiva Brooklyn)   

23 Paidge Avenue; Brooklyn,

NY 11222

  

3000 Research Forest Drive,

Suite 250; The Woodlands,

TX 77381

B & B Petroleum, Inc.   

1 Brownstone Avenue;

Portland CT 06480

  

1 Brownstone Avenue;

Portland CT 06480

Bigelow Oil Company, Inc.   

50 Tower Road; Newton

Upper Falls, MA 02164

  

50 Tower Road; Newton

Upper Falls, MA 02164

BP Products North America Inc.   

125 Apollo Street; Brooklyn,

NY 11222

  

28301 Ferry Road;

Warrenville, IL 60555

Buckeye Terminals, LLC   

50 Burbank Road,

Wethersfield, CT 06109

  

Five TEK Park, 9999

Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Terminals, LLC   

County Route 37 & River

Road; Brewerton, NY 13029

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

5198 Buckeye Road;

Macungie, PA 18062

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

9586 River Road Route 49;

Marcy, NY 13403

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

37 Wurz. Avenue; Utica,

NY 13502

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

3121 Shippers Road; Vestal,

NY 13850

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

1111 Delancy St.; Newark,

NJ 07105

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

--------------------------------------------------------------------------------

Legal Name

  

Physical Address

  

Office Address

Buckeye Pensauken Terminal LLC   

123 Derousse Ave;

Pennsauken, NJ 08110

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Terminals, LLC   

1040 East 149th St.; Bronx,

NY 10455

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Terminals, LLC   

764 Court St.; Brooklyn,

NY 11231

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Terminals, LLC   

443 Eastern Point Rd.;

Groton, CT 06340

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Rochester Terminal LLC   

1975 Lyell Ave.; Rochester,

NY 14606

  

Five TEK Park,

9999 Hamilton Blvd.;

Breinigsville, PA 18031

Carbo Industries Inc.   

1 Bay Boulevard; Lawrence,

NY 11559

  

1 Bay Boulevard; Lawrence,

NY 11559

Carmel Terminals, Inc.   

79 Old Route 6, Carmel,

NY 10512

  

120 Fields Lane, Brewster,

NY 10509

Carmel Terminals, Inc.   

279 Route 6, Mahopac,

NY 10541

  

120 Fields Lane, Brewster,

NY 10509

Citgo Petroleum Corporation   

4801 South Woods Ave;

Linden, NJ 07036

  

1293 Eldridge Parkway;

Houston, TX 77077

Duck Island Terminal, Inc.   

1463 Lamberton Road;

Trenton, NJ 08611

  

1463 Lamberton Road;

Trenton, NJ 08611

Dutch Hill Terminals, LLC   

568 Paulson Avenue; Clifton,

NJ 07011

  

568 Paulson Avenue;

Clifton, NJ 07011

Edgemont Garage & Oil Co.   

115 W. Main Street;

Merrimac, MA 01860

  

115 W. Main Street;

Merrimac, MA 01860

Frank Bros. Fuel Corp.   

7 Belford Avenue; Bay Shore,

NY 11706

  

7 Belford Avenue; Bay

Shore, NY 11706

General Utilities, Inc.   

82 Arlington Ave.; St. James,

NY 11780

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

48 Brooklyn Avenue;

Massapequa, NY 11758

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

3 Washington Pkwy;

Hicksville, NY 11801

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

201 Union Blvd.; West Islip,

NY 11795

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

98 E. Montauk Highway;

Hampton Bays, NY 11946

  

100 Fairfield Avenue;

Plainfield, NY 11803

George T. Taylor &Son, Inc.   

152 Broad Brook Road;

Broad Brook, CT 06016

  

152 Broad Brook Road;

Broad Brook, CT 06016

--------------------------------------------------------------------------------

Legal Name

  

Physical Address

  

Office Address

Global Companies LLC (assigned from Warex Terminals Corp)   

1184 River Road, New

Windsor, NY 12553-6728

  

800 South Street, Suite 200,

Waltham, MA 02454-9161

Grafton Upton Rail Care, LLC   

25 Maple Avenue; Upton,

MA 01568

  

25 Maple Avenue; Upton,

MA 01568

L.E. Belcher, Inc.   

615 St. James Avenue,

Springfield, MA 01109

  

615 St. James Avenue,

Springfield, MA 01109

Lewisy Fuel Oil, Inc.   

549 Larkfield Road, East

Northport, NY 11731

  

549 Larkfield Road, East

Northport, NY 11731

Lucknow-Highspire Terminals Corp.   

900 Eisenhower Blvd.;

Middletown, PA 17057

  

P.O. Box 2621, Harrisburg,

PA 17105

Lucknow-Highspire Terminals Corp.   

Mountain Home Rd.; Sinking

Spring, PA 19608

  

P.O. Box 2621, Harrisburg,

PA 17105

Motiva Enterprises LLC   

111 State Street; Sewaren,

NJ 07077-1440

  

PO Box 2099; Houston,

TX 77252-2099

New Haven Terminal, Inc.   

100 Waterfront St; New

Haven, CT 06512

  

100 Waterfront St; New

Haven, CT 06512

New Hyde Park Oil Terminal, Inc.   

1900 Plaza Avenue; New

Hyde Park, NY 11040

  

1900 Plaza Avenue; New

Hyde Park, NY 11040

NuStar Logistics, L.P. & NuStar Pipeline Operating Partnership L.P.   

3700 South Wood Avenue,

Linden, NJ 07036

  

2330 North Loop 1604

West, San Antonio,

TX 78248

Oswego Oil Service Corporation   

45 Intersection Street,

Hempstead, NY 11550

  

45 Intersection Street,

Hempstead, NY 11550

Peterson Oil Service (should be Peterson’s Oil Service, Inc.)   

75 Crescent Street;

Worchester, MA 01604

14 Putnam Lane; Worchester,

MA 01604

  

75 Crescent Street;

Worchester, MA 10604

Plains Products Terminal LLC   

1630 S. 51st Street;

Philadelphia, PA 19153

  

333 Clay Street, Suite 1600;

Houston, TX 77022

Romanelli & Son, Inc.   

88 East Hoffman Avenue;

Lindenhurst, NY 11757

  

88 East Hoffman Avenue;

Lindenhurst, NY 11757

Savage Services Corporation   

123 Rodman Road; Auburn,

ME 04210

  

6430 South 3000 East, Suite

600; Salt Lake City,

UT 84121

Scalzo Utilities   

115 West 11th Street;

Huntington Station,

NY 11746

  

115 West 11th Street;

Huntington Station,

NY 11746

Shore Properties. LLC   

One Private Road; East

Moriches, NY 11940

  

Route 112; PO Box 684,

Patchogue, NY 11772

Sunoco Partners Marketing & Terminals L.P.   

436 Doremus Ave., Newark,

NJ 07105

  

1818 Market Street, Suite

1500, Phila. PA 19103

Swezey Fuel Co., Inc.   

51 Rider Avenue; Patchogue,

NY 11772

  

51 Rider Avenue;

Patchogue, NY 11772

Taylor & Murphy, Inc.   

188 Lexington Street;

Waltham, MA 02154

  

188 Lexington Street;

Waltham, MA 02154

--------------------------------------------------------------------------------

Legal Name

  

Physical Address

  

Office Address

Transflo Terminal Services, Inc.   

One Exchange Street

Extension; Albany, NY 12205

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Transflo Terminal Services, Inc.   

454 York Street; Elizabeth,

NJ 07201

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Transflo Terminal Services, Inc.   

19 Walkup Drive;

Westborough, MA 01581

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Windsor Fuel Co., Inc.   

80 Windsor Ave.; Mineola,

NY 11501-1922

  

80 Windsor Ave.; Mineola,

NY 11501-1922

--------------------------------------------------------------------------------

Schedule 1.1(B)

to Credit Agreement

CASH MANAGEMENT BANKS

JPMORGAN CHASE BANK, N.A.

J.P. MORGAN SECURITIES LLC

BNP PARIBAS

BNP PARIBAS PRIME BROKERAGE, INC.

CITIGROUP GLOBAL MARKETS INC.

NEWEDGE USA, LLC

RBS CITIZENS, NATIONAL ASSOCIATION

TD BANK, N.A.

SANTANDER BANK, N.A.

WELLS FARGO BANK, N.A.

--------------------------------------------------------------------------------

Schedule 1.1(C)

to Credit Agreement

ELIGIBLE FOREIGN COUNTERPARTIES

A/S DAMPSKIBSSELSKABET TORM

AS DAN-BUNKERING LTD

AET INC LIMITED

ANCORA SHIPPING BV

ANDRIAKI SHIPPING

ARMADA (SINGAPORE) PTE LTD

BALTSHIP A/S

BARCLAYS BANK PLC

BBC CHARTERING & LOGISTICS

BEBEKA

BERGEN BUNKERS AS

BP SHIPPING LIMITED

BRITISH AIRWAYS PLC

BSL AGENCIES MONACO SAM

BUNKERNET LTD.

CLIPPER GROUP AS

COCKETT MARINE OIL LTD

COLUMBIA SHIP MANAGEMENT

CSSA CHARTERING AND SHIPPING SERVICES SA

DALKIA ENERGY SERVICES LLC

DAMPSKIBSSELSKABET NORDEN AS

DANNEBROG REDERI A/S

DELTA TANKERS LTD.

DONNELLY TANKER MANAGEMENT LTD

DOUBLEIGHT LTD

DYNACOM TANKER MANAGEMENT

ED&F MAN HOLDINGS

EIGER SHIPPING S.A.

EIMSKIP-CTG AS

EITSEN BULK AS

EITZEN CHEMICAL A/S

ELETSON CORP

ES BOCES-TRANS LOC #2

EURONAV NV

FRONTLINE LTD.

GAC BUNKER FUELS (USA) L.L.C.

GAMESA EOLICA, S.L.

--------------------------------------------------------------------------------

GEARBULK (UK) LTD

GEMINI TANKERS, LLC

GORTHON LINES AB

GREENI TRADING OY

HAMPTON BERMUDA LTD.

INGENIO SAN RAFAEL DE PUCTE SA CV

INTEGRA FUELS INC.

KGJS CEMEMT AS

LAURITZEN BULKERS A/S

LOUIS DREYFUS COMMODITIES SUISSE SA

MARAN TANKERS

MITSUI OSK LINES LTD.

MONJASA A/S

MST MINERALIEN SCHIFFART

NAVIG8 PTE LTD.

NEREUS SHIPPING SA

NORWEGIAN OIL TRADING AS

ODFJELL SEACHEM AS

ONEGO SHIPPING & CHARTERING

ONEGO SHIPPING & CHARTERING B.V.

OSG SHIPMANAGEMENT (GR) LTD

OW BUNKER & TRADING AS

PACC CONTAINER LINE PTE LTD

PACIFIC BASIN CHARTERING LTD

PDVSA PETROLEO Y GAS S

PENINSULA PETROLEUM LTD

PETROL BUNKERING & TRADING PBT LTD

PP&L / SUNBURY

PRAXIS ENERGY AGENTS S.A.

PROJECTOR (UK) LIMITED

PT KALTIM PRIMA COAL

ROTTNEROS BRUK AB

RUDDER SAM

SBI SEA BUNKERING INTERNATIONAL BV

SCANDINAVIA BUNKERING

SCORPIO HANDYMAX TANKER POOL LTD.

SCORPIO MR POOLLTD

SCORPIO PANAMAX TANKER POOL LTD.

SHELL INTERNATIONAL TRADING & SHIPPING C

SKS TANKERS, LTD.

SMT SHIPMANAGEMENT & TRANSPORT LIMITED

SPLIETHOFF’S BEVRACHTINGSKANTOOR BV

ST SHIPPING & TRANSPORT INC.

--------------------------------------------------------------------------------

STATOILHYDRO ASA

STENA OIL AB

TANKER PACIFIC MANAGEMENT

THENAMARIS, INC.

TORVALD KLAVENESS GROUP

TRAFIGURA BEHEER BV

TRAFIGURA DERIVATIES LTD

TRANSATLANTIC SERVICES AB

TRECAN COMBUSTION LIMITED

TTS SHIPPING, LTD.

U-SEA BULK AS

ULTRABULK AS

UTANSJO BRUK AB

VALLVIKS BRUK AB

WESTERN BULK CARRIERS KS

WINDSOR EXCHANGE

--------------------------------------------------------------------------------

Schedule 1.1(D)

to Credit Agreement

INDEPENDENT ENTITY SCHEDULE

 

Counterparty Name

  

Parent

Counterparty Name

BP CANADA ENERGY COMPANY    BP. PLC BP CANADA ENERGY MARKETING CORP.    BP. PLC
BP CORPORATION NORTH AMERICA INC.    BP. PLC BP ENERGY CO    BP. PLC BP NORTH
AMERICA PETROLEUM    BP. PLC BP SHIPPING LIMITED    BP. PLC BP Products North
America    BP. PLC Cargill Incorporated    CARGILL, INC. Cargill Limited   
CARGILL, INC. Chevron Canada Resources    CHEVRON CORPORATION Chevron Products
Company    CHEVRON CORPORATION Chevron Natural Gas    CHEVRON CORPORATION Conoco
Canada Limited    CONOCOPHILLIPS CONOCOPHILLIPS COMPANY    CONOCOPHILLIPS Con
Edison Energy, Inc.    CONSOLIDATED EDISON, INC. CONSOLIDATED EDISON ENERGY,
INC.    CONSOLIDATED EDISON, INC. CONSTELLATION NEW ENERGY GAS DIV LLC   
CONSTELLATION GROUP, INC. DYNEGY CANADA MARKETING AND TRADE    Dynegy Holdings,
Inc. Dynegy Gas Imports    Dynegy Holdings, Inc. DYNEGY MARKETING AND TRADE   
Dynegy Holdings, Inc. EXXON COMPANY USA (INC)    Exxonmobil Corp EXXONMOBIL OIL
CORP    Exxonmobil Corp ExxonMobil Refining & Supply, LLC    ExxonMobil Corp
ExxonMobil Corp    ExxonMobil Corp Kingston Oil Supply Corp.    Lukoil North
America LukOil North America LLC    Lukoil North America Hess Corporation   
HESS CORPORATION Hess Energy Trading Co. LLC    HESS CORPORATION Irving Oil
Corp.    Irving Oil Irving Oil Limited    Irving Oil

--------------------------------------------------------------------------------

Counterparty Name

  

Parent

Counterparty Name

IRVING OIL COMMERCIAL GP    Irving Oil Irving Oil Terminals, Inc    Irving Oil
NRG POWER MARKETING INC    NRG POWER MARKETING, INC. NRG POWER MARKETING LLC   
NRG POWER MARKETING, INC. NRG Power Marketing LLC (Oswego)    NRG POWER
MARKETING, INC. NRG Energy    NRG Power Marketing, Inc Phillips 66 Company   
Phillips 66 Company Tambrands Manufacturing Inc.    Proctor and Gamble Company
The Gillette Company    Proctor and Gamble Company Shell Canada Products Ltd   
Royal Dutch Shell, plc Shell Energy North America    Royal Dutch Shell, plc
SHELL ENERGY NORTH AMERICA (CANADA) INC.    Royal Dutch Shell, plc Shell
International Trading & Shipping C    Royal Dutch Shell, plc Shell Trading (US)
Company    Royal Dutch Shell, plc Shell Energy North America (US), LP    Royal
Dutch Shell, PLC Santa Buckley Energy, Inc.    Santa Energy Corporation Santa
Fuel, Inc    Santa Energy Corporation Suncor Energy Marketing Inc.    Suncor
Energy Inc. Produits Suncor Energie s.e.n.c    Suncor Energy Inc.

--------------------------------------------------------------------------------

Schedule 1.1(E)

to Credit Agreement

MORTGAGED PROPERTY

 

1. Albany Terminal, NY

540 Riverside Avenue

East Greenbush, NY 12144

 

2. Rensselaer Terminal, NY

(Adjacent to Albany Terminal)

58 Riverside Avenue

Rensselaer, NY 12144

 

3. Avery Lane Terminal, NH

194 Shattuck Way

Newington, NH 03801

 

4. Bridgeport Terminal, CT

250 Eagles Nest Drive

Bridgeport, CT 06607

241 Seaview Avenue Rear

Bridgeport, CT 06607

 

5. Everett Terminal, MA

43 Beacham Street

Everett, MA 02149

 

6. Merrill’s Marine Terminal, ME (leased)

92 Cassidy Point Drive

Portland, ME 04102

 

7. Mt. Vernon Terminal, NY

40 Canal Street

Mt. Vernon, NY 10550

 

8. Oswego Terminal, NY

One West Van Buren Street

Oswego, NY 13126

 

9. Providence Terminal, RI

144 Allens Avenue

Providence, RI 02903

 

10. Quincy Terminal, MA

728 Southern Artery

Quincy, MA 02169

--------------------------------------------------------------------------------

11. River Road Terminal, NH

372 Shattuck Way

Newington, NH 03801

 

12. Searsport Terminal, ME

P.O. Box 435

Mack Point – Trundy Road

Searsport, ME 04974

 

13. South Portland Terminal, ME

59 Main Street

South Portland, ME 04106

 

14. Stamford Terminal, CT

10 Water Street

Stamford, CT 06902

 

15. Castle Port Morris Terminal, NY

290 Locust Avenue

Bronx, NY 104541

 

16. TRT Terminal (Leasehold)2

740 Washington Street

Quincy, MA 02169

 

17. East Providence Terminal (Leasehold)3

100 Dexter Rd

East Providence, RI 02914

 

18. An emplacement known and designated as being lot THREE MILLION FOUR HUNDRED
AND SIXTY-EIGHT THOUSAND THREE HUNDRED AND FIFTY-FIVE (3 468 355) of the
Cadastre of Québec, Registration Division of Richelieu, with buildings and
improvements erected thereon bearing civic number 11905 Industrielle Street,
Sorel-Tracy, Province of Quebec, J3R 0E7.

 

19. An emplacement known and designated as being lot FOUR MILLION SEVEN HUNDRED
AND EIGHTY-FOUR THOUSAND ONE HUNDRED AND SIXTY-NINE (4 784 169) of the Cadastre
of Québec, Registration Division of Richelieu.

 

20. An emplacement known and designated as being lot FOUR MILLION SEVEN HUNDRED
AND EIGHTY-FOUR THOUSAND ONE HUNDRED AND SEVENTY-ONE (4 784 171) of the Cadastre
of Québec, Registration Division of Richelieu.

 

1  Mortgage to be placed on property post Restatement Effective Date

2  Leasehold mortgage to be placed on property post Restatement Effective Date
subject to Landlord Approval

3  Leasehold mortgage to be placed on property post Restatement Effective Date
subject to Landlord Approval

--------------------------------------------------------------------------------

21. An emplacement fronting on Paul-Pauzé Street in the City of Sorel-Tracy,
Province of Quebec, known and designated as being lot FIVE MILLION THREE HUNDRED
AND THIRTY THOUSAND SEVEN HUNDRED AND THIRTY-THREE (5 330 733) of the Cadastre
of Québec, Registration Division of Richelieu.

 

22. An emplacement known and designated as being lot THREE MILLION EIGHT HUNDRED
AND THIRTY THOUSAND FOUR HUNDRED AND THIRTEEN (3 830 413) of the Cadastre of
Québec, Registration Division of Joliette, with buildings and improvements
erected thereon bearing civic number 92 Chemin Delangis, Municipality of
Saint-Paul, Province of Quebec, J0K 3E0.

--------------------------------------------------------------------------------

Schedule 1.1(F)

to Credit Agreement

SPECIFIED ACCOUNT DEBTORS

Aegean Bunkering (USA) LLC

BP Company North America Inc.

BP Corporation North America, Inc.

BP PLC

Cargill Ltd.

Cargill, Inc. Petroleum Trading

Cargill, Incorporated

Chemoil Corporation

FEDNAV International Ltd

Glencore International AG

Hess Corporation

Hess Energy Trading Comp. (LLC) Ltd

Hydro-Quebec

I.C.S. Petroleum (Montreal) LTD US

JP Morgan Ventures Energy Corp

Macquarie Energy Canada LTD

Morgan Stanley Capital Group

Phillips 66 Company

Royal Dutch Shell Plc

Shell Energy North America (US), L.P.

Shell Oil Company

Shell Trading

Trafigura AG

--------------------------------------------------------------------------------

Schedule 2.2

to Credit Agreement

WIRE INSTRUCTIONS FOR WORKING CAPITAL FACILITY LOANS, ACQUISITION FACILITY LOANS
AND SWING LINE LOANS

SPRAGUE

Sprague Operating Resources LLC

Bank: JPMorgan Chase Bank, N.A.

ABA: [    ]

Reference: Sprague Operating Resources LLC

Account #: [    ]

Swift: [    ]

KILDAIR

 

1.      CAD Payment

   Beneficiary Bank:    BNP PARIBAS (Canada)    1981 Avenue McGill Collège   
Montréal QC H3A 2W8 SWIFT:    BNPACAMM TRANSIT :    [    ] BRANCH:    [    ]
Beneficiary:    KILDAIR SERVICE LTEE    92, chemin Delangis   
St-Paul-de-Joliette Québec    J0K3E0 a/c    [    ]

2.      USD Payment

   Beneficiary Bank:    BNP PARIBAS (Canada)    1981 Avenue McGill Collège   
Montréal QC H3A 2W8 SWIFT:    [    ] Beneficiary :    KILDAIR SERVICE LTEE   
92, chemin Delangis    St-Paul-de-Joliette Québec    J0K3E0 a/c    [    ]

--------------------------------------------------------------------------------

Correspondant Bank:    BNP Paribas    New York SWIFT:    [    ] ABA:    [    ]

--------------------------------------------------------------------------------

Schedule 3.1(a)

to Credit Agreement

EXISTING KILDAIR LETTERS OF CREDIT

None.

--------------------------------------------------------------------------------

Schedule 3.1(b)

to Credit Agreement

EXISTING SPRAGUE LETTERS OF CREDIT

Trade Letters of Credit

 

Issuing Bank

   Amount ($)      Issue Date      Expiration Date  

Soc Gen

     13,263,725.82         08/22/2014         12/29/2014   

Soc Gen

     16,035,728.72         11/06/2014         12/29/2014   

Soc Gen

     2,464,941.15         11/21/2014         12/20/2014   

Soc Gen

     6,729,964.50         12/01/2014         12/31/2014   

Soc Gen

     620,735.00         10/02/2014         04/30/2015   

Soc Gen

     4,837,324.80         12/03/2014         01/05/2015   

BNPP

     1,250,000.00         02/28/2013         04/30/2015   

BNPP

     4,500,000.00         02/04/2013         05/31/2015   

BNPP

     500,000.00         05/15/2014         05/31/2015   

Long Term Letters of Credit ($40MM Sub Limit)

 

Issuing Bank

   Amount ($)      Issue Date      Expiration Date  

BNPP

     180,000.00         04/22/2011         12/13/2014   

Soc Gen

     500,000.00         02/28/2014         01/31/2015   

Soc Gen

     3,000,000.00         06/05/2014         05/31/2015   

BNPP

     2,650,000.00         06/09/2010         08/31/2015   

BNPP

     400,000.00         06/14/2010         08/31/2015   

Soc Gen

     1,000,000.00         10/15/2014         09/30/2015   

Performance/Transportation Letters of Credit ($40MM Sub Limit)

 

Issuing Bank

   Amount ($)      Issue Date      Expiration Date  

BNPP

     1,500,000.00         06/16/2010         10/31/2015   

BNPP

     75,000.00         04/02/2012         01/31/2015   

BNPP

     731,000.00         06/22/2010         03/31/2015   

BNPP

     300,000.00         11/26/2013         03/31/2015   

BNPP

     146,000.00         07/09/2010         03/31/2015   

BNPP

     50,000.00         07/09/2010         03/31/2015   

Soc Gen

     150,000.00         06/30/2014         05/31/2015   

BNPP

     500,000.00         06/23/2010         06/30/2015   

BNPP

     191,000.00         07/08/2010         07/08/2015   

BNPP

     250,000.00         06/01/2010         09/17/2015   

BNPP

     792,017.00         08/11/2010         09/30/2015   

BNPP

     16,000.00         10/04/2012         09/30/2015   

BNPP

     15,000.00         10/04/2012         09/30/2015   

--------------------------------------------------------------------------------

Schedule 3.2

to Credit Agreement

EXISTING ACQUISITION FACILITY LETTERS OF CREDIT

None.

--------------------------------------------------------------------------------

Schedule 5.1(c)

to Credit Agreement

LIABILITIES

Provided to Administrative Agent.

--------------------------------------------------------------------------------

Schedule 5.1(f)

to Credit Agreement

SALES, TRANSFERS, DISPOSITIONS AND ACQUISITIONS

SPRAGUE

I. As of the Restatement Effective Date:

1. Sprague Resources Coöperatief U.A. will form and acquire 100% of the equity
interests of AcquireCo

2. AcquireCo will acquire 100% of the equity interests of Sprague Canadian
Properties LLC, which will be liquidated such that AcquireCo will own 100% of
the equity interests in Kildair

II. On October 1, 2014, the U.S. Borrower acquired the natural gas marketing and
electricity brokerage business assets of Metromedia Gas & Power, Inc.

III. On December 8, 2014, the U.S. Borrower acquired specifically identified
assets of Castle Oil Corporation, Castle Port Morris Terminals, Inc., Castle
Energy Solutions, LLC, Castle Energy Solutions S.B., LLC, Castle Fuels
Corporation and Castle Supply & Marketing, Inc. (collectively, “Castle”)
pursuant to the Asset Purchase Agreement, dated as of November 3, 2014.

--------------------------------------------------------------------------------

Schedule 5.4

to Credit Agreement

CONSENTS AND AUTHORIZATIONS

 

1. The filing of an Amendment to Mortgage and Security Agreement or Mortgage and
Security Agreement, as applicable, in the applicable jurisdiction for each of
the Mortgaged Properties on Schedule 1.1(E).

 

2. The payment of recording taxes in connection with the filings described in
Item 1 above.

 

3. The filing of a deed of hypothec at the Quebec land registry office of the
registration divisions of Richelieu and Joliette which will be made concurrently
with or prior to the closing.

 

4. Filing of Dutch security documents, as applicable, with Dutch tax authority.

--------------------------------------------------------------------------------

Schedule 5.9

to Credit Agreement

INTELLECTUAL PROPERTY

None.

--------------------------------------------------------------------------------

Schedule 5.15

to Credit Agreement

SUBSIDIARIES AND GENERAL PARTNER OF THE MLP

Subsidiaries:

 

Name

 

Form of

Organization

 

Jurisdiction

of

Organization

 

Total

Number

of Issued

Shares or

Other

Interests

of Capital
Stock

 

Total Number

of

Outstanding

Shares or

Other

Interests of

Capital Stock

 

Classes

of

Capital

Stock

 

Total

Number

of Issued

Shares or

Other

Interests

of Capital

Stock of

Each

Class

 

Total Number

of

Outstanding

Shares or

Other

Interests of

Capital Stock

of Each Class

 

Owner of

Capital Stock

Sprague Operating Resources LLC   Limited Liability Company   Delaware   N/A  
N/A   N/A   N/A   N/A   MLP Sprague Energy Solutions Inc.   Corporation  
Delaware   1,000   1,000   Common   1,000   1,000   Sprague Operating Resources
LLC Sprague Terminal Services LLC   Limited Liability Company   Delaware   N/A  
N/A   N/A   N/A   N/A   Sprague Operating Resources LLC Sprague Resources LP  
Limited Partnership   Delaware   N/A   N/A   N/A   N/A   N/A   See Below

--------------------------------------------------------------------------------

Sprague Connecticut Properties LLC   Limited Liability Company   Delaware   N/A
  N/A   N/A   N/A   N/A   Sprague Operating Resources LLC Sprague Co-op Member
LLC   Limited Liability Company   Delaware   N/A   N/A   N/A   N/A   N/A  
Sprague Operating Resources LLC Sprague Resources Coöperatief U.A.   Cooperative
  Netherlands   N/A   N/A   N/A   N/A   N/A   Sprague Operating Resources LLC
and Sprague Co-op Member LLC Sprague Resources Finance Corp   Corporation  
Delaware   1,000   1,000   Common   1,000   1,000   MLP Sprague Resources ULC  
Unlimited Liability Company   British Columbia   1,000,000   1,000,000   Common
  1,000,000   1,000,000   Sprague Resources Coöperatief U.A. Kildair Service
Ltd.   Corporation   British Columbia   11,015   11,015   Common   11,015  
11,015   Sprague Resources ULC Transit P.M. ULC   Unlimited Liability Company  
British Columbia   237,250   237,250   Class A   237,250   237,250   Wintergreen
Transport ULC Wintergreen Transport ULC   Unlimited Liability Company   British
Columbia   157,680   157,680   Class A Common   157,680   157,680  
Kildair Service Ltd.

--------------------------------------------------------------------------------

General Partnership Interests of the MLP:

Sprague Resources GP LLC owns 100% of the general partnership interests of
Sprague Resources LP.

--------------------------------------------------------------------------------

Schedule 5.16

to Credit Agreement

FILING JURISDICTIONS

UCC-1 Financing Statements:

 

  1. Sprague Operating Resources LLC: Secretary of State of the State of
Delaware

 

  2. Sprague Energy Solutions Inc.: Secretary of State of the State of Delaware

 

  3. Sprague Terminal Services LLC: Secretary of State of the State of Delaware

 

  4. Sprague Connecticut Properties LLC: Secretary of State of the State of
Delaware

 

  5. Sprague Resources LP: Secretary of State of the State of Delaware

 

  6. Sprague Co-op Member LLC: Secretary of State of the State of Delaware

 

  7. Sprague Resources Finance Corp: Secretary of State of the State of Delaware

 

  8. Sprague Resources Coöperatief U.A.: Recorder of Deeds of the District of
Columbia

Copyright Security Interest Filings:

 

  1. Sprague Operating Resources LLC: United States Copyright Office

The filing of PPSA financing statements in British Columbia for:

 

  1. Kildair Service Ltd.;

 

  2. Wintergreen Transport ULC;

 

  3. Transit P.M. ULC; and

 

  4. Sprague Resources ULC

The registration of a hypothec granted by:

 

  1. Kildair Service Ltd.;

 

  2. Wintergreen Transport ULC;

 

  3. Transit P.M. ULC; and

 

  4. Sprague Resources ULC

--------------------------------------------------------------------------------

will be made concurrently with or just prior to closing at the Register of
Personal and Movable Real Rights (Quebec).

--------------------------------------------------------------------------------

Schedule 5.19

to Credit Agreement

INSURANCE

 

  1. Commercial General Liability

 

Carrier:    Zurich Policy Term:    June 1, 2014 to June 1, 2015 Policy No.:   
[    ] Coverages:    To pay those sums that the insured becomes legally
obligated to pay to third parties because of Bodily Injury, Property Damage,
Personal Injury and Advertising Injury resulting from a covered loss and
occurring during the policy period. Policy Limit:    $4,000,000 General
Aggregate Limit (Other than Products / Completed Operations)    2,000,000
Products/Completed Operations Aggregate Limit    2,000,000 Each Occurrence   
2,000,000 Each Person – Personal & Advertising Injury Limit    1,000,000 Any One
Fire – Damages to Premises Rented to You    10,000 Any One Person – Medical
Expense Limit    1,000,000 General Aggregate – Employee Benefits Liability   
1,000,000 Each Employee – Employee Benefits Liability Deductibles:    $2,000,000

 

  2. Automobile Liability

 

Carrier:    Zurich Policy Term:    June 1, 2014 to June 1, 2015 Policy No.:   
[    ] Coverages:    To pay all sums the insured legally must pay as damages
because of third party bodily injury or third party property damage to which
this insurance applies, caused by an accident and resulting from the ownership,
maintenance or use of a covered auto. Physical damage to the vehicle is
self-insured. Policy Limit:   

$2,000,000 Bodily Injury & Property Damage – Coverage Symbol “1” – Combined
Single Limit Bodily Injury & Property Damage

Personal Injury Protection – Coverage Symbol “5” – Minimum limits required by
law

Uninsured Motorists – Coverage Symbol “6” – Minimum limits required by law
Underinsured Motorists – Coverage Symbol “6” – Minimum limits required by law

Deductible:    $250,000 Per Occurrence

--------------------------------------------------------------------------------

  3. Workers’ Compensation & Employer’s Liability

 

Carrier:    Zurich Policy Term:    June 1, 2014 to June 1, 2015 Policy No.:   
[    ]    [    ] Coverages:    Workers’ Compensation provides statutory medical
and indemnity benefits to employees of the Named Insured arising out of bodily
injury resulting from an accident or disease caused or aggravated by conditions
of employment occurring during the policy period. Employer’s Liability provides
protection for the employer from employee liability claims for injuries not
covered by statutory Workers’ Compensation Laws. Policy Limit:    Coverage A:
Workers Compensation    Statutory Benefits    Coverage B: Employer’s Liability
   $5,000,000 Each Accident – Bodily Injury by Accident    5,000,000 Policy
Limit – Bodily Injury by Disease    5,000,000 Each Employee – Bodily Injury by
Disease Deductible:    $500,000

 

  4. Umbrella Liability

 

Carrier:    Zurich Policy Term:    June 1, 2014 to June 1, 2015 Policy No.:   
[    ] Coverages:    To pay on behalf of the insured, damages the insured
becomes legally obligated to pay by reason of liability imposed by law because
of bodily injury, property damage, personal injury or advertising injury
resulting from a covered loss and occurring during the policy period. Coverage
applies excess of primary liability policies, or excess of self-insured
retentions where no primary liability coverage exists, unless otherwise
excluded. Limits:    $10,000,000 Per Occurrence    10,000,000 Products Completed
Operations Aggregate    10,000,000 General Aggregate    250,000 Casualty
Business Crisis Aggregate Limit Retention:    $25,000

--------------------------------------------------------------------------------

  5. Excess Bumbershoot Liability

 

Carrier:    Lloyd’s of London Policy Term:    June 1, 2014 to June 1, 2015
Policy No.:    [    ] Coverages:    This policy is to indemnify the insured in
respect of their legal and or contractual liability to third parties which they
may incur by reason of their operations as port authorities and/or terminal
operators and/or any companies as presently or hereinafter constituted over
which the insured exercises active management control and as per underlying
policy(ies) Limits:    $100,000,000 Each Occurrence    100,000,000 Aggregate
Where Applicable    Excess of underlying insurance and Self Insured Retentions
as listed on the lead umbrella and terminal operator’s legal liability policies.
Retention:    $25,000 Any One Accident

 

  6. Excess Bumbershoot Liability

 

Carrier:    Lloyd’s of London Policy Term:    June 1, 2014 to June 1, 2015
Policy No.:    [    ] Coverages:    This policy is to indemnify the insured in
respect of their legal and or contractual liability to third parties which they
may incur by reason of their operations as port authorities and/or terminal
operators and/or any companies as presently or hereinafter constituted over
which the insured exercises active management control and as per underlying
policy(ies) Limits:    $100,000,000 Each Occurrence    100,000,000 Aggregate
Where Applicable    Excess of $100,000,000 which is in turn excess of underlying
insurance and Self Insured Retentions as listed on the lead umbrella and
terminal operator’s legal liability policies. Retention:    Nil

--------------------------------------------------------------------------------

  7. Marine Cargo / Stockthroughput

 

Carrier:    National Union Fire Insurance Company of Pittsburgh PA Policy Term:
   June 1, 2014 – June 1, 2015 (continuous until cancelled) Policy No.:   
[    ] Coverage:    Voyage: To cover all Shipments and / or Storage Risks made
by, for, or to the Assured for their own account as Principal, or as Agents for
others and in which they have an insurable interest; or for the account of
others from whom instructions to insure have been received prior to any known or
reported loss, damage, or accident, and prior to arrival of vessel. Conveyances:
   By all conveyances. Limits:    $30,000,000 Any one vessel or aircraft   
3,000,000 Any one vessel subject to an On-Deck bill of lading    17,500,000 Any
one steel barge, any one tow    1,000,000 Any one inland transit (not
connecting) conveyance    Per Schedule Per any one named Warehouse location on
file with these Assurers    1,000,000 Per any one unnamed Warehouse location
(not on file with these Assurers), but subject to an aggregate limit of
$5,000,000 and one occurrence.    10,000,000 Sub-limit flood, earthquake, earth
subsidence, and Named Windstorm per location Deductibles:    $50,000 Per
Occurrence each warehouse or oil storage tank    $2,500 Any one occurrence or
series of occurrences arising out of one event, with the exception of General
Averages and Salvage charges and total loss which are payable in full

 

  8. Terminal Operators Legal Liability

 

Carrier:    Starr Indemnity & Liability Company Policy Term:    June 1, 2014 –
June 1, 2015 Policy No.:    [    ] Coverage:    To cover 100% interest in the
legal and /or contractual liability, subject to contract approval, of the
Assured arising out of the premises and/or operation, including products hazard
or completed operations hazard and independent contractors, of scheduled US
locations only. Including worldwide any associated operations, including
products and completed operations. Limits:    $3,000,000 Per Occurrence, CSL,
Inclusive of Legal Fees Deductibles:    $75,000 Per Occurrence

--------------------------------------------------------------------------------

  9. Aircraft Products / Completed Operations & Grounding Liability

 

Carrier:    North American Elite Insurance Company (Swiss Re) Policy Term:   
June 1, 2014 – June 1, 2015 Policy No.:    [    ] Coverage:    Bodily Injury or
property damage arising out of the products hazard or the completed operations
hazard. Loss of use of completed aircraft occurring after delivery to and
acceptance for flight operations by a purchaser or operator of such aircraft,
and caused by a grounding following an occurrence arising out of the products or
completed operations hazard. Limits:    $100,000,000 Bodily Injury or Property
Damage per Occurrence    $100,000,000 Each Grounding and Annual Aggregate   
$100,000,000 Combined Aggregate Deductible:    Nil

 

  10. Pollution Legal Liability

 

Carrier:    Navigators Specialty Insurance Company Policy Term:    June 1, 2012
– June 1, 2015 Policy No.:    [    ] Coverage:    Third-party claims for on-site
and off-site bodily injury, property damage or clean-up costs for non-owned
locations. Pollution conditions resulting from transported cargo. Limits:   
$5,000,000 Each Incident Limit    $6,000,000 Aggregate Deductible:    $100,000
Each Incident

 

  11. Business Travel Accident Program

(Sprague Operating Resources, LLC)

 

Carrier:    Zurich Policy Term:    June 1, 2014 to June 1, 2017 Policy No.:   
[    ]

--------------------------------------------------------------------------------

Eligible Classes:    Class I: All employees of the Policyholder not included in
any other Class. 5 x Base Annual Earnings to a maximum of $500,000. Permanent
Total Disability Benefit = 5 x base Annual Earnings to a maximum of $500,000.   
Class II: Outside Directors, Trustees and Consultants on file with the
Policyholder. $250,000. Enhanced Benefits:    All Classes Higher Education
Benefit    All Classes Accidental Dismemberment    All Classes Day Care Benefit
   All Classes Felonious Assault Benefit    All Classes Seat Belt Benefit   
Class I & II Family Traveling With Employee on Business / Relocation Trips   
All Classes Permanent and Total Disability Benefit    All Classes Extra-Ordinary
Commutation Coverage    All Classes Travel Assistance Coverage    All Classes 24
Hour Accident Protection While on Business Trip Excluding Policyholder Owned or
Leased Aircraft H-14

 

  12. Property Insurance

 

Carrier:    Zurich American Insurance Policy Term:    June 1, 2014 to June 1,
2015 Policy #:    [    ]

Coverages: Policy insures against direct physical loss of or damage caused by a
Covered Cause of Loss to Covered Property, at an Insured Location.

Policy Limit: $50,000,000 total for all coverages

Sublimits:

 

$4,000,000    BUSINESS INTERRUPTION $2,000,000    ACCOUNTS RECEIVABLE
$10,000,000    COMPUTER SYSTEMS DAMAGE - EDP $5,000,000    CONTINGENT BUSINESS
INTERRUPTION NAMED $2,500,000    CONTINGENT BUSINESS INTERRUPTION UNNAMED
$5,000,000 or 25% whichever is greater    DEBRIS REMOVAL NCP    DECONTAMINATION
COSTS NCP    DEFERRED PAYMENTS $500,000    ERRORS AND OMISSIONS $5,000,000   
EXPEDITING COSTS $2,000,000    FINE ARTS $100,000    FIRE DEPARTMENT SERVICE
CHARGES $7,500,000    INCREASED COST OF CONSTRUCTION $100,000    LAND AND WATER
CONTAMINANT CLEANUP, REMOVAL AND DISPOSAL in the Annual Aggregate.

--------------------------------------------------------------------------------

$500,000    LAND IMPROVEMENTS NCP    MISCELLANEOUS PERSONAL PROPERTY $2,000,000
   MISCELLANEOUS UNNAMED LOCATIONS (Excluding Named Wind, Flood in Zones A, V
and their subdivisions and High Hazard EQ) $5,000,000    SERVICE INTERRUPTION
(PD/BI combined) NCP    PROFESSIONAL FEES: Plus 50% of the amount Recoverable
under this Coverage in excess of $0.00 up to $0.00 NCP    RADIOACTIVE
CONTAMINATION NCP    RESEARCH ANIMALS in excess of $0.00 NCP    TENANTS
PROHIBITED ACCESS $2,000,000    INLAND TRANSIT (PD Only - excluding Inventory
and Stock) $1,000,000    VALUABLE PAPERS $1,000,000    NEW CONSTRUCTION OR
ADDITIONS (PROPERTY DAMAGE ONLY) NCP    OFF PREMISES STORAGE FOR PROPERTY UNDER
CONSTRUCTION NCP    CURRENCY DEVALUATION NCP    DIFFERENCE IN
CONDITIONS/DIFFERENCE IN LIMITS <Country Limits> NCP    FINANCIAL INTEREST OF
THE FIRST NAMED INSURED NCP    TAX LIABILITY NCP    TENANTS AND NEIGHBORS
LIABILITY NCP    BREAKDOWN OF EQUIPMENT not to exceed: $0.00 for AMMONIA
CONTAMINATION, $0.00 for SPOILAGE $50,000,000    EARTH MOVEMENT <in the annual
aggregate> except:
-$20,000,000 New Madrid Earth Movement (annual aggregate)
-$100,000 California Earth Movement (annual aggregate) $50,000,000    FLOOD
including Storm Surge <annual aggregate> except:
-$10,000,000 Flood Zones A & V including Storm Surge (annual aggregate)
$50,000,000    Windstorm <annual aggregate>
-$20,000,000 Tier I or 2, Gulf Of Mexico and Atlantic Seaboard Wind (annual
aggregate) $10,000,000    Extra Expense $2,000,000    Mobile Equipment
$5,000,000    Newly Acquired Locations –120 Days Reporting (Excluding Named
Wind, Flood in Zones A, V and their subdivisions and High Hazard EQ) $100,000   
Pollution/Contamination Clean-up (annual aggregate) $500,000    Rental expenses
$500,000    Leasehold Interest $100,000    Exhibitions $1,000,000    Loss
Adjustment Expenses $10,000,000    Piers, Docks and Wharves $500,000   
Unintentional Errors and Omissions $100,000    Royalties

--------------------------------------------------------------------------------

Policy Deductibles:   $250,000 except:     $100,000 EDP Equipment     $100,000
Transit     $100,000 Mobile Equipment     $100,000 Cranes     5%   TIV subject
to minimum of $1,000,000 per location as respects High Hazard Flood including
Flood Zones A & V except:             5%   TIV minimum of $2,000,000 as respects
Flood at Oceanside      

      5%

  TIV minimum of $1,000,000 as respects Named Wind Storm or Wind related losses
in Tier 1 and 2 Counties GOM/Atlantic Seaboard             5%   TIV minimum of
$500,000 as respects CA EQ 2% TIV with a minimum of $500,000 as respects New
Madrid EQ

 

  13. Foreign Liability Insurance

 

Carrier:    ACE American Insurance Company Policy Term:    June 1, 2014 to June
1, 2015 Policy #:    [    ] Coverages:    A. Program Type    Integrated
Liability Program with a U.S. Master Policy and Liability (locally admitted)
policies issued in the following countries: Canada, Demark, France, Germany,
UAE, UK    B. Policy Form    Global Occurrence (excluding the US, Puerto Rico
and its possessions)    C. Master Primary Limits (in USD)    General Liability
   $2,000,000 General Aggregate    2,000,000 Each Occurrence Limit    2,000,000
Products/Completed Operations Aggregate    1,000,000 Personal & Advertising
Injury    1,000,000 Premises Damage Liability Limit ( Each Occurrence)    50,000
Medical Expense Limit    Auto Liability    1,000,000 Contingent Auto Liability
Coverage (each accident)    Employers Liability    1,000,000 Bodily Injury by
Accident (each accident)    1,000,000 Bodily Injury by Disease (each employee)
   1,000,000 Bodily Injury by Disease (policy limit)    10,000,000 GBP – UK EL
ONLY    Employee Benefits    1,000,000 Each Claim / Annual Aggregate Retention:
   $50,000 General Liability and Products/Completed Operations

--------------------------------------------------------------------------------

  14. Foreign Property Insurance

 

Carrier:    ACE American Insurance Company Policy Term:    June 1, 2014 to June
1, 2015 Policy #:    [    ] Coverages:    A. Program Type    Integrated
Liability Program with a U.S. Master Policy and Liability (locally admitted)
policies issued in the following countries: Canada, Demark, France, Germany,
Spain, UAE, UK    B. Policy Form    Global Occurrence (excluding the US, Puerto
Rico and its possessions)    C. Master Primary Limits (in USD)    Commercial
Property / Business Income Coverage    $2,582,000 Master (Highest Total Insured
Value for Any One Location)    Scheduled Various Limits Apply Based on Schedule
of Values Submitted By Lexa International Deductible(s):    $10,000 Per
Occurrence All Property Except Flood/Earthquake    25,000 Flood/Earthquake/Named
Windstorm Tier 1

 

  15. Canadian Railcar Liability

 

Carrier:    Zurich Insurance Company Ltd. Policy Term:    June 1, 2014 – June 1,
2015 Policy No.:    [    ] Coverage:    Railcar Rolling Stock Insurance protects
your company from claims & lawsuits alleging your negligence caused bodily
injury or property damage to a third party. Limits:    $5,000,000 Each
Occurrence (Defense costs exclusive)    10,000,000 General Aggregate (Defense
costs exclusive) Deductible:    $25,000 Each Claim

--------------------------------------------------------------------------------

  16. Canadian Automobile Liability

 

Carrier:    Zurich Insurance Company Ltd. Policy Term:    June 1, 2014 to June
1, 2015 Policy No.:    [    ] (Kildair Service and Wintergreen Transport Corp
Ltd) Coverages:    To pay all sums the insured legally must pay as damages
because of third party bodily injury or third party property damage to which
this insurance applies, caused by an accident and resulting from the ownership,
maintenance or use of a covered auto. Physical damage to the vehicle is
self-insured. Policy Limit:    $1,000,000 Bodily Injury & Property Damage –
Coverage Symbol “1” – Combined Single Limit Bodily Injury & Property Damage
Deductible:    $10,000 Loss or Damage – All Perils, Quebec all units except PPV
& LC, except $500 PPV & LC    $1,000 Loss or Damage – All Perils, Ontario Units

 

  17. Pollution and Remediation Legal Liability Declarations

 

Carrier:    XL Insurance Company Limited Policy Term:    November 28, 2011 –
November 28, 2016 Policy No.:    [    ] Coverage:    To pay those sums that the
insured becomes legally obligated to pay for loss and related legal expense
resulting from any pollution condition on, at, under or migrating from any
covered location. Limits:                $20,000,000    Each Pollution Condition
   20,000,000    Aggregate Self Insured Retention:    500,000    Each Pollution
Condition

 

  18. Canadian Property

 

Carrier:    ACE INA Insurance Policy Term:    June 1, 2014 – June 1, 2015 Policy
No.:    [    ]

--------------------------------------------------------------------------------

Coverage:    This policy covers property situated within the territorial limits
of Canada only. Limits:   

USD

4,420,753

   All Risks Direct Physical Loss or Damage (except as excluded) Deductible:   
$10,000    Property Damage / Business Interruption Combined

 

  19. Canadian General Liability

 

Carrier:    ACE INA Insurance Policy Term:    June 1, 2014 – June 1, 2015 Policy
No.:    [    ] Coverage:    To pay those sums that the insured becomes legally
obligated to pay to third parties because of Bodily Injury, Property Damage,
Personal Injury and Advertising Injury resulting from a covered loss and
occurring during the policy period. Limits:   

USD

1,000,000

   Bodily Injury & Property Damage, Each Occurrence    1,000,000    Products &
Completed Operations Aggregate    1,000,000    Personal Injury & Advertising
Liability    500,000    Tenant’s Legal Liability    1,000,000    Non-Owned
Automobile Liability

--------------------------------------------------------------------------------

Schedule 5.22

to Credit Agreement

ENVIRONMENTAL MATTERS

None.

--------------------------------------------------------------------------------

Schedule 5.25

to Credit Agreement

CANADIAN PENSION PLAN AND BENEFIT PLANS

Kildair Service Ltd.

 

1- Retirement Savings Plans

Retirement saving plan for the unionized employees (approximately 40 employees):
3% of their salary equal to approximately 40K per year is contributed into a
RRSP.

 

2- Benefit Plans

Other benefits Group Insurance with half of the cost covered by the employer
equal to approximately $145,000 per year.

--------------------------------------------------------------------------------

Schedule 8.2

to Credit Agreement

EXISTING INDEBTEDNESS

 

1. Indebtedness pursuant to Lease and Purchase Option dated as of November 8,
2004 between Merrill Industries Inc., as lessor, and Sprague Operating Resources
LLC, as lessee, in an approximate principal amount equal to $3,117,622.17 as of
November 21, 2014.

 

2. Indebtedness pursuant to a capital lease dated as of May 26, 2011 between
Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $252,226 as of October 31, 2014.

 

3. Indebtedness pursuant to a capital lease dated as of February 18, 2011, as
amended on July 6, 2011, between Royal Bank of Canada, as lessor, and Kildair
Service Ltd., as lessee, in an amount equal to $401,187 as of October 31, 2014.

 

4. Indebtedness pursuant to a capital lease dated as of September 12, 2011
between Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in
an amount equal to $37,136 as of October 31, 2014.

 

5. Indebtedness pursuant to a capital lease dated as of October 17, 2011 between
Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $135,021 as of October 31, 2014.

 

6. Indebtedness pursuant to a capital lease dated as of January 27, 2012 between
Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $74,488 as of October 31, 2014.

 

7. Indebtedness pursuant to a capital lease dated as of February 17, 2012
between Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in
an amount equal to $307,915 as of October 31, 2014.

 

8. Indebtedness pursuant to a capital lease dated as of April 24, 2012 between
Royal Bank of Canada, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $169,183 as of October 31, 2014.

 

9. Indebtedness pursuant to a capital lease dated as of September 21, 2012
between Roynat Inc., as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $380,511 as of October 31, 2014.

 

10. Indebtedness pursuant to a capital lease dated as of July 15, 2013 between
Techniflamme Combustion, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $324,750 as of October 31, 2014.

 

11. Indebtedness pursuant to a capital lease dated as of February 24, 2014
between Wells Fargo, as lessor, and Kildair Service Ltd., as lessee, in an
amount equal to $379,525 as of October 31, 2014.

--------------------------------------------------------------------------------

Schedule 8.3

to Credit Agreement

EXISTING LIENS

 

Debtor

  

Secured Party

  

Description of Collateral

  

Filing

Date

  

Jurisdiction

Sprague Operating Resources LLC    De Lage Landen Financial Services, Inc.   
Hercules trackmobile rail car movers, S/N LGN993160413    5/22/2013    Delaware
Sprague Operating Resources LLC    Caterpillar Financial Services Corporation   
One (1) Caterpillar 930K Wheel Loader, S/N RHN03145    07/07/2014    Delaware

 

Lessee

  

Lessor

  

Type of

Registration

  

Filing Date

  

Filing Number

  

Jurisdiction

Kildair Service Ltd.

(as purchaser)

  

Seller: Manac Inc.

 

Assignee: Precision Trust

   Reservation of ownership (Instalment Sale) and assignment of all rights   
July 31, 2008    08-0446870-0001    Quebec
Register of
Personal and
Movable
Real Rights
(“RPMRR”)

Kildair Service Ltd.

(as purchaser)

  

Seller: Manac Inc.

 

Assignee: Precision Trust

   Reservation of ownership (Instalment Sale) and assignment of all rights   
July 29, 2009    09-0463250-0001    RPMRR Kildair Service Ltd.    Royal Bank of
Canada    Rights of ownership of the lessor    February 22, 2011   
11-0113187-0003    RPMRR Kildair Service Ltd.    Royal Bank of Canada    Rights
of ownership of the lessor    May 26, 2011    11-0385082-0001    RPMRR Kildair
Service Ltd.    Royal Bank of Canada    Rights of ownership of the lessor   
July 6, 2011    11-0505479-0004    RPMRR Kildair Service Ltd.    Royal Bank of
Canada    Rights of ownership of the lessor    September 2, 2011   
11-0676820-0003    RPMRR Kildair Service Ltd.    Royal Bank of Canada    Rights
of ownership of the lessor    October 18, 2011    11-0800431-0010    RPMRR
Kildair Service Ltd.    Royal Bank of Canada    Rights of ownership of the
lessor    January 30, 2012    12-0059136-0002    RPMRR Kildair Service Ltd.   
Royal Bank of Canada    Rights under a lease    February 17, 2012   
12-0111475-0002    RPMRR Kildair Service Ltd.    Royal Bank of Canada    Rights
under a lease    April 24, 2012    12-0305475-0001    RPMRR

--------------------------------------------------------------------------------

Kildair Service Ltd.    Roynat Inc.    Rights of ownership of the lessor   
September 27, 2012    12-0794513-0002    RPMRR Kildair Service Ltd.   

Infiniti Laval

 

Assignee: Nissan Canada Finance a Division of Nissan Canada Inc.

   Rights under a lease and assignment of all rights    October 10, 2012   
12-0893579-0025    RPMRR

Kildair Service Ltd.

(as purchaser)

  

Seller: Globocam (Anjou) Inc.

 

Assignee: Financement d’équipement GE Canada S.E.N.C.

   Reservation of ownership (Instalment Sale) and assignment of all rights   
February 19, 2013    13-0119266-0001    RPMRR

Kildair Service Ltd.

(as purchaser)

  

Seller: Manac Inc.

 

Assignee: Wells Fargo Equipment Finance Company

   Reservation of ownership (Instalment Sale) and assignment of all rights   
February 27, 2014    14-0153920-0003    RPMRR

--------------------------------------------------------------------------------

Schedule 8.8

to Credit Agreement

INVESTMENTS

None.

--------------------------------------------------------------------------------

Schedule 8.10

to Credit Agreement

TRANSACTIONS WITH AFFILIATES

1. Services Agreement, dated as of October 30, 2013, by and among Sprague
Resources GP LLC, Sprague Resources LP, Sprague Resources Holdings LLC and
Sprague Energy Solutions Inc.

2. First Amended and Restated Agreement of Limited Partnership of Sprague
Resources LP, dated as of October 30, 2013.

3. Terminal Operating Agreement, dated as of October 30, 2013, by and among
Sprague Massachusetts Properties LLC, Sprague Resources Holdings LLC and Sprague
Operating Resources LLC.

4. Omnibus Agreement, dated as of October 30, 2013, by and among Axel Johnson
Inc., Sprague Resources Holdings LLC, Sprague Resources LP and Sprague Resources
GP LLC.

5. Purchase Agreement, dated on or about the Restatement Effective Date, between
Sprague International Properties LLC, Sprague Canadian Properties LLC, Sprague
Resources ULC and Axel Johnson Inc., and the other transfer documents related
thereto.

--------------------------------------------------------------------------------

Exhibit A-1

to Credit Agreement

FORM OF DOLLAR WORKING CAPITAL FACILITY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                New York, New York                     , 201    

FOR VALUE RECEIVED, each of SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “U.S. Borrower”), KILDAIR SERVICE LTD., a Canadian
corporation (“Kildair”) and SPRAGUE RESOURCES ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”, and together
with the U.S. Borrower and Kildair, the “Borrowers”), hereby unconditionally
promises to pay to                      or its registered assigns (the “Dollar
Working Capital Facility Lender”), at the times specified in the Credit
Agreement (referred to below), in lawful money of the United States of America,
in immediately available funds, the principal amount of                     , or
such lesser principal amount of Dollar Working Capital Facility Loans made by
the Dollar Working Capital Facility Lender as may then be outstanding from time
to time under the Credit Agreement; provided that notwithstanding anything to
the contrary herein or in the Credit Agreement, at any time prior to the ULC
Conversion, Kildair shall not be jointly and severally liable for any U.S.
Obligations.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Dollar Working Capital
Facility Loan made by the Dollar Working Capital Facility Lender pursuant to
Section 2.1 of the Credit Agreement, each Conversion of all or a portion thereof
to another Type pursuant to Section 4.3 of the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof. Each such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded; provided that, failure of the Dollar Working Capital Facility Lender
to make any such recordation (or any error in such recordation) shall not affect
the obligations of any Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent and the other agents parties thereto, and the Dollar Working
Capital Facility Lender is entitled to the benefits thereof, is secured as
provided for therein, and is subject to optional and mandatory prepayment in
whole or in part as provided therein. Capitalized terms used herein but not
defined herein shall have the meanings provided in the Credit Agreement.

--------------------------------------------------------------------------------

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

Each Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: KILDAIR SERVICE LTD. By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC By:  

 

  Name:   Title:

[Signature Page to Dollar Working Capital Facility Note]

--------------------------------------------------------------------------------

Schedule A

to Dollar Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

Date

   Amount of
Base Rate Loans    Amount
Converted to
Base Rate Loans    Amount of
Principal of
Base Rate Loans
Repaid    Amount of Base Rate
Loans Converted to
Eurocurrency Loans    Unpaid Principal
Balance
of Base Rate Loans    Notation
Made By                                                      

--------------------------------------------------------------------------------

Schedule B

to Dollar Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS

 

Date

   Amount of
Eurocurrency
Loans    Amount Converted
to
Eurocurrency Loans    Amount of Principal of
Eurocurrency Loans
Repaid    Amount of Eurocurrency
Loans Converted to
Base Rate Loans    Unpaid Principal
Balance
of Eurocurrency
Loans    Notation Made
By                                                      

--------------------------------------------------------------------------------

Exhibit A-2

to Credit Agreement

FORM OF MULTICURRENCY WORKING CAPITAL FACILITY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                New York, New York                     , 201    

FOR VALUE RECEIVED, each of SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “U.S. Borrower”), KILDAIR SERVICE LTD., a Canadian
corporation (“Kildair”) and SPRAGUE RESOURCES ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”, and together
with the U.S. Borrower and Kildair, the “Borrowers”), hereby unconditionally
promises to pay to                      or its registered assigns (the
“Multicurrency Working Capital Facility Lender”), at the times specified in the
Credit Agreement (referred to below), in lawful money of the United States of
America or Canada, as applicable, in immediately available funds, the principal
amount of                     , or such lesser principal amount of Multicurrency
Working Capital Facility Loans made by the Multicurrency Working Capital
Facility Lender as may then be outstanding from time to time under the Credit
Agreement; provided that notwithstanding anything to the contrary provided
herein or in the Credit Agreement, at any time prior to the ULC Conversion,
Kildair shall not be jointly and severally liable for any U.S. Obligations.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Multicurrency Working
Capital Facility Loan made by the Multicurrency Working Capital Facility Lender
pursuant to Section 2.1 of the Credit Agreement, each Conversion of all or a
portion thereof to another Type pursuant to Section 4.3 of the Credit Agreement
and the date and amount of each payment or prepayment of principal thereof. Each
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that, failure of the Multicurrency Working
Capital Facility Lender to make any such recordation (or any error in such
recordation) shall not affect the obligations of any Borrower under this Note or
under the Credit Agreement.

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent and the other agents parties thereto, and the Multicurrency
Working Capital Facility Lender is entitled to the benefits thereof, is secured
as provided for therein, and is subject to optional and mandatory prepayment in
whole or in part as provided therein. Capitalized terms used herein but not
defined herein shall have the meanings provided in the Credit Agreement.

--------------------------------------------------------------------------------

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

Each Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: KILDAIR SERVICE LTD. By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule A

to Multicurrency Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

Date

   Amount of
Base Rate Loans    Amount
Converted to
Base Rate Loans    Amount of
Principal of
Base Rate Loans
Repaid    Amount of Base Rate
Loans Converted to
Eurocurrency Loans    Unpaid Principal
Balance
of Base Rate Loans    Notation
Made By                                                      

--------------------------------------------------------------------------------

Schedule B

to Multicurrency Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS

 

Date

   Amount of
Eurocurrency
Loans    Amount Converted
to
Eurocurrency Loans    Amount of Principal of
Eurocurrency Loans
Repaid    Amount of Eurocurrency
Loans Converted to
Base Rate Loans    Unpaid Principal
Balance
of Eurocurrency
Loans    Notation Made
By                                                      

--------------------------------------------------------------------------------

Schedule C

to Multicurrency Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF PRIME LOANS

 

Date

   Amount of
Prime Rate
Loans    Amount Converted
to
Prime Rate Loans    Amount of Principal of
Prime Rate Loans
Repaid    Amount of Prime Rate
Loans Converted to
Eurocurrency Loans    Unpaid Principal
Balance
of Prime Rate
Loans    Notation Made
By                                                      

--------------------------------------------------------------------------------

Schedule D

to Multicurrency Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS

 

Date

   Amount of
Eurocurrency
Loans    Amount Converted
to
Eurocurrency Loans    Amount of Principal of
Eurocurrency Loans
Repaid    Amount of Eurocurrency
Loans Converted to
Prime Rate Loans    Unpaid Principal
Balance
of Eurocurrency
Loans    Notation Made
By                                                      

--------------------------------------------------------------------------------

Exhibit A-3

to Credit Agreement

FORM OF DOLLAR SWING LINE NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                New York, New York                     , 201    

FOR VALUE RECEIVED, each of SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “U.S. Borrower”), KILDAIR SERVICE LTD., a Canadian
corporation (“Kildair”) and SPRAGUE RESOURCES ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”, and together
with the U.S. Borrower and Kildair, the “Borrowers”), hereby unconditionally
promises to pay to [    ] or its registered assigns (the “Dollar Swing Line
Lender”), at the times specified in the Credit Agreement (referred to below), in
lawful money of the United States of America, in immediately available funds,
the principal amount of                     , or such lesser principal amount of
Dollar Swing Line Loans as may then be outstanding from time to time under the
Credit Agreement; provided that notwithstanding anything to the contrary
contained herein or in the Credit Agreement, at any time prior to the ULC
Conversion, Kildair shall not be jointly and severally liable for any U.S.
Obligations.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, and amount of each Dollar Swing Line Loan made
by the Dollar Swing Line Lender pursuant to Section 2.3 of the Credit Agreement,
and the date and amount of each payment or prepayment of principal thereof. Each
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that, failure of the Dollar Swing Line Lender
to make any such recordation (or any error in such recordation) shall not affect
the obligations of any Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent and the other agents parties thereto, and the Dollar Swing Line
Lender is entitled to the benefits thereof, is secured as provided for therein,
and is subject to optional and mandatory prepayment in whole or in part as
provided therein. Capitalized terms used herein but not defined herein shall
have the meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

--------------------------------------------------------------------------------

Each Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: KILDAIR SERVICE LTD. By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule A

to Dollar Swing Line Note

LOANS AND REPAYMENTS OF DOLLAR SWING LINE LOANS

 

Date

   Amount of
Dollar Swing Line Loans    Amount of
Principal of
Dollar Swing Line Loans
Repaid    Unpaid Principal
Balance
of Dollar Swing Line Loans    Notation
Made By                                    

--------------------------------------------------------------------------------

Exhibit A-4

to Credit Agreement

FORM OF MULTICURRENCY SWING LINE NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                New York, New York                     , 201    

FOR VALUE RECEIVED, each of SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “U.S. Borrower”), KILDAIR SERVICE LTD., a Canadian
corporation (“Kildair”) and SPRAGUE RESOURCES ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”, and together
with the U.S. Borrower and Kildair, the “Borrowers”), hereby unconditionally
promises to pay to [    ] or its registered assigns (the “Multicurrency Swing
Line Lender”), at the times specified in the Credit Agreement (referred to
below), in lawful money of the United States of America or Canada, as
applicable, in immediately available funds, the principal amount of
                    , or such lesser principal amount of Multicurrency Swing
Line Loans as may then be outstanding from time to time under the Credit
Agreement; provided that notwithstanding anything to the contrary contained
herein or in the Credit Agreement, at any time prior to the ULC Conversion,
Kildair shall not be jointly and severally liable for any U.S. Obligations.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Multicurrency Swing
Line Loan made by the Multicurrency Swing Line Lender pursuant to Section 2.3 of
the Credit Agreement, and the date and amount of each payment or prepayment of
principal thereof. Each such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded; provided that, failure of the
Multicurrency Swing Line Lender to make any such recordation (or any error in
such recordation) shall not affect the obligations of any Borrower under this
Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent and the other agents parties thereto, and the Multicurrency Swing
Line Lender is entitled to the benefits thereof, is secured as provided for
therein, and is subject to optional and mandatory prepayment in whole or in part
as provided therein. Capitalized terms used herein but not defined herein shall
have the meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

--------------------------------------------------------------------------------

Each Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: KILDAIR SERVICE LTD. By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule A

to Multicurrency Swing Line Note

LOANS AND REPAYMENTS OF MULTICURRENCY SWING LINE LOANS

 

Date

   Amount of Multicurrency
Swing Line Loans    Amount of
Principal of Multicurrency
Swing Line Loans
Repaid    Unpaid Principal
Balance of
Multicurrency Swing Line
Loans    Notation
Made By                                    

--------------------------------------------------------------------------------

Exhibit A-5

to Credit Agreement

FORM OF ACQUISITION FACILITY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                New York, New York                     , 201    

FOR VALUE RECEIVED, SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “U.S. Borrower”), KILDAIR SERVICE LTD., a Canadian
corporation (“Kildair”) and SPRAGUE RESOURCES ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”, and and together
with the U.S. Borrower and Kildair, the “Borrowers”), hereby unconditionally
promises to pay to                     or its registered assigns (the
“Acquisition Facility Lender”), at the times specified in the Credit Agreement
(referred to below), in lawful money of the United States of America, in
immediately available funds, the principal amount of                     , or
such lesser principal amount of Acquisition Facility Loans made by the
Acquisition Facility Lender as may then be outstanding from time to time under
the Credit Agreement; provided that notwithstanding anything to the contrary
contained herein or in the Credit Agreement, at any time prior to the ULC
Conversion, Kildair shall not be jointly and severally liable for any U.S.
Obligations.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Acquisition Facility
Loan made by the Acquisition Facility Lender pursuant to Section 2.4 of the
Credit Agreement, each Conversion of all or a portion thereof to another Type
pursuant to Section 4.3 of the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof. Each such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided that, failure of the Acquisition Facility Lender to make any such
recordation (or any error in such recordation) shall not affect the obligations
of any Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian Agent and the other agents parties thereto, and the Acquisition
Facility Lender is entitled to the benefits thereof, is secured as provided for
therein, and is subject to optional and mandatory prepayment in whole or in part
as provided therein. Capitalized terms used herein but not defined herein shall
have the meanings provided in the Credit Agreement.

--------------------------------------------------------------------------------

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

Each Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: KILDAIR SERVICE LTD. By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule A

to Acquisition Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

Date

   Amount of
Base Rate Loans    Amount
Converted to
Base Rate Loans    Amount of
Principal of
Base Rate Loans
Repaid    Amount of Base Rate
Loans Converted to
Eurocurrency Loans    Unpaid Principal
Balance
of Base Rate Loans    Notation
Made By                                                      

--------------------------------------------------------------------------------

Schedule B

to Acquisition Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS

 

Date

   Amount of
Eurocurrency
Loans    Amount Converted
to
Eurocurrency Loans    Amount of Principal of
Eurocurrency Loans
Repaid    Amount of Eurocurrency
Loans Converted to
Base Rate Loans    Unpaid Principal
Balance
of Eurocurrency
Loans    Notation Made
By                                                      

--------------------------------------------------------------------------------

Exhibit B-1

to Credit Agreement

FORM OF U.S. SECURITY AGREEMENT

AMENDED AND RESTATED SECURITY AGREEMENT, dated as of December 9, 2014, made by
each party listed on Schedule I hereto (together with each Person which may,
from time to time, become party hereto as a Grantor, each a “Grantor”,
collectively, the “Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”) for the
Secured Parties as described and defined below.

RECITALS

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC, a
Delaware limited liability company (the “U.S. Borrower”), SPRAGUE RESOURCES ULC
(“AcquireCo”), KILDAIR SERVICE LTD. (“Kildair”), the several banks and other
financial institutions or entities from time to time parties thereto (the
“Lenders”), the Administrative Agent and the other agents parties thereto, the
Lenders have severally agreed to make loans to and participate in letters of
credit issued on behalf of, and certain Lenders (the “Issuing Lenders”) have
agreed to issue letters of credit for the account of, the Borrowers (as defined
in the Credit Agreement) upon the terms and subject to the conditions set forth
therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers, and the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
and for other good, fair and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged by each
Grantor, each Grantor hereby agrees with the Administrative Agent, on behalf of
and for the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement; provided, that the following terms which are defined in the
UCC are used herein as so defined: Accounts, Certificated Security, Chattel
Paper, Commercial Tort Claims, Commodity Account, Documents, Equipment, Farm
Products, General Intangibles, Goods, Instruments, Inventory, Investment
Property, Letter-of-Credit Rights, Proceeds, Securities Account and Supporting
Obligations; and the following terms shall have the following meanings:

“Account Control Agreement”: (i) with respect to any Deposit Account, a control
agreement in a form reasonably satisfactory to the Administrative Agent, as
amended, supplemented or otherwise modified from time to time; (ii) with respect
to any Securities Account, a control agreement in a form reasonably satisfactory
to the Administrative Agent, as amended, supplemented or otherwise modified from
time to time; and (iii) with respect to any Commodity Account, a control
agreement in a form reasonably satisfactory to the Administrative Agent, as
amended, supplemented or otherwise modified from time to time.

--------------------------------------------------------------------------------

“Account Transaction”: as defined in Section 5(j).

“Administrative Agent”: as defined in the Preamble hereto.

“Bankruptcy Code”: the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.

“Bankruptcy Law”: the Bankruptcy Code and any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law affecting creditors’ rights
generally.

“Cash Management Account”: a Controlled Account maintained at a Cash Management
Bank.

“Collateral”: as defined in Section 2 of this Security Agreement.

“Collateral Account”: any collateral account established by the Administrative
Agent as provided in Section 3(c) or 8 of this Security Agreement.

“Contract”: any contract to which a Pledgor is a party, other than the Loan
Documents.

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

“Copyrights”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Credit Agreement”: as defined in the Recitals hereto.

“Deposit Account”: a “deposit account” as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with any
depositary institution.

“DIP Financing”: as defined in Section 10(c)(ii).

“Enforcement Actions”: as defined in Section 9(b).

“Excluded Assets”: (i) Capital Stock of Exempt CFCs (or of any Subsidiaries of
Exempt CFCs) owned by any Grantor not pledged or required to be pledged pursuant
to any Pledge Agreement; (ii) any property to the extent that such grant of a
security interest is prohibited by any Requirements of Law, requires a consent
not obtained of any Governmental Authority or is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any consent
(other than consent of a Loan Party) not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise to such
property or, in the case of any Investment Property (other than any of the
foregoing issued by a Grantor), any applicable shareholder or similar agreement,
except to the extent that such Requirement of Law or the term in such contract,
license, agreement, instrument or other document or shareholder or similar
agreement providing for such prohibition, breach, default or termination or
requiring such consent is ineffective under applicable law; (iii) any assets
that are subject to a purchase money Lien or capital lease permitted under the
Credit Agreement to the extent the documents relating to such purchase money
Lien or capital lease do not permit such assets to be subject to the security
interests created hereby; (iv) the Grantors’ office space leased in White
Plains, New York, Lawrence, New York, Harrison, New York, Eatontown, New Jersey,
Westborough, Massachusetts and Portsmouth, New Hampshire; (v) the Newington
Electric Pipeline; and (vi) the Excluded Accounts; provided that “Excluded
Assets” shall not include any Proceeds, substitutions or replacements of
Excluded Assets (unless such Proceeds, substitutions or replacements would
constitute “Excluded Assets”).

 

-2-

--------------------------------------------------------------------------------

“FERC Contract Collateral”: contracts of any Grantor and the books and records
related thereto, in each case, that constitute Collateral, that, by their
nature, require a filing with FERC (whether such filing is made for notice
purposes only or is intended to receive acceptance by FERC of such filing or
approval by FERC of the requests set forth therein) in order for the
Administrative Agent to be able to exercise the remedies set forth in Section 9.

“FERC Sub-Agent”: as defined in Section 11(a).

“Grantors”: as defined in the Preamble hereto.

“Grantor’s Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property used (but not owned) or licensed by such Grantor at such
time.

“Incidental Rights”: (a) all books and records relating to the Collateral,
(b) all indemnities, guaranties or warranties relating to any type of the
Collateral to the extent a security interest is permitted to be granted therein
pursuant to the UCC and (c) all governmental filings, permits, approvals or
licenses relating to the ownership, use or occupancy of the Inventory that
constitutes Collateral to the extent that (i) a security interest may be granted
therein under applicable Law, (ii) the granting of a security interest therein
would not result in the violation, termination, suspension or limitation thereof
or otherwise violate applicable Law and (iii) the granting of a security
interest therein would not require the prior approval of or prior notice to any
Governmental Authority under applicable Law, which notice or approval has not
been made or obtained.

“Insolvency Proceeding”: as to any Grantor, any of the following: (a) any case
or proceeding with respect to such Person under any Bankruptcy Law or any other
or similar proceedings seeking any stay, reorganization, arrangement,
composition or readjustment of the obligations and indebtedness of such Grantor,
(b) any proceeding seeking the appointment of any trustee, receiver, liquidator,
custodian or other insolvency official with similar powers with respect to such
Grantor or any of its assets, (c) any proceeding for liquidation, dissolution or
other winding up of the business of such Grantor, (d) any assignment for the
benefit of creditors or (e) any marshalling of assets of such Grantor.

“Intellectual Property”: all (i) trademarks, collective marks, certification
marks, trade names, corporate names, company names, business names, fictitious
business names, domain names, service marks, logos, brand names, trade dress,
designs and all other source identifiers, and the rights in any of the foregoing
which arise under applicable law, the goodwill of the business symbolized
thereby or associated with each of them, all registrations and applications in
connection therewith and all renewals of any of the foregoing, including
registrations and applications in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof (“Trademarks”);
(ii) inventions and discoveries whether patentable or not, invention
disclosures, patentable designs, all letters patent and design letters patent of
the United States or any other country and all applications for letters patent
or design letters patent of the United States or any other country, including
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, and all reissues, renewals, divisions,
continuations, continuations in part, revisions and extensions of any of the
foregoing (“Patents”); (iii) trade secrets or confidential information,
including confidential technical and business information, know-how, show-how,
processes, schematics, algorithms, concepts, ideas, inventions, business
methods, research and development, formulae, drawings, prototypes, models,
designs, customer and supplier information and lists, software, including source
code,

 

-3-

--------------------------------------------------------------------------------

object code, user interface, or other confidential proprietary intellectual
property, and all additions and improvements to, and books and records
describing or used in connection with, any of the foregoing (“Trade Secrets”),
(iv) all published and unpublished works of authorship whether copyrightable or
not, databases and other compilations of information, software, including source
code, object code, user interface, algorithms and the like, or other
confidential proprietary intellectual property, and all additions and
improvements to, and books and records describing or used in connection with,
any of the foregoing, including user manuals and other training documentation
related thereto, arising under the laws of the United States or any other
country, all registrations and applications for copyrights under the laws of the
United States or any other country, including registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, and all derivative works, renewals, extensions,
restorations and reversions of any of the foregoing (“Copyrights”), (v) all
other intellectual property to the extent entitled to legal protection as such,
including products under development and methodologies therefor, and (vi) all
claims for, and rights to sue for, past, present or future infringement,
misappropriation, dilution or other impairment or violation of any of the
foregoing and all income, royalties, damages and payments now or hereafter due
or payable with respect to any of the foregoing.

“Intellectual Property Licenses”: any and all agreements, whether written or
oral, to which any Grantor is a party and pursuant to which (i) any third Person
is granted a license in or right to use any Owned Intellectual Property, or
(ii) any Grantor is granted a license in or right to use any Intellectual
Property of a third Person.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Material Contracts”: the contracts and agreements integral to operating the
business of the Loan Parties listed on Schedule IV hereto, as the same may from
time to time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of any Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of any Grantor
to damages arising out of, or for, breach or default in respect thereof and
(iii) all rights of any Grantor to perform and to exercise all remedies
thereunder.

“Owned Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property owned by such Grantor at such time.

“Patents”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Permitted Liens”: Liens permitted on the Collateral pursuant to the Credit
Agreement.

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

“Post-Petition Claims”: means interest, fees, costs, expenses and other charges
that, pursuant to the Loan Documents or any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement, continue to accrue after
the commencement of an Insolvency Proceeding, to the extent such interest, fees,
expenses and other charges are allowed or allowable under Bankruptcy Law or in
an Insolvency Proceeding.

“Receivable”: any right to payment for goods sold, leased, licensed, assigned or
otherwise disposed of or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including, without limitation, any Account).

 

-4-

--------------------------------------------------------------------------------

“Security Agreement”: this Security Agreement, as amended, supplemented or
otherwise modified from time to time.

“Senior Obligations”: all Obligations other than the Subordinated Obligations.

“Senior Parties”: collectively, the Secured Parties, solely with respect to the
Senior Obligations.

“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“Trade Secrets”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Trademarks”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“UCC”: the Uniform Commercial Code as from time to time in effect in the State
of New York or, as the context requires, any other applicable jurisdiction.

“U.S. Borrower” as defined in the Recitals hereto.

“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles owned by any Grantor and covered by a certificate of title
law of any State of the United States of America and all tires and other
appurtenances to any of the foregoing.

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

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

2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, each Grantor hereby grants to the
Administrative Agent on behalf and for the ratable benefit of the Secured
Parties a security interest in all of its right, title and interest in, to and
under all personal

 

-5-

--------------------------------------------------------------------------------

property and other assets, whether now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in the future
may acquire any right, title or interest (collectively, the “Collateral”),
including:

 

  1. all Accounts;

 

  2. all Chattel Paper;

 

  3. all Commercial Tort Claims described on Schedule VI hereto (as such
Schedule VI may be from time to time supplemented pursuant to Section 5(l));

 

  4. all Commodity Accounts;

 

  5. all Contracts;

 

  6. all Deposit Accounts;

 

  7. all Documents;

 

  8. all Equipment;

 

  9. all General Intangibles;

 

  10. all Incidental Rights;

 

  11. all Instruments;

 

  12. all Intellectual Property and Intellectual Property Licenses;

 

  13. all Inventory;

 

  14. all Investment Property;

 

  15. all Letter-of-Credit Rights;

 

  16. all Payment Intangibles

 

  17. all Securities Accounts, and all Investment Property held therein or
credited thereto;

 

  18. all Vehicles;

 

  19. all Goods and other property not otherwise described above;

 

  20. all books and records pertaining to any and/or all of the Collateral; and

 

  21. to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing, all Supporting Obligations in respect of any of the
foregoing, and all collateral security and guarantees given by any Person with
respect to any of the foregoing;

provided, that the Collateral shall not include the Excluded Assets.

3. Certain Matters Respecting Receivables and Material Contracts.

(a) Communication with and Notice to Receivable Obligors and Contracting
Parties. The Administrative Agent in its own name or in the name of any one or
more of the Grantors may, at any time in the course of any audit pursuant to
Section 7.9 of the Credit Agreement, in consultation with the U.S. Borrower,
communicate with Account Debtors on the Receivables and parties to the Material
Contracts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any such Receivables or Material Contracts. Each
Grantor shall notify Account Debtors on the Receivables that the Receivables
have been collaterally assigned to the Administrative Agent on behalf and for
the ratable benefit of the Secured Parties.

(b) Analysis of Receivables. The Co-Collateral Agents shall have the right to
make test verifications of the Receivables in any manner and through any medium
that they reasonably consider advisable at any time during an Event of Default
or in the course of any audit pursuant to Section 7.9 of the Credit Agreement,
in consultation with the U.S. Borrower, and each Grantor shall furnish all such
assistance and information as the Co-Collateral Agents may require in connection
therewith. At any time during an Event of Default or in the course of any audit
pursuant to Section 7.9 of the Credit Agreement,

 

-6-

--------------------------------------------------------------------------------

in consultation with the U.S. Borrower, upon the Co-Collateral Agents’ request
and at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.

(c) Collections on Receivables. The Grantors shall instruct and shall use
commercially reasonable efforts to cause the Account Debtor on each Receivable
to remit all amounts owing in respect of such Receivable to a Cash Management
Account. Any amounts in respect of any Receivable collected by any Grantor,
(i) shall be promptly deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Administrative Agent if required, in a Cash
Management Account, and (ii) until so turned over, shall be held by such Grantor
in trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor. All Proceeds constituting collections of
Receivables while held by the Administrative Agent (or by any Grantor in trust
for the Administrative Agent and the other Secured Parties) shall continue to be
collateral security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. At the Administrative Agent’s
reasonable request, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to such Grantor’s Receivables, including, without
limitation, all original orders, invoices and shipping receipts.

4. Representations and Warranties. Each Grantor hereby represents and warrants
as of the Restatement Effective Date and each Borrowing Date that:

(a) Title; No Other Liens. Except for the Liens granted to the Administrative
Agent on behalf and for the ratable benefit of the Secured Parties pursuant to
this Security Agreement and the other Permitted Liens, such Grantor owns each
item of the Collateral pledged by it free and clear of any and all Liens or
claims of others. No security agreement, financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as may have been filed in favor of the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, pursuant to this Security Agreement or as may be filed to secure a
Permitted Lien.

(b) Perfected First Priority Liens. Upon the filing of UCC-1 financing
statements in the applicable jurisdictions and, with respect to each Pledged
Account, upon the execution and delivery of an Account Control Agreement with
respect to such Pledged Account, the Liens granted pursuant to this Security
Agreement other than Liens on Vehicles shall constitute perfected Liens (with
respect to Intellectual Property, if and to the extent perfection may be
achieved by the filing of UCC-1 financing statements and/or security agreements
substantially in the form of Annex A, Annex B or Annex C, as applicable, in the
United States Patent and Trademark Office or the United States Copyright Office)
in favor of the Administrative Agent, on behalf and for the ratable benefit of
the Secured Parties, in the Collateral as collateral security for the
Obligations, which Liens will be prior to all other Liens on the Collateral of
such Grantor, subject to Permitted Borrowing Base Liens, Permitted Cash
Management Liens and First Purchaser Liens and which are enforceable as such
against all creditors of such Grantor and any Person purporting to purchase such
Collateral from such Grantor.

(c) Receivables. The amount represented by such Grantor to the Administrative
Agent from time to time as owing by each Account Debtor or by all Account
Debtors in respect of such Grantor’s Receivables will at such time be the
correct amount actually owing by such Account Debtor or Account Debtors
thereunder. No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper in a principal amount
that is greater than $2,500,000 that has not been delivered to the
Administrative Agent. As of the Restatement Effective Date, the place where such
Grantor keeps its records concerning such Grantor’s Receivables is the address
set forth opposite such Grantor’s name on Schedule I.

 

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(d) Material Contracts. No consent of any party (other than such Grantor) to any
Material Contract such Grantor is party to is required, or purports to be
required, in connection with the execution, delivery and performance of this
Security Agreement. Each Material Contract such Grantor is party to is in full
force and effect and constitutes a valid and legally enforceable obligation of
the parties thereto, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting the enforcement of creditor’s rights generally and general
equitable principles (whether considered in a proceeding in equity or at law).
No consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
validity or enforceability of any of the Material Contracts such Grantor is
party to by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Material Contract to any material adverse limitation, either specific
or general in nature. Neither such Grantor nor (to the best of such Grantor’s
knowledge) any other party to any Material Contract such Grantor is party to is
in default or is likely to become in default in the performance or observance or
any of the terms thereof in any manner that, in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Such Grantor has fully performed
all its material obligations under each Material Contract such Grantor is party
to. The right, title and interest of such Grantor in, to and under each Material
Contract such Grantor is party to are not subject to any defense, offset,
counterclaim or claim which could reasonably be expected to have a Material
Adverse Effect, nor have any of the foregoing been asserted or alleged against
such Grantor as to any such Material Contract. Such Grantor has delivered to the
Administrative Agent a complete and correct copy of each Material Contract such
Grantor is party to, including all amendments, supplements and other
modifications thereto. No amount payable to such Grantor under or in connection
with any Material Contract such Grantor is party to is evidenced by any
Instrument or Chattel Paper that has not been delivered to the Administrative
Agent.

(e) Inventory and Equipment. As of the Restatement Effective Date, the Inventory
and the Equipment of such Grantor as of the Restatement Effective Date are kept
at the locations listed on Schedule III hereto. All of said locations are owned
by such Grantor except for locations (i) which are leased by the Grantor as
lessee and designated in Part (b) of Schedule III and (ii) at which Inventory is
held in a public warehouse or is otherwise held by a bailee or on consignment or
pursuant to a throughput or other storage arrangement as designated in Part
(c) of Schedule III.

(f) Location. As of the Restatement Effective Date, such Grantor’s location (for
purposes of Section 9-307 of the UCC) is, and for the four (4) months preceding
the Restatement Effective Date has been, at the place specified for such Grantor
on Schedule I. As of the Restatement Effective Date, such Grantor, if not a
“registered organization” as defined in the UCC, is so designated on Schedule I
and has only one place of business, the location of which is at the place
specified for such Grantor on Schedule I.

(g) Name; Type and Jurisdiction of Organization; Organizational and
Identification Number. As of the Restatement Effective Date, (i) the exact legal
name of such Grantor is as specified for such Grantor on Schedule I; (ii) such
Grantor has not done business under a previous name, assumed name or trade name
or changed its name in the prior twelve (12) months and (iii) the type of entity
of such Grantor, its state of organization, the organizational number issued to
it by its state of organization and its federal employer identification number
are set forth on Schedule I.

(h) Farm Products. None of the Collateral of such Grantor constitutes, or is the
Proceeds of, Farm Products.

 

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(i) Insurance Policies. As of the Restatement Effective Date, none of the
Collateral of such Grantor constitutes an interest or claim in or under any
policy of insurance or contract for annuity, except to the extent the same
constitutes Proceeds.

(j) Intellectual Property.

1. Schedule II is a true, correct and complete list setting forth all
Intellectual Property registered by, issued to, or applied for by each Grantor,
and, for each listed item (as applicable) the application or registration
numbers and dates, and the name of the current registered owner and/or registrar
of domain names;

2. Schedule II sets forth a true, correct and complete list of all material
written Intellectual Property Licenses of each Grantor and true and complete
copies of each such license have been made available by the Grantors to the
Administrative Agent prior to the Restatement Effective Date. Such Intellectual
Property Licenses are enforceable by the Grantors, either alone or in the
aggregate, in accordance with their terms, except to the extent that enforcement
may be limited by applicable law. No Grantor has in the past year received any
written notice alleging any breach or default by any Grantor of any such
Intellectual Property Licenses, and (A) no Grantor is in breach or default of
any such Intellectual Property Licenses, (B) to the knowledge of the Grantors,
no counterparty to any such Intellectual Property Licenses is in breach or
default of any such Intellectual Property Licenses and (C) no defense, offset,
deduction or counterclaim exists under any Intellectual Property License in
favor of any third party or such counterparty which could reasonably be expected
to have a Material Adverse Effect;

3. (A) all of each Grantor’s Owned Intellectual Property set forth on Schedule
II is subsisting, unexpired and has not been abandoned or allowed to lapse;
(B) to the knowledge of any Grantor, all of such Grantor’s Owned Intellectual
Property is valid and enforceable; and (C) no Grantor has within the past year
received any written notice or claim challenging the validity, enforceability,
registration or use of such Grantor’s Owned Intellectual Property;

4. all necessary registration, maintenance and renewal fees in connection with
such Grantor’s material Owned Intellectual Property have been paid and all
necessary documents and certificates in connection with such Grantor’s Owned
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or applicable foreign
jurisdictions, as the case may be, for the purposes of prosecuting, maintaining
or renewing such Grantor’s Owned Intellectual Property;

5. the Grantors, either individually or in the aggregate, exclusively own free
and clear of all Liens (other than Permitted Liens) or have the right to use all
of each Grantor’s material Owned Intellectual Property. All of such Grantor’s
rights pertaining to such Grantor’s Intellectual Property shall survive
unchanged immediately following the applicable closing and the consummation of
the transactions contemplated by this Security Agreement;

6. with respect to Intellectual Property other than Patents, none of such
Grantor’s material Owned Intellectual Property nor the conduct of any Grantors’
business infringes, misappropriates, or otherwise violates Intellectual Property
owned by any third party. No Grantor has within the past three years received
any written notice or written claim asserting any of the foregoing;

7. with respect to Intellectual Property other than Patents, to the knowledge of
such Grantor, none of such Grantor’s material Owned Intellectual Property is
being infringed,

 

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misappropriated or otherwise violated by any third party. No Grantor has
(A) within the past three years received any written notice or written claim
asserting any of the foregoing, or (B) entered into any agreement granting any
other third party the exclusive right to bring infringement actions with respect
to, or otherwise exclusively to enforce rights with respect to, any of such
Grantor’s Owned Intellectual Property;

8. to the knowledge of such Grantor, none of such Grantor’s Patents is being
infringed, misappropriated or otherwise violated by any third party and none of
such Grantor’s business infringes, misappropriates, or otherwise violates
Patents owned by any third party. No Grantor has within the past six years
received any written notice or written claim asserting infringement,
misappropriation, or other violations of the Intellectual Property owned by any
third party;

9. no holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel, invalidate or question the validity of, or
any of such Grantor’s rights in, any of such Grantor’s Owned Intellectual
Property in any respect that could reasonably be expected to have a Material
Adverse Effect;

10. to the knowledge of any Grantor, no holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel, invalidate or
question the validity of, or any of such Grantors’ rights in, any of such
Grantor’s Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect;

11. no action or proceeding is pending, or, to the knowledge of any Grantor,
threatened, on the date hereof (A) seeking to limit, cancel, invalidate or
question the validity of any of such Grantor’s material Owned Intellectual
Property or any Grantors’ ownership interest therein or use thereof, or
(B) which, if adversely determined, would have a Material Adverse Effect on the
use, transfer, licensing or value of any such Grantor’s Owned Intellectual
Property;

12. each Grantor has taken reasonable steps to protect its rights in, and
confidentiality of all material Trade Secrets, and any other confidential
information owned, used or held by such Grantor, including a policy that
employees, licensees, contractors, and other third parties with access to Trade
Secrets or other confidential information safeguard and maintain the secrecy and
confidentiality of such Trade Secrets and confidential information. To such
Grantor’s knowledge, such Trade Secrets have not been used, disclosed to or
discovered by any third party except pursuant to valid and appropriate
non-disclosure, license or any other appropriate contract which has not been
breached;

13. except as permitted under the Credit Agreement, none of the Grantors have
conveyed, pledged or otherwise transferred ownership of, or granted or agreed to
grant any exclusive license of or right to use, or granted joint ownership of,
any such Grantor’s Owned Intellectual Property to any third party; and

14. the consummation of the transactions contemplated by the Loan Documents will
not cause to be provided or licensed to any third party, or give rise to any
rights of any third party with respect to, any software source code that is such
Grantor’s Owned Intellectual Property. Grantors have implemented reasonable
disaster recovery and back-up plans with respect to information technology
systems that are included within such Grantor’s Intellectual Property.

(k) Vehicles. As of the Restatement Effective Date, the aggregate book value of
all Vehicles owned by all Grantors is less than $5,000,000.

 

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(l) Governmental Obligors. As of the Restatement Effective Date, none of the
obligors on any Receivable that constitutes Collateral, and none of the parties
to any Contract that constitutes Collateral, is a Governmental Authority except
for (i) with respect to Receivables or Contracts not included in the U.S.
Borrowing Base or the Kildair Borrowing Base because all actions required under
all applicable Assignment of Claims Acts have not been taken to approve and
permit the assignment of rights to payment thereunder or thereon to the
Administrative Agent, the obligors thereon or parties thereto, (ii) with respect
to Receivables or Contracts included in the U.S. Borrowing Base or the Kildair
Borrowing Base as to which all actions required under all applicable Assignment
of Claims Acts have been taken to approve and permit the assignment of rights to
payment thereunder or thereon to the Administrative Agent, for the ratable
benefit of the Secured Parties, the obligors thereon or parties thereto, and
(iii) with respect to any other Receivables or Contracts, in each case, that
constitute Collateral, those obligors and parties thereof so long as the
requirements of Section 5(m) have been satisfied with respect to such
Receivables or Contracts.

(m) Deposit Accounts, Commodity Accounts and Securities Accounts. All Pledged
Accounts with respect to such Grantor are listed on Schedule V, including the
institution at which such Deposit Account, Securities Account or Commodity
Account is established, the purpose thereof, the name thereon, and the account
number thereof. Each Pledged Account is a Controlled Account.

(n) Additional Representations and Warranties. Each representation and warranty
set forth in Section 5 of the Credit Agreement and applicable to any Grantor is
incorporated herein by reference as if fully set forth herein.

5. Covenants. The Grantors hereby jointly and severally agree that, so long as
any of the Commitments remain in effect or any amount is owing to any Secured
Party hereunder or under any other Loan Document (except contingent
indemnification and expense reimbursement obligations for which no claim has
been made), each Grantor shall:

(a) Maintenance of Perfected Security Interests; Further Documentation; Pledge
of Instruments and Chattel Paper. Such Grantor shall maintain the security
interest created by this Security Agreement as a perfected security interest
having at least the priority described in Section 4(b) hereof and shall defend
such security interest against the claims and demands of all Persons whomsoever.
At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, (i) the filing of any financing statements, financing change
statements or amendments to financing statements or continuation statements
under the UCC or any similar personal property security legislation in effect in
any jurisdiction with respect to the Liens created hereby, (ii) the filing of
any recordation of security interest documents with the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other applicable office or
agency of another country or political subdivision thereof and (iii) in the case
of Investment Property, Deposit Accounts (other than Excluded Accounts) and any
other relevant Collateral, taking any actions (including, without limitation,
entering into, and using its best efforts to cause any relevant third party to
enter into, one or more Account Control Agreements) necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
UCC) with respect thereto. Upon the request of the Administrative Agent during
the continuance of an Event of Default, each Grantor shall enable the
Administrative Agent to obtain control of each Letter-of-Credit Right of such
Grantor by (A) assigning such Letter-of-Credit Right to the Administrative
Agent, (B) causing the issuing bank of the related letter of credit to consent
to such assignment and (C) causing the related letter of credit to be advised by
the Administrative Agent. Each Grantor also hereby authorizes the Administrative
Agent to file any such financing statements, financing

 

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change statements or amendments to financing statements or continuation
statements without the signature of such Grantor to the extent permitted by
applicable law. Any such financing statement may, at the option of the
Administrative Agent, describe the property covered thereby as “all assets” or
“all personal property” of such Grantor, or may use a similar description;
provided, however, that the Administrative Agent shall amend any such
description to the extent reasonably necessary to accommodate Excluded Assets. A
carbon, photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement for filing in any jurisdiction. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Chattel Paper in a principal amount that
is greater than $2,500,000 or any Certificated Security, such Instrument,
Chattel Paper or Certificated Security shall be promptly delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Security
Agreement; provided, however, that any other such Instrument or Chattel Paper
shall be held by such Grantor in trust for the Administrative Agent.

(b) Maintenance of Records. Such Grantor will keep and maintain at its own cost
and expense satisfactory and complete records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Accounts.

(c) [Reserved].

(d) Compliance with Laws, etc. Such Grantor will comply with all Requirements of
Law applicable to the Collateral or any part thereof or to the operation of such
Grantor’s business except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect;
provided, however, that each Grantor may obtain waivers or contest any
Requirement of Law in any reasonable manner which shall not, in the sole opinion
of the Administrative Agent, adversely affect the Administrative Agent’s, or the
Lenders’ or the Issuing Lender’s rights or the priority of its Liens on the
Collateral.

(e) Compliance with Terms of Material Contracts, etc. Such Grantor will perform
and comply with all its obligations under the Material Contracts and all its
other Contractual Obligations relating to the Collateral unless (i) the subject
of a good faith dispute or (ii) such failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.

(f) Payment of Obligations. Such Grantor will pay promptly when due all material
Taxes, assessments and governmental charges or levies imposed upon the
Collateral, as well as all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if (i) the validity
thereof is being contested in good faith by appropriate proceedings and
(ii) such charge is adequately reserved against on such Grantor’s books in
accordance with GAAP.

(g) Limitation on Liens on Collateral. Such Grantor will not create, incur or
suffer to exist, will defend the Collateral against, and will take such other
reasonable action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than Permitted Liens,
and will defend the right, title and interest of the Secured Parties in and to
any of the Collateral against the claims and demands, other than in respect of
Permitted Liens, of all Persons whomsoever.

(h) Limitations on Dispositions of Collateral. Such Grantor will not sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so except for sales, transfers and other dispositions of
Collateral permitted under the Credit Agreement.

 

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(i) Control of Pledged Accounts. Such Grantor agrees that, subject to
Section 8(a) or otherwise with the consent of the Administrative Agent in its
sole discretion (exercised in good faith), at no time shall it hold any funds or
any other assets in any Pledged Account that is not a Controlled Account.

(j) Assets in Pledged Accounts. Such Grantor agrees that at any time after the
occurrence and during the continuance of an Event of Default in respect of which
the Administrative Agent has exercised any remedies in respect of any Collateral
in any Controlled Account, including without limitation, giving any instruction
to a bank, securities intermediary or other Person maintaining a Controlled
Account, such Grantor will not, and will not cause or permit any of its agents,
representatives or other Persons to withdraw any cash (or, with respect to any
Securities Account or Commodity Account, withdraw, transfer, sell, redeem,
pledge, rehypothecate or otherwise deliver or dispose of any assets in such
account) from any Controlled Account (each an “Account Transaction”) without the
prior written consent of the Administrative Agent. Upon the occurrence and
during the continuance of an Event of Default, (i) the Administrative Agent
shall be entitled to instruct the applicable bank, securities intermediary or
other Person maintaining any Controlled Account to not execute any Account
Transaction without the prior written consent of the Administrative Agent and
(ii) any amounts in any Controlled Account may be withdrawn by the
Administrative Agent and applied as provided in Section 8(b). Such Grantor
agrees that it will not transfer assets out of any Securities Accounts or
Commodity Accounts, or transfer any Securities Accounts or Commodity Accounts to
another securities intermediary, unless such Grantor, the Administrative Agent,
and the substitute securities intermediary have entered into an Account Control
Agreement. No arrangement contemplated hereby or by any Account Control
Agreement in respect of any Securities Accounts, Commodity Accounts or other
Investment Property shall be modified by such Grantor without the prior written
consent of the Administrative Agent (such consent to be exercised in good
faith). Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent may notify any securities intermediary to liquidate the
applicable Securities Accounts and/or Commodity Accounts or any related
Investment Property maintained or held thereby and remit the proceeds thereof to
an account specified by the Administrative Agent (including any Collateral
Account). For the avoidance of doubt, and notwithstanding anything to the
contrary in any Account Control Agreement or any other Loan Document, including
this Security Agreement, the Administrative Agent shall not exercise any
remedies in respect of any Collateral in any Controlled Account, including
without limitation, giving any instruction (including any shifting control, or
other like, notice) to a bank, securities intermediary or other Person
maintaining a Controlled Account, or withdrawing or transferring any funds or
assets from a Controlled Account, unless in each case an Event of Default has
occurred and is continuing.

(k) Inventory Evidenced by Documents.

(i) Such Grantor shall cause any negotiable Documents evidencing any Inventory
of such Grantor (A) if being held by the ultimate purchaser thereof, to be
(1) issued to the order of the Administrative Agent and (2) delivered to the
Administrative Agent and (B) if otherwise, to be duly endorsed in a manner
satisfactory to the Administrative Agent (provided that any bill of lading
issued for such Inventory shall be duly endorsed to the extent that it has been
issued to or endorsed to such Grantor (without further endorsement)), to be held
as Collateral pursuant to this Security Agreement.

(ii) Unless otherwise agreed by the Administrative Agent in its reasonable
discretion, such Grantor shall, within 60 days after the Restatement Effective
Date, provide to the bailee or consignee of any such Inventory of such Grantor
that is evidenced by a non-negotiable Document or that is not evidenced by any
Document a written notice of the Lien created by this Security Agreement, such
notice to be substantially in the form of Annex E or such other form otherwise

 

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acceptable to the Administrative Agent and duly executed and delivered by such
Grantor and the Administrative Agent; provided that such Grantor shall use
commercially reasonable efforts to have such notices acknowledged by such bailee
or consignee as described therein; provided, further that, delivery of such a
notice pursuant to this Section (k)(ii) with respect to any contract for the
storage of Inventory that constitutes Collateral shall be deemed a delivery of
such a notice with respect to any and all Documents evidencing any additional
Inventory that constitutes Collateral, delivered to such bailee or consignee at
any time pursuant to such contract. The Administrative Agent hereby agrees not
to deliver a “Control Notice” (as defined in Annex E) to any bailee or consignee
of any Inventory of any Grantor pursuant to any notice referred to in the
preceding sentence unless an Event of Default has occurred and is continuing.

(l) Additional Commercial Tort Claims. If at any time such Grantor has any
Commercial Tort Claims for an amount in controversy in excess of $2,500,000 that
constitute Collateral which are not described on Schedule VI hereto, such
Grantor shall as soon as reasonably practicable provide to the Administrative
Agent a supplement to Schedule VI, describing such additional Commercial Tort
Claims. Upon delivery of such supplement, Schedule VI shall be deemed modified
to the extent provided in such supplement.

(m) Certain Government Receivables. With respect to Receivables or Contracts, in
each case, that constitute Collateral, to which the counterparty or obligor is
(i) a Governmental Authority, such Grantor shall, as soon as reasonably
practicable after the request by the Administrative Agent, take any commercially
reasonable actions under any Assignment of Claims Act required to permit or
approve the assignment of the rights to payment thereunder or thereon to the
Administrative Agent on behalf of and for the benefit of the Secured Parties;
provided, that the Administrative Agent shall not make such request with respect
to any Receivables or Contracts that are not included in the calculation of the
U.S. Borrowing Base or the Kildair Borrowing Base to the extent that the value
of all such Receivables and Contracts to which the counterparty or obligor is a
Governmental Authority that have not been perfected under an Assignment of
Claims Act is less than $5,000,000 at any one time outstanding unless an Event
of Default shall have occurred and be continuing or (ii) a Governmental
Authority of a State within the United States, such Grantor shall, as soon as
reasonably practicable, give notice to the Administrative Agent if such
Governmental Authority has not, or has ceased to, waive all claims of sovereign
immunity with respect to such Receivable or Contract by statute, applicable case
law, contract or otherwise.

(n) Limitations on Modifications of Material Contracts and Agreements Giving
Rise to Receivables; Exercise of Rights; Notices. Such Grantor will not
(i) other than in accordance with its standard operating practices and customary
market practice in markets similar to those in which such Grantor operates,
amend, modify, terminate or waive any provision of any Material Contract or any
agreement giving rise to a Receivable in any manner which could reasonably be
expected to materially adversely affect the value of such Material Contract or
such Receivable as Collateral, (ii) other than in accordance with its standard
operating practices and customary market practice in markets similar to those in
which such Grantor operates, fail to exercise promptly and diligently each and
every material right which it may have under each Material Contract and each
agreement giving rise to a Receivable (other than any right of termination) or
(iii) fail to deliver to the Administrative Agent a copy of each material
demand, notice or document received by it relating in any way to any Material
Contract or any agreement giving rise to a Receivable that questions the
validity or enforceability of such Material Contract or Receivables constituting
more than 5% of the aggregate amount of the Receivables indicated in the latest
Borrowing Base Report within three (3) Business Days after receipt by such
Grantor thereof.

(o) Maintenance of Equipment. Such Grantor will maintain each item of Equipment
in good operating condition, ordinary wear and tear and immaterial impairments
of value and damage by the elements excepted, and will provide all maintenance,
service and repairs in accordance with its standard operating practices and
customary market practice in markets similar to those in which such Grantor
operates.

 

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(p) Limitations on Discounts, Compromises, Extensions of Receivables. Other than
in accordance with its standard operating practices and customary market
practice in markets similar to those in which such Grantor operates, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise, compound or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, or (iv) allow any credit or discount whatsoever
on any Receivable.

(q) Maintenance of Insurance. Such Grantor will maintain, with financially sound
and reputable companies, insurance policies (i) insuring the Inventory,
Equipment and Vehicles against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent in
amounts comparable to amounts of insurance coverage obtained by similar
businesses of similar size acting prudently and (ii) insuring each Grantor and
the Administrative Agent (for the benefit of the Lenders, the Issuing Lenders
and the other Secured Parties) against liability for personal injury and
property damage relating to such Inventory, Equipment and Vehicles, such
policies to be in such form and amounts and having such coverage as shall be
comparable to forms, amounts and coverage, respectively, obtained by similar
businesses of similar size acting prudently, with losses payable to any Grantor
and the Administrative Agent (for the benefit of the Lenders, the Issuing
Lenders and the other Secured Parties) as their respective interests may appear
or, in the case of liability insurance, showing the Administrative Agent (for
the benefit of the Lenders, the Issuing Lenders and the other Secured Parties)
as additional insured parties. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof (unless the policy of the
applicable insurance company shall be not to provide such assurance), (ii) name
the Administrative Agent as insured party and loss payee, (iii) include a breach
of warranty clause and (iv) be reasonably satisfactory in all other respects to
the Administrative Agent. Each Grantor shall deliver to the Administrative Agent
a report of a reputable insurance broker with respect to such insurance when
available during each calendar year and such supplemental reports with respect
thereto as the Administrative Agent may from time to time reasonably request.

(r) Further Identification of Collateral. Such Grantor will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

(s) Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, at its address set forth in the Credit Agreement, (i) of any
Lien (other than Liens created hereby or Permitted Liens) on, or claim asserted
against, any of the Collateral and (ii) of the occurrence of any event which
could reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.

(t) Changes in Locations, Name, etc. Such Grantor will not (i) without ten
(10) Business Days’ prior written notice to the Administrative Agent (or such
later notice as the Administrative Agent shall agree in its sole discretion),
change its location (for purposes of Section 9-307 of the UCC) from that
specified in Section 4(f) or remove its books and records concerning the
Receivables from the location specified in Section 4(c), (ii) without ten
(10) Business Days’ prior written notice to the Administrative Agent (or such
later notice as the Administrative Agent shall agree in its sole discretion),
permit any of the Inventory or Equipment to be kept at a location other than
those listed on Schedule III hereto or otherwise in such other locations in the
United States as notified to the

 

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Administrative Agent other than while in transit to such locations or for
repairs, (iii) without ten (10) Business Days’ prior written notice to the
Administrative Agent (or such later notice as the Administrative Agent shall
agree in its sole discretion), change its name, identity or structure or
(iv) unless thirty (30) days written notice to such effect shall have been given
(or such later notice as the Administrative Agent shall agree in its sole
discretion) and any filing under the UCC as the Administrative Agent may
reasonably request to maintain the perfected security interest granted hereto
has been made, reorganize under the laws of another jurisdiction or as a
different type of entity.

(u) Intellectual Property.

1. Each Grantor, as applicable, (either itself or through licensees) shall
(A) continue to use each material Trademark on each and every product or in
connection with each and every service identified in its respective applications
or registrations in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, except such Trademarks that such Grantor
decides, in its reasonable good faith business judgment and consistent with its
past practices, to abandon, (B) maintain the quality of products and services
offered under such Trademark consistent with its best past standards, (C) use
such Trademark with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, and (D) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become abandoned, invalidated or impaired
in any way.

2. Except as otherwise permitted herein, each Grantor (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any of such
Grantor’s material Owned Intellectual Property may become forfeited, invalidated
or abandoned or dedicated to the public, or placed or fall in public domain.

3. Whenever any Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any applicable office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence and/or perfect the Administrative Agent’s security
interest in any applicable Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.

4. Each Grantor, as applicable, shall take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any applicable
office or agency in any other country or political subdivision thereof, to
maintain, pursue and enforce each application relating to any of such Grantor’s
material Owned Intellectual Property (and to obtain the relevant registration)
and to maintain each registration of such Grantor’s material Owned Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability, except for applications
and registrations that such Grantor decides, in its reasonable good faith
business judgment and consistent with its past practices, to abandon or allow to
expire.

 

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5. Each Grantor (either itself or through licensees) shall not perform any act
or use any of such Grantor’s Owned Intellectual Property to knowingly infringe
the intellectual property rights of any third party.

6. In the event that any Grantor’s material Owned Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall
(A) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (B) if such
Grantor’s Owned Intellectual Property is of material economic value, promptly
notify the Administrative Agent after such Grantor learns thereof and protect
and/or enforce such Intellectual Property, including, as applicable, by suing
for infringement, misappropriation, or dilution, seeking injunctive relief where
appropriate and recovering any and all damages for such infringement,
misappropriation or dilution; provided that, the Grantors shall not have any
obligation to protect or enforce such Intellectual Property if the
Administrative Agent provides any Grantor with a written waiver of this
requirement.

(v) Vehicles. Such Grantor will maintain each Vehicle in good operating
condition, ordinary wear and tear and immaterial impairments of value and damage
by the elements excepted, and will provide all maintenance, service and repairs
necessary for such purpose in accordance with its standard operating practices
and customary market practice in markets similar to those in which such Grantor
operates. If an Event of Default shall occur and be continuing, at the request
of the Administrative Agent, such Grantor shall, within thirty (30) days after
such request, file applications for certificates of title indicating the
Administrative Agent’s first priority Lien on behalf and for the ratable benefit
of the Secured Parties on the Vehicles covered by such certificates, together
with any other necessary documentation, in each office in each jurisdiction
which the Administrative Agent shall deem advisable to perfect their Liens on
the Vehicles.

6. Agent’s Appointment as Attorney-in-Fact.

(a) Powers. Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Grantor and in the name of
each Grantor or in its own name, from time to time in the Administrative Agent’s
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of each Grantor, without notice to or assent by any Grantor, to
do the following:

1. in the name of each Grantor or its own name, or otherwise, to take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account, Instrument, Chattel
Paper, General Intangible or Material Contract or with respect to any other
Collateral and to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Account, Instrument, Chattel Paper, General Intangible or Material Contract or
with respect to any other Collateral whenever payable;

2. to pay or discharge Taxes and Liens levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance called for by the terms
of this Security Agreement and to pay all or any part of the premiums therefor
and the costs thereof;

 

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3. in the case of any Grantor’s Intellectual Property, to execute and deliver
any and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the other Secured
Parties’ security interest in such Intellectual Property and the goodwill and
general intangibles of the Grantors relating thereto or represented thereby;

4. to execute, in connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

5. (A) to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or proceeding brought
against any Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, to give
such discharges or releases as the Administrative Agent may deem appropriate;
(G) to assign any Patent or Trademark (along with the goodwill of the business
to which any such Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; and (H) generally, subject to any applicable
FERC approvals, rules and regulations and any applicable tariffs, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative Agent
was the absolute owner thereof for all purposes, and to do, at the
Administrative Agent’s option and the Grantors’ expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent’s Liens thereon on behalf of and for the ratable benefit of the Secured
Parties and to effect the intent of this Security Agreement, all as fully and
effectively as the Grantors might do.

Anything in this Section 6(a) to the contrary notwithstanding, (x) the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 6(a) unless an Event of Default has occurred and is continuing and
(y) Administrative Agent’s power of attorney over the FERC Contract Collateral,
and the delegation thereof to the FERC Sub-Agent pursuant to Section 11, shall
not be effective until the Administrative Agent delivers notice to such Grantor
that such power of attorney is effective.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

The power of attorney conferred hereby on the Administrative Agent is solely to
protect, preserve and realize upon its security interest in the Collateral. This
power of attorney shall neither create any agency on the part of the
Administrative Agent in favor of any Grantor, nor any fiduciary obligations or
relationship on the part of any Secured Party for the benefit of any Grantor.

 

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(b) No Duty on Administrative Agent’s or other Secured Parties’ Part. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and each Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither they nor any of their officers, directors, shareholders, employees
or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct.

7. Performance by Administrative Agent of Grantors’ Obligations; Use of
Collateral. If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, only upon the occurrence and during
the continuance of an Event of Default and at its option, but without any
obligation to do so, may itself perform or comply, or otherwise cause
performance or compliance, with such agreement. Notwithstanding anything herein
to the contrary, so long as none of (a) an Event of Default of the type
described in Section 9.1(g) of the Credit Agreement shall have occurred, (b) any
other Event of Default shall have occurred and be continuing pursuant to which
the Administrative Agent shall be exercising remedies pursuant to Section 9
hereof or (c) any other Event of Default shall have occurred and be continuing
and the Administrative Agent shall have provided notice to a Grantor, each
Grantor may use, commingle and dispose of all or any part of the Collateral in
the ordinary course of its business, subject to the provisions of the Credit
Agreement and the provisions of this Security Agreement.

8. Proceeds.

(a) In addition to the rights of the Administrative Agent and the Secured
Parties specified in Section 3(c) with respect to payments of Receivables, it is
agreed that all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by the Grantors in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of the
Grantors, and shall, promptly upon receipt by any Grantor, be deposited and held
in a Controlled Account (or, to the limit allowed, in an Excluded Account). Any
and all such Proceeds held in a Controlled Account (or by any Grantor in trust
for the Administrative Agent and the Secured Parties) shall continue to be held
as collateral security for the Obligations and shall not constitute payment
thereof until applied as provided in Section 8(b). Cash or any other property
held in a Controlled Account shall not be transferred to any Deposit Account,
Securities Account or Commodity Account of any Grantor that is not a Controlled
Account or an Excluded Account.

(b) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
Proceeds of any Pledge Agreement, the Guarantee or any other Loan Document, or
otherwise received by the Administrative Agent, against the Obligations (whether
matured or unmatured), such application to be in the following order:

1. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

2. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

 

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3. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

4. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

5. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

6. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

7. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Grantor
or to whomsoever else may be lawfully entitled to receive the same.

Notwithstanding the foregoing, no amounts received from any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor.

9. Remedies.

(a) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Security Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the UCC. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may transfer all or any part of
the Collateral into the Administrative Agent’s name or the name of its nominee
or nominees, and/or may forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Secured Party or elsewhere
upon such terms and conditions (including by lease or by deferred payment
arrangement) as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk and/or may take such other actions as may be available under applicable
law. The Administrative Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to

 

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the extent permitted by law, upon any such private sale or sales, auction or
closed tender, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived or released. Each Grantor further agrees, at the Administrative
Agent’s request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select (on its behalf and on behalf of the Secured Parties), whether at any
Grantor’s premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties arising out of the exercise
by the Administrative Agent hereunder, including, without limitation, documented
fees and disbursements of counsel, to the payment in whole or in part of the
Obligations, in such order as provided in Section 8(b), and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation,
Section 9-615 of the UCC, or required pursuant to clause (vi) of Section 8(b),
need the Administrative Agent account for the surplus, if any, to the Grantors.
To the extent permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Administrative Agent or any other
Secured Party arising out of the exercise by the Administrative Agent or any
other Secured Party of any of its rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay the Obligations (including the documented fees and disbursements of counsel
employed by the Administrative Agent or any Secured Party to collect such
deficiency to the extent provided therefor in Section 11.6 of the Credit
Agreement).

(b) With respect to FERC Contract Collateral, (i) only the FERC Sub-Agent shall
take any of the actions described in Section 9(a) (“Enforcement Actions”),
(ii) the FERC Sub-Agent shall not take any Enforcement Actions until the FERC
Sub-Agent delivers a notice to the Administrative Agent and such Grantor that it
thereafter may take Enforcement Actions, (iii) the FERC Sub-Agent shall take
such Enforcement Actions as it determines are advisable, in consultation with
the Administrative Agent, but without obligation to follow direction of the
Administrative Agent or the Required Lenders and (iv) any such enforcement
actions shall be subject to any applicable FERC approvals, rules and regulations
and any applicable tariffs.

10. Subordination Provisions.

(a) Who May Exercise Remedies.

1. Subject to subsection (ii) below, until the date on which all Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, the Senior Parties
will have the exclusive right to:

(i) commence and maintain an Enforcement Action or exercise rights with respect
to a Lien, credit bid their debt, make any set-off, sue or participate in any
suit, action or proceeding to enforce payment or collection or enforce any
redemption or mandatory prepayment obligation, or commence any judicial
enforcement of rights and remedies;

(ii) subject to Section 19 hereof and Section 10.10 and 11.5 of the Credit
Agreement, make determinations regarding the release or Disposition of, or
restrictions with respect to, the Collateral; and

(iii) otherwise enforce the rights and remedies of a secured creditor under the
UCC and the Bankruptcy Laws of any applicable jurisdiction.

 

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2. Notwithstanding Section 10(a)(i), a Subordinated Party may:

(i) file a proof of claim or statement of interest, vote on a plan of
reorganization (including a vote to accept or reject a plan of partial or
complete liquidation, reorganization, arrangement, composition or extension),
and make other filings, arguments and motions, with respect to the Subordinated
Obligations and the Collateral in any Insolvency Proceeding commenced by or
against any Grantor, in each case in accordance with this Security Agreement;

(ii) take action to create, perfect, preserve or protect its Lien on the
Collateral, so long as such actions are not adverse to the priority status in
accordance with this Security Agreement of Liens on the Collateral securing the
Senior Obligations or Senior Parties’ rights to exercise remedies;

(iii) file necessary pleadings in opposition to a claim objecting to or
otherwise seeking the disallowance of a Subordinated Obligation or a Lien
securing the Obligation; and

(iv) join (but not exercise any control over) a judicial foreclosure or Lien
enforcement proceeding with respect to the Collateral initiated by the
Administrative Agent on behalf of the Senior Parties, to the extent that such
action could not reasonably be expected to materially interfere with the
Enforcement Action, but no Subordinated Party may receive any proceeds thereof
unless expressly permitted herein.

3. Except as otherwise expressly set forth in this Section 10(a), Subordinated
Parties may exercise rights and remedies as unsecured creditors, other than
initiating or joining in an involuntary case or proceeding under the Bankruptcy
Code with respect to a Grantor against a Grantor that has guaranteed or granted
Liens to secure the Subordinated Obligations, in accordance with the terms of
the Loan Documents and the Cash Management Bank Agreements, Commodity OTC
Agreements or Financial Hedging Agreements to which the Subordinated Party is a
party and applicable law; provided, that any judgment Lien obtained by a
Subordinated Party as a result such exercise of rights will be included in the
Collateral and be subject to this Security Agreement for all purposes (including
in relation to the Senior Obligations).

(b) Manner of Exercise.

1. Subject to the terms of the Loan Documents, a Senior Party may take any
Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) without consultation with or the consent of any Subordinated Party;

(iii) regardless of whether an Insolvency Proceeding has been commenced;

(iv) regardless of any provision of any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement; and

(v) regardless of whether such exercise is adverse to the interest of any
Subordinated Party.

 

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2. The rights of a Senior Party to enforce any provision of this Security
Agreement or any other Loan Document will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor, or

(ii) noncompliance by any Person other than such Senior Party with any provision
of this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement,

regardless of any knowledge thereof that any Senior Party or the Administrative
Agent may have or otherwise be charged with.

3. No Subordinated Party will contest, protest or object to, or take any action
to hinder, and each waives any and all claims with respect to, any Enforcement
Action by a Senior Party.

4. Subject to the terms of the Loan Documents and the applicable Cash Management
Bank Agreements, Commodity OTC Agreements or Financial Hedging Agreements,
following the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, a Subordinated Party may take any Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) regardless of whether an Insolvency Proceeding has been commenced; and

(iii) regardless of any provision of any Loan Document (other than this Security
Agreement).

5. Following the date on which the Senior Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
been terminated, the rights of a Subordinated Party to enforce any provision of
this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement to which it is
party to will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor or any other Subordinated Party; or

(ii) noncompliance by any Person other than such Subordinated Party with any
provision of this Security Agreement, any other Loan Document or any Cash
Management Bank Agreement, Commodity OTC Agreement or Financial Hedging
Agreement to which it is party;

regardless of any knowledge thereof that any Subordinated Party or the
Administrative Agent may have or otherwise be charged with.

 

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(c) Use of Cash Collateral and DIP Financing.

1. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
any use, sale or lease of “cash collateral” (as defined in section 363(a) of the
Bankruptcy Code) if the Administrative Agent, on behalf of the Senior Parties,
has consented in writing to such use, sale or lease; provided, that the
Subordinated Parties will have the right to seek adequate protection permitted
by Section 10(f) and if such adequate protection is not granted, the
Subordinated Parties will have the right to object under this Section 10(c)
solely on such basis.

2. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
any Borrower or any other Grantor obtaining credit or incurring debt secured by
Liens on the Collateral pursuant to section 364 of the Bankruptcy Code (or
similar Bankruptcy Law) (each, a “DIP Financing”) if the Administrative Agent,
on behalf of the Senior Parties, has consented in writing to such DIP Financing;
provided, that the Subordinated Parties will have the right to seek adequate
protection permitted by Section 10(f), and if such adequate protection is not
granted, the Subordinated Parties will have the right to object under this
Section 10(c) solely on such basis.

3. The amount of any customary “carve-out” or other similar administrative
priority expense or claim consented to in writing by the Administrative Agent,
on behalf of the Senior Parties, to be paid prior to the payment in full of the
Senior Obligations (i) will be deemed to be, for purposes of Section 10(c)(i), a
use of cash collateral at the time consented to by the Administrative Agent, on
behalf of the Senior Parties, and (ii) will not be deemed to be, for purposes of
Section 10(c)(ii), a principal amount of DIP Financing at the time consented to
by the Administrative Agent, on behalf of the Senior Parties.

4. No Subordinated Party may, directly or indirectly, seek to provide DIP
Financing to any Borrower or any other Grantor secured by Liens equal or senior
in priority to the Liens securing any Senior Obligations; provided, that nothing
in this Section 10(c)(iv) shall prohibit any Subordinated Party which is also a
Senior Party from offering to provide or from providing a DIP Financing to the
extent permitted under Section 10(c)(ii); provided further that, if one or more
of Senior Parties do not offer to provide a DIP Financing to the extent
permitted under Section 10(c)(ii), then the Subordinated Parties may seek to
provide such DIP Financing permitted under Section 10(c)(ii), secured by Liens
equal or senior in priority to the Liens securing any Senior Obligations, and
the Senior Parties may object thereto.

(d) Sale of Collateral. In its capacity as the holder of a Lien on the
Collateral, no Subordinated Party will, or will direct the Administrative Agent
to, contest, protest or object to, and each Subordinated Party will be deemed to
have consented to, pursuant to section 363(f) of the Bankruptcy Code (or similar
Bankruptcy Law), a sale, lease, exchange, transfer or other disposition of any
Collateral free and clear of its Liens or other interests under section 363 of
the Bankruptcy Code (or similar Bankruptcy Law), if the Administrative Agent, on
behalf of the Senior Parties, has consented in writing to such Disposition;
provided, that the Liens of the Subordinated Parties attach to any net proceeds
of such Disposition with the same priority and validity as the Liens held by the
Subordinated Parties on the assets disposed of in such Disposition, and any such
Liens will remain subject to the terms of this Security Agreement.
Notwithstanding the foregoing, the Subordinated Parties may raise objections to
any Disposition of Collateral that could be raised in an Insolvency Proceeding
by unsecured creditors generally so long as not otherwise inconsistent with the
terms of this Security Agreement.

 

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(e) Relief from the Automatic Stay. Until the date on which the Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, no Subordinated
Party will, or will direct the Administrative Agent on its behalf to, seek
relief from the automatic stay or any other stay in any Insolvency Proceeding in
respect of the Collateral, without the prior written consent of the
Administrative Agent, on behalf of the Senior Parties, or oppose any request by
the Administrative Agent, on behalf of the Senior Parties, for relief from the
automatic stay or any other stay in any Insolvency Proceeding.

(f) Adequate Protection. No Subordinated Party will, or will direct the
Administrative Agent on its behalf to, contest, protest or object to (x) any
request by a Senior Party for “adequate protection” (within the meaning of the
Bankruptcy Code or any similar Bankruptcy Law); or (y) any objection by a Senior
Party to any motion, relief, action or proceeding based on a Senior Party
claiming a lack of adequate protection.

Notwithstanding the foregoing provisions in this Section 10(f), in any
Insolvency Proceeding:

1. except as permitted in this Section 10(f), the Subordinated Parties may not
seek or request adequate protection and may not seek relief from the automatic
stay imposed by section 362 of the Bankruptcy Code (or similar Bankruptcy Law)
or other relief based upon a lack of adequate protection;

2. if the Senior Parties (or any subset thereof) are granted adequate protection
in the form of additional Collateral in connection with any motion described in
Section 10(c), then the Administrative Agent, on behalf of the Subordinated
Parties, may seek or request adequate protection in the form of a Lien on such
additional or replacement Collateral for the benefit of the Subordinated
Parties, which Lien will be subordinated to the Liens at any time securing the
Senior Obligations and any DIP Financing (and all Obligations relating thereto)
on the same basis as the other Liens securing the Subordinated Obligations are
so subordinated to the Senior Obligations under this Security Agreement; and

3. any claim of any Subordinated Party under section 507(b) of the Bankruptcy
Code (or similar Bankruptcy Law) will be subordinate in right of payment to any
claim of the Senior Parties under section 507(b) of the Bankruptcy Code (or
similar Bankruptcy Law); provided, that the Subordinated Parties will be deemed
to have agreed pursuant to section 1129(a)(9) of the Bankruptcy Code (or any
similar Bankruptcy Law) that any such junior claims may be paid under any plan
of reorganization in any form, having a value on the effective date of such plan
equal to the allowed amount of such claims.

(g) No Waiver. Subject to Section 10(a)(i) and (iii), nothing contained herein
will prohibit or in any way limit a Senior Party from objecting in any
Insolvency Proceeding or otherwise to any action taken by a Subordinated Party,
including the seeking by any Subordinated Party of adequate protection or the
asserting by a Subordinated Party of any of its rights and remedies under the
Loan Documents or any Cash Management Bank Agreements, Commodity OTC Agreements
or Financial Hedging Agreements to which it is a party or otherwise.

 

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(h) Post-Petition Claims.

1. Neither the Administrative Agent on behalf of any Subordinated Party, nor any
other Subordinated Party, will oppose or seek to challenge any claim by a Senior
Party for allowance or payment in any Insolvency Proceeding of Senior
Obligations consisting of Post-Petition Claims, to the extent of the value of
the Senior Parties’ Lien on the Collateral, without regard to the existence of
the Lien of the Administrative Agent for the benefit of the Subordinated Party
on the Collateral.

2. Neither the Administrative Agent on behalf of any Senior Party, nor any other
Senior Party, will oppose or seek to challenge any claim by a Subordinated Party
for allowance and any payment permitted under Section 10(f) in any Insolvency
Proceeding of Subordinated Obligations consisting of Post-Petition Claims, to
the extent of the value of the Lien of the Administrative Agent for the benefit
of the Subordinated Party on the Collateral (after taking account of the
existence of the Lien of the Administrative Agent for the benefit of the Senior
Parties on the Collateral).

(i) Waiver. Each Subordinated Party waives any claim it may hereafter have
against any Senior Party arising out of the election of any Senior Party of the
application of section 1111(b)(2) of the Bankruptcy Code, and/or out of any cash
collateral or financing arrangement or out of any grant of a security interest
in connection with the Collateral in any Insolvency Proceeding.

(j) Separate Grants of Security and Separate Classification. Each Subordinated
Party and each Senior Party acknowledges and agrees that because of, among other
things, their differing rights in the Collateral, the Subordinated Obligations,
to the extent deemed to be “secured claims” within the meaning of section 506(b)
of the Bankruptcy Code (or any similar Bankruptcy Law), are fundamentally
different from the Senior Obligations and must be separately classified in any
plan of reorganization in an Insolvency Proceeding. No Subordinated Party will
seek in any Insolvency Proceeding to be treated as part of the same class of
creditors as Senior Parties and will not oppose or contest any pleading by
Senior Parties seeking separate classification of their respective secured
claims.

(k) Effectiveness in Insolvency Proceedings. The provisions of this Section 10,
which the Secured Parties agree constitutes a “subordination agreement” under
section 510(a) of the Bankruptcy Code, will be effective before, during and
after the commencement of an Insolvency Proceeding. All references herein to any
Grantor will include such Grantor as a debtor-in-possession and any receiver or
trustee for such Grantor in any Insolvency Proceeding. The relative rights of
the Senior Parties and the Subordinated Parties in respect of any Collateral or
proceeds thereof shall continue after the filing of such petition on the same
basis as prior to the date of such filing, subject to any court order approving
the financing of, or use of cash collateral by, any Grantor.

(l) No Third Party Beneficiaries. No Person (including, without limitation, any
Loan Party) is a third-party beneficiary of the provisions of this Section 10,
except that the Senior Parties and Subordinated Parties which are not parties
hereto shall be entitled to the benefits of the provisions of this Section 10.
This Section 10 shall be binding upon the Senior Parties and Subordinated
Parties and each Senior Party and Subordinated Party shall be deemed to have
agreed to the terms hereof, by virtue of its acceptance of the benefits of the
Senior Obligations and the Subordinated Obligations, respectively. No other
creditor of any Grantor has any rights under this Section 10, and no Grantor or
other Loan Party may rely on the terms hereof. Nothing in this Section 10
impairs the Obligations of the Borrowers and the other Grantors to pay
principal, interest, fees and other amounts as provided in, or otherwise comply
with the provisions of, the Loan Documents, the Cash Management Bank Agreements,
the Commodity OTC Agreements or the Financial Hedging Agreements.

 

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11. Appointment of FERC Sub-Agent.

(a) In connection with the FERC Contract Collateral, the Administrative Agent
may designate and appoint a sub-agent (in such capacity, the “FERC Sub-Agent”),
which appointment and designation shall be effective upon written notice of the
same to the Lenders and the Grantors, to take actions on behalf of the
Administrative Agent and, upon the effectiveness of such appointment and
designation, hereby authorizes the FERC Sub-Agent to take any action in
connection with the FERC Contract Collateral required under this Security
Agreement or otherwise permitted thereunder, without any further consent or
instruction of the Administrative Agent or the Required Lenders.

(b) If at any time the FERC Sub-Agent determines in good faith that its status
as FERC Sub-Agent may adversely affect the FERC Sub-Agent or any of its
affiliates, the FERC Sub-Agent may resign and/or release the security interest
in the FERC Contract Collateral whether or not a new FERC Sub-Agent is
appointed. Any release of the security interest in the FERC Contract Collateral
pursuant to this Section 11 shall not constitute a Default or an Event of
Default or a breach of any representation, warranty, covenant or agreement made
by any Grantor in this Security Agreement or made by any Grantor in any other
Loan Document.

12. Grant of License to Use Patent, Trademark and Copyright Collateral. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under Section 9 hereof at such time as the Administrative Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Administrative Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to
use, license or sublicense any of the Copyrights, Patents and Trademarks, now
owned or hereafter acquired by any Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored. The use of such license by
the Administrative Agent shall be exercised, at the option of the Administrative
Agent for any purpose appropriate in connection with the exercise of remedies
hereunder, only upon the occurrence and during the continuance of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Administrative Agent in accordance herewith shall be binding upon each
Grantor notwithstanding any subsequent cure of an Event of Default. The
Administrative Agent agrees to apply the net proceeds received from any license
as provided in Section 8 hereof.

13. Limitation on Duties Regarding Presentation of Collateral.

(a) The Administrative Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the UCC or otherwise, shall be to deal with it in the same
manner as the Administrative Agent deals with similar property for its own
account. None of the Administrative Agent nor any Secured Party nor any of their
respective directors, officers, employees, agents or advisors shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof. The powers conferred on the Administrative Agent and the other
Secured Parties hereunder are solely to protect the Administrative Agent’s and
the Secured Parties’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Secured Party to exercise any such powers.
The Administrative Agent and other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees, agents or
advisors shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

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(b) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and Contracts (that constitute Collateral)
and neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Receivable or under any Contract, in each
case, that constitutes Collateral, by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Secured Party of any
payment relating to such Receivable or Contract pursuant hereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable or
under or pursuant to any Contract, in each case, that constitutes Collateral, to
make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Receivable or under any Contract, in each case, that constitutes
Collateral, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

14. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.

15. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the U.S. Borrower shall be effected in the manner set forth in
Section 11.2 of the Credit Agreement and (b) notices, requests and demands to or
upon any other Grantor shall be effected in the manner set forth in Section 15
of the Guarantee.

16. Waivers by Grantor. Each Grantor waives, to the maximum extent permitted by
law, demand, presentment for payment, notice of non-payment, protest, notice of
protest, notice of intent to accelerate, notice of acceleration, or any other
notice or formalities of any kind (except notice of the time and place of public
or private sale of the Collateral and any notice specifically provided herein,
or in the other Loan Documents) to or upon such Grantor or any other Person (all
and each of which are hereby expressly waived) with respect to the Obligations,
and waives notice of the amount of the Obligations outstanding at any time.

17. Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Security Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

18. Indemnification. Each Grantor agrees, jointly and severally, to (i) save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) with respect to, or resulting from, any
delay in paying, any and all Other Taxes which may be payable or determined to
be payable with respect to any of the Collateral and (ii) indemnify each Secured
Party as set forth in Section 11.6(e) of the Credit Agreement (or as may be
applied to such Grantor pursuant to Section 2(c) of the Guarantee). The
agreements in this Section 18 shall survive the termination of this Security
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable under the Loan Documents.

 

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19. Termination and Release.

(a) In addition to, and not in limitation of, the release provisions contained
in Sections 10.10 and 11.5 of the Credit Agreement, this Security Agreement
(including as to any power of attorney, authorization or agency granted herein)
and all other security interests granted hereby shall terminate when all the
Obligations have been paid in full (other than inchoate claims in respect of
indemnities for which no claim has been made or is known to any Grantor at the
time all other Obligations have been paid in full), no Letters of Credit remain
outstanding (unless such Letters of Credit have been Cash Collateralized) and
the Commitments no longer remain in effect.

(b) In connection with any termination or release pursuant to paragraph (a) or
Sections 10.10 or 11.5 of the Credit Agreement, the Administrative Agent shall
promptly execute and deliver to each Grantor, at such Grantor’s expense, all UCC
termination statements and similar documents that such Grantor shall reasonably
request to evidence such termination or release, and will duly assign and
transfer to such Grantor, such of the Collateral that may be in the possession
of the Administrative Agent and has not theretofore been sold or otherwise
applied or released pursuant to this Security Agreement. Any execution and
delivery of documents pursuant to this Section 19 shall be without recourse to
or representation or warranty by the Administrative Agent or any other Secured
Party.

20. Severability. Any provision of this Security Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

21. Paragraph Headings. The paragraph headings used in this Security Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

22. No Waiver; Cumulative Remedies. None of the Administrative Agent nor any
other Secured Party shall by any act (except by a written instrument pursuant to
Section 23 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or any other such Secured Party
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.

23. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Grantor and the Administrative Agent (subject to the Administrative Agent
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement and, solely to the extent such instrument
waives, amends, supplements or otherwise modifies Section 10, the written
consent of each Subordinated Party adversely affected thereby); provided that
any provision of this Security Agreement may be waived by the Administrative
Agent in a written instrument executed by the Administrative Agent (subject to
the Administrative Agent obtaining the requisite consents of the applicable
Secured Parties pursuant to

 

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Section 11.1 of the Credit Agreement and, solely to the extent such instrument
waives, amends, supplements or otherwise modifies Section 10, the written
consent of each Subordinated Party adversely affected thereby); provided further
that, reasonable updates and modifications to the schedules hereto shall not
require the consent of the Administrative Agent or any other Secured Party. This
Security Agreement shall be binding upon the successors and assigns of each
Grantor and shall inure to the benefit of the Administrative Agent, and the
other Secured Parties and their respective successors and assigns. THIS SECURITY
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

24. Additional Grantors. Each Subsidiary of any Loan Party which is required
pursuant to Section 7.13 of the Credit Agreement to become party to this
Security Agreement shall become a Grantor for all purposes of this Security
Agreement upon execution and delivery by such Subsidiary of an Addendum to
Security Agreement in the form of Annex D hereto.

25. Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Loan Documents to which it is
a party, or for recognition and enforcement of any judgment in respect thereof,
to the exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address set forth in (a) Section 11.2 of the Credit Agreement, with respect to
the U.S. Borrower or (b) Section 15 of the Guarantee, with respect to each other
Grantor, or at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

26. Waiver of Certain Damages. Each Grantor and the Administrative Agent (on
behalf of themselves and each Secured Party) hereby waives, to the maximum
extent not prohibited by law, any right it may have to claim or recover in any
legal action or proceeding referred to in Section 25 any special, exemplary,
punitive or consequential damages.

27. WAIVER OF JURY. EACH OF THE GRANTOR AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

28. Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security Agreement on any number of separate counterparts
(including by facsimile

 

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transmission or other electronic transmission of signature pages hereto), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed signature page of this Security
Agreement by facsimile transmission or other electronic transmission shall be
effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Security Agreement signed by all the parties shall be lodged with
the U.S. Borrower and the Administrative Agent.

29. Amendment and Restatement. This Security Agreement amends and restates the
Security Agreement (as defined under the Existing Credit Agreement).

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to be duly
executed and delivered as of the date first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as a Grantor By:  

 

  Name:   Title: SPRAGUE RESOURCES LP, as a Grantor By:  

 

  Name:   Title: SPRAGUE ENERGY SOLUTIONS INC., as a Grantor By:  

 

  Name:   Title: SPRAGUE TERMINAL SERVICES LLC, as a Grantor By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC, as a Grantor By:  

 

  Name:   Title:

 

Signature Page to Security Agreement

--------------------------------------------------------------------------------

SPRAGUE RESOURCES FINANCE CORP, as a Grantor By:  

 

  Name:   Title: SPRAGUE CO-OP MEMBER LLC, as a Grantor By:  

 

  Name:   Title:

 

Signature Page to Security Agreement

--------------------------------------------------------------------------------

Schedule I

NAMES, FORM OF ORGANIZATION, AND LOCATION (AND JUSTIFICATION THEREFOR) OF
GRANTORS

 

-Sch. I-1-

--------------------------------------------------------------------------------

Schedule II

INTELLECTUAL PROPERTY

 

-Sch. II-1-

--------------------------------------------------------------------------------

Schedule III

INVENTORY AND EQUIPMENT

 

-Sch. III-1-

--------------------------------------------------------------------------------

Schedule IV

MATERIAL CONTRACTS

 

-Sch. IV-1-

--------------------------------------------------------------------------------

Schedule V

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

-Sch. VI-1-

--------------------------------------------------------------------------------

ANNEX A

FORM OF

PATENT SECURITY AGREEMENT

PATENT SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favor of
JPMORGAN CHASE BANK, N.A. ,having its principal place of business at
                    , as Administrative Agent (in such capacity, the
“Administrative Agent”), under the Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES
LLC (the “U.S. Borrower”), SPRAGUE RESOURCES ULC (“AcquireCo”), KILDAIR SERVICE
LTD. (“Kildair”), the several banks and other financial institutions or entities
from time to time parties thereto, the Administrative Agent and the other agents
party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered an Amended and Restated Security Agreement, dated as of December 9,
2014, in favor of the Administrative Agent (as amended, supplemented, restated
or otherwise modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Patents set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Patents constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Patent Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Patent and Trademark Office. The security interest granted hereby has
been granted to the Administrative Agent in connection with the Security
Agreement and is expressly subject to the terms and conditions thereof. The
Security Agreement (and all rights and remedies of the Administrative Agent
thereunder) shall remain in full force and effect in accordance with its terms.

 

-Annex A-1-

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein. In the event of any conflict between this Agreement and
the Security Agreement, the terms of the Security Agreement shall govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

-Annex A-2-

--------------------------------------------------------------------------------

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

 

[GRANTOR] By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

 

-Annex A-3-

--------------------------------------------------------------------------------

Exhibit A

PATENTS

 

Serial No. or

Patent No.

  

Inventor

  

Issue or File Date

  

Title

                          

PATENT LICENSES

 

United States Patent No.

  

Owner

  

Issue Date

                 

PATENT APPLICATIONS

 

Serial No.

  

Owner

  

Nature of Interest

  

Filing Date

                          

 

-Annex A-4-

--------------------------------------------------------------------------------

ANNEX B

FORM OF

TRADEMARK SECURITY AGREEMENT

TRADEMARK SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favor of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                    , as Administrative Agent (in such capacity, the
“Administrative Agent”), under the Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES
LLC (the “U.S. Borrower”), SPRAGUE RESOURCES ULC (“AcquireCo”), KILDAIR SERVICE
LTD. (“Kildair”), the several banks and other financial institutions or entities
from time to time parties thereto, the Administrative Agent and the other agents
party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered an Amended and Restated Security Agreement, dated as of December 9,
2014 in favor of the Administrative Agent (as amended, supplemented, restated or
otherwise modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Trademarks set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Trademarks constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto and all goodwill
related thereto) (collectively, the “Trademark Collateral”), to the
Administrative Agent, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Patent and Trademark Office. The security interest granted hereby has
been granted to the Administrative Agent in connection with the Security
Agreement and is expressly subject to the terms and conditions thereof. The
Security Agreement (and all rights and remedies of the Administrative Agent
thereunder) shall remain in full force and effect in accordance with its terms.

 

-Annex B-1-

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

[Remainder of page intentionally left blank]

 

-Annex B-2-

--------------------------------------------------------------------------------

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

 

[GRANTOR] By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

 

-Annex B-3-

--------------------------------------------------------------------------------

Exhibit A

TRADEMARKS

 

Serial No.

or Registration No.

  

Issue or File Date

(Renewal Date, if Applicable)

  

Mark

                 

TRADEMARK LICENSES

 

Serial No.

or Registration No.

  

Owner

  

Issue or File Date

(Renewal Date,

If Applicable

  

Mark

                          

TRADEMARK APPLICATIONS

 

Serial Number

  

Filing Date

  

Mark

                                   

 

-Annex B-4-

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ANNEX C

FORM OF COPYRIGHT SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favor of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                    , as Administrative Agent (in such capacity, the
“Administrative Agent”), under the Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES
LLC (the “U.S. Borrower”), SPRAGUE RESOURCES ULC, KILDAIR SERVICE LTD.
(“Kildair”), the several banks and other financial institutions or entities from
time to time parties thereto, the Administrative Agent and other agents party
thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for, the account of the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered an Amended and Restated Security Agreement, dated as of December 9,
2014, in favor of the Administrative Agent (as amended, restated , supplemented
or otherwise modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Copyrights set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Copyrights constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Copyright Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Copyright Office. The security interest granted hereby has been granted
to the Administrative Agent in connection with the Security Agreement and is
expressly subject to the terms and conditions thereof. The Security Agreement
(and all rights and remedies of the Administrative Agent thereunder) shall
remain in full force and effect in accordance with its terms.

 

-Annex C-1-

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

[Remainder of page intentionally left blank]

 

-Annex C-2-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized, as of the date first
written above.

 

[NAME OF GRANTOR] By:  

 

  Name:   Title: [NAME OF GRANTOR] By:  

 

  Name:   Title:

 

-Annex C-3-

--------------------------------------------------------------------------------

Exhibit A

COPYRIGHTS

 

Registration No.

  

Country

  

Issue or File Date

  

Title of Work

                          

COPYRIGHT LICENSES

 

Registration No.

  

Owner

  

Issue or File Date

  

Title of Work

                          

COPYRIGHT APPLICATIONS

 

Title of Work

  

File Date

  

Application No.

                 

 

-Annex C-4-

--------------------------------------------------------------------------------

ANNEX D

ADDENDUM TO SECURITY AGREEMENT

Each of the undersigned, [NAME OF NEW SUBSIDIARY] (each a “New Grantor”,
together the “New Grantors”):

(A) agrees to all of the provisions of the Amended and Restated Security
Agreement, dated as of December 9, 2014 (as amended, supplemented or otherwise
modified prior to the date hereof, the “Security Agreement”), made by SPRAGUE
OPERATING RESOURCES LLC (the “U.S. Borrower”), and each other party listed on
Schedule I thereto (together with each Person which may, from time to time,
become party thereto as a Grantor, each a “Grantor”, collectively, the
“Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”) for the Secured Parties, made
pursuant to the Amended and Restated Credit Agreement, dated as of December 9,
2014 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the U.S. Borrower, SPRAGUE RESOURCES ULC
(“AcquireCo”), KILDAIR SERVICE LTD. (“Kildair”), the several banks and other
financial institutions or entities from time to time parties thereto, the
Administrative Agent and the other agents party thereto;

(B) effective on the date hereof, becomes a party to the Security Agreement, as
a Grantor, with the same effect as if the undersigned were an original signatory
to the Security Agreement and with the representations and warranties contained
therein being deemed to be made by it on and as of the date hereof;

(C) as additional collateral security for the prompt and complete payment when
due (whether at stated maturity, by acceleration or otherwise) of the
Obligations and in order to induce the Lenders to make and maintain outstanding
their Loans under the Credit Agreement and the other Loan Documents, hereby
grants to the Administrative Agent, for the benefit of the Secured Parties, a
security interest in all of the property listed in Section 2 of the Security
Agreement now owned or at any time hereafter acquired by such New Grantor or in
which such New Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the “New Grantor Collateral”);

(D) represents and warrants that the information provided on the attached
schedules disclose, with respect to it, all information that is required under
the Security Agreement to be disclosed by a Grantor; and

(E) the Schedules to the Security Agreement are hereby supplemented by (a) if a
supplement to any such Schedule is attached to this Addendum to Security
Agreement, by including the items listed on such supplement to such Schedule in
such Schedule, and (b) if any such Schedule refers to the Collateral Certificate
delivered by the Grantors on the Restatement Effective Date, by deeming
incorporated in such Collateral Certificate the Supplement to Collateral
Certificate delivered by the New Grantor to the Administrative Agent on the date
of this Addendum to Security Agreement.

Terms defined in the Security Agreement and the Credit Agreement shall have such
defined meanings when used herein. This Addendum to Security Agreement and the
rights and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

 

-Annex D-1-

--------------------------------------------------------------------------------

By its acceptance hereof, each undersigned New Grantor hereby ratifies and
confirms its respective obligations under the Security Agreement, as
supplemented hereby.

 

-Annex D-2-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Addendum to Security Agreement, all as of the day and year written below.

 

[NAME OF NEW GRANTOR] By:  

 

  Name:   Title:

                 , 20    

 

ACCEPTED AND AGREED:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

-Annex D-3-

--------------------------------------------------------------------------------

Schedule I

NAME, FORM OF ORGANIZATION AND LOCATION OF NEW GRANTOR

 

-Annex D-4-

--------------------------------------------------------------------------------

Schedule II

INTELLECTUAL PROPERTY

 

Registration No.

  

Country

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

                                   

INTELLECTUAL PROPERTY LICENSES

 

Registration No.

  

Owner

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

                                   

INTELLECTUAL PROPERTY APPLICATIONS

 

Description/Title

  

File Date

  

Application No.

                 

 

-Annex D-5-

--------------------------------------------------------------------------------

Schedule III

INVENTORY AND EQUIPMENT

 

-Annex D-6-

--------------------------------------------------------------------------------

Schedule IV

MATERIAL CONTRACTS

 

-Annex D-7-

--------------------------------------------------------------------------------

Schedule V

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

-Annex D-8-

--------------------------------------------------------------------------------

Schedule VI

COMMERCIAL TORT CLAIMS

 

Annex D-9

--------------------------------------------------------------------------------

ANNEX E

INVENTORY ACKNOWLEDGMENT CERTIFICATE

[Date]

[NAME OF BAILEE/CONSIGNEE]

[ADDRESS]

Ladies and Gentlemen:

[NAME OF GRANTOR] (the “Grantor”) hereby notifies and acknowledges to [NAME OF
BAILEE/CONSIGNEE] (the “Company”) that it has granted to JPMORGAN CHASE BANK,
N.A. as Administrative Agent for the benefit of the Secured Parties (the
“Administrative Agent”) a security interest in all assets of the Grantor and the
proceeds thereof currently held or which may be delivered from time to time to
the Company at its facility located at
[                                        ] (the “Product”).

The Grantor remains the owner of the Product and the Company can follow any and
all instructions of the Grantor until the Company shall have received written
notice from the Administrative Agent (a “Control Notice”) instructing the
Company to no longer take instruction from the Grantor. After receipt of a
Control Notice, the Grantor irrevocably authorizes and instructs the Company to
take instructions only from the Administrative Agent with respect to the Product
and any warehouse receipts or documents of title related thereto. The Company
shall be fully protected in relying upon any Control Notice and any subsequent
instructions from the Administrative Agent. The Grantor hereby irrevocably
agrees that delivery of any or all of the Product by the Company in accordance
with any such notification and instruction from the Administrative Agent shall
constitute delivery of such Product to a person whose receipt was rightful as
against the Grantor, notwithstanding that the Grantor is the holder or the
person to which delivery is to be made under or pursuant to any warehouse
receipt or other document of title.

By countersigning below, the Company (a) acknowledges the Administrative Agent’s
security interest in the Product and agrees to hold the Product for the benefit
of the Administrative Agent, (b) confirms that no party has advised the Company
that such party claims a security interest or lien in the Product or requested
the Company to hold the Product, or any portion thereof, for its benefit, and
(c) agrees that, without prior notice to the Administrative Agent, the Company
will not issue negotiable warehouse receipts or documents of title covering the
Product.

 

Sincerely, [GRANTOR], as Grantor By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:

 

 

  Name:   Title:

--------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED:

 

[NAME OF BAILEE/CONSIGNEE] By:  

 

  Name:   Title:

INSERT CONTACT INFORMATION

--------------------------------------------------------------------------------

Exhibit B-2

to Credit Agreement

FORM OF CANADIAN SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of December 9, 2014, made by each party listed on
Schedule I hereto (together with each Person which may, from time to time,
become party hereto as a Grantor, each a “Grantor”, collectively, the
“Grantors”), in favour of JPMORGAN CHASE BANK, N.A., as administrative agent (in
such capacity, the “Administrative Agent”) for the Secured Parties as described
and defined below.

RECITALS

WHEREAS, pursuant to the amended and restated credit agreement, dated as of
December 9, 2014 (as further amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among inter alios, SPRAGUE
OPERATING RESOURCES LLC, a Delaware limited liability company (the “U.S.
Borrower”), as U.S. borrower, KILDAIR SERVICE LTD., a corporation organized
under the laws of Canada and continued under the laws of British Columbia
(“Kildair”), SPRAGUE RESOURCES ULC, an unlimited liability company formed under
the laws of British Columbia (“AcquireCo” and together with Kildair, the
“Initial Canadian Borrowers”), the several banks and other financial
institutions or entities from time to time parties thereto (the “Lenders”), the
Administrative Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian
Agent (in such capacity the “Canadian Agent”) and the other agents parties
thereto, the Lenders have severally agreed to make loans to and participate in
letters of credit issued on behalf of, and certain Lenders (the “Issuing
Lenders”) have agreed to issue letters of credit for the account of, the
Borrowers upon the terms and subject to the conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers, and the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
and for other good, fair and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged by each
Grantor, each Grantor hereby agrees with the Administrative Agent, on behalf of
and for the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

(b) Terms defined in the PPSA which are not otherwise defined in this Security
Agreement are used herein as defined in the PPSA, including without limitation,
“Accessions”, “Accounts”, “Chattel Paper”, “Document of Title”, “Equipment”,
“Goods”, “Intangible”, “Instruments”, “Investment Property”, “Money”, “financing
statement”, “financing change statement” and “Proceeds”. However, the term
“Goods” when used herein does not include “consumer goods” as that term is
defined in the PPSA.

(c) Capitalized terms defined in the STA which are not otherwise defined in this
Security Agreement or the PPSA are used herein as defined in the STA, including
without limitation, “Certificated Security”, “Securities”, “Securities Account”,
“Securities Intermediary” and “Securities Entitlement”.

 

CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

(d) The following terms shall have the following meanings:

“Account Control Agreement”: (i) with respect to any Deposit Account, a blocked
account or other agreement in a form reasonably satisfactory to the
Administrative Agent, as amended, supplemented or otherwise modified from time
to time; (ii) with respect to any Securities Account, a control agreement in a
form reasonably satisfactory to the Administrative Agent, as amended,
supplemented or otherwise modified from time to time; and (iii) with respect to
any Commodity Account, a control agreement in a form reasonably satisfactory to
the Administrative Agent, as amended, supplemented or otherwise modified from
time to time.

“Account Transaction”: as defined in Section 5(j).

“Administrative Agent”: as defined in the Preamble hereto.

“Canadian Agent”: as defined in the Recitals hereto.

“Cash Management Account”: a Controlled Account maintained at a Cash Management
Bank.

“CIPO” the Canadian Intellectual Property Office.

“Collateral”: as defined in Section 2 of this Security Agreement.

“Collateral Account”: any collateral account established by the Administrative
Agent as provided in Section 3(c) or 8 of this Security Agreement.

“Contract”: any contract to which a Grantor is a party, other than the Loan
Documents.

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

“Copyrights”: as defined in the definition of “Intellectual Property” in this
Section 1(d).

“Credit Agreement”: as defined in the Recitals hereto.

“Deposit Account”: any demand, time, savings, passbook or like account
maintained with any depositary institution.

“Designs” as defined in the definition of “Intellectual Property” in this
Section 1(d).

“DIP Financing”: as defined in Section 10(c)(ii).

“Enforcement Actions”: as defined in Section 9(b).

“Excluded Assets”: (i) any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law, requires a consent not
obtained of any Governmental Authority or is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any consent
(other than consent of a Loan Party) not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise to such
property or, in the case of any Investment

 

CANADIAN SECURITY AGREEMENT

 

-2-

--------------------------------------------------------------------------------

Property (other than any of the foregoing issued by a Grantor), any applicable
shareholder or similar agreement, except to the extent that such Requirement of
Law or the term in such contract, license, agreement, instrument or other
document or shareholder or similar agreement providing for such prohibition,
breach, default or termination or requiring such consent is ineffective under
applicable law; (ii) any assets that are subject to a purchase money Lien or
capital lease permitted under the Credit Agreement to the extent the documents
relating to such purchase money Lien or capital lease do not permit such assets
to be subject to the security interests created hereby; and (iii) the Excluded
Accounts.

“Grantors”: as defined in the Preamble hereto.

“Grantor’s Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property used (but not owned) or licensed by such Grantor at such
time.

“Incidental Rights”: (a) all books and records relating to the Collateral,
(b) all indemnities, guaranties or warranties relating to any type of the
Collateral to the extent a security interest is permitted to be granted therein
pursuant to the PPSA and (c) all governmental filings, permits, approvals or
licenses relating to the ownership, use or occupancy of the Inventory that
constitutes Collateral to the extent that (i) a security interest may be granted
therein under applicable Law, (ii) the granting of a security interest therein
would not result in the violation, termination, suspension or limitation thereof
or otherwise violate applicable Law and (iii) the granting of a security
interest therein would not require the prior approval of or prior notice to any
Governmental Authority under applicable Law, which notice or approval has not
been made or obtained.

“Initial Canadian Borrowers”: as defined in the Recitals hereto.

“Insolvency Laws”: each of the Bankruptcy and Insolvency Act (Canada), the
Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and
Restructuring Act (Canada), each as now and hereafter in effect, any successors
to such statutes and any other applicable bankruptcy, insolvency or other
similar law of any jurisdiction, including any corporate law of any jurisdiction
permitting a debtor to obtain a stay or a compromise of the claims of its
creditors against it.

“Insolvency Proceeding”: as to any Grantor, any of the following: (a) any
voluntary or involuntary case, proceeding, petition, filing, application or plan
of arrangement with respect to such Person under any Insolvency Law or any other
or similar proceedings seeking any stay, reorganization, arrangement,
composition or readjustment of the obligations and indebtedness of such Grantor,
(b) any proceeding seeking the appointment of any trustee, receiver, liquidator,
monitor, custodian or other insolvency official with similar powers with respect
to such Grantor or any of its assets, (c) any voluntary or involuntary
liquidation, dissolution or other winding up of the business of such Grantor,
(d) any general assignment for the benefit of creditors or (e) any marshalling
of assets of such Grantor.

“Intellectual Property”: all (i) trade-marks, collective marks, certification
marks, trade names, corporate names, company names, business names, fictitious
business names, domain names, service marks, logos, brand names, trade dress,
designs and all other source identifiers, and the rights in any of the foregoing
which arise under applicable law, the goodwill of the business symbolized
thereby or associated with each of them, all registrations and applications in
connection therewith and all renewals of any of the foregoing, including
registrations and applications in CIPO or in any similar office or agency of
Canada, any province or territory thereof or any other country or any political
subdivision thereof (“Trade-marks”); (ii) inventions and discoveries whether
patentable or not, invention disclosures, patentable designs, all letters patent
and design letters patent of Canada or any other country and all applications
for letters patent or design letters patent of Canada or any other country,
including applications in CIPO or in any similar office or agency of Canada, any
province or territory thereof or any

 

CANADIAN SECURITY AGREEMENT

 

-3-

--------------------------------------------------------------------------------

other country or any political subdivision thereof, and all reissues, renewals,
divisions, continuations, continuations in part, revisions and extensions of any
of the foregoing (“Patents”); (iii) trade secrets or confidential information,
including confidential technical and business information, know-how, show-how,
processes, schematics, algorithms, concepts, ideas, inventions, business
methods, research and development, formulae, drawings, prototypes, models,
designs, customer and supplier information and lists, software, including source
code, object code, user interface, or other confidential proprietary
intellectual property, and all additions and improvements to, and books and
records describing or used in connection with, any of the foregoing (“Trade
Secrets”); (iv) all published and unpublished works of authorship whether
copyrightable or not, databases and other compilations of information, software,
including source code, object code, user interface, algorithms and the like, or
other confidential proprietary intellectual property, and all additions and
improvements to, and books and records describing or used in connection with,
any of the foregoing, including user manuals and other training documentation
related thereto, arising under the laws of Canada or any other country, all
registrations and applications for copyrights under the laws of Canada or any
other country, including registrations, recordings and applications in CIPO or
in any similar office or agency of Canada, any province or territory thereof or
any other country or any political subdivision thereof, and all derivative
works, renewals, extensions, restorations and reversions of any of the foregoing
(“Copyrights”); (v) all right, title and interest in and to the following: all
industrial designs, all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the Canadian Industrial Design Office or in any similar
office or agency in any other country or any political subdivision thereof, and
all reissues, extensions or renewals of any of the foregoing (“Designs”);
(vi) all other intellectual property to the extent entitled to legal protection
as such, including products under development and methodologies therefor; and
(vii) all claims for, and rights to sue for, past, present or future
infringement, misappropriation, dilution or other impairment or violation of any
of the foregoing and all income, royalties, damages and payments now or
hereafter due or payable with respect to any of the foregoing.

“Intellectual Property Licenses”: any and all agreements, whether written or
oral, to which any Grantor is a party and pursuant to which (i) any third Person
is granted a license in or right to use any Owned Intellectual Property, or
(ii) any Grantor is granted a license in or right to use any Intellectual
Property of a third Person.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Letter-of-Credit Right”: any right to payment or performance under a letter of
credit, whether or not the beneficiary has demanded or is at the time entitled
to demand payment or performance.

“Material Contracts”: the contracts and agreements integral to operating the
business of the Loan Parties listed on Schedule IV hereto, as the same may from
time to time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of any Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of any Grantor
to damages arising out of, or for, breach or default in respect thereof and
(iii) all rights of any Grantor to perform and to exercise all remedies
thereunder.

“Owned Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property owned by such Grantor at such time.

“Patents”: as defined in the definition of “Intellectual Property” in this
Section 1(d).

 

CANADIAN SECURITY AGREEMENT

 

-4-

--------------------------------------------------------------------------------

“Permitted Liens”: Liens permitted on the Collateral pursuant to the Credit
Agreement.

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

“Post-Petition Claims”: means interest, fees, costs, expenses and other charges
that, pursuant to the Loan Documents or any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement, continue to accrue after
the commencement of an Insolvency Proceeding, to the extent such interest, fees,
expenses and other charges are allowed or allowable under Insolvency Law or in
an Insolvency Proceeding.

“PPSA”: the Personal Property Security Act (Ontario), including the regulations
thereto, provided that, if perfection or the effect of perfection or
non-perfection or the priority of the security interest created hereunder in any
Collateral is governed by the personal property security legislation or other
applicable legislation with respect to personal property security as in effect
in a jurisdiction other than Ontario, “PPSA” means the Personal Property
Security Act or such other applicable legislation as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“Receivable”: any right to payment for goods sold, leased, licensed, assigned or
otherwise disposed of or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including, without limitation, any Account).

“Securities”: (i) “securities” as defined in the STA, or if no STA is in force
in the applicable jurisdiction, the PPSA of such jurisdiction and (ii) including
any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as “securities” or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.

“Security Agreement”: this Canadian Security Agreement, as amended, supplemented
or otherwise modified from time to time.

“Senior Obligations”: all Obligations other than the Subordinated Obligations.

“Senior Parties”: collectively, the Secured Parties, solely with respect to the
Senior Obligations.

“STA”: the Securities Transfer Act, 2006 (Ontario), including the regulations
thereto, provided that, to the extent that perfection or the effect of
perfection or non-perfection or the priority of any Lien created hereunder on
Collateral that is Investment Property is governed by the laws in effect in any
province or territory of Canada other than Ontario in which there is in force
legislation substantially the same as the Securities Transfer Act, 2006
(Ontario) (an “Other STA Province”), then the “STA” shall mean such other
legislation as in effect from time to time in such Other STA Province for the
purposes of the provisions hereof referring to or incorporating by reference
provisions of the STA; and to the extent that such perfection or the effect of
perfection or non-perfection or the priority of any Lien created hereunder on
Collateral is governed by the laws of a jurisdiction other than Ontario or an
Other STA Province, then references herein to the STA shall be disregarded
except for the terms “Certificated Security” and “Uncertificated Security” which
shall have the meanings herein as defined in the Securities Transfer Act, 2006
(Ontario) regardless of whether the STA is in force in the applicable
jurisdiction.

 

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“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“Trade Secrets”: as defined in the definition of “Intellectual Property” in this
Section 1(d).

“Trade-marks”: as defined in the definition of “Intellectual Property” in this
Section 1(d).

“U.S. Borrower”: as defined in the Recitals hereto.

“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles owned by any Grantor and all tires and other appurtenances to
any of the foregoing.

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

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

2. Grant of Security Interest.

(a) Grant of Security. As collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, each Grantor hereby grants to the
Administrative Agent on behalf and for the ratable benefit of the Secured
Parties a security interest in all of its right, title and interest in, to and
under all personal property and other assets, whether now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
“Collateral”), including:

 

  1. all Accounts;

 

  2. all Chattel Paper;

 

  3. all Commodity Accounts;

 

  4. all Contracts;

 

  5. all Deposit Accounts;

 

CANADIAN SECURITY AGREEMENT

 

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  6. all Documents of Title;

 

  7. all Equipment;

 

  8. all Intangibles;

 

  9. all Incidental Rights;

 

  10. all Instruments;

 

  11. all Intellectual Property and Intellectual Property Licenses;

 

  12. all Inventory;

 

  13. all Investment Property;

 

  14. all letters of credit, Letter-of-Credit Rights and supporting obligations;

 

  15. all Securities;

 

  16. all Securities Accounts and all Investment Property held therein or
credited thereto;

 

  17. all Vehicles;

 

  18. all Money;

 

  19. all Goods and other property not otherwise described above;

 

  20. all books and records pertaining to any and/or all of the Collateral; and

 

  21. to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing, all accession or additions of any and all of the
foregoing, in each case whether or not affixed to real or immovable property or
otherwise constituting a fixture, and all collateral security and guarantees
given by any Person with respect to any of the foregoing;

provided, that the Collateral shall not include the Excluded Assets.

(b) Exception Respecting Trade-Marks. Notwithstanding Section 2(a), each
Grantors’ grant of security in Trade-marks (as defined in the Trade-marks Act
(Canada)) under this Agreement shall be limited to a grant by the Grantor of a
security interest in all of the Grantors’ right, title and interest in such
Trade-marks and shall not constitute an assignment thereof.

(c) Attachment of Security Interest. Each Grantor and the Secured Parties hereby
acknowledge that (a) value has been given; (b) each Grantor has rights in the
Collateral in which it has granted a security interest; (c) this Security
Agreement constitutes a security agreement as that term is defined in the PPSA;
and (d) the security interest attaches upon the execution of this Security
Agreement (or in the case of any after-acquired property, at the time of
acquisition thereof).

(d) Limitation of Obligations. Notwithstanding anything to the contrary in this
Agreement, (i) prior to the ULC Conversion, (x) with respect to any Grantor that
is an Exempt CFC or a Subsidiary thereof, Obligations secured by the Collateral
shall exclude U.S. Obligations; and (y) the security interested granted on the
voting Capital Stock of Kildair which secures the U.S. Obligations shall be
limited to 65% of such voting Capital Stock, provided that immediately after the
ULC Conversion and subject to clause (ii) below, the Obligations secured by the
Collateral shall automatically include U.S. Obligations without further action
of the parties, (ii) at any time prior to the Kildair Subsidiary Election, the
Collateral shall not include any properties or assets of Transit P.M. ULC and
Wintergreen Transport Corporation ULC nor any Capital Stock of Transit P.M. ULC
or Wintergreen Transport Corporation ULC and such properties, assets or Capital
Stock shall not secure any Obligations; provided that immediately after the
Kildair Subsidiary Election, the Collateral shall include such assets,
properties and Capital Stock Obligations as security for the Obligations without
further action of the parties, and (iii) with respect to any Exempt CFC acquired
or formed by a Grantor after the date hereof, the security interest granted
under this Agreement in the voting Capital Stock of such Exempt CFC which
secured the U.S. Obligations shall be limited to 65% of the voting Capital Stock
of such Exempt CFC.

 

CANADIAN SECURITY AGREEMENT

 

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3. Certain Matters Respecting Receivables and Material Contracts.

(a) Communication with and Notice to Receivable Obligors and Contracting
Parties. The Administrative Agent in its own name or in the name of any one or
more of the Grantors may, at any time in the course of any audit pursuant to
Section 7.9 of the Credit Agreement, in consultation with the U.S. Borrower,
communicate with Account Debtors on the Receivables and parties to the Material
Contracts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any such Receivables or Material Contracts. Each
Grantor shall notify Account Debtors on the Receivables that the Receivables
have been collaterally assigned to the Administrative Agent on behalf and for
the ratable benefit of the Secured Parties.

(b) Analysis of Receivables. The Co-Collateral Agents shall have the right to
make test verifications of the Receivables in any manner and through any medium
that they reasonably consider advisable at any time during an Event of Default
or in the course of any audit pursuant to Section 7.9 of the Credit Agreement,
in consultation with the U.S. Borrower, and each Grantor shall furnish all such
assistance and information as the Co-Collateral Agents may require in connection
therewith. At any time during an Event of Default or in the course of any audit
pursuant to Section 7.9 of the Credit Agreement, in consultation with the U.S.
Borrower, upon the Co-Collateral Agents’ request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.

(c) Collections on Receivables. The Grantors shall instruct and shall use
commercially reasonable efforts to cause the Account Debtor on each Receivable
to remit all amounts owing in respect of such Receivable to a Cash Management
Account. Any amounts in respect of any Receivable collected by any Grantor,
(i) shall be promptly deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Administrative Agent if required, in a Cash
Management Account, and (ii) until so turned over, shall be held by such Grantor
in trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor. All Proceeds constituting collections of
Receivables while held by the Administrative Agent (or by any Grantor in trust
for the Administrative Agent and the other Secured Parties) shall continue to be
collateral security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. At the Administrative Agent’s
reasonable request, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to such Grantor’s Receivables, including, without
limitation, all original orders, invoices and shipping receipts.

4. Representations and Warranties. Each Grantor hereby represents and warrants
as of the Restatement Effective Date and each Borrowing Date that:

(a) Title; No Other Liens. Except for the Liens granted to the Administrative
Agent on behalf and for the ratable benefit of the Secured Parties pursuant to
this Security Agreement and the other Permitted Liens, such Grantor owns each
item of the Collateral pledged by it free and clear of any and all Liens or
claims of others. No security agreement, financing statement, financing change
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as may have
been filed in favour of the Administrative Agent, on behalf and for the ratable
benefit of the Secured Parties, pursuant to this Security Agreement or as may be
filed to secure a Permitted Lien.

(b) Perfected First Priority Liens. Upon the registration or filing of PPSA
financing statements in the applicable jurisdictions and, with respect to each
Commodity Account and Securities

 

CANADIAN SECURITY AGREEMENT

 

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Account, upon the execution and delivery of an Account Control Agreement with
respect to such Commodity Account or Securities Account, the Liens granted
pursuant to this Security Agreement shall constitute perfected Liens (with
respect to Intellectual Property, if and to the extent perfection may be
achieved by the registration or filing of PPSA financing statements and/or
security agreements substantially in the form of Annex A, Annex B or Annex C, as
applicable, at CIPO) in favour of the Administrative Agent, on behalf and for
the ratable benefit of the Secured Parties, in the Collateral as collateral
security for the Obligations, which Liens will be prior to all other Liens on
the Collateral of such Grantor, subject to Permitted Borrowing Base Liens,
Permitted Cash Management Liens and First Purchaser Liens and which are
enforceable as such against all creditors of such Grantor and any Person
purporting to purchase such Collateral from such Grantor.

(c) Receivables. The amount represented by such Grantor to the Administrative
Agent from time to time as owing by each Account Debtor or by all Account
Debtors in respect of such Grantor’s Receivables will at such time be the
correct amount actually owing by such Account Debtor or Account Debtors
thereunder. No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper in a principal amount
that is greater than $2,500,000 that has not been delivered to the
Administrative Agent. As of the Restatement Effective Date, the place where such
Grantor keeps its records concerning such Grantor’s Receivables is the address
set forth opposite such Grantor’s name on Schedule I.

(d) Material Contracts. No consent of any party (other than such Grantor) to any
Material Contract such Grantor is party to is required, or purports to be
required, in connection with the execution, delivery and performance of this
Security Agreement. Each Material Contract such Grantor is party to is in full
force and effect and constitutes a valid and legally enforceable obligation of
the parties thereto, except as enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting the enforcement of creditor’s rights generally and general
equitable principles (whether considered in a proceeding in equity or at law).
No consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
validity or enforceability of any of the Material Contracts such Grantor is
party to by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Material Contract to any material adverse limitation, either specific
or general in nature. Neither such Grantor nor (to the best of such Grantor’s
knowledge) any other party to any Material Contract such Grantor is party to is
in default or is likely to become in default in the performance or observance or
any of the terms thereof in any manner that, in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Such Grantor has fully performed
all its material obligations under each Material Contract such Grantor is party
to. The right, title and interest of such Grantor in, to and under each Material
Contract such Grantor is party to are not subject to any defense, offset,
counterclaim or claim which could reasonably be expected to have a Material
Adverse Effect, nor have any of the foregoing been asserted or alleged against
such Grantor as to any such Material Contract. Such Grantor has delivered to the
Administrative Agent a complete and correct copy of each Material Contract such
Grantor is party to, including all amendments, supplements and other
modifications thereto. No amount payable to such Grantor under or in connection
with any Material Contract such Grantor is party to is evidenced by any
Instrument or Chattel Paper that has not been delivered to the Administrative
Agent.

(e) Inventory and Equipment. As of the Restatement Effective Date, the Inventory
and the Equipment of such Grantor as of the Restatement Effective Date are kept
at the locations listed on Schedule III hereto. All of said locations are owned
by such Grantor except for locations (i) which are leased by the Grantor as
lessee and designated in Part (b) of Schedule III and (ii) at which Inventory is
held in a public warehouse or is otherwise held by a bailee or on consignment or
pursuant to a throughput or other storage arrangement as designated in Part
(c) of Schedule III.

 

CANADIAN SECURITY AGREEMENT

 

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(f) Location. As of the Restatement Effective Date, the location of such
Grantor’s principal place of business and chief executive office (and domicile
for the purposes of the Quebec Civil Code) is at the place specified for such
Grantor on Schedule I, and for the four (4) months preceding the Restatement
Effective Date has been at the place specified for such Grantor on Schedule I,
except as otherwise provided in Schedule I.

(g) Name; Type and Jurisdiction of Organization; Organizational and
Identification Number. As of the Restatement Effective Date, (i) the exact legal
name of such Grantor is as specified for such Grantor on Schedule I; (ii) such
Grantor has not done business under a previous name, assumed name or trade name
or changed its name in the prior twelve (12) months, except as otherwise
provided in Schedule I; and (iii) the type of entity of such Grantor, its
jurisdiction of incorporation, continuation or amalgamation and the
organizational number issued to it by its jurisdiction of organization are set
forth on Schedule I.

(h) Insurance Policies. As of the Restatement Effective Date, none of the
Collateral of such Grantor constitutes an interest or claim in or under any
policy of insurance or contract for annuity, except to the extent the same
constitutes Proceeds.

(i) Intellectual Property.

1. Schedule II is a true, correct and complete list setting forth all
Intellectual Property registered by, issued to, or applied for by each Grantor,
and, for each listed item (as applicable) the application or registration
numbers and dates, and the name of the current registered owner and/or registrar
of domain names;

2. Schedule II sets forth a true, correct and complete list of all material
written Intellectual Property Licenses of each Grantor and true and complete
copies of each such license have been made available by the Grantors to the
Administrative Agent prior to the Restatement Effective Date. Such Intellectual
Property Licenses are enforceable by the Grantors, either alone or in the
aggregate, in accordance with their terms, except to the extent that enforcement
may be limited by applicable law. No Grantor has in the past year received any
written notice alleging any breach or default by any Grantor of any such
Intellectual Property Licenses, and (A) no Grantor is in breach or default of
any such Intellectual Property Licenses, (B) to the knowledge of the Grantors,
no counterparty to any such Intellectual Property Licenses is in breach or
default of any such Intellectual Property Licenses and (C) no defense, offset,
deduction or counterclaim exists under any Intellectual Property License in
favour of any third party or such counterparty which could reasonably be
expected to have a Material Adverse Effect;

3. (A) all of each Grantor’s Owned Intellectual Property set forth on Schedule
II is subsisting, unexpired and has not been abandoned or allowed to lapse;
(B) to the knowledge of any Grantor, all of such Grantor’s Owned Intellectual
Property is valid and enforceable; and (C) no Grantor has within the past year
received any written notice or claim challenging the validity, enforceability,
registration or use of such Grantor’s Owned Intellectual Property;

4. all necessary registration, maintenance and renewal fees in connection with
such Grantor’s material Owned Intellectual Property have been paid and all
necessary documents and certificates in connection with such Grantor’s Owned
Intellectual Property have been filed with the relevant patent, copyright,
trade-mark, industrial design or other authorities in Canada or applicable
foreign jurisdictions, as the case may be, for the purposes of prosecuting,
maintaining or renewing such Grantor’s Owned Intellectual Property;

 

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5. the Grantors, either individually or in the aggregate, exclusively own free
and clear of all Liens (other than Permitted Liens) or have the right to use all
of each Grantor’s material Owned Intellectual Property. All of such Grantor’s
rights pertaining to such Grantor’s Intellectual Property shall survive
unchanged immediately following the applicable closing and the consummation of
the transactions contemplated by this Security Agreement;

6. with respect to Intellectual Property other than Patents, none of such
Grantor’s material Owned Intellectual Property nor the conduct of any Grantors’
business infringes, misappropriates, or otherwise violates Intellectual Property
owned by any third party. No Grantor has within the past three years received
any written notice or written claim asserting any of the foregoing;

7. with respect to Intellectual Property other than Patents, to the knowledge of
such Grantor, none of such Grantor’s material Owned Intellectual Property is
being infringed, misappropriated or otherwise violated by any third party. No
Grantor has (A) within the past three years received any written notice or
written claim asserting any of the foregoing, or (B) entered into any agreement
granting any other third party the exclusive right to bring infringement actions
with respect to, or otherwise exclusively to enforce rights with respect to, any
of such Grantor’s Owned Intellectual Property;

8. to the knowledge of such Grantor, none of such Grantor’s Patents is being
infringed, misappropriated or otherwise violated by any third party and none of
such Grantor’s business infringes, misappropriates, or otherwise violates
Patents owned by any third party. No Grantor has within the past six years
received any written notice or written claim asserting infringement,
misappropriation, or other violations of the Intellectual Property owned by any
third party;

9. no holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel, invalidate or question the validity of, or
any of such Grantor’s rights in, any of such Grantor’s Owned Intellectual
Property in any respect that could reasonably be expected to have a Material
Adverse Effect;

10. to the knowledge of any Grantor, no holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel, invalidate or
question the validity of, or any of such Grantors’ rights in, any of such
Grantor’s Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect;

11. no action or proceeding is pending, or, to the knowledge of any Grantor,
threatened, on the date hereof (A) seeking to limit, cancel, invalidate or
question the validity of any of such Grantor’s material Owned Intellectual
Property or any Grantors’ ownership interest therein or use thereof, or
(B) which, if adversely determined, would have a Material Adverse Effect on the
use, transfer, licensing or value of any such Grantor’s Owned Intellectual
Property;

12. each Grantor has taken reasonable steps to protect its rights in, and
confidentiality of all material Trade Secrets, and any other confidential
information owned, used or held by such Grantor, including a policy that
employees, licensees, contractors, and other third parties with access to Trade
Secrets or other confidential information safeguard and maintain the secrecy and
confidentiality of such Trade Secrets and confidential information. To such
Grantor’s knowledge, such Trade Secrets have not been used, disclosed to or
discovered by any third party except pursuant to valid and appropriate
non-disclosure, license or any other appropriate contract which has not been
breached;

 

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13. except as permitted under the Credit Agreement, none of the Grantors have
conveyed, pledged or otherwise transferred ownership of, or granted or agreed to
grant any exclusive license of or right to use, or granted joint ownership of,
any such Grantor’s Owned Intellectual Property to any third party; and

14. the consummation of the transactions contemplated by the Loan Documents will
not cause to be provided or licensed to any third party, or give rise to any
rights of any third party with respect to, any software source code that is such
Grantor’s Owned Intellectual Property. Grantors have implemented reasonable
disaster recovery and back-up plans with respect to information technology
systems that are included within such Grantor’s Intellectual Property.

(j) Vehicles. As of the Restatement Effective Date, the aggregate book value of
all Vehicles owned by all Grantors is less than $5,000,000.

(k) Governmental Obligors. As of the Restatement Effective Date, none of the
obligors on any Receivable that constitutes Collateral, and none of the parties
to any Contract that constitutes Collateral, is a Governmental Authority except
for (i) with respect to Receivables or Contracts not included in the U.S.
Borrowing Base or the Kildair Borrowing Base because all actions required under
the Financial Administration Act (Canada), or any similar local, provincial or
territorial laws, rules or regulations, have not been taken to approve and
permit the assignment of rights to payment thereunder or thereon to the
Administrative Agent, the obligors thereon or parties thereto, (ii) with respect
to Receivables or Contracts included in the U.S. Borrowing Base or the Kildair
Borrowing Base as to which all actions required under the Financial
Administration Act (Canada), and any similar local, provincial or territorial
laws, rules or regulations, have been taken to approve and permit the assignment
of rights to payment thereunder or thereon to the Administrative Agent, for the
ratable benefit of the Secured Parties, the obligors thereon or parties thereto,
and (iii) with respect to any other Receivables or Contracts, in each case, that
constitute Collateral, those obligors and parties thereof so long as the
requirements of Section 5(m) have been satisfied with respect to such
Receivables or Contracts.

(l) Deposit Accounts, Commodity Accounts and Securities Accounts. All Pledged
Accounts with respect to such Grantor are listed on Schedule V, including the
institution at which such Deposit Account, Securities Account or Commodity
Account is established, the purpose thereof, the name thereon, and the account
number thereof. Each Pledged Account is a Controlled Account.

(n) Additional Representations and Warranties. Each representation and warranty
set forth in Section 5 of the Credit Agreement and applicable to any Grantor is
incorporated herein by reference as if fully set forth herein.

5. Covenants. The Grantors hereby jointly and severally agree that, so long as
any of the Commitments remain in effect or any amount is owing to any Secured
Party hereunder or under any other Loan Document (except contingent
indemnification and expense reimbursement obligations for which no claim has
been made), each Grantor shall:

(a) Maintenance of Perfected Security Interests; Further Documentation; Pledge
of Instruments and Chattel Paper. Such Grantor shall maintain the security
interest created by this Security Agreement as a perfected security interest
having at least the priority described in Section 4(b) hereof and shall defend
such security interest against the claims and demands of all Persons whomsoever.
At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and

 

CANADIAN SECURITY AGREEMENT

 

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powers herein granted, including, without limitation, (i) the registration or
filing of any financing statements, financing change statements or amendments to
financing statements under the PPSA or any similar personal property security
legislation in effect in any jurisdiction with respect to the Liens created
hereby, (ii) the filing of any recordation of security interest documents with
CIPO and any other applicable office or agency of another country or political
subdivision thereof, (iii) in the case of Investment Property and any other
relevant Collateral, taking any actions (including, without limitation, entering
into, and using its best efforts to cause any relevant third party to enter
into, one or more Account Control Agreements) necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the PPSA) with
respect thereto and (iv) in the case of Deposit Accounts (other than Excluded
Accounts), entering into, and using best efforts to cause any relevant third
party to enter into, one or more Account Control Agreements. Upon the request of
the Administrative Agent during the continuance of an Event of Default, each
Grantor shall (A) assign such Letter of Credit Rights to the Administrative
Agent, (B) cause the issuing bank of the related letter of credit to consent to
such assignment and (C) cause the related letter of credit to be advised by the
Administrative Agent. Each Grantor also hereby authorizes the Administrative
Agent to register or file any such financing statements, financing change
statements or amendments to financing statements without the signature of such
Grantor to the extent permitted by applicable law. Any such financing statement
may, at the option of the Administrative Agent, describe the property covered
thereby as “all present and after acquired assets” or “all present and after
acquired personal property” of such Grantor, or may use a similar description;
provided, however, that the Administrative Agent shall amend any such
description to the extent reasonably necessary to accommodate Excluded Assets. A
carbon, photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement for registering or filing in any
jurisdiction. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument or Chattel Paper in a
principal amount that is greater than $2,500,000 or any Certificated Security,
such Instrument, Chattel Paper or Certificated Security shall be promptly
delivered to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Security
Agreement; provided, however, that any other such Instrument or Chattel Paper
shall be held by such Grantor in trust for the Administrative Agent.

(b) Maintenance of Records. Such Grantor will keep and maintain at its own cost
and expense satisfactory and complete records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Accounts.

(c) [Reserved]

(d) Compliance with Laws, etc. Such Grantor will comply with all Requirements of
Law applicable to the Collateral or any part thereof or to the operation of such
Grantor’s business except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect;
provided, however, that each Grantor may obtain waivers or contest any
Requirement of Law in any reasonable manner which shall not, in the sole opinion
of the Administrative Agent, adversely affect the Administrative Agent’s, or the
Lenders’ or the Issuing Lender’s rights or the priority of its Liens on the
Collateral.

(e) Compliance with Terms of Material Contracts, etc. Such Grantor will perform
and comply with all its obligations under the Material Contracts and all its
other Contractual Obligations relating to the Collateral unless (i) the subject
of a good faith dispute or (ii) such failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.

(f) Payment of Obligations. Such Grantor will pay promptly when due all material
Taxes, assessments and governmental charges or levies imposed upon the
Collateral, as well as all material claims of any kind (including, without
limitation, claims for labor, materials and supplies)

 

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against or with respect to the Collateral, except that no such charge need be
paid if (i) the validity thereof is being contested in good faith by appropriate
proceedings and (ii) such charge is adequately reserved against on such
Grantor’s books in accordance with GAAP.

(g) Limitation on Liens on Collateral. Such Grantor will not create, incur or
suffer to exist, will defend the Collateral against, and will take such other
reasonable action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than Permitted Liens,
and will defend the right, title and interest of the Secured Parties in and to
any of the Collateral against the claims and demands, other than in respect of
Permitted Liens, of all Persons whomsoever.

(h) Limitations on Dispositions of Collateral. Such Grantor will not sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so except for sales, transfers and other dispositions of
Collateral permitted under the Credit Agreement.

(i) Control of Pledged Accounts. Such Grantor agrees that, subject to
Section 8(a) or otherwise with the consent of the Administrative Agent in its
sole discretion (exercised in good faith), at no time shall it hold any funds or
any other assets in any Pledged Account that is not a Controlled Account.

(j) Assets in Pledged Accounts. Such Grantor agrees that at any time after the
occurrence and during the continuance of an Event of Default in respect of which
the Administrative Agent has exercised any remedies in respect of any Collateral
in any Controlled Account, including without limitation, giving any instruction
to a bank, securities intermediary or other Person maintaining a Controlled
Account, such Grantor will not, and will not cause or permit any of its agents,
representatives or other Persons to withdraw any cash (or, with respect to any
Securities Account or Commodity Account, withdraw, transfer, sell, redeem,
pledge, rehypothecate or otherwise deliver or dispose of any assets in such
account) from any Controlled Account (each an “Account Transaction”) without the
prior written consent of the Administrative Agent. Upon the occurrence and
during the continuance of an Event of Default, (i) the Administrative Agent
shall be entitled to instruct the applicable bank, securities intermediary or
other Person maintaining any Controlled Account to not execute any Account
Transaction without the prior written consent of the Administrative Agent and
(ii) any amounts in any Controlled Account may be withdrawn by the
Administrative Agent and applied as provided in Section 8(b). Such Grantor
agrees that it will not transfer assets out of any Securities Accounts or
Commodity Accounts, or transfer any Securities Accounts or Commodity Accounts to
another securities intermediary, unless such Grantor, the Administrative Agent,
and the substitute securities intermediary have entered into an Account Control
Agreement. No arrangement contemplated hereby or by any Account Control
Agreement in respect of any Securities Accounts, Commodity Accounts or other
Investment Property shall be modified by such Grantor without the prior written
consent of the Administrative Agent (such consent to be exercised in good
faith). Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent may notify any securities intermediary to liquidate the
applicable Securities Accounts and/or Commodity Accounts or any related
Investment Property maintained or held thereby and remit the proceeds thereof to
an account specified by the Administrative Agent (including any Collateral
Account). For the avoidance of doubt, and notwithstanding anything to the
contrary in any Account Control Agreement or any other Loan Document, including
this Security Agreement, the Administrative Agent shall not exercise any
remedies in respect of any Collateral in any Controlled Account, including
without limitation, giving any instruction (including any shifting control, or
other like, notice) to a bank, securities intermediary or other Person
maintaining a Controlled Account, or withdrawing or transferring any funds or
assets from a Controlled Account, unless in each case an Event of Default has
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(k) Inventory Evidenced by Documents of Title.

(i) Such Grantor shall cause any negotiable Documents of Title evidencing any
Inventory of such Grantor (A) if being held by the ultimate purchaser thereof,
to be (1) issued to the order of the Administrative Agent and (2) delivered to
the Administrative Agent and (B) if otherwise, to be duly endorsed in a manner
satisfactory to the Administrative Agent (provided that any bill of lading
issued for such Inventory shall be duly endorsed to the extent that it has been
issued to or endorsed to such Grantor (without further endorsement)), to be held
as Collateral pursuant to this Security Agreement.

(ii) Unless otherwise agreed by the Administrative Agent in its reasonable
discretion, such Grantor shall, within 60 days after the Restatement Effective
Date, provide to the bailee or consignee of any such Inventory of such Grantor
that is evidenced by a non-negotiable Document of Title or that is not evidenced
by any Document of Title a written notice of the Lien created by this Security
Agreement, such notice to be substantially in the form of Annex E or such other
form otherwise acceptable to the Administrative Agent and duly executed and
delivered by such Grantor and the Administrative Agent; provided that, such
Grantor shall use commercially reasonable efforts to have such notices
acknowledged by such bailee or consignee as described therein; provided, further
that, delivery of such a notice pursuant to this Section (k)(ii) with respect to
any contract for the storage of Inventory that constitutes Collateral shall be
deemed a delivery of such a notice with respect to any and all Documents of
Title evidencing any additional Inventory that constitutes Collateral, delivered
to such bailee or consignee at any time pursuant to such contract. The
Administrative Agent hereby agrees not to deliver a “Control Notice” (as defined
in Annex E) to any bailee or consignee of any Inventory of any Grantor pursuant
to any notice referred to in the preceding sentence unless an Event of Default
has occurred and is continuing.

(l) Certain Government Receivables. With respect to Receivables or Contracts, in
each case, that constitute Collateral, to which the counterparty or obligor is a
Governmental Authority, such Grantor shall, as soon as reasonably practicable
after the request by the Administrative Agent, take any commercially reasonable
actions under the Financial Administration Act (Canada), and any similar local,
provincial or territorial laws, rules or regulations, required to permit or
approve the assignment of the rights to payment thereunder or thereon to the
Administrative Agent on behalf of and for the benefit of the Secured Parties;
provided, that the Administrative Agent shall not make such request with respect
to any Receivables or Contracts that are not included in the calculation of the
U.S. Borrowing Base or the Kildair Borrowing Base to the extent that the value
of all such Receivables and Contracts to which the counterparty or obligor is a
Governmental Authority that have not been perfected under the Financial
Administration Act (Canada), or any similar local, provincial or territorial
laws, rules or regulations, is less than $5,000,000 at any one time outstanding
unless an Event of Default shall have occurred and be continuing.

(m) Limitations on Modifications of Material Contracts and Agreements Giving
Rise to Receivables; Exercise of Rights; Notices. Such Grantor will not
(i) other than in accordance with its standard operating practices and customary
market practice in markets similar to those in which such Grantor operates,
amend, modify, terminate or waive any provision of any Material Contract or any
agreement giving rise to a Receivable in any manner which could reasonably be
expected to materially adversely affect the value of such Material Contract or
such Receivable as Collateral, (ii) other than in accordance with its standard
operating practices and customary market practice in markets similar to those in
which such Grantor operates, fail to exercise promptly and diligently each and
every material right which it may have under each Material Contract and each
agreement giving rise to a Receivable (other than any right of termination) or
(iii) fail to deliver to the Administrative Agent a copy of each

 

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material demand, notice or document received by it relating in any way to any
Material Contract or any agreement giving rise to a Receivable that questions
the validity or enforceability of such Material Contract or Receivables
constituting more than 5% of the aggregate amount of the Receivables indicated
in the latest Borrowing Base Report within three (3) Business Days after receipt
by such Grantor thereof.

(n) Maintenance of Equipment. Such Grantor will maintain each item of Equipment
in good operating condition, ordinary wear and tear and immaterial impairments
of value and damage by the elements excepted, and will provide all maintenance,
service and repairs in accordance with its standard operating practices and
customary market practice in markets similar to those in which such Grantor
operates.

(o) Limitations on Discounts, Compromises, Extensions of Receivables. Other than
in accordance with its standard operating practices and customary market
practice in markets similar to those in which such Grantor operates, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise, compound or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, or (iv) allow any credit or discount whatsoever
on any Receivable.

(p) Maintenance of Insurance. Such Grantor will maintain, with financially sound
and reputable companies, insurance policies (i) insuring the Inventory,
Equipment and Vehicles against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent in
amounts comparable to amounts of insurance coverage obtained by similar
businesses of similar size acting prudently and (ii) insuring each Grantor and
the Administrative Agent (for the benefit of the Lenders, the Issuing Lenders
and the other Secured Parties) against liability for personal injury and
property damage relating to such Inventory, Equipment and Vehicles, such
policies to be in such form and amounts and having such coverage as shall be
comparable to forms, amounts and coverage, respectively, obtained by similar
businesses of similar size acting prudently, with losses payable to any Grantor
and the Administrative Agent (for the benefit of the Lenders, the Issuing
Lenders and the other Secured Parties) as their respective interests may appear
or, in the case of liability insurance, showing the Administrative Agent (for
the benefit of the Lenders, the Issuing Lenders and the other Secured Parties)
as additional insured parties. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof (unless the policy of the
applicable insurance company shall be not to provide such assurance), (ii) name
the Administrative Agent as insured party and loss payee and mortgagee,
(iii) include a breach of warranty clause and (iv) be reasonably satisfactory in
all other respects to the Administrative Agent. Each Grantor shall deliver to
the Administrative Agent a report of a reputable insurance broker with respect
to such insurance when available during each calendar year and such supplemental
reports with respect thereto as the Administrative Agent may from time to time
reasonably request.

(q) Further Identification of Collateral. Such Grantor will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

(r) Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, at its address set forth in the Credit Agreement, (i) of any
Lien (other than Liens created hereby or Permitted Liens) on, or claim asserted
against, any of the Collateral and (ii) of the occurrence of any event which
could reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.

 

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(s) Changes in Locations, Name, etc. Such Grantor will not (i) unless thirty
(30) days prior written notice to the Administrative Agent to such effect shall
have been given (or such later notice as the Administrative Agent shall agree in
its sole discretion) and any filing or registration under the PPSA as the
Administrative Agent may reasonably request to maintain the perfected security
interest granted hereto has been made, change its principal place of business or
chief executive office (or domicile for the purposes of the Quebec Civil Code)
from that specified in Section 4(f) or remove its books and records concerning
the Receivables from the location specified in Section 4(c), (ii) without thirty
(30) days prior written notice to the Administrative Agent, permit any of the
Inventory or Equipment to be kept at a location other than those listed on
Schedule III hereto (iii) without ten (10) Business Days’ prior written notice
to the Administrative Agent, change its name, identity or structure or
(iv) unless thirty (30) days written notice to such effect shall have been given
continue or reorganize under the laws of another jurisdiction or as a different
type of entity; provided that in connection with the ULC Conversion and the
Amalgamation, any change to Kildair’s or AcquireCo’s name and structure or
Kildair’s or AcquireCo’s conversion and amalgamation as an unlimited liability
company under the laws of the province of British Columbia shall not require
prior written notice so long as the Administrative Agent has received prompt
confirmation thereof.

(t) Intellectual Property.

1. Each Grantor, as applicable, (either itself or through licensees) shall
(A) continue to use each material Trade-mark on each and every product or in
connection with each and every service identified in its respective applications
or registrations in order to maintain such Trade-mark in full force free from
any claim of abandonment for non-use, except such Trade-marks that such Grantor
decides, in its reasonable good faith business judgment and consistent with its
past practices, to abandon, (B) maintain the quality of products and services
offered under such Trade-mark consistent with its best past standards, (C) use
such Trade-mark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, and (D) not (and
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby such Trade-mark may become abandoned, invalidated or
impaired in any way.

2. Except as otherwise permitted herein, each Grantor (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any of such
Grantor’s material Owned Intellectual Property may become forfeited, invalidated
or abandoned or dedicated to the public, or placed or fall in public domain.

3. Whenever any Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with CIPO or any applicable office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence and/or perfect the Administrative Agent’s security
interest in any applicable Intellectual Property and the goodwill and
intangibles of such Grantor relating thereto or represented thereby.

4. Each Grantor, as applicable, shall take all reasonable and necessary steps,
including, without limitation, in any proceeding before the CIPO or any
applicable office or agency in any other country or political subdivision
thereof, to maintain, pursue and enforce each application relating to any of
such Grantor’s material Owned Intellectual Property (and to obtain the relevant
registration) and to maintain each registration of such Grantor’s material Owned

 

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Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability, except for
applications and registrations that such Grantor decides, in its reasonable good
faith business judgment and consistent with its past practices, to abandon or
allow to expire.

5. Each Grantor (either itself or through licensees) shall not perform any act
or use any of such Grantor’s Owned Intellectual Property to knowingly infringe
the intellectual property rights of any third party.

6. In the event that any Grantor’s material Owned Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall
(A) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (B) if such
Grantor’s Owned Intellectual Property is of material economic value, promptly
notify the Administrative Agent after such Grantor learns thereof and protect
and/or enforce such Intellectual Property, including, as applicable, by suing
for infringement, misappropriation, or dilution, seeking injunctive relief where
appropriate and recovering any and all damages for such infringement,
misappropriation or dilution; provided that, the Grantors shall not have any
obligation to protect or enforce such Intellectual Property if the
Administrative Agent provides any Grantor with a written waiver of this
requirement.

(u) Vehicles. Such Grantor will maintain each Vehicle in good operating
condition, ordinary wear and tear and immaterial impairments of value and damage
by the elements excepted, and will provide all maintenance, service and repairs
necessary for such purpose in accordance with its standard operating practices
and customary market practice in markets similar to those in which such Grantor
operates. If an Event of Default shall occur and be continuing, at the request
of the Administrative Agent, such Grantor shall, within thirty (30) days after
such request, provide the Administrative Agent with vehicle identification
numbers of the Vehicle together with any other necessary information requested
by the Administrative Agent for the purposes of registering under the PPSA or
similar personal property security legislation in each jurisdiction which the
Administrative Agent shall deem advisable to perfect their Liens on the
Vehicles.

6. Agent’s Appointment as Attorney-in-Fact.

(a) Powers. Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Grantor and in the name of
each Grantor or in its own name, from time to time in the Administrative Agent’s
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of each Grantor, without notice to or assent by any Grantor, to
do the following:

1. in the name of each Grantor or its own name, or otherwise, to take possession
of and endorse and collect any cheques, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account, Instrument, Chattel
Paper, Intangible or Material Contract or with respect to any other Collateral
and to file any claim or to take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under any Account,
Instrument, Chattel Paper, Intangible or Material Contract or with respect to
any other Collateral whenever payable;

 

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2. to pay or discharge Taxes and Liens levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance called for by the terms
of this Security Agreement and to pay all or any part of the premiums therefor
and the costs thereof;

3. in the case of any Grantor’s Intellectual Property, to execute and deliver
any and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the other Secured
Parties’ security interest in such Intellectual Property and the goodwill and
intangibles of the Grantors relating thereto or represented thereby;

4. to execute, in connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

5. (A) to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or proceeding brought
against any Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, to give
such discharges or releases as the Administrative Agent may deem appropriate;
(G) to assign any Patent or Trade-mark (along with the goodwill of the business
to which any such Trade-mark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; and (H) generally, subject to any applicable
approvals, rules and regulations and any applicable tariffs, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent was the
absolute owner thereof for all purposes, and to do, at the Administrative
Agent’s option and the Grantors’ expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative Agent’s Liens
thereon on behalf of and for the ratable benefit of the Secured Parties and to
effect the intent of this Security Agreement, all as fully and effectively as
the Grantors might do.

Anything in this Section 6(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 6(a) unless an Event of Default has occurred and is continuing.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

The power of attorney conferred hereby on the Administrative Agent is solely to
protect, preserve and realize upon its security interest in the Collateral. This
power of attorney shall neither create any agency on the part of the
Administrative Agent in favour of any Grantor, nor any fiduciary obligations or
relationship on the part of any Secured Party for the benefit of any Grantor.

 

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(b) No Duty on Administrative Agent’s or other Secured Parties’ Part. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and each Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither they nor any of their officers, directors, shareholders, employees
or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct.

7. Performance by Administrative Agent of Grantors’ Obligations; Use of
Collateral. If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, only upon the occurrence and during
the continuance of an Event of Default and at its option, but without any
obligation to do so, may itself perform or comply, or otherwise cause
performance or compliance, with such agreement. Notwithstanding anything herein
to the contrary, so long as none of (a) an Event of Default of the type
described in Section 9.1(g) of the Credit Agreement shall have occurred, (b) any
other Event of Default shall have occurred and be continuing pursuant to which
the Administrative Agent shall be exercising remedies pursuant to Section 9
hereof or (c) any other Event of Default shall have occurred and be continuing
and the Administrative Agent shall have provided notice to a Grantor, each
Grantor may use, commingle and dispose of all or any part of the Collateral in
the ordinary course of its business, subject to the provisions of the Credit
Agreement and the provisions of this Security Agreement.

8. Proceeds.

(a) In addition to the rights of the Administrative Agent and the Secured
Parties specified in Section 3(c) with respect to payments of Receivables, it is
agreed that all Proceeds received by any Grantor consisting of cash, cheques and
other near-cash items shall be held by the Grantors in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of the
Grantors, and shall, promptly upon receipt by any Grantor, be deposited and held
in a Controlled Account (or, to the limit allowed, in an Excluded Account). Any
and all such Proceeds held in a Controlled Account (or by any Grantor in trust
for the Administrative Agent and the Secured Parties) shall continue to be held
as collateral security for the Obligations and shall not constitute payment
thereof until applied as provided in Section 8(b). Cash or any other property
held in a Controlled Account shall not be transferred to any Deposit Account,
Securities Account or Commodity Account of any Grantor that is not a Controlled
Account or an Excluded Account.

(b) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
Proceeds of any Pledge Agreement, the Guarantee or any other Loan Document, or
otherwise received by the Administrative Agent, against the Obligations (whether
matured or unmatured), such application to be in the following order:

1. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

2. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

 

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3. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

4. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

5. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

6. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

7. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Grantor
or to whomsoever else may be lawfully entitled to receive the same.

Notwithstanding the foregoing, no amounts received from any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor.

9. Remedies.

(a) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Security Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the PPSA. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may transfer all or any part of
the Collateral into the Administrative Agent’s name or the name of its nominee
or nominees, and/or may forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Secured Party or elsewhere
upon such terms and conditions (including by lease or by deferred payment
arrangement) as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk and/or may take such other actions as may be available under applicable
law. The Administrative Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to

 

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the extent permitted by law, upon any such private sale or sales, auction or
closed tender, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived or released. Each Grantor further agrees, at the Administrative
Agent’s request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select (on its behalf and on behalf of the Secured Parties), whether at any
Grantor’s premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties arising out of the exercise
by the Administrative Agent hereunder, including, without limitation, documented
fees and disbursements of counsel, to the payment in whole or in part of the
Obligations, in such order as provided in Section 8(b), and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, or required pursuant to clause (vi) of
Section 8(b), need the Administrative Agent account for the surplus, if any, to
the Grantors. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the exercise by the Administrative Agent
or any other Secured Party of any of its rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations (including the documented fees and
disbursements of counsel employed by the Administrative Agent or any Secured
Party to collect such deficiency to the extent provided therefor in Section 11.6
of the Credit Agreement).

(b) If an Event of Default shall have occurred and be continuing, the
Administrative Agent may appoint or reappoint by instrument in writing, any
Person or Persons, whether an officer or officers or an employee or employees of
any Grantor or not, to be an interim receiver, receiver or receivers
(hereinafter called a “Receiver”, which term when used herein shall include a
receiver and manager) of the Collateral of such Grantor (including any interest,
income or profits therefrom) and may remove any Receiver so appointed and
appoint another in his/her/its stead. Any such Receiver shall, to the extent
permitted by applicable law, so far as concerns responsibility for his/her/its
acts, be deemed the agent of such Grantor and not of the Administrative Agent,
and the Administrative Agent shall not be in any way responsible for any
misconduct, negligence or non-feasance on the part of any such Receiver or
his/her/its servants, agents or employees. Subject to the provisions of the
instrument appointing him/her/it, any such Receiver shall (i) have such powers
as have been granted to the Administrative Agent under this Section 9(b), and
(ii) shall be entitled to exercise such powers at any time that such powers
would otherwise be exercisable by the Administrative Agent under this
Section 9(b), which powers shall include the power to take possession of the
Collateral, to preserve the Collateral or its value, to carry on or concur in
carrying on all or any part of the business of such Grantor and to sell, lease,
license or otherwise dispose of or concur in selling, leasing, licensing or
otherwise disposing of the Collateral. To facilitate the foregoing powers, any
such Receiver may, to the exclusion of all others, including such Grantor, enter
upon, use and occupy all premises owned or occupied by such Grantor wherein the
Collateral may be situate, maintain the Collateral upon such premises, borrow
money on a secured or unsecured basis and use the Collateral directly in
carrying on such Grantor’s business or as security for loans or advances to
enable the Receiver to carry on such Grantor’s business or otherwise, as such
Receiver shall, in its reasonable discretion, determine. Except as may be
otherwise directed by the Administrative Agent, all money received from time to
time by such Receiver in carrying out his/her/its appointment shall be received
in trust for and be paid over to the Administrative Agent, and any surplus shall
be applied in accordance with applicable law. Every such Receiver may, in the
discretion of the Administrative Agent, be vested with all or any of the rights
and powers of the Administrative Agent.

 

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10. Subordination Provisions.

(a) Who May Exercise Remedies.

1. Subject to subsection (ii) below, until the date on which all Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, the Senior Parties
will have the exclusive right to:

(i) commence and maintain an Enforcement Action or exercise rights with respect
to a Lien, credit bid their debt, make any set-off, sue or participate in any
suit, action or proceeding to enforce payment or collection or enforce any
redemption or mandatory prepayment obligation, or commence any judicial
enforcement of rights and remedies;

(ii) subject to Section 19 hereof and Sections 10.10 and 11.5 of the Credit
Agreement, make determinations regarding the release or Disposition of, or
restrictions with respect to, the Collateral; and

(iii) otherwise enforce the rights and remedies of a secured creditor under the
PPSA and the Insolvency Laws of any applicable jurisdiction.

2. Notwithstanding Section 10(a)(i), a Subordinated Party may:

(i) file a proof of claim and any necessary responsive or defensive pleadings in
opposition of any notice, motion or other pleadings made by any Person objecting
to or otherwise seeking the disallowance of any Person objecting to or otherwise
seeking the disallowance of such claim, vote on a plan of reorganization
(including a vote to accept or reject a plan of partial or complete liquidation,
reorganization, arrangement, composition, compromise or extension), and make
other filings, arguments and motions, with respect to the Subordinated
Obligations and the Collateral in any Insolvency Proceeding commenced by or
against any Grantor, in each case in accordance with this Security Agreement;

(ii) take action to create, perfect, preserve or protect its Lien on the
Collateral, so long as such actions are not adverse to the priority status in
accordance with this Security Agreement of Liens on the Collateral securing the
Senior Obligations or Senior Parties’ rights to exercise remedies;

(iii) file necessary pleadings in opposition to a claim objecting to or
otherwise seeking the disallowance of a Subordinated Obligation or a Lien
securing the Obligation; and

(iv) join (but not exercise any control over) a judicial foreclosure or Lien
enforcement proceeding with respect to the Collateral initiated by the
Administrative Agent on behalf of the Senior Parties, to the extent that such
action could not reasonably be expected to materially interfere with the
Enforcement Action, but no Subordinated Party may receive any proceeds thereof
unless expressly permitted herein.

3. Except as otherwise expressly set forth in this Section 10(a), Subordinated
Parties may exercise rights and remedies as unsecured creditors, other than
initiating or joining in an involuntary Insolvency Proceeding with respect to a
Grantor against a Grantor that has

 

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guaranteed or granted Liens to secure the Subordinated Obligations, in
accordance with the terms of the Loan Documents and the Cash Management Bank
Agreements, Commodity OTC Agreements or Financial Hedging Agreements to which
the Subordinated Party is a party and applicable law; provided, that any
judgment Lien obtained by a Subordinated Party as a result of such exercise of
rights will be included in the Collateral and be subject to this Security
Agreement for all purposes (including in relation to the Senior Obligations).

(b) Manner of Exercise.

4. Subject to the terms of the Loan Documents, a Senior Party may take any
Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) without consultation with or the consent of any Subordinated Party;

(iii) regardless of whether an Insolvency Proceeding has been commenced;

(iv) regardless of any provision of any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement; and

(v) regardless of whether such exercise is adverse to the interest of any
Subordinated Party.

5. The rights of a Senior Party to enforce any provision of this Security
Agreement or any other Loan Document will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor, or

(ii) noncompliance by any Person other than such Senior Party with any provision
of this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement,

regardless of any knowledge thereof that any Senior Party or the Administrative
Agent may have or otherwise be charged with.

6. No Subordinated Party will contest, protest or object to, or take any action
to hinder, and each waives any and all claims with respect to, any Enforcement
Action by a Senior Party.

7. Subject to the terms of the Loan Documents and the applicable Cash Management
Bank Agreements, Commodity OTC Agreements or Financial Hedging Agreements,
following the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, a Subordinated Party may take any Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) regardless of whether an Insolvency Proceeding has been commenced; and

(iii) regardless of any provision of any Loan Document (other than this Security
Agreement).

 

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8. Following the date on which the Senior Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
been terminated, the rights of a Subordinated Party to enforce any provision of
this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement to which it is
party to will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor or any other Subordinated Party; or

(ii) noncompliance by any Person other than such Subordinated Party with any
provision of this Security Agreement, any other Loan Document or any Cash
Management Bank Agreement, Commodity OTC Agreement or Financial Hedging
Agreement to which it is party;

regardless of any knowledge thereof that any Subordinated Party or the
Administrative Agent may have or otherwise be charged with.

(c) Use of Cash Collateral and DIP Financing.

1. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
any use, sale or lease of cash, negotiable instruments, documents of title,
securities, deposit accounts, or other cash equivalents if the Administrative
Agent, on behalf of the Senior Parties, has consented in writing to such use,
sale or lease; provided, that the Subordinated Parties will have the right to
seek adequate protection permitted by Section 10(f) and if such adequate
protection is not granted, the Subordinated Parties will have the right to
object under this Section 10(c) solely on such basis.

2. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
any Borrower or any other Grantor obtaining credit or incurring debt secured by
Liens on the Collateral pursuant to any Insolvency Law (each, a “DIP Financing”)
if the Administrative Agent, on behalf of the Senior Parties, has consented in
writing to such DIP Financing; provided, that the Subordinated Parties will have
the right to seek adequate protection permitted by Section 10(f), and if such
adequate protection is not granted, the Subordinated Parties will have the right
to object under this Section 10(c) solely on such basis.

3. The amount of any customary “carve out” or other similar administrative
priority expense or claim consented to in writing by the Administrative Agent,
on behalf of the Senior Parties, to be paid prior to the payment in full of the
Senior Obligations (i) will be deemed to be, for purposes of Section 10(c)(i), a
use of cash collateral at the time consented to by the Administrative Agent, on
behalf of the Senior Parties, and (ii) will not be deemed to be, for purposes of
Section 10(c)(ii), a principal amount of DIP Financing at the time consented to
by the Administrative Agent, on behalf of the Senior Parties. In its capacity as
the holder of a Lien on the Collateral, no Subordinated Party will, or will
direct the Administrative Agent to, contest,

 

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protest or object to, and each Subordinated Party will be deemed to have
consented to, any court ordered priority charge granted in an Insolvency
Proceeding consented to in writing by the Administrative Agent, on behalf of the
Senior Parties, securing payment of an obligation to be paid prior to the
payment in full of the Senior Obligations. Notwithstanding the foregoing, the
Subordinated Parties may raise objections to the granting of any such court
ordered priority charge that could be raised in an Insolvency Proceeding by
unsecured creditors generally so long as not otherwise inconsistent with the
terms of this Security Agreement.

4. No Subordinated Party may, directly or indirectly, seek to provide DIP
Financing to the Borrowers or other Grantor secured by Liens equal or senior in
priority to the Liens securing any Senior Obligations; provided, that nothing in
this Section 10(c)(iv) shall prohibit any Subordinated Party which is also a
Senior Party from offering to provide or from providing a DIP Financing to the
extent permitted under Section 10(c)(ii); provided further that, if one or more
of Senior Parties do not offer to provide a DIP Financing to the extent
permitted under Section 10(c)(ii), then the Subordinated Parties may seek to
provide such DIP Financing permitted under Section 10(c)(ii), secured by Liens
equal or senior in priority to the Liens securing any Senior Obligations, and
the Senior Parties may object thereto.

(d) Sale of Collateral. In its capacity as the holder of a Lien on the
Collateral, no Subordinated Party will, or will direct the Administrative Agent
to, contest, protest or object to, and each Subordinated Party will be deemed to
have consented to, a sale, lease, exchange, transfer or other disposition of any
Collateral free and clear of its Liens or other interests pursuant to any
Insolvency Law or court order in an Insolvency Proceeding or, if the
Administrative Agent, on behalf of the Senior Parties, has consented in writing
to such Disposition; provided, that the Liens of the Subordinated Parties attach
to any net proceeds of such Disposition with the same priority and validity as
the Liens held by the Subordinated Parties on the assets disposed of in such
Disposition, and any such Liens will remain subject to the terms of this
Security Agreement. Notwithstanding the foregoing, the Subordinated Parties may
raise objections to any Disposition of Collateral that could be raised in an
Insolvency Proceeding by unsecured creditors generally so long as not otherwise
inconsistent with the terms of this Security Agreement.

(e) Relief from the Automatic Stay. Until the date on which the Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, no Subordinated
Party will, or will direct the Administrative Agent on its behalf to, seek
relief from the automatic stay or any other stay in any Insolvency Proceeding in
respect of the Collateral, without the prior written consent of the
Administrative Agent, on behalf of the Senior Parties, or oppose any request by
the Administrative Agent, on behalf of the Senior Parties, for relief from the
automatic stay or any other stay in any Insolvency Proceeding.

(f) Additional Protection. No Subordinated Party will, or will direct the
Administrative Agent on its behalf to, contest, protest or object to (x) any
request by a Senior Party for additional or replacement Collateral or other
protection; or (y) any objection by a Senior Party to any motion, relief, action
or proceeding based on a Senior Party claiming a lack of protection.

Notwithstanding the foregoing provisions in this Section 10(f), in any
Insolvency Proceeding:

1. except as permitted in this Section 10(f), the Subordinated Parties may not
seek or request additional or replacement Collateral or other protection and may
not seek relief from the automatic stay imposed by any Insolvency Law or other
relief based upon a lack of protection;

 

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2. if the Senior Parties (or any subset thereof) are granted protection in the
form of additional or replacement Collateral in connection with any motion
described in Section 10(c), then the Administrative Agent, on behalf of the
Subordinated Parties, may seek or request protection in the form of a Lien on
such additional or replacement Collateral for the benefit of the Subordinated
Parties, which Lien will be subordinated to the Liens at any time securing the
Senior Obligations and any DIP Financing (and all Obligations relating thereto)
on the same basis as the other Liens securing the Subordinated Obligations are
so subordinated to the Senior Obligations under this Security Agreement; and

3. any claim of any Subordinated Party in respect of protection as described in
Section 10(f)(ii) will be subordinate in right of payment to any claim of the
Senior Parties in respect of such protection; provided, that the Subordinated
Parties will be deemed to have agreed that any such junior claims may be paid
under any plan of reorganization in any form, having a value on the effective
date of such plan equal to the allowed amount of such claims.

(g) No Waiver. Subject to Section 10(a)(i) and (iii), nothing contained herein
will prohibit or in any way limit a Senior Party from objecting in any
Insolvency Proceeding or otherwise to any action taken by a Subordinated Party,
including the seeking by any Subordinated Party of adequate protection or the
asserting by a Subordinated Party of any of its rights and remedies under the
Loan Documents or any Cash Management Bank Agreements, Commodity OTC Agreements
or Financial Hedging Agreements to which it is a party or otherwise.

(h) Post-Petition Claims.

1. Neither the Administrative Agent on behalf of any Subordinated Party, nor any
other Subordinated Party, will oppose or seek to challenge any claim by a Senior
Party for allowance or payment in any Insolvency Proceeding of Senior
Obligations consisting of Post-Petition Claims, to the extent of the value of
the Senior Parties’ Lien on the Collateral, without regard to the existence of
the Lien of the Administrative Agent for the benefit of the Subordinated Party
on the Collateral.

2. Neither the Administrative Agent on behalf of any Senior Party, nor any other
Senior Party, will oppose or seek to challenge any claim by a Subordinated Party
for allowance and any payment permitted under Section 10(f) in any Insolvency
Proceeding of Subordinated Obligations consisting of Post-Petition Claims, to
the extent of the value of the Lien of the Administrative Agent for the benefit
of the Subordinated Party on the Collateral (after taking account of the
existence of the Lien of the Administrative Agent for the benefit of the Senior
Parties on the Collateral).

(i) Waiver. Each Subordinated Party waives any claim it may hereafter have
against any Senior Party arising out of the election of any Senior Party to have
the entirety of its claim in an Insolvency Proceeding (including any potential
deficiency claim) treated as a secured claim and/or out of any cash collateral
or financing arrangement or out of any grant of a security interest in
connection with the Collateral in any Insolvency Proceeding.

(j) Separate Grants of Security and Separate Classification. Each Subordinated
Party and each Senior Party acknowledges and agrees that because of, among other
things, their differing rights in the Collateral, the Subordinated Obligations,
to the extent they are determined to be secured claims within the meaning of any
applicable Insolvency Law, are fundamentally different from the Senior
Obligations and must be separately classified in any plan of reorganization in
an Insolvency Proceeding. Each Subordinated Party acknowledges and agrees that
the Subordinated Parties do not have a common

 

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interest with the Senior Parties. No Subordinated Party will seek in any
Insolvency Proceeding to be treated as part of the same class of creditors as
Senior Parties and will not oppose or contest any pleading by Senior Parties
seeking separate classification of their respective secured claims.

(k) Effectiveness in Insolvency Proceedings. The provisions of this Section 10
will be effective before, during and after the commencement of an Insolvency
Proceeding. All references herein to any Grantor will include such Grantor as a
debtor in possession and control of its assets and the subject of an Insolvency
Proceeding and any receiver, interim receiver, receiver and manager, trustee or
monitor for such Grantor in any Insolvency Proceeding. The relative rights of
the Senior Parties and the Subordinated Parties in respect of any Collateral or
proceeds thereof shall continue after the filing of such petition, notice of
intention, application, proposal or plan on the same basis as prior to the date
of such filing, subject to any court order approving the financing of, or use of
cash collateral by, any Grantor.

(l) No Third Party Beneficiaries. No Person (including, without limitation, any
Loan Party) is a third-party beneficiary of the provisions of this Section 10,
except that the Senior Parties and Subordinated Parties which are not parties
hereto shall be entitled to the benefits of the provisions of this Section 10.
This Section 10 shall be binding upon the Senior Parties and Subordinated
Parties and each Senior Party and Subordinated Party shall be deemed to have
agreed to the terms hereof, by virtue of its acceptance of the benefits of the
Senior Obligations and the Subordinated Obligations, respectively. No other
creditor of any Grantor has any rights under this Section 10, and no Grantor or
other Loan Party may rely on the terms hereof. Nothing in this Section 10
impairs the Obligations of the Borrowers and the other Grantors to pay
principal, interest, fees and other amounts as provided in, or otherwise comply
with the provisions of, the Loan Documents, the Cash Management Bank Agreements,
the Commodity OTC Agreements or the Financial Hedging Agreements.

11. [Reserved].

12. Grant of License to Use Patent, Trade-mark and Copyright Collateral. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under Section 9 hereof at such time as the Administrative Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Administrative Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to
use, license or sublicense any of the Copyrights, Patents, Designs and
Trade-marks, now owned or hereafter acquired by any Grantor, and wherever the
same may be located, and including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored. The use of
such license by the Administrative Agent shall be exercised, at the option of
the Administrative Agent for any purpose appropriate in connection with the
exercise of remedies hereunder, only upon the occurrence and during the
continuance of an Event of Default; provided that any license, sublicense or
other transaction entered into by the Administrative Agent in accordance
herewith shall be binding upon each Grantor notwithstanding any subsequent cure
of an Event of Default. The Administrative Agent agrees to apply the net
proceeds received from any license as provided in Section 8 hereof.

13. Limitation on Duties Regarding Presentation of Collateral.

(a) The Administrative Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. None of the Administrative Agent nor any
Secured Party nor any of their respective directors, officers, employees, agents
or advisors shall be liable for failure to demand, collect or realize upon all
or any part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the

 

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Collateral or any part thereof. The powers conferred on the Administrative Agent
and the other Secured Parties hereunder are solely to protect the Administrative
Agent’s and the Secured Parties’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees, agents or advisors shall be responsible to any Grantor for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct.

(b) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and Contracts (that constitute Collateral)
and neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Receivable or under any Contract, in each
case, that constitutes Collateral, by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Secured Party of any
payment relating to such Receivable or Contract pursuant hereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable or
under or pursuant to any Contract, in each case, that constitutes Collateral, to
make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Receivable or under any Contract, in each case, that constitutes
Collateral, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

14. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.

15. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the Borrowers shall be effected in the manner set forth in Section 11.2
of the Credit Agreement and (b) notices, requests and demands to or upon any
other Grantor shall be effected in the manner set forth in Section 15 of the
Guarantee.

16. Waivers by Grantor. Each Grantor waives, to the maximum extent permitted by
law, demand, presentment for payment, notice of non-payment, protest, notice of
protest, notice of intent to accelerate, notice of acceleration, or any other
notice or formalities of any kind (except notice of the time and place of public
or private sale of the Collateral and any notice specifically provided herein,
or in the other Loan Documents) to or upon such Grantor or any other Person (all
and each of which are hereby expressly waived) with respect to the Obligations,
and waives notice of the amount of the Obligations outstanding at any time.

17. Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Security Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

18. Indemnification. Each Grantor agrees, jointly and severally, to (i) save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses

 

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(including, without limitation, reasonable and documented fees and expenses of
counsel) with respect to, or resulting from, any delay in paying, any and all
Other Taxes which may be payable or determined to be payable with respect to any
of the Collateral and (ii) indemnify each Secured Party as set forth in
Section 11.6(e) of the Credit Agreement (or as may be applied to such Grantor
pursuant to Section 2(c) of the Guarantee). The agreements in this Section 18
shall survive the termination of this Security Agreement and the payment of the
Loans, Reimbursement Obligations and all other amounts payable under the Loan
Documents.

19. Termination and Release.

(a) In addition to, and not in limitation of, the release provisions contained
in Sections 10.10 and 11.5 of the Credit Agreement, this Security Agreement
(including as to any power of attorney, authorization or agency granted herein)
and all other security interests granted hereby shall terminate when all the
Obligations have been paid in full (other than inchoate claims in respect of
indemnities for which no claim has been made or is known to any Grantor at the
time all other Obligations have been paid in full), no Letters of Credit remain
outstanding (unless such Letters of Credit have been Cash Collateralized) and
the Commitments no longer remain in effect.

(b) In connection with any termination or release pursuant to paragraph (a) or
Sections 10.10 or 11.5 of the Credit Agreement, the Administrative Agent shall
promptly execute and deliver to each Grantor, at such Grantor’s expense, all
PPSA financing change statements and similar documents that such Grantor shall
reasonably request to evidence such termination or release, and will duly assign
and transfer to such Grantor, such of the Collateral that may be in the
possession of the Administrative Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Security Agreement. Any execution
and delivery of documents pursuant to this Section 19 shall be without recourse
to or representation or warranty by the Administrative Agent or any other
Secured Party.

20. Severability. Any provision of this Security Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

21. Paragraph Headings. The paragraph headings used in this Security Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

22. No Waiver; Cumulative Remedies. None of the Administrative Agent nor any
other Secured Party shall by any act (except by a written instrument pursuant to
Section 23 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or any other such Secured Party
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.

 

CANADIAN SECURITY AGREEMENT

 

-30-

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23. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Grantor and the Administrative Agent (subject to the Administrative Agent’
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement and, solely to the extent such instrument
waives, amends, supplements or otherwise modifies Section 10, the written
consent of each Subordinated Party adversely affected thereby); provided that
any provision of this Security Agreement may be waived by the Administrative
Agent in a written instrument executed by the Administrative Agent (subject to
the Administrative Agent obtaining the requisite consents of the applicable
Secured Parties pursuant to Section 11.1 of the Credit Agreement and, solely to
the extent such instrument waives, amends, supplements or otherwise modifies
Section 10, the written consent of each Subordinated Party adversely affected
thereby); provided further that, reasonable updates and modifications to the
schedules hereto shall not require the consent of the Administrative Agent or
any other Secured Party. This Security Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent, and the other Secured Parties and their respective
successors and assigns. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF
CANADA APPLICABLE IN THE PROVINCE OF ONTARIO.

24. Additional Grantors. Each Subsidiary of any Loan Party which is required
pursuant to Section 7.13 of the Credit Agreement to become party to this
Security Agreement shall become a Grantor for all purposes of this Security
Agreement upon execution and delivery by such Subsidiary of an Addendum to the
Security Agreement in the form of Annex E hereto.

25. Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Loan Documents to which it is
a party, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the Province of
Ontario, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address set forth in (a) Section 11.2 of the Credit Agreement, with respect to
the Borrowers or (b) Section 15 of the Guarantee, with respect to each other
Grantor, or at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

26. Waiver of Certain Damages. Each Grantor and the Administrative Agent (on
behalf of themselves and each Secured Party) hereby waives, to the maximum
extent not prohibited by law, any right it may have to claim or recover in any
legal action or proceeding referred to in Section 25 any special, exemplary,
punitive or consequential damages.

 

CANADIAN SECURITY AGREEMENT

 

-31-

--------------------------------------------------------------------------------

27. WAIVER OF JURY. EACH OF THE GRANTOR AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

28. Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security Agreement on any number of separate counterparts
(including by facsimile transmission or other electronic transmission of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Security Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Security Agreement signed by all
the parties shall be lodged with the U.S. Borrower and the Administrative Agent.

[SIGNATURE PAGE FOLLOWS]

 

CANADIAN SECURITY AGREEMENT

 

-32-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to be duly
executed and delivered as of the date first above written.

 

KILDAIR SERVICE LTD., as a Grantor By:  

 

  Name:   Title:

 

CANADIAN SECURITY AGREEMENT

 

-33-

--------------------------------------------------------------------------------

WINTERGREEN TRANSPORT CORPORATION ULC, as a Grantor By:  

 

  Name:   Title:

 

CANADIAN SECURITY AGREEMENT

 

-34-

--------------------------------------------------------------------------------

TRANSIT P.M. ULC, as a Grantor By:  

 

  Name:   Title:

 

CANADIAN SECURITY AGREEMENT

 

-35-

--------------------------------------------------------------------------------

SPRAGUE RESOURCES ULC, as a Grantor By:  

 

  Name:   Title:

 

CANADIAN SECURITY AGREEMENT

 

-36-

--------------------------------------------------------------------------------

Schedule I

NAMES, FORM OF ORGANIZATION, AND LOCATION

(AND JUSTIFICATION THEREFOR) OF GRANTORS

 

CANADIAN SECURITY AGREEMENT

 

Sch. I-1

--------------------------------------------------------------------------------

Schedule II

INTELLECTUAL PROPERTY

 

   Sch. II-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Schedule III

INVENTORY AND EQUIPMENT

 

   Sch. III-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Schedule IV

MATERIAL CONTRACTS

 

   Sch. IV-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Schedule V

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

   Sch. V-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

ANNEX A

FORM OF

PATENT SECURITY AGREEMENT

PATENT SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favour of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                                        , as Administrative Agent (in such
capacity, the “Administrative Agent”), under the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among SPRAGUE
OPERATING RESOURCES LLC (the “U.S. Borrower”), KILDAIR SERVICE LTD.,
(“Kildair”), SPRAGUE RESOURCES ULC (“AcquireCo” and, together with Kildair, the
“Initial Canadian Borrowers”), the several banks and other financial
institutions or entities from time to time parties thereto, the Administrative
Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH as Canadian agent (in such
capacity, the “Canadian Agent”) and the other agents party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered a Canadian Security Agreement, dated as of December 9, 2014, in favour
of the Administrative Agent (as amended, supplemented, restated or otherwise
modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Patents set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Patents constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Patent Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the Canadian
Intellectual Property Office. The security interest granted hereby has been
granted to the Administrative Agent in connection with the Security Agreement
and is expressly subject to the terms and conditions thereof. The Security
Agreement (and all rights and remedies of the Administrative Agent thereunder)
shall remain in full force and effect in accordance with its terms.

 

   Annex A-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein. In the event of any conflict between this Agreement and
the Security Agreement, the terms of the Security Agreement shall govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario.

[Remainder of page intentionally left blank]

 

   Annex A-2    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

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

 

[GRANTOR] By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

 

   Annex A-3    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Exhibit A to Annex A

PATENTS

 

Serial No. or

Patent No.

  

Owner

  

Issue or File Date

  

Title

                          

PATENT APPLICATIONS

 

Serial No.

  

Owner

  

Filing Date

                 

 

   Annex A-4    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

ANNEX B

FORM OF

TRADE-MARK SECURITY AGREEMENT

TRADE-MARK SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favour of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                                        , as Administrative Agent (in such
capacity, the “Administrative Agent”), under the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among SPRAGUE
OPERATING RESOURCES LLC (the “U.S. Borrower”), KILDAIR SERVICE LTD.,
(“Kildair”), SPRAGUE RESOURCES ULC (“AcquireCo” and, together with Kildair, the
“Initial Canadian Borrowers”), the several banks and other financial
institutions or entities from time to time parties thereto, the Administrative
Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian agent (in such
capacity, the “Canadian Agent”), and the other agents party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered a Canadian Security Agreement, dated as of December 9, 2014, in favour
of the Administrative Agent (as amended, supplemented, restated or otherwise
modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Trade-marks set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Trade-marks constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto and all goodwill
related thereto) (collectively, the “Trade-mark Collateral”), to the
Administrative Agent, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the Canadian
Intellectual Property Office. The security interest granted hereby has been
granted to the Administrative Agent in connection with the Security Agreement
and is expressly subject to the terms and conditions thereof. The Security
Agreement (and all rights and remedies of the Administrative Agent thereunder)
shall remain in full force and effect in accordance with its terms.

 

   Annex B-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trade-mark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario.

[Remainder of page intentionally left blank]

 

   Annex B-2    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

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

 

[GRANTOR] By:  

 

  Name:   Title: [GRANTOR] By:  

 

  Name:   Title:

 

   Annex B-3    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Exhibit A to Annex B

TRADE-MARKS

 

Serial No.

or Registration No.

  

Issue or File Date

  

Mark

  

Owner

                          

TRADE-MARK APPLICATIONS

 

Serial Number

  

Filing Date

  

Mark

  

Owner

                          

 

   Annex B-4    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

ANNEX C

FORM OF COPYRIGHT SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favour of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                                        , as Administrative Agent (in such
capacity, the “Administrative Agent”), under the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among SPRAGUE
OPERATING RESOURCES LLC (the “U.S. Borrower”), KILDAIR SERVICE LTD.,
(“Kildair”), SPRAGUE RESOURCES ULC (“AcquireCo” and, together with Kildair, the
“Initial Canadian Borrowers”), the several banks and other financial
institutions or entities from time to time parties thereto, the Administrative
Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian agent (in such
capacity, the “Canadian Agent”), and the other agents party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for, the account of the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered a Canadian Security Agreement, dated as of December 9, 2014, in favour
of the Administrative Agent (as amended, restated , supplemented or otherwise
modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Copyrights set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Copyrights constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Copyright Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the Canadian
Intellectual Property Office. The security interest granted hereby has been
granted to the Administrative Agent in connection with the Security Agreement
and is expressly subject to the terms and conditions thereof. The Security
Agreement (and all rights and remedies of the Administrative Agent thereunder)
shall remain in full force and effect in accordance with its terms.

 

   Annex C-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario.

[Remainder of page intentionally left blank]

 

   Annex C-2    CANADIAN SECURITY AGREEMENT

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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized, as of the date first
written above.

 

[NAME OF GRANTOR] By:  

 

  Name:   Title: [NAME OF GRANTOR] By:  

 

  Name:   Title:

 

   Annex C-3    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Exhibit A to Annex C

COPYRIGHTS

 

Registration No.

  

Registration Date

  

Title of Work

  

Owner

                          

 

   Annex C-4    CANADIAN SECURITY AGREEMENT

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ANNEX D

FORM OF DESIGN SECURITY AGREEMENT

DESIGN SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favour of
JPMORGAN CHASE BANK, N.A., having its principal place of business at
                                        , as Administrative Agent (in such
capacity, the “Administrative Agent”), under the Amended and Restated Credit
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among SPRAGUE
OPERATING RESOURCES LLC (the “U.S. Borrower”), KILDAIR SERVICE LTD.,
(“Kildair”), SPRAGUE RESOURCES ULC (“AcquireCo” and, together with Kildair, the
“Initial Canadian Borrowers”), the several banks and other financial
institutions or entities from time to time parties thereto, the Administrative
Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian agent (in such
capacity, the “Canadian Agent”), and the other agents party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for, the account of the Borrowers upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered a Canadian Security Agreement, dated as of December 9, 2014, in favour
of the Administrative Agent (as amended, restated, supplemented or otherwise
modified from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Designs set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Designs constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Design Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the Canadian
Industrial Design Office. The security interest granted hereby has been granted
to the Administrative Agent in connection with the Security Agreement and is
expressly subject to the terms and conditions thereof. The Security Agreement
(and all rights and remedies of the Administrative Agent thereunder) shall
remain in full force and effect in accordance with its terms.

 

   Annex D-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario.

[Remainder of page intentionally left blank]

 

   Annex D-2    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized, as of the date first
written above.

 

[NAME OF GRANTOR] By:  

 

  Name:   Title: [NAME OF GRANTOR] By:  

 

  Name:   Title:

 

   Annex D-3    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

Exhibit A to Annex D

INDUSTRIAL DESIGNS

 

Title

  

Owner

  

Registration No.

  

Registration Date

                          

 

   Annex D-4    CANADIAN SECURITY AGREEMENT

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ANNEX E

ADDENDUM TO SECURITY AGREEMENT

Each of the undersigned, [NAME OF NEW SUBSIDIARY] (each a “New Grantor”,
together the “New Grantors”):

agrees to all of the provisions of the Canadian Security Agreement, dated as of
December 9, 2014 (as amended, supplemented or otherwise modified prior to the
date hereof, the “Security Agreement”), made by KILDAIR SERVICE LTD., and each
other party listed on Schedule I thereto (together with each Person which may,
from time to time, become party thereto as a Grantor, each a “Grantor”,
collectively, the “Grantors”), JPMORGAN CHASE BANK, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”), under the Amended and
Restated Credit Agreement, dated as of December 9, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among SPRAGUE OPERATING RESOURCES LLC (the “U.S. Borrower”), KILDAIR SERVICE
LTD., (“Kildair”), SPRAGUE RESOURCES ULC (“AcquireCo” and, together with
Kildair, the “Initial Canadian Borrowers”), the several banks and other
financial institutions or entities from time to time parties thereto, the
Administrative Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian
agent (in such capacity, the “Canadian Agent”), and the other agents party
thereto.

(A) effective on the date hereof, becomes a party to the Security Agreement, as
a Grantor, with the same effect as if the undersigned were an original signatory
to the Security Agreement and with the representations and warranties contained
therein being deemed to be made by it on and as of the date hereof;

(B) as additional collateral security for the prompt and complete payment when
due (whether at stated maturity, by acceleration or otherwise) of the
Obligations and in order to induce the Lenders to make and maintain outstanding
their Loans under the Credit Agreement and the other Loan Documents, hereby
grants to the Administrative Agent, for the benefit of the Secured Parties, a
security interest in all of the property listed in Section 2 of the Security
Agreement now owned or at any time hereafter acquired by such New Grantor or in
which such New Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the “New Grantor Collateral”);

(C) represents and warrants that the information provided on the attached
schedules disclose, with respect to it, all information that is required under
the Security Agreement to be disclosed by a Grantor; and

(D) the Schedules to the Security Agreement are hereby supplemented by (a) if a
supplement to any such Schedule is attached to this Addendum to Security
Agreement, by including the items listed on such supplement to such Schedule in
such Schedule, and (b) if any such Schedule refers to the Perfection Certificate
delivered by the Grantors on the Restatement Effective Date, by deeming
incorporated in such Perfection Certificate the Supplement to Perfection
Certificate delivered by the New Grantor to the Administrative Agent on the date
of this Addendum to Security Agreement.

Terms defined in the Security Agreement and the Credit Agreement shall have such
defined meanings when used herein. This Addendum to Security Agreement and the
rights and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the laws of the Province of
Ontario and the federal laws of Canada applicable in the Province of Ontario.

 

   Annex E-1    CANADIAN SECURITY AGREEMENT

--------------------------------------------------------------------------------

By its acceptance hereof, each undersigned New Grantor hereby ratifies and
confirms its respective obligations under the Security Agreement, as
supplemented hereby.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Addendum to Security Agreement, all as of the day and year written below.

 

[NAME OF NEW GRANTOR] By:  

 

  Name:   Title:

                 , 20    

 

ACCEPTED AND AGREED: JPMORGAN CHASE BANK, N.A. as Administrative Agent By:  

 

  Name:   Title:

 

   Annex E-2    CANADIAN SECURITY AGREEMENT

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[Schedule 1 to Annex E]

NAME, FORM OF ORGANIZATION AND LOCATION OF NEW GRANTOR

 

CANADIAN SECURITY AGREEMENT

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[Schedule 2 to Annex E]

INTELLECTUAL PROPERTY

 

Registration No.

  

Country

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

                                   

INTELLECTUAL PROPERTY LICENSES

 

Registration No.

  

Owner

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

                                   

INTELLECTUAL PROPERTY APPLICATIONS

 

Description/Title

  

File Date

  

Application No.

                 

 

CANADIAN SECURITY AGREEMENT

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[Schedule 3 to Annex E]

INVENTORY AND EQUIPMENT

 

CANADIAN SECURITY AGREEMENT

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[Schedule 4 to Annex E]

MATERIAL CONTRACTS

 

CANADIAN SECURITY AGREEMENT

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[Schedule 5 to Annex E]

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

CANADIAN SECURITY AGREEMENT

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ANNEX F

INVENTORY ACKNOWLEDGMENT CERTIFICATE

[Date]

[NAME OF BAILEE/CONSIGNEE]

[ADDRESS]

Ladies and Gentlemen:

[NAME OF GRANTOR] (the “Grantor”) hereby notifies and acknowledges to [NAME OF
BAILEE/CONSIGNEE] (the “Company”) that it has granted to JPMORGAN CHASE BANK,
N.A., as Administrative Agent for the benefit of the Secured Parties (the
“Administrative Agent”) a security interest in all assets of the Grantor and the
proceeds thereof currently held or which may be delivered from time to time to
the Company at its facility located at
[                                        ] (the “Product”).

The Grantor remains the owner of the Product and the Company can follow any and
all instructions of the Grantor until the Company shall have received written
notice from the Administrative Agent (a “Control Notice”) instructing the
Company to no longer take instruction from the Grantor. After receipt of a
Control Notice, the Grantor irrevocably authorizes and instructs the Company to
take instructions only from the Administrative Agent with respect to the Product
and any warehouse receipts or documents of title related thereto. The Company
shall be fully protected in relying upon any Control Notice and any subsequent
instructions from the Administrative Agent. The Grantor hereby irrevocably
agrees that delivery of any or all of the Product by the Company in accordance
with any such notification and instruction from the Administrative Agent shall
constitute delivery of such Product to a person whose receipt was rightful as
against the Grantor, notwithstanding that the Grantor is the holder or the
person to which delivery is to be made under or pursuant to any warehouse
receipt or other document of title.

By countersigning below, the Company (a) acknowledges the Administrative Agent’s
security interest in the Product and agrees to hold the Product for the benefit
of the Administrative Agent, (b) confirms that no party has advised the Company
that such party claims a security interest or lien in the Product or requested
the Company to hold the Product, or any portion thereof, for its benefit, and
(c) agrees that, without prior notice to the Administrative Agent, the Company
will not issue negotiable warehouse receipts, bills of lading or documents of
title covering the Product.

 

Sincerely, [GRANTOR], as Grantor By:  

 

  Name:   Title:

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ACKNOWLEDGED AND AGREED:           JPMORGAN CHASE BANK, N.A., as Administrative
Agent     By:  

 

      Name:       Title: ACKNOWLEDGED AND AGREED:           [NAME OF
BAILEE/CONSIGNEE]     By:  

 

      Name:       Title: INSERT CONTACT INFORMATION      

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Exhibit B-3

to Credit Agreement

FORM OF DUTCH RECEIVABLES PLEDGE AGREEMENT

THIS DEED is dated 9 December 2014 and made between:

 

1. SPRAGUE RESOURCES COÖPERATIEF U.A., a cooperative with excluded liability
(coöperatie met uitgesloten aansprakelijkheid) having its official seat
(statutaire zetel) in Amsterdam, the Netherlands and registered with the Dutch
trade register under number 61938459 (the “Pledgors” and each a “Pledgor”); and

 

2. JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent of the
other Secured Parties, as pledgee (the “Pledgee”).

WHEREAS

 

A. The Pledgor has or will have monetary payment obligations to the Secured
Parties under or in connection with the Loan Documents.

 

B. The Pledgee acts as Administrative Agent (as defined in the Credit Agreement,
defined hereafter) for the benefit of the Lender Parties (as defined in the
Credit Agreement, defined hereafter) and, for the purpose of the creation of the
rights of pledge in favour of the Pledgee in its capacity as Administrative
Agent, the Pledgor will have monetary payment obligations to the Pledgee under
or in connection with its Parallel Debt.

 

C. The Parties have agreed that the Pledgor will create the rights of pledge in
favour of the Pledgee as security for the monetary payment obligations of the
Pledgor to the Pledgee under or in connection with its Parallel Debt.

IT IS AGREED as follows:

DEFINITIONS AND INTERPRETATION

Definitions Credit Agreement

Unless otherwise defined in this deed, capitalised words and expressions defined
in the Credit Agreement have the same meanings when used in this deed.

 

1

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Definitions

Capitalised terms used in this deed have the following meanings:

 

“Account”    an account of the Pledgor listed in Schedule 1 as “Account” and
each other account held or to be held by the Pledgor with a bank in the
Netherlands. “Bank”    a bank listed in Schedule 1 as “Bank” and, upon signing
of a Supplemental Pledge Deed in respect of an Additional Bank as defined in
that Supplemental Pledge Deed, that Additional Bank. “Bank Receivables”    all
Receivables of the Pledgor owing by a Bank , including Receivables which are or
will be reflected from time to time in the balance of any Account of the
Pledgor. “Business Day”    a Business Day as defined in the Credit Agreement.
“Clause”    a clause in this deed. “Collateral”    all Bank Receivables,
Insurance Receivables and Intercompany Receivables. “Credit Agreement”    the
amended and restated credit agreement dated 9 December 2014 (as amended,
restated, supplemented or otherwise modified from time to time), among Sprague
Operating Resources LLC, Sprague Resources ULC, and Kildair Service Ltd., as
borrowers, the several banks and other financial institutions or entities from
time to time) parties therto, the Administrative Agent and certain other agents
a party thereto. “Debtor”    each Bank with respect to the Bank Receivables,
each Insurance Company with respect to the Insurance Receivables and each Group
Company with respect to the Intercompany Receivables. “Enforcement Event”    a
default within the meaning of section 3:248 NCC with respect to the payment of
the Secured Obligations by the Pledgor. “Event of Default”    an Event of
Default as defined in the Credit Agreement. “Foreign Account”    Any account
held or to be held by the Pledgor with a bank other than in the Netherlands.
“Group”    the US Borrower and each of its Subsidiaries.

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“Group Company”    each group company listed in Schedule 1 as “Group Company”
and, upon signing of a Supplemental Pledge Deed in respect of an Additional
Group Company as defined in that Supplemental Pledge Deed, that Additional Group
Company. “Guarantee Agreement”    the Guarantee as defined in the Credit
Agreement “Insurance Company”    an insurance company listed in Schedule 1 as
“Insurance Company” and, upon signing of a Supplemental Pledge Deed in respect
of an Additional Insurance Company as defined in that Supplemental Pledge Deed,
that Additional Insurance Company. “Insurance Policy”    an insurance policy
listed in Schedule 1 as an “Insurance Policy”. “Insurance Receivables”    all
Receivables owing by an Insurance Company, including but not limited to all
Receivables under or in connection with an Insurance Policy. “Intercompany
Receivables”    all Receivables owing by any Group Company to the Pledgor.
“Lender Party”    a Lender Party as defined in the Credit Agreement. “Loan
Document”    a Loan Document as defined in the Credit Agreement. “NCC”    the
Netherlands Civil Code. “Parallel Debt”    The Parallel Debt as defined in
clause 28 (Parallel debt) of the Guarantee Agreement. “Party”    a party to this
deed. “Receivables”    all present and future rights of the Pledgor as creditor
in relation to a Debtor for the payment of an amount (including rights to
(re)payment of principal, payment of interest, payment of other amounts and
rights of recourse or subrogation in relation to the rights of that Debtor)
under or in connection with any agreement or other legal relationship with that
Debtor. “Schedule”    a schedule to this deed. “Secured Obligations”    all
obligations consisting of monetary payment obligations (vorderingen tot betlaing
van een geldsom) (whether present or future, actual or contingent) by the

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   Pledgor to the Pledgee under or in connection with (i) clause 28 (Parallel
debt) of the Guarantee Agreement and (ii) this deed (other than in connection
with its obligations referred to under (i)) but only to the extent such payment
obligations are due to the Pledgee itself and not any of its assignees.
“Supplemental Pledge Deed”    a deed of pledge substantially in the form set out
in Schedule 2 or any other form the Pledgee may deem appropriate. “U.S. Security
Agreement”    the U.S. Security Agreement as defined in the Credit Agreement.

Construction

 

  (a) A reference to any “Collateral” is a reference to that Collateral in whole
or in part and includes all rights attached to such Collateral, including
dependent rights and ancillary rights.

 

  (b) A reference to the “Pledgee” is also a reference to any successor or
assignee of the Pledgee and a reference to the “Pledgor” is also a reference to
any successor or assignee of the Pledgor.

 

  (c) A reference to the “registration” of this deed and a reference to
“register” is a reference to the presentation for registration of this deed to
the Rotterdam office of the Tax Authorities which provide registration services.

 

  (d) A reference to an authority to “collect” any Collateral is a reference to
the collection of monetary payment obligations (to the extent the Collateral
consists of rights to receive payment of an amount) and to the collection of
other obligations (to the extent the Collateral consists of rights other than
rights to receive payment of an amount). A reference to an authority to
“collect” Collateral is also a reference to a right or authority to demand, by
legal proceedings or otherwise, payment by the Debtor of that Collateral.

 

  (e) A reference to “this deed” is, unless the context requires otherwise, also
a reference to any Supplemental Pledge Deed.

 

  (f) A reference to a “right of pledge” is, unless the context requires
otherwise, a reference to a right of pledge purported to be created under this
deed over each individual asset falling within the scope of the definition of
Collateral.

 

  (g) A reference to a “default” with respect to the payment of the Secured
Obligations is a reference to any non-payment of the Secured Obligations when
due, without any reminder letter or notice of default being required.

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  (h) An Event of Default is “continuing” if it has not been cured or waived by
the Lender Party authorised to do so.

 

  (i) Words denoting the singular shall include the plural and vice versa.

 

  (j) English language words used in this deed intend to describe Netherlands
legal concepts only and the consequences of the use of those words in English
law or any other foreign law are to be disregarded.

AGREEMENT, CREATION AND REGISTRATION OF PLEDGE

Agreement to pledge Collateral

As security for the payment when due of the Secured Obligations, the Pledgor
agrees with the Pledgee to grant to the Pledgee a right of pledge over its
Collateral.

Creation of pledge over Collateral

As security for the payment when due of the Secured Obligations, the Pledgor, as
the case may be in advance, hereby grants to the Pledgee a right of pledge over
its Collateral. The Pledgee, as the case may be in advance, hereby accepts this
right of pledge.

Creation of pledge over receivables with future debtors

The Pledgor will sign a Supplemental Pledge Deed in connection with one or more
additional:

 

  (i) accounts (other than Excluded Accounts (as defined in the Credit
Agreement) or Foreign Accounts) opened by the Pledgor with a bank other than a
Bank;

 

  (ii) insurance policies under which the Pledgor becomes a beneficiary with an
insurance company other than an Insurance Company; and

 

  (iii) intercompany loans or other facilities which the Pledgor makes available
to a future Group Company,

in each case within five Business Days (or such other date as may be agreed by
the Administrative Agent and the Pledgor) of opening such additional account,
agreeing to such additional insurance policy or granting such additional
intercompany loan or other facility as referred to above. The Pledgee hereby in
advance accepts these rights of pledge to be created under a Supplemental Pledge
Deed.

Registration of pledge

 

  (a) The Pledgee will immediately upon signing of this deed register this deed
with the Dutch tax authorities and shall promptly provide the Pledgor (a) with
documentation evidencing that this deed has been offered for registration with
the Dutch tax authorities and (b) upon receipt of a registered copy of this
deed, with such registered copy.

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  (b) The Pledgor will register each Supplemental Pledge Deed on the date of
signing of that deed and will provide the Pledgee immediately with a copy of
that executed Supplemental Pledge Deed, a copy of the letter whereby that
Supplemental Pledge Deed has been offered for registration and, upon receipt of
evidence of registration, immediately with a copy of that registered
Supplemental Pledge Deed.

Security intent

 

  (a) The Pledgor confirms and agrees that any right of pledge so created is
intended to extend from time to time to any (however fundamental) of the
following or any combination thereof;

 

  (i) variation, amendment, modification, novation, restatement, increase,
extension or addition of or to any of the Loan Documents or to any agreement or
document (under whatever name) including without limitation by way of increase,
reduction, alteration of the purpose or other amendment of the facilities made
available under it, addition of new facilities, any rescheduling of indebtedness
incurred thereunder;

 

  (ii) accession or retirement of the parties to any of the Loan Documents;

 

  (iii) extension of any commitment (or its maturity or availability) or any
redenomination of a commitment into another currency under any Loan Document;

 

  (iv) any deferral or redenomination of any amount owing under any Loan
Document;

 

  (v) any facility, tranche or amount made available under any of the Loan
Documents in any currency or currencies after the date of this deed for the
purposes of or in connection with any of the following: business acquisitions of
any nature; increasing working capital; enabling investor distributions to be
made; carrying out restructurings; refinancing existing facilities; refinancing
any other indebtedness; making facilities available to new borrowers; any other
variation or extension of the purposes for which any such facility, tranche or
amount might be made available from time to time (an “Incremental Facility”);
and/or

 

  (vi) any increase in any margin, fee or commission or any other amount owing
or accruing under any Loan Document or any fees, costs and/or expenses
associated with any of the foregoing.

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  (b) The Pledgor confirms and agrees that any right of pledge so created is
intended not to be affected by any amendment, novation, supplement, extension or
restatement of any Loan Document or any combination of the foregoing (and
including by way of an Incremental Facility); and

 

  (c) The Pledgor confirms and agrees that if the Pledgee would transfer the
Parallel Debt to a successor security agent (the “New Administrative Agent”) in
accordance with the terms of the Loan Documents, it is intended that:

 

  (i) claims of the New Administrative Agent arising after the date of such
transfer and falling within the definition of Secured Obligations shall be
secured by the right of pledge;

 

  (ii) Collateral acquired by the Pledgor after the date of such transfer shall
be subject to the right of pledge (and the Pledgor agrees and confirms that any
right of pledge created by the Pledgor in advance must be deemed to have been
created also for the benefit of such New Administrative Agent); and

 

  (iii) any power of attorney or waiver granted to the Pledgee under this deed
must be deemed to have been created also for the benefit of such New
Administrative Agent and can be enforced against the Pledgor by the New
Administrative Agent.

REPRESENTATIONS AND WARRANTIES

Representations and warranties

The Pledgor represents and warrants to the Pledgee that:

it has full title to the Collateral to the extent acquired prior to the moment
of this representation and it has full power to dispose of and encumber that
Collateral;

except as permitted under the Loan Documents, the Collateral is not subject to
any limited right or other encumbrance and no offer has been made or agreement
entered into to transfer or encumber, whether or not in advance, the Collateral
and no attachment has been levied on the Collateral;

the Collateral is freely transferable and may be made subject to the rights of
pledge;

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it does not hold any account numbers with any bank other than the Accounts
(other than any Excluded Accounts (as defined in the Credit Agreement));

it does not have any insurance policies other than the Insurance Policies;

the Group Companies constitute all companies which form part of the Group;

the notification details for each Debtor set forth in Schedule 1 are complete
and correct;

Times when representations made

The representations and warranties in Clause 0 (Representations and warranties)
are deemed to be repeated by the Pledgor on the date hereof and on each date
specified in the Credit Agreement. Each representation and warranty deemed to be
made after the date of this deed shall be deemed to be made by reference to the
facts and circumstances existing at the date the representation and warranty is
deemed to be made.

UNDERTAKINGS

Information

At the Pledgee’s first reasonable request and in such form as the Pledgee may
designate, the Pledgor must, subject to the terms of the Credit Agreement,
provide all information, evidence and documents relating to the Collateral which
the Pledgee reasonably may deem necessary to exercise its rights under this
deed.

Inspection of books and records

The Pledgee shall at all times, subject to Section 7.6 of the Credit Agreement,
be granted access to the premises of the Pledgor to inspect the Pledgor’s books
and records relating to the Collateral.

Duty to notify

The Pledgor shall notify the Pledgee immediately of all circumstances of which
it becomes aware which could reasonably be expected to affect the interests of
the Pledgee under this deed, including but not limited to:

an application being filed for the Pledgor’s bankruptcy or (provisional)
suspension of payments;

the Pledgor being declared bankrupt, being granted (provisional) suspension of
payments, being unable to pay its debts in respect of taxes or social security
premiums or planning to notify the relevant authorities thereof;

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an attachment being levied on any Collateral and/or any claim from any third
party with respect to any Collateral; and

an event analogous to any of the above occurring under the laws of any other
jurisdiction.

Disposal and negative pledge

Unless permitted under the Credit Agreement, the Pledgor shall not without the
prior written consent of the Pledgee:

sell, transfer or otherwise dispose of the Collateral in whole or in part and
whether or not in advance;

create or permit to subsist whether or not in advance any limited right or other
encumbrance on the Collateral other than as envisaged under this deed or permit
to subsist any attachment over the Collateral; or

other than in the ordinary course of business and on arm’s length terms vary the
term or extend, release, determine, rescind or grant time for payment in respect
of the Collateral if that variation, extension, release, determination,
rescission or granting of time for payment in respect of the Collateral would
have a material adverse effect on the rights of pledge.

Further assurances

 

  (a) At the Pledgee’s first request, the Pledgor shall at its own expense
execute any further encumbrances and assurances in favour of, or for the benefit
of, the Pledgee and perform all acts as the Pledgee may reasonably deem
necessary to create, perfect or protect the rights of pledge purported to be
created or to exercise or have the full benefit of its rights under or in
connection with this deed (including the right to enforce these rights).

 

  (b) When any Foreign Account (other than any Excluded Account (as defined in
the Credit Agreement)) is opened by the Pledgor, the Pledgor shall notify the
Pledgee as soon as practicable and the Pledgor shall with respect to that
Foreign Account, if so requested by the Pledgee in its sole discretion shall
cause an Account Control Agreement (as defined in the Credit Agreement) to be
executed and delivered by the Pledgor and the bank, broker or other person
maintaining such Foreign Account.

NOTIFICATION TO DEBTORS AND WAIVER

The Pledgor will immediately upon the signing of this deed and of each
Supplemental Pledge Deed send a notice substantially in the form of Schedule 3
to each Debtor other than an Insurance Company. The Pledgee is authorised to
notify:

 

  (i) any Debtor other than an Insurance Company of the rights of pledge; and

 

  (ii) upon the occurrence of an Event of Default, any Insurance Company.

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The Pledgor will use all reasonable endeavours to ensure that the Banks will
release any right of pledge, waive any right to create a right of pledge and any
right to set-off and suspension that Bank may have in respect of any Account by
countersigning the notice from the Pledgor to that Bank with a copy to the
Pledgee within ten Business Days from the date of this deed.

AUTHORITY TO COLLECT

Collection by Pledgee

The Pledgee is authorised to collect the Collateral and to enter into
compromises, settlements and other agreements with one or more Debtors, to grant
discharge in respect of the Collateral and to exercise all other rights of the
Pledgor in connection with the Collateral (including calling in the Collateral).

Collection by Pledgor

Further to Clause 6.1 above, the Pledgee hereby authorises the Pledgor to
collect the Collateral and to enter into compromises, settlements and other
agreements with any Debtor, to grant discharge in respect of its Collateral and
to exercise all other rights of the Pledgor in connection with the Collateral
(including calling in its Collateral) and during such period while the Pledgor
is so authorised, the Pledgee agrees not to exercise such rights. The Pledgee
may revoke this authorisation upon the occurrence of an Event of Default which
is continuing and notice to the Pledgor. Upon such revocation the Pledgor cannot
derive any further rights from section 3:246(4) NCC and the Pledgee may inform
the Debtors of that revocation and that further payments must be made into a
bank account designated by the Pledgee.

IMMEDIATE FORECLOSURE

 

  (a) Upon the occurrence of an Enforcement Event the Pledgee may, without any
further notice of default or other notice being required, sell the Collateral in
accordance with applicable law and have recourse against any Collateral
collected pursuant to Clause 0 (Collection by Pledgee).

 

  (b) The Pledgor shall not be entitled to file a request with an interim
provisions judge to request that its Collateral be sold in a deviating manner as
provided for in section 3:251 NCC.

 

  (c) The Pledgee shall not be obliged to give notice of an intended sale as
provided for in section 3:249 NCC, and the Pledgee shall not be obliged to give
the notice following the sale as provided for in section 3:252 NCC.

 

  (d) The Pledgee is not obliged to first foreclose on any other security right
created under or in connection with the Loan Documents.

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APPLICATION OF PROCEEDS

The Pledgee will apply the proceeds from the sale of or the collection of and
recourse against any Collateral towards satisfaction of the Secured Obligations
in accordance with Section 8(b) of the U.S. Security Agreement, subject to
mandatory provisions of Netherlands law.

CANCELLATION

The Pledgee is entitled to cancel any right of pledge under this deed in whole
or in part by notice in writing to the Pledgor within the meaning of section
3:81(2)(d) NCC.

LIABILITY

The Pledgee is not liable to the Pledgor for any loss or damage arising from any
exercise of, or failure to exercise, its rights under this deed, except for
gross negligence or wilful misconduct of the Pledgee.

COSTS

The Pledgee may charge:

 

  (i) all reasonable and documented costs, losses, claims and expenses of
whatever nature (including legal fees) incurred by the Pledgee relating to or
arising out of this deed (including the entering into and registration of this
deed and/or any amendment of this deed), in connection with Clause 0 (Further
assurances) and/or

 

  (ii) in the event of an enforcement of the rights of pledge in connection with
this deed, charge all costs, losses, claims and expenses of whatever nature
(including legal fees) incurred by the Pledgee.

POWER OF ATTORNEY

The Pledgor grants to the Pledgee an irrevocable power of attorney with the
power of substitution to perform all acts, including acts of disposition
(beschikkingshandelingen) on behalf of the Pledgor which in the sole opinion of
the Pledgee are necessary in order to (i) create or perfect the rights of pledge
and/or (ii) to have the full benefit of those rights (including performing any
of the Pledgor’s obligations under this deed and exercising any of the Pledgor’s
rights to and in connection with the Collateral). The Pledgee may act as
counterparty of the Pledgor even in the event of a conflict of interest. The
Pledgor hereby waives its rights under section 3:68 NCC which waiver is hereby

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accepted by the Pledgee. The Pledgee shall only use this power of attorney if
the Pledgor fails to comply with any of its obligations under or in connection
with this deed or an Event of Default has occurred.

MISCELLANEOUS

No rescission, nullification or suspension

To the extent permitted by law, the Pledgor hereby waives any right it may have
at any time:

 

  (a) under sections 6:228 or 6:265 NCC or any other ground (under any
applicable law) to rescind or nullify, or demand in legal proceedings the
rescission or nullification of this deed; and

 

  (b) under sections 6:52, 6:262 or 6:263 NCC or any other ground (under any
applicable law) to suspend any obligation under or in connection with this deed.

Transfer of rights and obligations

 

  (a) The Pledgor may not transfer any of its rights or obligations or its
contractual relationship under or in connection with this deed without the prior
written consent of the Pledgee.

 

  (b) To the extent permitted under the Loan Documents, the Pledgee may transfer
its rights and obligations under or in connection with this deed by an
assignment, assumption of debt or transfer of contractual relationship. The
Pledgor in advance irrevocably consents to and provides its co-operation with
any such assumption of debt and/or transfer of contractual relationship, as the
case may be.

 

  (c) Upon a transfer by the Pledgee of any rights in respect of the Secured
Obligations the transferee will become entitled to the rights of pledge or to a
corresponding undivided part thereof, as the case may be.

 

  (d) To the extent permitted under the Loan Documents, the Pledgee is entitled
to provide any transferee or proposed transferee with any information concerning
the Pledgor and/or the Collateral.

Notices

Any notice or other communication under or in connection with this deed must be
made in accordance with the Credit Agreement.

Records and calculations of the Pledgee

The books and records maintained by the Pledgee and any calculation or
determination by the Pledgee of the existence and the amount of the Secured
Obligations, are prima facie evidence (dwingend bewijs) of the existence and the
amounts of the Secured Obligations and other matters to which they relate.

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Partial invalidity

If, at any time, any provision of this deed is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

Amendments

This deed may only be amended by a written agreement.

No implied waiver and no forfeiture

Any waiver under this deed must be given by written notice to that effect.

Where the Pledgee does not exercise any right under or in connection with this
deed (which includes the granting by the Pledgee to the Pledgor of an extension
of time in which to perform its obligations under any of these provisions), this
is not deemed to constitute a waiver of that right and does not lead to
forfeiture of that right of the Pledgee under this deed.

The rights of the Pledgee under this deed are not deemed to constitute a waiver
of any other right the Pledgee may have under Netherlands law or any other
applicable law. In case of a conflict of the rights of the Pledgee under this
deed and the rights of the Pledgee under Netherlands law or any other applicable
law, the provisions of this deed will apply.

SUBORDINATION

Section 10 of the U.S. Security Agreement is hereby incorporated by reference
mutatis mutandis.

GOVERNING LAW AND JURISDICTION

 

  (a) This deed and any non-contractual obligations arising out of or in
connection with it are governed by the laws of the Netherlands (including for
the avoidance of doubt the obligation of the Pledgor to create the rights of
pledge set out in Clause 0 (Agreement to pledge Collateral) notwithstanding that
such obligation may be governed by any other law pursuant to any other Loan
Document).

 

  (b) If a Party incorporated under the laws of the Netherlands is represented
by an attorney in connection with the signing and/or execution of this deed or
any other deed, agreement or document referred to in this deed or made pursuant
to this deed, it is hereby expressly acknowledged and accepted by each other
Party that the existence and extent of the attorney’s authority and the effects
of the attorney’s exercise or purported exercise of his authority shall be
governed by the laws of the Netherlands.

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  (c) The courts of Amsterdam, the Netherlands have exclusive jurisdiction to
settle any dispute arising from or in connection with this deed (including a
dispute regarding the existence, validity or termination of this deed) (a
“Dispute”). This paragraph (c) is for the benefit of the Pledgee only. As a
result, the Pledgee shall not be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by law, the
Pledgee may take concurrent proceedings in any number of jurisdictions.

This deed has been entered into on the date stated at the beginning of this deed
and may be signed in any number of counterparts and by way of exchange of pdf or
facsimile copies of signed signature pages, all of which taken together shall
constitute one and the same deed.

[signature page follows]

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SIGNATURES

THE PLEDGOR

SPRAGUE RESOURCES COÖPERATIEF U.A.

 

 

   

 

By:       By:   Title:       Title:  

--------------------------------------------------------------------------------

THE PLEDGEE

JPMORGAN CHASE BANK, N.A.

 

 

   

 

By:     By: Title:     Title:

--------------------------------------------------------------------------------

SCHEDULE 0

DEBTORS AND CONTACT DETAILS

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SCHEDULE 1

FORM OF SUPPLEMENTAL PLEDGE DEED

JPMORGAN CHASE BANK, N.A.

Address   :    [—] Fax number   :    [—] Attn.   :    [—]

[insert date]

Dear Sirs,

Reference is made to the Deed of Pledge over Receivables between the Pledgee (as
defined in that deed) and the undersigned, dated [[            ] 2014] (the
“Deed”).

 

1. The provisions of the Deed apply mutatis mutandis to this deed and are
included in this deed by means of cross-reference. Capitalised terms in this
deed have the meanings ascribed to them in the Deed.

 

2. This is a Supplemental Pledge Deed and a Loan Document.

 

3. We hereby inform you that an additional [account has been opened by us with a
bank other than a Bank (the “Additional Bank”)]*/[insurance policy under which
we are a beneficiary has been entered into by us with an insurance company other
than [intercompany loan or other facility has been made available by us to a
member of the Group which was not a Group Company on the date of the Deed (the
“Additional Group Company”)]*/*, the details of which are as follows:

Additional Bank and new account number:*

[…]

Additional Insurance Company and insurance policy:*

[…]

Additional Group Company:*

[…]

 

4. As security for the payment when due of the Secured Obligations, we hereby
grant to the Pledgee, as the case may be in advance, a right of pledge over our
Receivables owing by the [Additional Bank]*/[Additional Insurance
Company]*/[Additional Group Company]*/*.

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5. We hereby repeat the representations and warranties set out in Clause 0
(Representations and Warranties) of the Deed with respect to the Receivables
purported to be pledged under Clause 4 of this Supplemental Pledge Deed.

 

6. Immediately upon signing of this Supplemental Pledge Deed we will register
this deed, notify the [Additional Bank]*//[Additional Group Company]* of this
deed by means of a notice substantially in the form of Schedule 3 to the Deed
and provide you with a copy of the registered deed and [that]/[each]* notice
without delay.

Yours faithfully,

Sprague Resources Coöperatief U.A.

 

 

   

 

By:     By: Title:     Title:

 

* Delete if not applicable

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SCHEDULE 2

FORM OF NOTICE TO DEBTORS

[insert name of Bank] (“Bank”)

Address   :    [—] Fax number   :    [—] Attn.   :    [—]*

[insert name of Group Company] (“Group Company”)

Address   :    [—] Fax number   :    [—] Attn.   :    [—]*

[insert date]

Dear Sir/Madam,

We write with reference to a Deed of Pledge over Receivables dated
[[            ] 2014] [and a Supplemental Pledge Deed dated [insert date]]**
between JPMORGAN CHASE BANK, N.A. and the undersigned ([jointly]** the “Deed”),
under which we have created, among other things, rights of pledge over all our
present and future rights as creditor or co-creditor in relation to you for the
payment of any amount (including rights to (re)payment of principal, payment of
interest, payment of other amounts and rights of recourse or subrogation in
relation to the rights of you) under or in connection with any agreement or
other legal relationship with you (the “Receivables”).

We hereby notify you of the creation of this right of pledge over the
Receivables.

[On the basis of the Deed we are under an obligation to use all reasonable
efforts to ensure that you waive any right of pledge, any right to create a
right of pledge and any right of set-off or retention that you may have in
relation to the Receivables by signing and returning this notice. In this
connection we would request you to waive any right of pledge, any right to
create a right of pledge and any right of set-off that you may have based on
your general conditions or otherwise, in relation to the Receivables.***]

Please also note that we are authorised under the Deed to collect all
Receivables and pay these into the following account number numbers:

[specify account numbers with one or more of the Lenders [which are subject to a
right of pledge in favour of the Pledgee[s]]]****

until the Pledgee informs you that this authorisation has been terminated and
that further payments are to be made into a bank account designated for that
purpose by the Pledgee.

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We greatly appreciate your cooperation.

Yours faithfully,

[insert name of relevant Pledgor(s)]

 

 

   

 

By:     By: Title:     Title:

Contact details [insert contact details of relevant Pledgor(s) below and use
separate blocks for each pledgor]:

 

Pledgor   :    [—] Address   :    [—] Fax number   :    [—] Tel number   :   
[—] Email   :    [—] Attn.   :    [—]

 

* Choose appropriate block for each separate notice

** Insert if this letter is used for the purpose of notification of additional
debtors pursuant to a Supplemental Deed of Pledge

*** Insert this paragraph if the notice is to a Bank

**** Delete this wording if the notice is to a Bank

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Exhibit C-1

to Credit Agreement

FORM OF U.S. PLEDGE AGREEMENT

AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of December 9, 2014, made by
each party listed on Schedule II hereto (each a “Pledgor” and, collectively,
together with each Person which may, from time to time, become party hereto as a
Pledgor, the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., as
administrative agent (in such capacity, the “Administrative Agent”) for the
Secured Parties defined in the Credit Agreement referred to below.

RECITALS

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC
(the “U.S. Borrower”), SPRAGUE RESOURCES ULC (“AcquireCo”), KILDAIR SERVICE LTD.
(“Kildair”), the several banks and other financial institutions or entities from
time to time parties thereto (the “Lenders”), the Administrative Agent, the
agents from time to time parties thereto, the Lenders have severally agreed to
make loans to and participate in letters of credit issued on behalf of, and
certain Lenders (the “Issuing Lenders”) have agreed to issue letters of credit
for the account of, the Borrowers (as defined in the Credit Agreement) upon the
terms and subject to the conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrowers, and the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
and for other good, fair and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged by each
Pledgor, each Pledgor hereby agrees with the Administrative Agent, on behalf and
for the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

(b) The following terms shall have the following meanings:

“Additional Pledged LLC Interest”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged Partnership Interest”: as defined in any supplement to this
Pledge Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged Stock”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Administrative Agent”: as defined in the Preamble hereto.

--------------------------------------------------------------------------------

“Collateral Account”: any account established to hold money Proceeds, maintained
under the sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the Secured Parties
only as provided in Section 8 hereof.

“Credit Agreement”: as defined in the Recitals hereto.

“Issuer”: each of the Persons identified on Schedule I or a supplement thereto
as an issuer of Pledged Stock, Pledged LLC Interests or Pledged Partnership
Interests.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Limited Liability Company”: any Issuer listed on Part B of Schedule I hereto or
in a supplement thereto.

“Limited Liability Company Agreement”: as to any Limited Liability Company, its
certificate of formation and operating agreement or other Governing Documents,
as each may be amended, supplemented or otherwise modified from time to time.

“LLC Interest”: any Limited Liability Company membership interest or economic
interest.

“Partnership”: any Issuer listed on Part C of Schedule I hereto or in a
supplement thereto.

“Partnership Agreement”: as to any Partnership, its certificate of formation, if
applicable, and partnership agreement or other Governing Documents, as each may
be amended, supplemented or otherwise modified from time to time.

“Partnership Interest”: any partnership interest or economic interest in a
Partnership.

“Permitted Liens”: Liens permitted on the Pledged Collateral pursuant to the
Credit Agreement.

“Pledge Agreement”: this Pledge Agreement, as amended, supplemented or otherwise
modified from time to time.

“Pledged Collateral”: the Pledged Stock, the Pledged LLC Interests, the Pledged
Partnership Interests and all Proceeds, except that the Pledged Collateral shall
not include more than 65% of the total combined voting power of all classes of
stock entitled to vote of any Exempt CFC.

“Pledged LLC Interest”: any and all of each Pledgor’s interests, including units
of membership interest, in the Limited Liability Companies as set forth in
Schedule I attached hereto and any Additional Pledged LLC Interest at any time
pledged pursuant to Section 5(e), including, without limitation, all its rights
to participate in the operation or management of the Limited Liability Companies
and all its rights to properties, assets, member interests and distributions
(except as otherwise provided herein) under the Limited Liability Company
Agreements in respect of such membership interests, together with all
certificates, options or rights of any nature whatsoever which may be issued or
granted by any of the Issuers to any of the Pledgors in respect of the Pledged
LLC Interests while this Pledge Agreement is in effect.

--------------------------------------------------------------------------------

“Pledged Partnership Interest”: any and all of each Pledgor’s interests,
including units of partnership interest, in the Partnerships as set forth in
Schedule I attached hereto and any Additional Pledged Partnership Interest at
any time pledged pursuant to Section 5(e), including, without limitation, all
its rights to participate in the operation or management of the Partnerships and
all its rights to properties, assets, partnership interests and distributions
(except as otherwise provided herein) under the Partnership Agreements in
respect of such Partnership Interests, together with all certificates, options
or rights of any nature whatsoever which may be issued or granted by any of the
Issuers to any of the Pledgors in respect of the Pledged Partnership Interests
while this Pledge Agreement is in effect.

“Pledged Stock”: the shares of Capital Stock listed on Part A of Schedule I
hereto, together with all stock certificates, options or rights of any nature
whatsoever which may be issued or granted by any of the Issuers to any of the
Pledgors in respect of the Pledged Stock while this Pledge Agreement is in
effect, together with any Additional Pledged Stock at any time pledged pursuant
to Section 5(e).

“Pledgors”: as defined in the Preamble hereto.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include, without limitation, all dividends,
distributions or other income from the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests or collections with respect thereto.

“Securities Act”: the Securities Act of 1933, as amended.

“Security”: as defined in Article 8-102(15) of the UCC.

“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“UCC”: the Uniform Commercial Code from time to time in effect in the State of
New York or, as the context requires, any other applicable jurisdiction.

“U.S. Borrower”: as defined in the Recitals hereto.

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

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

--------------------------------------------------------------------------------

2. Pledge; Grant of Security Interest. Subject to the terms hereof, each Pledgor
hereby delivers, pledges and assigns, and transfers, as appropriate, to the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, and hereby grants to the Administrative Agent, on behalf and for the
ratable benefit of the Secured Parties, a first priority security interest in
all of such Pledgor’s right, title and interest in, to and under the Pledged
Collateral, whether now owned or existing or hereafter acquired or existing or
in which such Pledgor has or at any time in the future may acquire any right,
title or interest, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

3. Transfer Powers. Concurrently with the delivery to the Administrative Agent
of each certificate representing one or more shares of the Pledged Stock,
Pledged LLC Interest or Pledged Partnership Interest which is a Security, each
Pledgor shall deliver an undated stock power or transfer power covering such
certificate, duly executed in blank with, if the Administrative Agent so
requests, signature guaranteed.

4. Representations and Warranties. Each Pledgor represents and warrants that:

(a) the shares of Pledged Stock listed on Part A of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding shares of all
classes of the Capital Stock of the Issuers and are represented by the
certificates listed thereon;

(b) the Pledged LLC Interests listed on Part B of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding LLC Interests of
all classes of the Issuers and are represented by the certificates listed
thereon, if such Pledged LLC Interests are Securities;

(c) the Pledged Partnership Interests listed on Part C of Schedule I, as
supplemented from time to time, constitute all the issued and outstanding
Partnership Interests of all classes of the Issuers owned by each Pledgor and
are represented by the certificates listed thereon, if such Pledged Partnership
Interests are Securities;

(d) all the shares of the Pledged Stock, the Pledged LLC Interests and the
Pledged Partnership Interests have been duly and validly issued and are fully
paid and, to the extent that such shares are assessable by their nature,
nonassessable, except as such non-accessability may be affected by Sections
17-607 or 17-804 of the Delaware Revised Uniform Limited Partnership Act or
Sections 18-607 or 18-804 of the Delaware Limited Liability Company Act;

(e) such Pledgor is the record and beneficial owner of, and has title to, the
Pledged Collateral, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement and
Permitted Liens;

(f) upon delivery to the Administrative Agent of the certificates evidencing the
Pledged Stock, the certificates evidencing the Pledged LLC Interests (to the
extent these certificates or the interests evidenced thereby constitute
Securities), if any, or the certificates evidencing the Pledged Partnership
Interests (to the extent these constitute Securities), if any, the Liens granted
pursuant to this Pledge Agreement shall constitute perfected Liens in favor of
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, on the Pledged Collateral as collateral security for the Obligations,
which Liens will be prior to all other Liens on the Pledged Collateral of such
Pledgor, other than Permitted Liens, and which are enforceable as such against
all creditors of such Pledgor and any Person purporting to purchase such Pledged
Collateral from such Pledgor;

--------------------------------------------------------------------------------

(g) upon the filing of UCC-1 (or equivalent) financing statements in the
jurisdictions referenced on Schedule II or in a supplement thereto, the Liens
granted pursuant to this Pledge Agreement on that portion of the Pledged
Collateral not perfected as described in Section 4(f) shall constitute perfected
Liens in favor of the Administrative Agent, on behalf and for the ratable
benefit of the Secured Parties, on such Pledged Collateral as collateral
security for the Obligations, which Liens will be prior to all other Liens on
such Pledged Collateral of such Pledgor and which are enforceable as such
against all creditors of such Pledgor and any Person purporting to purchase such
Pledged Collateral from such Pledgor;

(h) none of the Pledged LLC Interests or Pledged Partnership Interests (i) is
dealt in or traded on securities exchanges or in securities markets, (ii) is by
its terms expressly subject to Article 8 of the UCC, (iii) constitute an
investment company security or (iv) is held in a securities account (in each
case within the meaning of Section 8-103(c) of the UCC);

(i) all consents of each member in each Limited Liability Company or Partnership
to the grant of the security interests provided hereby and to the transfer of
the Pledged LLC Interests or Pledged Partnership Interests, as the case may be,
to the Administrative Agent or its designee pursuant to the exercise of any
remedies under Section 8 have been obtained and are in full force and effect;

(j) such Pledgor’s location (for purposes of Section 9-307 of the UCC) is, and
for the four (4) months preceding the date hereof has been, the place specified
for such Pledgor on Schedule II. Such Pledgor, if not a “registered
organization” as defined in the UCC, is so designated on Schedule II and has
only one place of business, the location of which is at the place specified for
such Pledgor on Schedule II; and

(k) (i) the exact legal name of such Pledgor is as specified for such Pledgor on
Schedule II; and (ii) such Pledgor has not changed its legal name in the twelve
(12) months preceding the date hereof.

5. Covenants. Each Pledgor covenants and agrees with the Administrative Agent
that, from and after the date of this Pledge Agreement until the Obligations are
paid in full, no Letters of Credit remain outstanding (unless such Letters of
Credit have been fully Cash Collateralized) and the Commitments have been
terminated:

(a) If any Pledgor shall, as a result of its ownership of any Pledged
Collateral, become entitled to receive or shall receive any stock certificate,
partnership interest certificate or membership interest certificate or similar
certificate evidencing such interest (including, without limitation, any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights, whether in addition
to, in substitution for, as a conversion of, or in exchange for any shares of
any Pledged Collateral, or otherwise in respect thereof, such Pledgor shall
accept the same as the Administrative Agent’s and the Secured Parties’ agent,
hold the same as collateral in trust for the Administrative Agent and the
Secured Parties and deliver the same forthwith to the Administrative Agent in
the exact form received, and duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock or transfer power covering
such certificate duly executed in blank and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, on
behalf and for the ratable benefit of the Secured Parties, subject to the terms
hereof as additional collateral security for the Obligations. Any sums paid upon
or in respect of any Pledged Collateral upon the liquidation or dissolution of
any of the Issuers shall be paid over to the Administrative Agent to be held by
it hereunder on behalf and for the ratable benefit of the Secured Parties as
additional collateral security for the Obligations, and in case any distribution
of capital shall be

--------------------------------------------------------------------------------

made on or in respect of any Pledged Collateral or any property shall be
distributed upon or with respect to any Pledged Collateral pursuant to the
recapitalization or reclassification of the capital of any of the Issuers or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to the Administrative Agent to be held by it on behalf and for the
ratable benefit of the Secured Parties, subject to the terms hereof, as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of any Pledged Collateral shall be
received by any Pledgor, such Pledgor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Administrative Agent and the Secured Parties segregated from other
funds of such Pledgor, as additional collateral security for the Obligations.

(b) Without the prior written consent of the Administrative Agent, such consent
not to be unreasonably withheld and except as permitted under the Credit
Agreement, no Pledgor will (i) vote to enable, or take any other action to
permit, any of the Issuers to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock or other equity securities of any of the
Issuers, or (ii) sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, any Pledged Collateral, or (iii) create, incur
or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Pledged Collateral, or any interest therein, except
for the Lien provided for by this Pledge Agreement and Permitted Liens, or
(iv) enter into any agreement or undertaking restricting the right or ability of
any Pledgor or the Administrative Agent to sell, assign or transfer any of the
Pledged Collateral.

(c) Each Pledgor shall maintain the security interest created by this Pledge
Agreement as a first, perfected security interest and shall defend such security
interest against the claims and demands of all Persons whomsoever. At any time
and from time to time, upon the written request of the Administrative Agent, and
at the sole expense of the Pledgors, each Pledgor will promptly and duly execute
and deliver such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purposes of obtaining
or preserving the full benefits of this Pledge Agreement and of the rights and
powers herein granted, including, without limitation, (i) the filing of any
financing statements, financing change statements or amendments to financing
statements or continuation statements under the UCC or any similar personal
property security legislation in effect in any jurisdiction with respect to the
Liens created hereby and (ii) taking any actions necessary to enable the
Administrative Agent to take delivery of the Pledged Collateral or to obtain
“control” (within the meaning of the UCC) with respect thereto. If any amount
payable under or in connection with any of the Pledged Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Pledged Collateral pursuant to this Pledge
Agreement.

(d) Each Pledgor agrees, jointly and severally, to (i) pay, and to save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) with respect to, or resulting from, any
delay in paying, any and all Other Taxes which may be payable or determined to
be payable with respect to any of the Pledged Collateral or in connection with
any of the transactions contemplated by this Pledge Agreement and (ii) indemnify
each Secured Party as set forth in Section 11.6 of the Credit Agreement. The
agreements in this Section 5(d) shall survive the termination of this Pledge
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable under the Loan Documents.

(e) If any Pledgor shall at any time acquire any shares of Capital Stock of any
Subsidiary which is not an Issuer hereunder, such Pledgor shall (i) promptly
deliver such shares of Capital Stock, and all stock or other certificates
evidencing the same, to the Administrative Agent to be held as

--------------------------------------------------------------------------------

additional collateral security for the Obligations hereunder, except that no
more than 65% of the total combined voting power of all classes of Capital Stock
entitled to vote of any Exempt CFC and the stock or other certificates
evidencing the same must be delivered, (ii) promptly deliver to the
Administrative Agent a supplement to this Pledge Agreement, substantially in the
form of Exhibit A to this Pledge Agreement, duly completed, adding such shares
of Capital Stock (other than shares of Capital Stock not required to be
delivered pursuant to clause (i) above) to Schedule I hereto, and (iii) promptly
cause such Subsidiary to execute and deliver an acknowledgment and consent
substantially in the form appended as Annex I to Exhibit A to this Pledge
Agreement. If any Wholly-Owned Subsidiary (other than a Subsidiary that is an
Exempt CFC or a Subsidiary thereof) of a Pledgor which is not a Pledgor
hereunder (a “New Pledgor”) shall at any time acquire any shares of Capital
Stock of any Subsidiary, such New Pledgor shall (i) promptly deliver such shares
of Capital Stock, and all stock or other certificates evidencing the same, to
the Administrative Agent to be held as additional collateral security for the
Obligations hereunder, except that no more than 65% of the total combined voting
power of all classes of Capital Stock entitled to vote of any Exempt CFC or any
Subsidiary thereof and the stock or other certificates evidencing the same must
be delivered, (ii) promptly deliver to the Administrative Agent a supplement to
this Pledge Agreement, substantially in the form of Exhibit A to this Pledge
Agreement, duly completed, including such New Pledgor as a Pledgor hereunder and
adding such shares of Capital Stock (other than shares of Capital Stock not
required to be delivered pursuant to the immediately preceding clause (i)) to
Schedule I hereto, and (iii) promptly cause such Subsidiary to execute and
deliver an acknowledgment and consent substantially in the form appended as
Annex I to Exhibit A to this Pledge Agreement.

(f) Such Pledgor will not (i) without ten (10) Business Days’ prior written
notice to the Administrative Agent (or such later notice as the Administrative
Agent shall agree in its sole discretion), change its location (for purposes of
Section 9-307 of the UCC) from that specified in Section 4(j), (ii) without ten
(10) Business Days’ prior written notice to the Administrative Agent (or such
later notice as the Administrative Agent shall agree in its sole discretion),
change its name, identity or structure or (iii) unless it shall give 30 days’
written notice to such effect to the Administrative Agent (or such later notice
as the Administrative Agent shall agree in its sole discretion) and shall have
made any filing under the UCC as the Administrative Agent may reasonably request
to maintain the perfected security interest granted pursuant to this Pledge
Agreement, reincorporate or reorganize under the laws of another jurisdiction.

(g) Such Pledgor acknowledges and agrees that (i) to the extent each interest in
any Partnership controlled now or in the future by such Pledgor and pledged
hereunder is a Security, such interest shall be certificated and (ii) each such
interest shall at all times hereafter continue to be such a Security and
represented by such certificate. Such Pledgor further acknowledges and agrees
that with respect to any interest in any Partnership controlled now or in the
future by such Pledgor and pledged hereunder that is not a Security such Pledgor
shall at no time elect to treat any such interest as a “Security”, nor shall
such interest be represented by a certificate, unless such Pledgor provides
prior written notification to the Administrative Agent of such election and such
interest is thereafter represented by a certificate that is promptly delivered
to the Administrative Agent pursuant to the terms hereof.

6. Cash Dividends; Voting Rights.

(a) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgors of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 7 below, each Pledgor shall be permitted to receive and retain all cash
distributions, dividends or preferred share redemption proceeds permitted to be
paid pursuant to the terms of the Credit Agreement and to exercise all voting,
corporate (with respect to Pledged Stock), member (with respect to Pledged LLC
Interests) and partnership (with respect to Pledged Partnership Interests)
rights with respect to the Pledged Collateral.

(b) Notwithstanding Section 6(a), each Pledgor, in its capacity as the owner of
Pledged Collateral, agrees that no vote shall be cast by it or corporate,
partnership or member right exercised or other action taken by it which would
impair any Pledged Collateral or which would result in any violation of any
provision of the Credit Agreement, this Pledge Agreement or any other Loan
Document.

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7. Rights of the Administrative Agent.

(a) If an Event of Default shall occur and be continuing and the Administrative
Agent shall give notice of its intent to exercise such rights to any Pledgor:
(i) the Administrative Agent shall have the right to receive any and all cash
dividends or other cash distributions paid in respect of the Pledged Collateral
and make application thereof to the Obligations in the order provided in
Section 8(a) and (ii) at the request of the Administrative Agent, all shares of
the Pledged Stock, all Pledged LLC Interests and all Pledged Partnership
Interests shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(A) all voting, corporate or other rights pertaining to such shares of Pledged
Stock at any meeting of shareholders of any of the Issuers or otherwise; (B) all
members rights, powers and privileges with respect to the Pledged LLC Interests
to the same extent as a member under the applicable Limited Liability Company
Agreement; (C) all partnership rights, powers and privileges with respect to the
Pledged Partnership Interests to the same extent as a partner under the
applicable Partnership Agreement; and (D) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options pertaining to
such shares of the Pledged Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or company
structure of any of the Issuers, or upon the exercise by any Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such shares
or interests of the Pledged Collateral, and in connection therewith, the right
to deposit and deliver any and all of the Pledged Collateral with any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

(b) The rights of the Administrative Agent hereunder shall not be conditioned or
contingent upon the pursuit by the Administrative Agent of any right or remedy
against any of the Issuers or against any other Person which may be or become
liable in respect of all or any part of the Obligations or against any other
collateral security therefor, guarantee thereof or right of offset with respect
thereto. The Administrative Agent shall not be liable for any failure to demand,
collect or realize upon all or any part of the Pledged Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise
dispose of any Pledged Collateral upon the request of any Pledgor or any other
Person or to take any other action whatsoever with regard to the Pledged
Collateral or any part thereof.

8. Remedies.

(a) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
held in any Collateral Account in payment of the Obligations in the following
order:

3. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

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4. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

5. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

6. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

7. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

8. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

9. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Pledgor
or to whomsoever else may be lawfully entitled to receive the same.

(b) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Pledge Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the UCC. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Pledgor, any of the Issuers or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may transfer
all or any part of the Pledged Collateral into the Administrative Agent’s name
or the name of its nominee or nominees, and/or may forthwith collect, receive,
appropriate and realize upon the Pledged Collateral, or any part thereof, and/or
may forthwith sell, assign, give option or options to purchase or otherwise
dispose of and deliver the Pledged Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, in the over-the-counter market, at any exchange, broker’s board or office
of the Administrative Agent or any Secured Party or elsewhere upon such terms
and conditions as it may deem advisable and at

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such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk and/or may take such other actions as may
be available under applicable law. The Administrative Agent or any Secured Party
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Pledged Collateral so sold, free of any right or equity of
redemption in any Pledgor, which right or equity is hereby waived or released.
The Administrative Agent shall apply any Proceeds from time to time held by it
and the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Pledged Collateral or in any way relating to the Pledged Collateral or the
rights of the Administrative Agent and the other Secured Parties arising out of
the exercise by the Administrative Agent hereunder, including, without
limitation, documented fees and disbursements of counsel, to the payment in
whole or in part of the Obligations, in such order as is provided in
Section 8(a), and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615 of the UCC, or required pursuant to
clause (vi) of Section 8(a), need the Administrative Agent account for the
surplus, if any, to any Pledgor. To the extent permitted by applicable law, each
Pledgor waives all claims, damages and demands it may acquire against the
Administrative Agent or any other Secured Party arising out of the exercise by
the Administrative Agent or any other Secured Party of any of its rights
hereunder. If any notice of a proposed sale or other disposition of Pledged
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least ten (10) days before such sale or other disposition.
Each Pledgor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of Pledged Collateral are insufficient to pay the
Obligations (including the documented fees and disbursements of counsel employed
by the Administrative Agent or any Secured Party to collect such deficiency to
the extent provided therefor in Section 11.6 of the Credit Agreement).

9. Registration Rights; Private Sales.

(a) If the Administrative Agent shall determine to exercise its right to sell
any or all of the shares of Pledged Stock, any or all of the Pledged LLC
Interests or any or all of the Pledged Partnership Interests pursuant to
Section 8 hereof, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock and/or the Pledged LLC
Interests and/or the Pledged Partnership Interests, or that portion thereof to
be sold, registered under the provisions of the Securities Act, each Pledgor
will cause any or all of the Issuers to (i) execute and deliver, and cause the
officers of such Issuers to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
shares of Pledged Stock and/or the Pledged LLC Interests and/or the Pledged
Partnership Interests or that portion of them to be sold, under the provisions
of the Securities Act, (ii) to use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the shares of
Pledged Collateral, or that portion thereof to be sold, and (iii) to make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Pledgor agrees to
cause the Issuers to comply with the provisions of the securities or “Blue Sky”
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.

(b) Each Pledgor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other

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things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the Administrative Agent than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the Issuers to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the Issuers would agree to do so.

(c) Each Pledgor further agrees to use its reasonable efforts to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Pledged Collateral pursuant to this Pledge Agreement valid
and binding and in compliance with any and all other applicable Requirements of
Law. Each Pledgor further agrees that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Administrative Agent and
the Secured Parties, that the Administrative Agent and the Secured Parties have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against each Pledgor, and each Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.

10. Irrevocable Authorization and Instruction to Issuers. Each Pledgor hereby
authorizes and instructs each Issuer to comply with any instruction received by
it from the Administrative Agent in writing that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Pledge Agreement, without any other or further instructions
from any Pledgor, and each Pledgor agrees that each Issuer shall be fully
protected in so complying.

11. Agent’s Appointment as Attorney-in-Fact.

(a) Each Pledgor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Pledgor and in the name of
each Pledgor or in the Administrative Agent’s own name, from time to time in the
Administrative Agent’s discretion, for the purpose of carrying out the terms of
this Pledge Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Pledge Agreement, including, without limitation,
any financing statements, endorsements, assignments or other instruments of
transfer.

(b) Each Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done pursuant to the power of attorney granted in Section 11(a). All
powers, authorizations and agencies contained in this Pledge Agreement are
coupled with an interest and are irrevocable until this Pledge Agreement is
terminated and the security interest created hereby is released.

(c) The power of attorney conferred hereby on the Administrative Agent is solely
to protect, preserve and realize upon its security interest in the Pledged
Collateral. This power of attorney shall neither create any agency on the part
of the Administrative Agent in favor of any Pledgor, nor any fiduciary
obligations or relationship on the part of any Secured Party for the benefit of
any Pledgor.

(d) Anything in this Section 11 to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 11 unless an Event of Default has occurred and is continuing.

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12. Limitation on Duties Regarding Pledged Collateral. The Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Pledged Collateral in its possession, under Section 9-207 of
the UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account, except that the Administrative Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as demand deposits.
None of the Administrative Agent, any Secured Party or any of their respective
directors, officers, employees, agents or advisors shall be liable for failure
to demand, collect or realize upon all or any part of the Pledged Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Pledged Collateral upon the request of the Pledgors or any other
Person or to take any other action whatsoever with regard to the Pledged
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the other Secured Parties hereunder are solely to protect the Administrative
Agent’s and the Secured Parties’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers. The Administrative Agent and other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees, agents or advisors shall be responsible to any Pledgor for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct.

13. Authorization of Financing Statements. Each Pledgor hereby authorizes the
Administrative Agent to file financing statements with respect to the Pledged
Collateral in such form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Pledge Agreement.

14. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Pledged Collateral are irrevocable and powers
coupled with an interest.

15. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the U.S. Borrower shall be effected in the manner set forth in
Section 11.2 of the Credit Agreement and (b) notices, requests and demands to or
upon any other Pledgor shall be effected in the manner set forth in Section 15
of the Guarantee.

16. Authority of Administrative Agent. Each Pledgor acknowledges that the rights
and responsibilities of the Administrative Agent under this Pledge Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and neither the Pledgors
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

17. Severability. Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

18. Paragraph Headings. The paragraph headings used in this Pledge Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

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19. No Waiver; Cumulative Remedies. The Administrative Agent or any Secured
Party shall not by any act (except by a written instrument pursuant to
Section 20 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Administrative Agent or any Secured Party would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

20. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Pledgor and the Administrative Agent (subject to the Administrative Agent
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement), provided that any provision of this
Pledge Agreement may be waived by the Administrative Agent (subject to the
Administrative Agent obtaining the requisite consents of any applicable Secured
Parties pursuant to Section 11.1 of the Credit Agreement) in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent; provided further that, reasonable
updates and modifications to Schedule I hereto shall not require the consent of
the Administrative Agent or any other Secured Party and Schedule I shall be
deemed amended pursuant to any applicable Disposition permitted under the Credit
Agreement. This Pledge Agreement shall be binding upon the successors and
assigns of each Pledgor and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their respective successors and assigns. THIS
PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

21. Additional Pledgors. Each Subsidiary of a Pledgor which is required pursuant
to Section 5(e) to become party to this Pledge Agreement shall become a Pledgor
for all purposes of this Pledge Agreement upon execution and delivery by such
Subsidiary of a Supplement in the form of Exhibit A hereto.

22. Submission to Jurisdiction; Waivers. Each Pledgor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Pledge Agreement and the other Loan Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail),

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postage prepaid, to such Pledgor at its address set forth in (a) Section 11.2 of
the Credit Agreement, with respect to the U.S. Borrower or (b) Section 15 of the
Guarantee, with respect to each other Pledgor, or at such other address of which
the Administrative Agent shall have been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

23. Waiver of Certain Damages. Each Pledgor and the Administrative Agent (on
behalf of itself and each Secured Party) hereby waives, to the maximum extent
not prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in Section 22 any special, exemplary, punitive
or consequential damages.

24. WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

25. Counterparts. This Pledge Agreement may be executed by one or more of the
parties to this Pledge Agreement on any number of separate counterparts
(including by facsimile transmission or other electronic transmission of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Pledge Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Pledge Agreement signed by all
the parties shall be lodged with the U.S. Borrower and the Administrative Agent.

26. Amendment and Restatement. This Pledge Agreement amends and restates the
Pledge Agreement (as defined under the Existing Credit Agreement).

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: SPRAGUE RESOURCES LP By:  

 

  Name:   Title: SPRAGUE ENERGY SOLUTIONS INC. By:  

 

  Name:   Title: SPRAGUE TERMINAL SERVICES LLC By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC By:  

 

  Name:   Title:

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SPRAGUE RESOURCES FINANCE CORP By:  

 

  Name:   Title: SPRAGUE CO-OP MEMBER LLC By:  

 

  Name:   Title:

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ACKNOWLEDGMENT AND CONSENT

The undersigned, the Issuers referred to in the foregoing Pledge Agreement,
hereby acknowledge receipt of a copy thereof and agree to be bound thereby and
to comply with the terms thereof insofar as such terms are applicable to it. The
undersigned agree to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The undersigned further agree that the terms of Section 9(c) of the
Pledge Agreement shall apply to them, mutatis mutandis, with respect to all
actions that may be required of them under or pursuant to or arising out of
Section 9 of the Pledge Agreement.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: SPRAGUE ENERGY SOLUTIONS INC. By:  

 

  Name:   Title: SPRAGUE TERMINAL SERVICES LLC By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC By:  

 

  Name:   Title:

 

[Signature Page to Acknowledgment and Consent to Pledge Agreement]

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SPRAGUE RESOURCES FINANCE CORP By:  

 

  Name:   Title: SPRAGUE CO-OP MEMBER LLC By:  

 

  Name:   Title:

 

[Signature Page to Acknowledgment and Consent to Pledge Agreement]

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SCHEDULE I to

Pledge Agreement

A. DESCRIPTION OF PLEDGED STOCK

B. DESCRIPTION OF PLEDGED LLC INTERESTS

C. DESCRIPTION OF PLEDGED PARTNERSHIP INTERESTS

 

Sch. I-1

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SCHEDULE II to

Pledge Agreement

PLEDGORS, FILING OFFICES, LOCATION AND BASIS FOR DETERMINING LOCATION

 

Sch. II-1

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EXHIBIT A to

Pledge Agreement

PLEDGE AGREEMENT SUPPLEMENT

PLEDGE AGREEMENT SUPPLEMENT, [            ,         ] (this “Supplement”), made
by [NAME OF PLEDGOR], a                      [corporation] and [NAME OF
PLEDGOR], a                      [corporation] (each an “Existing Pledgor” and
collectively, the “Existing Pledgors”), [and by [NAME OF NEW PLEDGOR], a
                     [corporation] and [NAME OF NEW PLEDGOR], a                 
[corporation] (each, a “New Pledgor” and collectively, the “New Pledgors”];
collectively, the Existing Pledgors and the New Pledgors are referred to herein
as the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative
agent (in such capacity, the “Administrative Agent”) under the Credit Agreement
(as defined in the Pledge Agreement referred to below) for the benefit of the
Secured Parties (as so defined).

1. Reference is hereby made to that certain Amended and Restated Pledge
Agreement, dated as of [—], 2014 made by the Existing Pledgors in favor of the
Administrative Agent (as amended, supplemented or otherwise modified as of the
date hereof, the “Pledge Agreement”). Terms defined in the Pledge Agreement are
used herein as therein defined.

2. [Each Pledgor hereby confirms and reaffirms the security interest in the
Pledged Collateral granted to the Administrative Agent for the benefit of the
Secured Parties under the Pledge Agreement, and, as additional collateral
security for the prompt and complete payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations and in order to
induce the Lenders to make their respective extensions of credit to the
Borrowers, and the Issuing Lenders to issue their letters of credit, under the
Credit Agreement and the other Loan Documents, each Pledgor hereby delivers to
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, all of the shares, membership or partnership interests of Capital Stock
[(other than Capital Stock representing more than 65% of the total combined
voting power of all classes of Capital Stock entitled to vote)] of [INSERT NAME
OF ADDITIONAL ISSUER], a                      [corporation] (each, an
“Additional Issuer”, together the “Additional Issuers”) listed in Schedule I
hereto, together with all certificates, options, or rights of any nature
whatsoever which may be issued or granted by each Additional Issuer in respect
of such Capital Stock while the Pledge Agreement, as supplemented hereby, is in
force (the “Additional Pledged Stock”, “Additional Pledged LLC Interests” or
“Additional Pledged Partnership Interest”, as applicable, as described on such
Schedule I) and hereby grants to the Administrative Agent, on behalf and for the
ratable benefit of the Secured Parties, a first priority security interest in
the Additional Pledged Stock, the Additional Pledged LLC Interests and the
Additional Pledged Partnership Interests, as applicable, and all Proceeds
thereof. From and after the date of this Supplement, as used in the Pledge
Agreement as supplemented by this Supplement and for all purposes of the Pledge
Agreement as so supplemented, “Pledged Stock” shall be deemed to include the
Additional Pledged Stock, “Pledged LLC Interests” shall be deemed to include the
Additional Pledged LLC Interests, “Pledged Partnership Interests” shall be
deemed to include the Additional Pledged Partnership Interests and “Issuers”
shall be deemed to include each of the Additional Issuers.]

3. [Each New Pledgor agrees to all of the provisions of the Pledge Agreement and
effective on the date hereof, becomes a party to the Pledge Agreement, as a
Pledgor, with the same effect as if the undersigned were an original signatory
to the Pledge Agreement. Each New Pledgor, as additional collateral security for
the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations and in order to induce the Lenders
to make their respective extensions of credit to the Borrowers, and the Issuing
Lenders to issue their letters of credit,

 

Exh. A-1

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under the Credit Agreement and the other Loan Documents, hereby delivers to the
Administrative Agent, on behalf and for the ratable benefit of the Lenders, all
of the shares or interests of Capital Stock [(other than Capital Stock
representing more than 65% of the total combined voting power of all classes of
Capital Stock entitled to vote)] of [INSERT NAME OF NEW ISSUER], a
                     [corporation] (the “New Issuer”) listed in Schedule I
hereto, together with all certificates, options, or rights of any nature
whatsoever which may be issued or granted by the New Issuer in respect of such
Capital Stock while the Pledge Agreement, as supplemented hereby, is in force
(the “New Pledged Stock”, “New Pledged LLC Interests” or “New Pledged
Partnership Interest”, as applicable, as described on such Schedule I) and
hereby grants to the Administrative Agent, on behalf and for the ratable benefit
of the Lenders, a first priority security interest in the New Pledged Stock, the
New Pledged LLC Interests and the New Pledged Partnership Interests, as
applicable, and all Proceeds thereof. From and after the date of this
Supplement, as used in the Pledge Agreement as supplemented by this Supplement
and for all purposes of the Pledge Agreement as so supplemented, “Pledged Stock”
shall be deemed to include the New Pledged Stock, “Pledged LLC Interests” shall
be deemed to include the New Pledged LLC Interests, “Pledged Partnership
Interests” shall be deemed to include the New Pledged Partnership Interests and
“Issuers” shall be deemed to include the New Issuer. Each New Pledgor has set
forth such New Pledgor’s name and the applicable filing office for a financing
statement covering the Pledged Collateral owned by such New Pledgor on Schedule
II attached hereto.]

4. Each Pledgor hereby represents and warrants that the representations and
warranties contained in Section 4 of the Pledge Agreement are true and correct
in all material respects on the date of this Supplement with references therein
to the “Pledged Stock” to include [the Additional Pledged Stock] and [the New
Pledged Stock], with references to “Pledged LLC Interests” to include [the
Additional Pledged LLC Interests] and [the New Pledged LLC Interests], with
references to “Pledged Partnership Interests” to include [the Additional Pledged
Partnership Interests] and [the New Pledged Partnership Interests], with
references to the “Issuers” therein to include each [New Issuer] and each
[Additional Issuer], and with references to the Pledge Agreement to mean the
Pledge Agreement as supplemented hereby.

5. This Supplement is supplemental to the Pledge Agreement, forms a part thereof
and is subject to the terms thereof. From and after the date of this Supplement,
[Schedule I to the Pledge Agreement shall be deemed to include each item listed
on Schedule I to this Supplement] [Schedule II to the Pledge Agreement shall be
deemed to include each item listed on Schedule II to this Supplement]. This
Supplement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered as of the date first above written.

 

[NAME OF PLEDGOR] By  

 

  Name:   Title:

 

Exh. A-2

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SCHEDULE I to

Supplement

A. DESCRIPTION OF ADDITIONAL PLEDGED STOCK

 

Name of Issuer

   Class of
Stock    Stock
Certificate
Number    Number of
Shares    Percentage of
Stock Owned
by Pledgor    Pledgor                                             

B. DESCRIPTION OF ADDITIONAL PLEDGED LLC INTERESTS

 

Name of Issuer

   Class of
LLC Interest    Certificate
Number    Number of
Interests    Percentage of
LLC Interest
Owned by
Pledgor    Pledgor                                             

C. DESCRIPTION OF ADDITIONAL PLEDGED PARTNERSHIP INTERESTS

 

Name of Issuer

   Class of
Partnership
Interest    Certificate
Number    Number of
Interests    Percentage of
Partnership
Interest
Owned by
Pledgor    Pledgor                                             

D. DESCRIPTION OF NEW PLEDGED STOCK

 

Name of Issuer

   Class of
Stock    Stock
Certificate
Number    Number of
Shares    Percentage of
Stock Owned
by Pledgor    Pledgor                                             

 

Schedule I to Supplement-1

--------------------------------------------------------------------------------

E. DESCRIPTION OF NEW PLEDGED LLC INTERESTS

 

Name of Issuer

   Class of
LLC Interest    Certificate
Number    Number of
Interests    Percentage of
LLC Interest
Owned by
Pledgor    Pledgor                                             

F. DESCRIPTION OF NEW PLEDGED PARTNERSHIP INTERESTS

 

Name of Issuer

   Class of
Partnership
Interest    Certificate
Number    Number of
Interests    Percentage of
Partnership
Interest
Owned by
Pledgor    Pledgor                                             

 

Schedule I to Supplement-2

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SCHEDULE II to

Supplement

NEW PLEDGORS AND FILING OFFICES

 

Name of New Pledgor

  

Filing Office

           

 

Schedule II to Supplement-1

--------------------------------------------------------------------------------

ANNEX I to

Supplement

ACKNOWLEDGMENT AND CONSENT

The undersigned, the [New] [Additional] Issuer referred to in the foregoing
Supplement to Pledge Agreement, hereby acknowledges receipt of a copy thereof
and of the Pledge Agreement referred to therein and agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable to it.
The undersigned agrees to notify the Administrative Agent promptly in writing of
the occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The undersigned further agrees that the terms of Section 9(c) of the
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 9 of the Pledge Agreement.

 

[NAME OF NEW/ADDITIONAL ISSUER] By:  

 

  Name:   Title:

 

Schedule II to Supplement-1

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Exhibit C-2

to Credit Agreement

FORM OF CANADIAN PLEDGE AGREEMENT

CANADIAN PLEDGE AGREEMENT, dated as of December 9, 2014 made by each party
listed on Schedule II hereto (each a “Pledgor” and, collectively, together with
each Person which may, from time to time, become party hereto as a Pledgor, the
“Pledgors”), in favour of JPMORGAN CHASE BANK, N.A., as administrative agent (in
such capacity, the “Administrative Agent”) for the Secured Parties defined in
the Credit Agreement referred to below.

RECITALS

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC
(the “U.S. Borrower”), KILDAIR SERVICE LTD. ( “Kildair”) and SPRAGUE RESOURCES
ULC (“AcquireCo” and together with Kildair, the “Initial Canadian Borrowers”),
the several banks and other financial institutions or entities from time to time
parties thereto (the “Lenders”), the Administrative Agent, JPMORGAN CHASE BANK,
N.A., TORONTO BRANCH, as Canadian agent (in such capacity the “Canadian Agent”),
and the other agents from time to time parties thereto, the Lenders have
severally agreed to make loans to and participate in letters of credit issued on
behalf of, and certain Lenders (the “Issuing Lenders”) have agreed to issue
letters of credit for the account of, the Borrowers upon the terms and subject
to the conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent and the Canadian Agent to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrowers, and the Issuing Lenders to issue their letters of
credit, under the Credit Agreement, and for other good, fair and valuable
consideration and reasonably equivalent value, the receipt and sufficiency of
which are hereby acknowledged by each Pledgor, each Pledgor hereby agrees with
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

(b) Terms defined in the PPSA which are not otherwise defined in this Pledge
Agreement are used herein as defined in the PPSA.

(c) Capitalized terms defined in the STA which are not otherwise defined in this
Pledge Agreement or the PPSA are used herein as defined in the STA, including
without limitation “Entitlement Holder” and “Securities Account”.

(d) The following terms shall have the following meanings:

“Additional Pledged LLC Interest”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

“Additional Pledged Partnership Interest”: as defined in any supplement to this
Pledge Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged Stock”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged ULC Interest”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Administrative Agent”: as defined in the Preamble hereto.

“Canadian Agent”: as defined in the Recitals hereto.

“Collateral Account”: any account established to hold money Proceeds, maintained
under the sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the Secured Parties
only as provided in Section 8 hereof.

“Control”: with respect to a specified form of Investment Property, “control” as
defined in sections 23 through 26 of the STA as applicable to such form of
Investment Property.

“Credit Agreement”: as defined in the Recitals hereto.

“Initial Canadian Borrowers”: as defined in the Recitals hereto.

“Issuer”: each of the Persons identified on Schedule I or a supplement thereto
as an issuer of Pledged Stock, Pledged LLC Interests, Pledged ULC Interests or
Pledged Partnership Interests.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Limited Liability Company”: any Issuer identified as a limited liability
company on Part B of Schedule I hereto or in a supplement thereto.

“Limited Liability Company Agreement”: as to any Limited Liability Company, its
certificate of formation and operating agreement or other Governing Documents,
as each may be amended, supplemented or otherwise modified from time to time.

“LLC Interest”: any Limited Liability Company membership interest or economic
interest.

“Partnership”: any Issuer identified as a limited or general partnership on Part
C of Schedule I hereto or in a supplement thereto.

“Partnership Agreement”: as to any Partnership, its certificate of formation, if
applicable, and partnership agreement or other Governing Documents, as each may
be amended, supplemented or otherwise modified from time to time.

“Partnership Interest”: any partnership interest or economic interest in a
Partnership.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

“Permitted Liens”: Liens permitted on the Pledged Collateral pursuant to the
Credit Agreement.

“Pledge Agreement”: this Canadian Pledge Agreement, as amended, supplemented or
otherwise modified from time to time.

“Pledged Collateral”: the Pledged Stock, the Pledged LLC Interests, the Pledged
ULC Interests, the Pledged Partnership Interests, and all Proceeds.

“Pledged LLC Interest”: any and all of each Pledgor’s interests, including units
of membership interest, in the Limited Liability Companies as set forth in
Schedule I attached hereto and any Additional Pledged LLC Interest at any time
pledged pursuant to Section 5(e), including, without limitation, all its rights
to participate in the operation or management of the Limited Liability Companies
and all its rights to properties, assets, member interests and distributions
(except as otherwise provided herein) under the Limited Liability Company
Agreements in respect of such membership interests, together with all
certificates, options or rights of any nature whatsoever which may be issued or
granted by any of the Issuers to any of the Pledgors in respect of the Pledged
LLC Interests while this Pledge Agreement is in effect.

“Pledged Partnership Interest”: any and all of each Pledgor’s interests,
including units of partnership interest, in the Partnerships as set forth in
Schedule I attached hereto and any Additional Pledged Partnership Interest at
any time pledged pursuant to Section 5(e), including, without limitation, all
its rights to participate in the operation or management of the Partnerships and
all its rights to properties, assets, partnership interests and distributions
(except as otherwise provided herein) under the Partnership Agreements in
respect of such Partnership Interests, together with all certificates, options
or rights of any nature whatsoever which may be issued or granted by any of the
Issuers to any of the Pledgors in respect of the Pledged Partnership Interests
while this Pledge Agreement is in effect.

“Pledged Stock”: the shares of Capital Stock listed on Part A of Schedule I
hereto, together with all stock certificates, options or rights of any nature
whatsoever which may be issued or granted by any of the Issuers to any of the
Pledgors in respect of the Pledged Stock while this Pledge Agreement is in
effect, together with any Additional Pledged Stock at any time pledged pursuant
to Section 5(e).

“Pledged ULC Interest”: the shares, interests, participations or other
equivalents of capital stock of an Unlimited Liability Company listed on Part D
of Schedule I hereto, together with all stock certificates, options or rights of
any nature whatsoever which may be issued or granted by any of the Issuers to
any of the Pledgors in respect of the Pledged ULC Interest while this Pledge
Agreement is in effect, together with any Additional Pledged ULC Interests at
any time pledged pursuant to Section 5(e).

“Pledgors”: as defined in the Preamble hereto.

“PPSA”: the Personal Property Security Act (Ontario), including the regulations
thereto, provided that, if perfection or the effect of perfection or
non-perfection or the priority of the security interest created hereunder in any
Pledged Collateral is governed by the personal property security legislation or
other applicable legislation with respect to personal property security as in
effect in a jurisdiction other than Ontario, “PPSA” means the Personal Property
Security Act or such other applicable legislation as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

“Proceeds”: all “proceeds” as such term is defined in the PPSA and, in any
event, shall include, without limitation, all dividends, distributions or other
income from the Pledged Stock, Pledged LLC Interests, Pledged ULC Interests,
Pledged Partnership Interests or collections with respect thereto.

“Securities”: (i) “securities” as defined in the STA, or if no STA is in force
in the applicable jurisdiction, the PPSA of such jurisdiction and (ii) including
any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as “securities” or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.

“STA”: the Securities Transfer Act, 2006 (Ontario), including the regulations
thereto, provided that, to the extent that perfection or the effect of
perfection or non-perfection or the priority of any Lien created hereunder on
Pledged Collateral that is Investment Property is governed by the laws in effect
in any province or territory of Canada other than Ontario in which there is in
force legislation substantially the same as the Securities Transfer Act, 2006
(Ontario) (an “Other STA Province”), then the “STA” shall mean such other
legislation as in effect from time to time in such Other STA Province for the
purposes of the provisions hereof referring to or incorporating by reference
provisions of the STA; and to the extent that such perfection or the effect of
perfection or non-perfection or the priority of any Lien created hereunder on
Pledged Collateral is governed by the laws of a jurisdiction other than Ontario
or an Other STA Province, then references herein to the STA shall be disregarded
except for the terms “Certificated Security” and “Uncertificated Security” which
shall have the meanings herein as defined in the Securities Transfer Act, 2006
(Ontario) regardless of whether the STA is in force in the applicable
jurisdiction.

“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“ULC Interest”: a share of stock or other equity interest carrying membership
rights issued by an Unlimited Liability Company.

“Unlimited Liability Company”: any Issuer identified as an unlimited company, an
unlimited liability company or an unlimited liability corporation on Part D of
Schedule I hereto or in a supplement thereto.

“U.S. Borrower”: as defined in the Recitals hereto.

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

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

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

2. Pledge; Grant of Security Interest.

(a) Subject to the terms hereof, each Pledgor hereby delivers, pledges, assigns
(except in the case of the Pledged ULC Interests) and transfers (except in the
case of the Pledged ULC Interests), as appropriate, to the Administrative Agent,
on behalf and for the ratable benefit of the Secured Parties, and hereby grants
to the Administrative Agent, on behalf and for the ratable benefit of the
Secured Parties, a first priority security interest in all of such Pledgor’s
right, title and interest in, to and under the Pledged Collateral, whether now
owned or existing or hereafter acquired or existing or in which such Pledgor has
or at any time in the future may acquire any right, title or interest, as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

(b) Each Pledgor and each of the Secured Parties hereby acknowledge that
(a) value has been given; (b) each Pledgor has rights in the Pledged Collateral
in which it has granted a security interest; (c) this Pledge Agreement
constitutes a security agreement as that term is defined in the PPSA; and
(d) the security interest attaches upon the execution of this Pledge Agreement
(or in the case of any after-acquired property, at the time of acquisition
thereof).

(c) If the Pledged Collateral is realized upon and such Pledged Collateral or
the proceeds of such Pledged Collateral is not sufficient to satisfy all
Obligations, each Pledgor acknowledges and agrees that, subject to the
provisions of the PPSA, each Pledgor shall continue to be liable for any
Obligations remaining outstanding and Administrative Agent shall be entitled to
pursue full payment thereof.

(d) Notwithstanding anything to the contrary in this Agreement, (i) prior to the
ULC Conversion, (x) with respect to any Pledgor that is an Exempt CFC or a
Subsidiary thereof, Obligations secured by the Pledged Collateral shall exclude
the U.S. Obligations; and (y) the security interest granted on the voting
Capital Stock of Kildair which secures the U.S. Obligations shall be limited to
65% of such voting Capital Stock; provided that immediately after the ULC
Conversion, and subject to clause (ii) below, the Obligations secured by the
Pledged Collateral (including 100% of the voting Capital Stock of Kildair) shall
automatically include the U.S. Obligations without further action of the
parties, (ii) at any time prior to the Kildair Subsidiary Election, the Pledged
Collateral shall not include any Capital Stock of Transit P.M. ULC or
Wintergreen Transport Corporation ULC and such Capital Stock shall not secure
any Obligations; provided that immediately after the Kildair Subsidiary
Election, the Collateral shall include such Capital Stock as security for the
Obligations without further action of the parties; and (iii) with respect to any
Exempt CFC acquired or formed by a Pledgor after the date hereof, the security
interest granted under this Pledge Agreement in the voting Capital Stock of such
Exempt CFC which secures the U.S. Obligations shall be limited to 65% of the
voting Capital Stock of such Exempt CFC.

3. Transfer Powers. Concurrently with the delivery to the Administrative Agent
of each certificate representing one or more shares of the Pledged Stock,
Pledged LLC Interest, Pledged ULC Interest or Pledged Partnership Interest which
is a Security, each Pledgor shall deliver an undated stock power or transfer
power covering such certificate, duly executed in blank with, if the
Administrative Agent so requests, signature guaranteed.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

4. Representations and Warranties. Each Pledgor represents and warrants that:

(a) the shares of Pledged Stock listed on Part A of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding shares of all
classes of the Capital Stock (other than ULC Interests) of the Issuers and are
represented by the certificates listed thereon;

(b) the Pledged LLC Interests listed on Part B of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding LLC Interests of
all classes of the Issuers and are represented by the certificates listed
thereon, if such Pledged LLC Interests are Securities;

(c) the Pledged Partnership Interests listed on Part C of Schedule I, as
supplemented from time to time, constitute all the issued and outstanding
Partnership Interests of all classes of the Issuers owned by each Pledgor and
are represented by the certificates listed thereon, if such Pledged Partnership
Interests are Securities;

(d) the Pledged ULC Interests listed on Part D of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding ULC Interests of
all classes of the Issuers and are represented by the certificates listed
thereon, if such Pledged ULC Interests are Securities;

(e) all the shares of the Pledged Stock, the Pledged LLC Interests, the Pledged
ULC Interests and the Pledged Partnership Interests have been duly and validly
issued and are fully paid and, to the extent that such shares are assessable by
their nature, nonassessable;

(f) such Pledgor is the beneficial owner and holder of record or Entitlement
Holder of, and has title to, the Pledged Collateral, free of any and all Liens
or options in favour of, or claims of, any other Person, except the Lien created
by this Pledge Agreement and Permitted Liens;

(g) upon delivery to the Administrative Agent of the certificates evidencing the
Pledged Stock, the certificates evidencing the Pledged LLC Interests (to the
extent these certificates or the interests evidenced thereby constitute
Securities), if any, the certificates evidencing the Pledged ULC Interests (to
the extent these certificates or the interests evidenced thereby constitute
Securities), if any, or the certificates evidencing the Pledged Partnership
Interests (to the extent these constitute Securities), if any (and assuming the
continuing possession by Administrative Agent of such certificates in accordance
with the requirements of applicable law), the Liens granted pursuant to this
Pledge Agreement shall constitute perfected Liens in favour of the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, on the Pledged Collateral as collateral security for the Obligations,
(but shall not provide to the Administrative Agent or any Secured Party any
rights which would constitute the Administrative Agent or any Secured Party as a
member or shareholder of any Unlimited Liability Company), which Liens will be
prior to all other Liens on the Pledged Collateral of such Pledgor, other than
Permitted Liens, and which are enforceable as such against all creditors of such
Pledgor and any Person purporting to purchase such Pledged Collateral from such
Pledgor;

(h) upon the filing or registration of financing statements in the jurisdictions
referenced on Schedule II or in a supplement thereto, the Liens granted pursuant
to this Pledge Agreement on that portion of the Pledged Collateral not perfected
as described in Section 4(g) shall constitute perfected Liens in favour of the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, on such Pledged Collateral as collateral security for the Obligations,
which Liens will be prior to all other Liens on such Pledged Collateral of such
Pledgor and which are enforceable as such against all creditors of such Pledgor
and any Person purporting to purchase such Pledged Collateral from such Pledgor;

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

(i) all consents of each member in each Limited Liability Company or Partnership
to the grant of the security interests provided hereby and to the transfer of
the Pledged LLC Interests or Pledged Partnership Interests, as the case may be,
to the Administrative Agent or its designee pursuant to the exercise of any
remedies under Section 8 have been obtained and are in full force and effect;

(j) the location of such Pledgor’s principal place of business and chief
executive office (and domicile for the purposes of the Quebec Civil Code) is the
place specified for such Pledgor on Schedule II, and for the four (4) months
preceding the date hereof has been the place specified for such Pledgor on
Schedule II, except as otherwise provided in Schedule II;

(k) (i) the exact legal name of such Pledgor is as specified for such Pledgor on
Schedule II; and (ii) such Pledgor has not changed its legal name in the twelve
(12) months preceding the date hereof, except as otherwise provided in Schedule
II;

(l) none of the Pledged Collateral that is a Pledged LLC Interest or Pledged
Partnership Interest and is subject to the STA:

(i) is dealt in or traded on any securities exchange or in any securities
market;

(ii) expressly provides by its terms that it is a “security” for the purposes of
the STA or otherwise subject to any other similar legislation; or

(iii) is held in a Securities Account.

(m) any Pledgor that controls or owns an interest in any Pledged ULC Interest
shall remain registered as the sole registered and beneficial owner of the
Pledged ULC Interests and will remain as registered and beneficial owner until
such time as the Pledged ULC Interests are effectively transferred into the name
of the Administrative Agent or any other Person on the books and records of the
Unlimited Liability Company. Nothing in this Pledge Agreement is intended to or
shall constitute the Administrative Agent or any Person other than the Unlimited
Liability Company a shareholder or member of such Unlimited Liability Company
until such time as notice is given to the applicable Pledgor and the Unlimited
Liability Company and further steps are taken thereunder so as to register the
Administrative Agent or any other Person as the holder of such Pledged ULC
Interests. The granting of the pledge and security interest pursuant to this
Pledge Agreement or any other Loan Document does not make the Administrative
Agent a successor to any Pledgor as a member or shareholder of any Unlimited
Liability Company, and neither the Administrative Agent nor any of its
respective successors or assigns hereunder shall be deemed to become a member or
shareholder of any Unlimited Liability Company by accepting this Pledge
Agreement or exercising any right granted herein or under any other Loan
Document unless and until such time, if any, when the Administrative Agent or
any successor or assign expressly becomes a registered member or shareholder of
any Unlimited Liability Company. To the extent any provision hereof would have
the effect of constituting the Administrative Agent or any other Person as a
shareholder or member of an Unlimited Liability Company prior to such time, such
provision shall be severed therefrom and ineffective with respect to the Pledged
ULC Interests without otherwise invalidating or rendering unenforceable this
Pledge Agreement or invalidating or rendering unenforceable such provision
insofar as it relates to Pledged Shares which are not Pledged ULC Interests.
Except upon the exercise of rights to sell or otherwise dispose of Pledged ULC
Interests following the occurrence and

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

during the continuance of an Event of Default hereunder, the Pledgor shall not
cause or permit, or enable any Unlimited Liability Company in which it holds
Pledged ULC Interests to cause or permit, the Administrative Agent to: (a) be
registered as shareholders or members of such Unlimited Liability Company;
(b) have any notation entered in their favour in the share register of such
Unlimited Liability Company; (c) be held out as shareholders or members of such
Unlimited Liability Company; (d) receive, directly or indirectly, any dividends,
property or other distributions from such Unlimited Liability Company by reason
of the Administrative Agent holding a security interest in such Unlimited
Liability Company; or (e) to act as a shareholder or member of such Unlimited
Liability Company, or exercise any rights of a shareholder or member including
the right to attend a meeting of, or to vote the shares of, such Unlimited
Liability Company.

5. Covenants. Each Pledgor covenants and agrees with the Administrative Agent
that, from and after the date of this Pledge Agreement until the Obligations are
paid in full, no Letters of Credit remain outstanding (unless such Letters of
Credit have been fully Cash Collateralized) and the Commitments have been
terminated:

(a) If any Pledgor shall, as a result of its ownership of any Pledged
Collateral, become entitled to receive or shall receive any stock certificate,
partnership interest certificate or membership interest certificate or similar
certificate evidencing such interest (including, without limitation, any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights, whether in addition
to, in substitution for, as a conversion of, or in exchange for any shares of
any Pledged Collateral, or otherwise in respect thereof, such Pledgor shall
accept the same as the Administrative Agent’s and the Secured Parties’ agent,
hold the same as collateral in trust for the Administrative Agent and the
Secured Parties and deliver the same forthwith to the Administrative Agent in
the exact form received, and duly endorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock or transfer power covering
such certificate duly executed in blank and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, on
behalf and for the ratable benefit of the Secured Parties, subject to the terms
hereof as additional collateral security for the Obligations. Any sums paid upon
or in respect of any Pledged Collateral upon the liquidation or dissolution of
any of the Issuers shall be paid over to the Administrative Agent to be held by
it hereunder on behalf and for the ratable benefit of the Secured Parties as
additional collateral security for the Obligations, and in case any distribution
of capital shall be made on or in respect of any Pledged Collateral or any
property shall be distributed upon or with respect to any Pledged Collateral
pursuant to the recapitalization or reclassification of the capital of any of
the Issuers or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Administrative Agent to be held by it on
behalf and for the ratable benefit of the Secured Parties, subject to the terms
hereof, as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of any Pledged Collateral
shall be received by any Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Administrative Agent and the Secured Parties
segregated from other funds of such Pledgor, as additional collateral security
for the Obligations.

(b) Without the prior written consent of the Administrative Agent, such consent
not to be unreasonably withheld and except as permitted under the Credit
Agreement, no Pledgor will (i) vote to enable, or take any other action to
permit, any of the Issuers to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock or other equity securities of any of the
Issuers, or (ii) sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, any Pledged Collateral, or (iii) create, incur
or permit to exist any Lien or option in favour of, or any claim of any Person
with respect to, any of the Pledged Collateral, or any interest therein, except
for the Lien provided for by this Pledge Agreement and Permitted Liens, or
(iv) enter into any agreement or undertaking restricting the right or ability of
any Pledgor or the Administrative Agent to sell, assign or transfer any of the
Pledged Collateral.

 

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(c) Each Pledgor shall maintain the security interest created by this Pledge
Agreement as a first, perfected security interest and shall defend such security
interest against the claims and demands of all Persons whomsoever. At any time
and from time to time, upon the written request of the Administrative Agent, and
at the sole expense of the Pledgors, each Pledgor will promptly and duly execute
and deliver such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purposes of obtaining
or preserving the full benefits of this Pledge Agreement and of the rights and
powers herein granted, including, without limitation, (i) the filing or
registration of any financing statements or financing change statements under
the PPSA or any similar personal property security legislation in effect in any
jurisdiction with respect to the Liens created hereby and (ii) taking any
actions necessary to enable the Administrative Agent to take delivery of the
Pledged Collateral or to obtain Control with respect thereto. If any amount
payable under or in connection with any of the Pledged Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Pledged Collateral pursuant to this Pledge
Agreement.

(d) Each Pledgor agrees, jointly and severally, to (i) pay, and to save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) with respect to, or resulting from, any
delay in paying, any and all Other Taxes which may be payable or determined to
be payable with respect to any of the Pledged Collateral or in connection with
any of the transactions contemplated by this Pledge Agreement and (ii) indemnify
each Secured Party as set forth in Section 11.6 of the Credit Agreement. The
agreements in this Section 5(d) shall survive the termination of this Pledge
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable under the Loan Documents.

(e) If any Pledgor shall at any time acquire any shares of Capital Stock of any
Subsidiary which is not an Issuer hereunder, such Pledgor shall (i) promptly
deliver such shares of Capital Stock, and all stock or other certificates
evidencing the same, to the Administrative Agent to be held as additional
collateral security for the Obligations hereunder (ii) promptly deliver to the
Administrative Agent a supplement to this Pledge Agreement, substantially in the
form of Exhibit A to this Pledge Agreement, duly completed, adding such shares
of Capital Stock to Schedule I hereto, and (iii) promptly cause such Subsidiary
to execute and deliver an acknowledgment and consent substantially in the form
appended as Annex I to Exhibit A to this Pledge Agreement. If any Wholly-Owned
Subsidiary of a Pledgor which is not a Pledgor hereunder (a “New Pledgor”) shall
at any time acquire any shares of Capital Stock of any Subsidiary, such New
Pledgor shall (i) promptly deliver such shares of Capital Stock, and all stock
or other certificates evidencing the same, to the Administrative Agent to be
held as additional collateral security for the Obligations hereunder
(ii) promptly deliver to the Administrative Agent a supplement to this Pledge
Agreement, substantially in the form of Exhibit A to this Pledge Agreement, duly
completed, including such New Pledgor as a Pledgor hereunder and adding such
shares of Capital Stock to Schedule I hereto, and (iii) promptly cause such
Subsidiary to execute and deliver an acknowledgment and consent substantially in
the form appended as Annex I to Exhibit A to this Pledge Agreement.

(f) Such Pledgor will not (i) unless thirty (30) days written notice to such
effect shall have been given and any filing or registration under the PPSA as
the Administrative Agent may reasonably request to maintain the perfected
security interest granted hereto and any hypothec has been made, change its
principal place of business and chief executive office (and domicile for the
purposes of

 

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the Quebec Civil Code) from that specified in Section 4(j); (ii) without ten
(10) Business Days’ prior written notice to the Administrative Agent, change its
name, identity or structure or (iii) unless thirty (30) days written notice to
such effect shall have been given to the Administrative Agent, continue or
reorganize under the laws of another jurisdiction; provided that in connection
with the ULC Conversion and the Amalgamation, any change to Kildair’s or
AcquireCo’s name and structure or Kildair’s or AcquireCo’s conversion and
amalgamation as an unlimited liability company under the laws of the province of
British Columbia shall not require prior written notice so long as the
Administrative Agent has received prompt confirmation thereof.

(g) Such Pledgor acknowledges and agrees that (i) to the extent each interest in
any Partnership controlled now or in the future by such Pledgor and pledged
hereunder is a Security, such interest shall be certificated and (ii) each such
interest shall at all times hereafter continue to be such a Security and
represented by such certificate. Such Pledgor further acknowledges and agrees
that with respect to any interest in any Partnership controlled now or in the
future by such Pledgor and pledged hereunder that is not a Security such Pledgor
shall at no time elect to treat any such interest as a “Security”, nor shall
such interest be represented by a certificate, unless such Pledgor provides
prior written notification to the Administrative Agent of such election and such
interest is thereafter represented by a certificate that is promptly delivered
to the Administrative Agent pursuant to the terms hereof.

(h) For greater certainty, each Pledgor acknowledges and agrees that any
security certificates evidencing Certificated Securities delivered to the
Administrative Agent pursuant to this Pledge Agreement shall be duly endorsed to
the Administrative Agent or its nominee or in blank by an effective endorsement
or accompanied by a duly executed instrument of transfer in favour of the
Administrative Agent or its nominee or in blank.

(i) Each Pledgor of a security interest in a Pledged ULC Interest agrees to
provide a proxy to hereby irrevocably constitute and appoint the Administrative
Agent as its proxy and attorney-in-fact with respect to its Pledged Collateral,
including the right to vote any of the Pledged Collateral, with full power of
substitution to do so. In addition to the right to vote any of the Pledged
Collateral, such Pledgor agrees to provide to the Administrative Agent any other
form of proxy or power of attorney as may be required to permit the
Administrative Agent to exercise the right contemplated hereby. No power of
attorney shall be exercised by the Administrative Agent other than in the name
of the Pledgor.

6. Cash Dividends; Voting Rights.

(a) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgors of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 7 below, each Pledgor shall be permitted to receive and retain all cash
distributions, dividends or preferred share redemption proceeds permitted to be
paid pursuant to the terms of the Credit Agreement and to exercise all voting,
corporate (with respect to Pledged Stock and Pledged ULC Interests), member
(with respect to Pledged LLC Interests) and partnership (with respect to Pledged
Partnership Interests) rights with respect to the Pledged Collateral.

(b) Notwithstanding Section 6(a), each Pledgor agrees that no vote shall be cast
or corporate, partnership or member right exercised or other action taken which
would impair any Pledged Collateral or which would result in any violation of
any provision of the Credit Agreement, this Pledge Agreement or any other Loan
Document.

 

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7. Rights of the Administrative Agent.

(a) If an Event of Default shall occur and be continuing and the Administrative
Agent shall give notice of its intent to exercise such rights to any Pledgor:
(i) the Administrative Agent shall have the right to receive any and all cash
dividends or other cash distributions paid in respect of the Pledged Collateral
(except with respect to ULC Interests) and make application thereof to the
Obligations in the order provided in Section 8(a) and (ii) (except with respect
to ULC Interests) at the request of the Administrative Agent, all shares of the
Pledged Stock, all Pledged LLC Interests and all Pledged Partnership Interests
shall be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (A) all voting,
corporate or other rights pertaining to such shares of Pledged Stock at any
meeting of shareholders of any of the Issuers or otherwise; (B) all members
rights, powers and privileges with respect to the Pledged LLC Interests to the
same extent as a member under the applicable Limited Liability Company
Agreement; (C) all partnership rights, powers and privileges with respect to the
Pledged Partnership Interests to the same extent as a partner under the
applicable Partnership Agreement; and (D) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options pertaining to
such shares of the Pledged Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or company
structure of any of the Issuers, or upon the exercise by any Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such shares
or interests of the Pledged Collateral, and in connection therewith, the right
to deposit and deliver any and all of the Pledged Collateral with any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing. Except upon the
exercise of rights to sell or otherwise dispose of ULC Interests following the
occurrence and during the continuance of an Event of Default hereunder, no
Guarantor shall cause or permit, or enable any Unlimited Liability Company in
which it holds ULC Interests to cause or permit, the Administrative Agent or any
of the Lenders to (a) be registered as shareholders or members of such Unlimited
Liability Company; (b) have any notation entered in its favour in the share
register of such Unlimited Liability Company; (c) be held out as a shareholder
or member of such Unlimited Liability Company; (d) receive, directly or
indirectly, any dividends, property or other distributions from such Unlimited
Liability Company by reason of the Administrative Agent holding a security
interest in such Unlimited Liability Company; or (e) act as a shareholder or
member of such Unlimited Liability Company, or exercise any rights of a
shareholder or member of such Unlimited Liability Company including the right to
attend a meeting of, or to vote the shares of, such Unlimited Liability Company.

(b) The rights of the Administrative Agent hereunder shall not be conditioned or
contingent upon the pursuit by the Administrative Agent of any right or remedy
against any of the Issuers or against any other Person which may be or become
liable in respect of all or any part of the Obligations or against any other
collateral security therefor, guarantee thereof or right of offset with respect
thereto. The Administrative Agent shall not be liable for any failure to demand,
collect or realize upon all or any part of the Pledged Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise
dispose of any Pledged Collateral upon the request of any Pledgor or any other
Person or to take any other action whatsoever with regard to the Pledged
Collateral or any part thereof.

8. Remedies.

(i) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
held in any Collateral Account in payment of the Obligations in the following
order:

1. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

 

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2. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

3. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

4. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

5. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

6. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

7. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Pledgor
or to whomsoever else may be lawfully entitled to receive the same.

(b) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Pledge Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the PPSA. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Pledgor, any of the Issuers or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may transfer
all or any part of the Pledged Collateral into the Administrative Agent’s name
or the name of its nominee or nominees, and/or may forthwith collect, receive,
appropriate and realize upon the Pledged Collateral, or any part thereof, and/or
may forthwith sell, assign, give option or options to purchase or otherwise
dispose of and deliver the Pledged Collateral

 

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or any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter market, at
any exchange, broker’s board or office of the Administrative Agent or any
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk and/or may take such other
actions as may be available under applicable law. The Administrative Agent or
any Secured Party shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Pledged Collateral so sold, free of any right or
equity of redemption in any Pledgor, which right or equity is hereby waived or
released. The Administrative Agent shall apply any Proceeds from time to time
held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Pledged Collateral or in any way relating to the Pledged
Collateral or the rights of the Administrative Agent and the other Secured
Parties arising out of the exercise by the Administrative Agent hereunder,
including, without limitation, documented fees and disbursements of counsel, to
the payment in whole or in part of the Obligations, in such order as is provided
in Section 8(a), and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law or
required pursuant to clause (vi) of Section 8(a), need the Administrative Agent
account for the surplus, if any, to any Pledgor. To the extent permitted by
applicable law, each Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by the Administrative Agent or any other Secured Party of any of
its rights hereunder. If any notice of a proposed sale or other disposition of
Pledged Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition. Each Pledgor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of Pledged Collateral are insufficient to pay
the Obligations (including the documented fees and disbursements of counsel
employed by the Administrative Agent or any Secured Party to collect such
deficiency to the extent provided therefor in Section 11.6 of the Credit
Agreement).

(c) If an Event of Default shall have occurred and be continuing, the
Administrative Agent may appoint or reappoint by instrument in writing, any
Person or Persons, whether an officer or officers or an employee or employees of
any Pledgor or not, to be an interim receiver, receiver or receivers
(hereinafter called a “Receiver”, which term when used herein shall include a
receiver and manager) of the Pledged Collateral of such Pledgor (including any
interest, income or profits therefrom) and may remove any Receiver so appointed
and appoint another in his/her/its stead. Any such Receiver shall, to the extent
permitted by applicable law, so far as concerns responsibility for his/her/its
acts, be deemed the agent of such Pledgor and not of the Administrative Agent,
and the Administrative Agent shall not be in any way responsible for any
misconduct, negligence or non-feasance on the part of any such Receiver or
his/her/its servants, agents or employees. Subject to the provisions of the
instrument appointing him/her/it, any such Receiver shall (i) have such powers
as have been granted to the Administrative Agent under this Section 8(c), and
(ii) shall be entitled to exercise such powers at any time that such powers
would otherwise be exercisable by the Administrative Agent under this
Section 8(c), which powers shall include the power to take possession of the
Pledged Collateral, to preserve the Pledged Collateral or its value, to carry on
or concur in carrying on all or any part of the business of such Pledgor and to
sell, lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of the Pledged Collateral. To facilitate the
foregoing powers, any such Receiver may, to the exclusion of all others,
including such Pledgor, enter upon, use and occupy all premises owned or
occupied by such Pledgor wherein the Pledged Collateral may be situate, maintain
the Pledged Collateral upon such premises, borrow money on a secured or
unsecured basis and use the Pledged Collateral directly in carrying on such
Pledgor’s business or as security for loans or advances to enable the Receiver
to carry on such Pledgor’s business or otherwise, as such Receiver shall, in its
reasonable discretion, determine. Except as may be otherwise directed by the
Administrative Agent, all money

 

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received from time to time by such Receiver in carrying out his/her/its
appointment shall be received in trust for and be paid over to the
Administrative Agent, and any surplus shall be applied in accordance with
applicable law. Every such Receiver may, in the discretion of the Administrative
Agent, be vested with all or any of the rights and powers of the Administrative
Agent.

9. Registration Rights; Private Sales.

(a) If the Administrative Agent shall determine to exercise its right to sell
any or all of the shares of Pledged Stock, any or all of the Pledged LLC
Interests, any or all of the Pledged ULC Interests or any or all of the Pledged
Partnership Interests pursuant to Section 8 hereof, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged Stock
and/or the Pledged LLC Interests and/or the Pledged ULC Interests and/or the
Pledged Partnership Interests, or that portion thereof to be sold, registered
under the provisions of the Securities Act (Ontario) or other applicable
securities laws, each Pledgor will cause any or all of the Issuers to
(i) execute and deliver, and cause the officers of such Issuers to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts as may be, in the opinion of the Administrative Agent, necessary or
advisable to register the shares of Pledged Stock and/or the Pledged LLC
Interests and/or Pledged ULC Interests and/or the Pledged Partnership Interests
or that portion of them to be sold, under the provisions of the Securities Act
(Ontario) or other applicable securities laws, (ii) to use its best efforts to
cause the registration statement and other related or similar documentation
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the shares of Pledged
Collateral, or that portion thereof to be sold, and (iii) to make all amendments
thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements, rules and regulations of the Securities Act (Ontario) and other
applicable securities authorities applicable thereto. Each Pledgor agrees to
cause the Issuers to comply with the provisions of the securities laws of any
and all jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, any financial
information required in connection therewith.

(b) Each Pledgor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral, by reason of certain
prohibitions contained in the Securities Act (Ontario) and other applicable
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favourable to the Administrative Agent than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Collateral for the period of time necessary to permit the
Issuers to register such securities for public sale under the Securities Act
(Ontario), or under other applicable securities laws, even if the Issuers would
agree to do so.

(c) Each Pledgor further agrees to use its reasonable efforts to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Pledged Collateral pursuant to this Pledge Agreement valid
and binding and in compliance with any and all other applicable Requirements of
Law. Each Pledgor further agrees that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Administrative Agent and
the Secured Parties, that the Administrative Agent and the Secured Parties have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against each Pledgor, and each Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.

 

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10. Irrevocable Authorization and Instruction to Issuers. Each Pledgor hereby
authorizes and instructs each Issuer to comply with any instruction received by
it from the Administrative Agent in writing that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Pledge Agreement, without any other or further instructions
from any Pledgor, and each Pledgor agrees that each Issuer shall be fully
protected in so complying.

11. Agent’s Appointment as Attorney-in-Fact.

(a) Each Pledgor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Pledgor and in the name of
each Pledgor or in the Administrative Agent’s own name, from time to time in the
Administrative Agent’s discretion, for the purpose of carrying out the terms of
this Pledge Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Pledge Agreement, including, without limitation,
any financing statements, financing change statements, endorsements, assignments
or other instruments of transfer.

(b) Each Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done pursuant to the power of attorney granted in Section 11(a). All
powers, authorizations and agencies contained in this Pledge Agreement are
coupled with an interest and are irrevocable until this Pledge Agreement is
terminated and the security interest created hereby is released.

(c) The power of attorney conferred hereby on the Administrative Agent is solely
to protect, preserve and realize upon its security interest in the Pledged
Collateral. This power of attorney shall neither create any agency on the part
of the Administrative Agent in favour of any Pledgor, nor any fiduciary
obligations or relationship on the part of any Secured Party for the benefit of
any Pledgor.

(d) Anything in this Section 11 to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 11 unless an Event of Default has occurred and is continuing.

12. Limitation on Duties Regarding Pledged Collateral. The Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Pledged Collateral in its possession shall be to deal with
it in the same manner as the Administrative Agent deals with similar securities
and property for its own account, except that the Administrative Agent shall
have no obligation to invest funds held in any Collateral Account and may hold
the same as demand deposits. None of the Administrative Agent, any Secured Party
or any of their respective directors, officers, employees, agents or advisors
shall be liable for failure to demand, collect or realize upon all or any part
of the Pledged Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Pledged Collateral upon the
request of the Pledgors or any other Person or to take any other action
whatsoever with regard to the Pledged Collateral or any part thereof. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees, agents or
advisors shall be responsible to any Pledgor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

13. Authorization of Financing Statements. Each Pledgor hereby authorizes the
Administrative Agent to file or register financing statements or financing
change statements with respect to the Pledged Collateral in such form and in
such filing offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Pledge Agreement.

14. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Pledged Collateral are irrevocable and powers
coupled with an interest.

15. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the Borrowers shall be effected in the manner set forth in Section 11.2
of the Credit Agreement and (b) notices, requests and demands to or upon any
other Pledgor shall be effected in the manner set forth in Section 15 of the
Guarantee.

16. Authority of Administrative Agent. Each Pledgor acknowledges that the rights
and responsibilities of the Administrative Agent under this Pledge Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and neither the Pledgors
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

17. Severability. Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

18. Paragraph Headings. The paragraph headings used in this Pledge Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

19. No Waiver; Cumulative Remedies. The Administrative Agent or any Secured
Party shall not by any act (except by a written instrument pursuant to
Section 20 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Administrative Agent or any Secured Party would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

20. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Pledgor and the Administrative Agent (subject to the Administrative Agent
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement), provided that any provision of this
Pledge Agreement may be waived by the Administrative Agent (subject to the
Administrative Agent obtaining the requisite consents of any applicable Secured
Parties pursuant to Section 11.1 of the Credit Agreement) in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent; provided further that, reasonable
updates and modifications to Schedule I hereto shall not require the consent of
the Administrative Agent or any other Secured Party and Schedule I shall be
deemed amended pursuant to any applicable Disposition permitted under the Credit
Agreement. This Pledge Agreement shall be binding upon the successors and
assigns of each Pledgor and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their respective successors and assigns. THIS
PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

21. Additional Pledgors. Each Subsidiary of a Pledgor which is required pursuant
to Section 5(e) to become party to this Pledge Agreement shall become a Pledgor
for all purposes of this Pledge Agreement upon execution and delivery by such
Subsidiary of a Supplement in the form of Exhibit A hereto.

22. Submission to Jurisdiction; Waivers. Each Pledgor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Pledge Agreement and the other Loan Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the Province of Ontario,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Pledgor at its
address set forth in (a) Section 11.2 of the Credit Agreement, with respect to
the Borrowers or (b) Section 15 of the Guarantee, with respect to each other
Pledgor, or at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

23. Waiver of Certain Damages. Each Pledgor and the Administrative Agent (on
behalf of itself and each Secured Party) hereby waives, to the maximum extent
not prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in Section 22 any special, exemplary, punitive
or consequential damages.

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

24. WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

25. Counterparts. This Pledge Agreement may be executed by one or more of the
parties to this Pledge Agreement on any number of separate counterparts
(including by facsimile transmission or other electronic transmission of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Pledge Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Pledge Agreement signed by all
the parties shall be lodged with the U.S. Borrower and the Administrative Agent.

26. English Language. The parties hereto confirm that it is their wish that this
Security Agreement and any other document executed in connection with the
transactions contemplated herein be drawn up in the English language only and
that all other documents contemplated thereunder or relating thereto, including
notices, may also be drawn up in the English language only. Les parties aux
présentes confirment que c’est leur volonté que cette convention et les autres
documents de crédit y affereuts soient rédigés en anglais seulement et que tous
les documents, y compris tous avis, envisagés par cette convention soient
rédigés en anglais seulement.

[SIGNATURE PAGE FOLLOWS]

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the undersigned has caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

KILDAIR SERVICE LTD., as a Pledgor By:  

 

  Name:   Title:

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SPRAGUE RESOURCES COOPERATIEF U.A., as a Pledgor By:  

 

  Name:   Title:

SPRAGUE RESOURCES ULC,

as a Pledgor

By:  

 

  Name:   Title:

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

TRANSIT P.M. ULC, as a Pledgor By:  

 

  Name:   Title:

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

WINTERGREEN TRANSPORT CORPORATION ULC,

as a Pledgor

By:  

 

  Name:   Title:

 

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

ACKNOWLEDGMENT AND CONSENT

The undersigned, the Issuers referred to in the foregoing Pledge Agreement,
hereby acknowledge receipt of a copy thereof and agree to be bound thereby and
to comply with the terms thereof insofar as such terms are applicable to it. The
undersigned agree to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The undersigned further agree that the terms of Section 9(c) of the
Pledge Agreement shall apply to them, mutatis mutandis, with respect to all
actions that may be required of them under or pursuant to or arising out of
Section 9 of the Pledge Agreement.

[SIGNATURE PAGE FOLLOWS]

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

KILDAIR SERVICE LTD., as an Issuer By:  

 

  Name:   Title:

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SPRAGUE RESOURCES ULC, as an Issuer By:  

 

  Name:   Title:

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

WINTERGREEN TRANSPORT CORPORATION ULC, as an Issuer By:  

 

  Name:   Title:

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

TRANSIT P.M. ULC, as an Issuer By:  

 

  Name:   Title:

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

A. DESCRIPTION OF PLEDGED STOCK

 

ACKNOWLEDGEMENT AND CONSENT TO

CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE I to

Pledge Agreement

B. DESCRIPTION OF PLEDGED LLC INTERESTS

 

   Sch. I-2   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE I to

Pledge Agreement

 

C. DESCRIPTION OF PLEDGED PARTNERSHIP INTERESTS

 

   Sch. I-3   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE I to

Pledge Agreement

 

D. DESCRIPTION OF PLEDGED ULC INTERESTS

 

   Sch. I-4   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE II to

Pledge Agreement

PLEDGORS, FILING OFFICES, LOCATION AND BASIS FOR DETERMINING LOCATION

 

   Sch. II-1   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT A to

Pledge Agreement

CANADIAN PLEDGE AGREEMENT SUPPLEMENT

CANADIAN PLEDGE AGREEMENT SUPPLEMENT, [            ,         ] (this
“Supplement”), made by [NAME OF PLEDGOR], a                      [corporation]
and [NAME OF PLEDGOR], a                      [corporation] (each an “Existing
Pledgor” and collectively, the “Existing Pledgors”), [and by [NAME OF NEW
PLEDGOR], a                      [corporation] and [NAME OF NEW PLEDGOR], a
                     [corporation] (each, a “New Pledgor” and collectively, the
“New Pledgors”]; collectively, the Existing Pledgors and the New Pledgors are
referred to herein as the “Pledgors”), in favour of JPMORGAN CHASE BANK, N.A. as
administrative agent (in such capacity, the “Administrative Agent”) under the
Credit Agreement (as defined in the Pledge Agreement referred to below) for the
benefit of the Secured Parties (as so defined).

1. Reference is hereby made to that certain Canadian Pledge Agreement, dated as
of [            ,         ] made by the Existing Pledgors in favour of the
Administrative Agent (as amended, supplemented or otherwise modified as of the
date hereof, the “Pledge Agreement”). Terms defined in the Pledge Agreement are
used herein as therein defined.

2. [Each Pledgor hereby confirms and reaffirms the security interest in the
Pledged Collateral granted to the Administrative Agent for the benefit of the
Secured Parties under the Pledge Agreement, and, as additional collateral
security for the prompt and complete payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations and in order to
induce the Lenders to make their respective extensions of credit to the
Borrower, and the Issuing Lenders to issue their letters of credit, under the
Credit Agreement and the other Loan Documents, each Pledgor hereby delivers to
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, all of the shares, membership or partnership interests of Capital Stock
of [INSERT NAME OF ADDITIONAL ISSUER], a                      [corporation]
(each, an “Additional Issuer”, together the “Additional Issuers”) listed in
Schedule I hereto, together with all certificates, options, or rights of any
nature whatsoever which may be issued or granted by each Additional Issuer in
respect of such Capital Stock while the Pledge Agreement, as supplemented
hereby, is in force (the “Additional Pledged Stock”, “Additional Pledged LLC
Interests”, “Additional Pledged Partnership Interest” or “Additional Pledged ULC
Interest”, as applicable, as described on such Schedule I) and hereby grants to
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, a first priority security interest in the Additional Pledged Stock, the
Additional Pledged LLC Interests and the Additional Pledged Partnership
Interests, as applicable, and all Proceeds thereof. From and after the date of
this Supplement, as used in the Pledge Agreement as supplemented by this
Supplement and for all purposes of the Pledge Agreement as so supplemented,
“Pledged Stock” shall be deemed to include the Additional Pledged Stock,
“Pledged LLC Interests” shall be deemed to include the Additional Pledged LLC
Interests, “Pledged Partnership Interests” shall be deemed to include the
Additional Pledged Partnership Interests, “Pledged ULC Interests” shall be
deemed to include the “Additional ULC Interests” and “Issuers” shall be deemed
to include each of the Additional Issuers.]

3. [Each New Pledgor agrees to all of the provisions of the Pledge Agreement and
effective on the date hereof, becomes a party to the Pledge Agreement, as a
Pledgor, with the same effect as if the undersigned were an original signatory
to the Pledge Agreement. Each New Pledgor, as additional collateral security for
the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations and in order to induce the Lenders
to make their respective extensions of credit to the Borrowers, and the Issuing
Lenders to issue their letters of credit,

 

   Exh. A-1   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT A to

Pledge Agreement

 

under the Credit Agreement and the other Loan Documents, hereby delivers to the
Administrative Agent, on behalf and for the ratable benefit of the Lenders, all
of the shares or interests of Capital Stock of [INSERT NAME OF NEW ISSUER], a
                     [corporation] (the “New Issuer”) listed in Schedule I
hereto, together with all certificates, options, or rights of any nature
whatsoever which may be issued or granted by the New Issuer in respect of such
Capital Stock while the Pledge Agreement, as supplemented hereby, is in force
(the “New Pledged Stock”, “New Pledged LLC Interests”, “New Pledged Partnership
Interest” or “ New Pledged ULC Interests”, as applicable, as described on such
Schedule I) and hereby grants to the Administrative Agent, on behalf and for the
ratable benefit of the Lenders, a first priority security interest in the New
Pledged Stock, the New Pledged LLC Interests, the New Pledged Partnership
Interests and the New Pledged ULC Interests, as applicable, and all Proceeds
thereof. From and after the date of this Supplement, as used in the Pledge
Agreement as supplemented by this Supplement and for all purposes of the Pledge
Agreement as so supplemented, “Pledged Stock” shall be deemed to include the New
Pledged Stock, “Pledged LLC Interests” shall be deemed to include the New
Pledged LLC Interests, “Pledged Partnership Interests” shall be deemed to
include the New Pledged Partnership Interests, “Pledged ULC Interests” shall be
deemed to include the New Pledged ULC Interests and “Issuers” shall be deemed to
include the New Issuer. Each New Pledgor has set forth such New Pledgor’s name
and the applicable filing office for a financing statement covering the Pledged
Collateral owned by such New Pledgor on Schedule II attached hereto.]

4. Each Pledgor hereby represents and warrants that the representations and
warranties contained in Section 4 of the Pledge Agreement are true and correct
in all material respects on the date of this Supplement with references therein
to the “Pledged Stock” to include [the Additional Pledged Stock] and [the New
Pledged Stock], with references to “Pledged LLC Interests” to include [the
Additional Pledged LLC Interests] and [the New Pledged LLC Interests], with
references to “Pledged Partnership Interests” to include [the Additional Pledged
Partnership Interests] and [the New Pledged Partnership Interests], with
references to “Pledged ULC Interests” to include [the Additional Pledged ULC
Interests] and [the New Pledged ULC Interests]with references to the “Issuers”
therein to include each [New Issuer] and each [Additional Issuer], and with
references to the Pledge Agreement to mean the Pledge Agreement as supplemented
hereby.

5. This Supplement is supplemental to the Pledge Agreement, forms a part thereof
and is subject to the terms thereof. From and after the date of this Supplement,
[Schedule I to the Pledge Agreement shall be deemed to include each item listed
on Schedule I to this Supplement] [Schedule II to the Pledge Agreement shall be
deemed to include each item listed on Schedule II to this Supplement]. This
Supplement shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the federal laws of Canada
applicable therein.

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered as of the date first above written.

 

[NAME OF PLEDGOR] By  

 

  Name:   Title:

 

   Exh. A-2   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

Schedule I to Supplement

A. DESCRIPTION OF ADDITIONAL PLEDGED STOCK

 

Name of Issuer

   Class of
Stock    Stock
Certificate
Number    Number of
Shares    Percentage of
Stock Owned
by Pledgor    Pledgor                              

B. DESCRIPTION OF ADDITIONAL PLEDGED LLC INTERESTS

 

Name of Issuer

   Class of
LLC Interest    Certificate
Number    Number of
Interests    Percentage of
LLC Interest
Owned by
Pledgor    Pledgor                              

C. DESCRIPTION OF ADDITIONAL PLEDGED PARTNERSHIP INTERESTS

 

Name of Issuer

   Class of
Partnership
Interest    Certificate
Number    Number of
Interests    Percentage of
Partnership
Interest
Owned by
Pledgor    Pledgor                              

D. DESCRIPTION OF ADDITIONAL PLEDGED ULC INTERESTS

 

Name of Issuer

   Class of
Stock    Certificate
Number    Number of
Shares/
Interests    Percentage
of ULC
Interests
Owned by
Pledgor    Pledgor                              

 

  Sch. I-1 to Exh. A   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

Schedule I to Supplement

 

E. DESCRIPTION OF NEW PLEDGED STOCK

 

Name of Issuer

   Class of
Stock    Stock
Certificate
Number    Number of
Shares    Percentage of
Stock Owned
by Pledgor    Pledgor                              

F. DESCRIPTION OF NEW PLEDGED LLC INTERESTS

 

Name of Issuer

   Class of
LLC Interest    Certificate
Number    Number of
Interests    Percentage of
LLC Interest
Owned by
Pledgor    Pledgor                              

G. DESCRIPTION OF NEW PLEDGED PARTNERSHIP INTERESTS

 

Name of Issuer

   Class of
Partnership
Interest    Certificate
Number    Number of
Interests    Percentage of
Partnership
Interest
Owned by
Pledgor    Pledgor                              

H. DESCRIPTION OF NEW PLEDGED ULC INTERESTS

 

Name of Issuer

   Class of
Partnership
Interest    Certificate
Number    Number of
Interests    Percentage of
ULC Interest
Owned by
Pledgor    Pledgor                              

 

  Sch. I-2 to Exh. A   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

Schedule II to Supplement

NEW PLEDGORS AND FILING OFFICES

 

Name of New Pledgor

 

Filing Office

       

 

   Sch. II-1 to Exh. A   CANADIAN PLEDGE AGREEMENT

--------------------------------------------------------------------------------

Schedule II to Supplement

 

ACKNOWLEDGMENT AND CONSENT

The undersigned, the [New] [Additional] Issuer referred to in the foregoing
Supplement to Canadian Pledge Agreement, hereby acknowledges receipt of a copy
thereof and of the Pledge Agreement referred to therein and agrees to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. The undersigned agrees to notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in
Section 5(a) of the Pledge Agreement. The undersigned further agrees that the
terms of Section 9(c) of the Pledge Agreement shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it under or
pursuant to or arising out of Section 9 of the Pledge Agreement.

 

[NAME OF NEW/ADDITIONAL ISSUER] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit C-3

to Credit Agreement

FORM OF DUTCH MEMBERSHIP PLEDGE AGREEMENT

THIS DEED is dated 9 December 2014 and made between:

 

1. THE ENTITIES listed in Schedule 1 as pledgors (the “Pledgors” and each a
“Pledgor”);

 

2. JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent of the
other Secured Parties, as pledgee (the “Pledgee”); and

 

3. SPRAGUE RESOURCES COÖPERATIEF U.A., a cooperative with excluded liability
(coöperatie met uitgesloten aansprakelijkheid) having its official seat
(statutaire zetel) in Amsterdam, the Netherlands and registered with the Dutch
trade register under number 61938459 (the “Cooperative”).

WHEREAS

The Pledgors and the Cooperative have or will have monetary payment obligations
to the Secured Parties, under or in connection with the Loan Documents.

The Pledgee acts as Administrative Agent (as defined in the Credit Agreement,
defined hereafter) for the benefit of the Lender Parties (as defined in the
Credit Agreement, defined hereafter) and, for the purpose of the creation of the
rights of pledge in favour of the Pledgee in its capacity as Administrative
Agent, the Pledgors and the Cooperative will have monetary payment obligations
to the Pledgee under or in connection with its Parallel Debt.

The Parties have agreed that each Pledgor will, by way of third party security
as applicable, create the rights of pledge in favour of the Pledgee as security
for the monetary payment obligations of each Pledgor and the Cooperative to the
Pledgee under or in connection with its respective Parallel Debt.

IT IS AGREED as follows:

DEFINITIONS AND INTERPRETATION

Definitions

Capitalised terms used in this deed have the following meanings:

 

“Clause”    a clause in this deed. “Collateral”    with respect to a Pledgor,
its Membership, and all present and future rights related thereto, including but
not limited to rights in respect of profits, distributions from the
Cooperative’s reserves or member accounts, liquidation or other forms of
distributions and all its present and future rights pursuant to or in connection
with any Member Agreement entered into by that Pledgor.

--------------------------------------------------------------------------------

“Credit Agreement”    the amended and restated credit agreement dated 9 December
2014 (as amended, restated, supplemented or otherwise modified from time to
time), among Sprague Operating Resources LLC, Sprague Resources ULC and Kildair
Service Ltd., as borrowers, the several banks and other financial institutions
or entities from time to time parties thereto, the Administrative Agent and
certain other agents a party thereto. “Enforcement Event”    a default within
the meaning of section 3:248 NCC with respect to the payment of any of the
Secured Obligations by a Pledgor or the Cooperative. “Event of Default”    an
Event of Default as defined in the Credit Agreement. “Guarantee Agreement”   
the Guarantee as defined in the Credit Agreement “Lender Party”    a Lender
Party as defined in the Credit Agreement. “Loan Document”    a Loan Document as
defined in the Credit Agreement. “Member Agreement”    with respect to a
Pledgor, any agreement entered into by it in the course of the business carried
out or caused to be carried out by the Cooperative within the meaning of article
2:53(1) NCC. “Membership”    with respect to a Pledgor, its membership in the
Cooperative. “NCC”    the Netherlands Civil Code. “Parallel Debt”    the
Parallel Debt as defined in clause 28 (Parallel debt) of the Guarantee
Agreement. “Party”    a party to this deed.

--------------------------------------------------------------------------------

“Schedule”    a schedule to this deed. “Secured Obligations”    all obligations
consisting of monetary payment obligations (vorderingen tot betaling van een
geldsom) (whether present or future, actual or contingent) by the Pledgors and
the Cooperative to the Pledgee under or in connection with (i) clause 28
(Parallel debt) of the Guarantee Agreement and (ii) this deed (other than in
connection with its obligations referred to under (i)) but only to the extent
such payment obligations are due to the Pledgee itself and not any of its
assignees. “US Security Agreement”    the U.S. Security Agreement as defined in
the Credit Agreement. “Voting Rights”    with respect to the Membership of a
Pledgor, the voting rights attached to that Membership.

Construction

 

  (a) This deed is entered into between the Pledgee on the one hand and each of
the Pledgors on the other hand for efficiency purposes and shall be construed so
as to constitute a separate pledge agreement between each Pledgor on the one
hand and the Pledgee on the other hand. Once this deed is signed by the Pledgee,
it will become effective between the Pledgee on the one hand and each Pledgor
who signs this deed on the other hand irrespective whether all Pledgors have at
such time signed this deed.

 

  (b) A reference to any “Collateral” is a reference to that Collateral in whole
or in part and includes all rights attached to such Collateral, including
dependent rights and ancillary rights.

 

  (c) A reference to the “Pledgee” is also a reference to any successor or
assignee of the Pledgee and a reference to the “Pledgor” is also a reference to
any successor or assignee of the Pledgor.

 

  (d) A reference to a “right of pledge” is, unless the context requires
otherwise, a reference to a right of pledge purported to be created under this
deed by each Pledgor over each individual asset falling within the scope of the
definition of Collateral of that Pledgor.

 

  (e) A reference to (a right in respect of) any Collateral of a Pledgor is a
reference to the share (aandeel) only of that Pledgor if that Collateral is
owned jointly by that Pledgor and one or more other parties.

 

  (f) A reference to a “default” with respect to the payment of the Secured
Obligations is a reference to any non-payment of the Secured Obligations when
due, without any reminder letter or notice of default being required.

--------------------------------------------------------------------------------

  (g) An Event of Default is “continuing” if it has not been cured or waived by
the Lender Party authorised to do so.

 

  (h) Words denoting the singular shall include the plural and vice versa.

 

  (i) English language words used in this deed intend to describe Netherlands
legal concepts only and the consequences of the use of those words in English
law or any other foreign law are to be disregarded.

AGREEMENT AND CREATION OF PLEDGE

Agreement to pledge Collateral

As security for the payment when due of the Secured Obligations, each Pledgor
agrees with the Pledgee to grant to the Pledgee, as applicable by way of third
party security, a right of pledge over its Collateral.

Creation of pledge over Collateral

As security for the payment when due of the Secured Obligations, each Pledgor,
as the case may be in advance, hereby grants to the Pledgee, as applicable by
way of third party security, a right of pledge over its Collateral. The Pledgee,
as the case may be in advance, hereby accepts this right of pledge.

Security intent

 

  (a) Each Pledgor confirms and agrees that any right of pledge so created is
intended to extend from time to time to any (however fundamental) of the
following or any combination thereof:

 

  (i) variation, amendment, modification, novation, restatement, increase,
extension or addition of or to any of the Loan Documents or to any agreement or
document (under whatever name) including without limitation by way of increase,
reduction, alteration of the purpose or other amendment of the facilities made
available under it, addition of new facilities, any rescheduling of indebtedness
incurred thereunder;

 

  (ii) accession or retirement of the parties to any of the Loan Documents;

 

  (iii) extension of any commitment (or its maturity or availability) or any
redenomination of a commitment into another currency under any Loan Document;

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  (iv) any deferral or redenomination of any amount owing under any Loan
Document;

 

  (v) any facility, tranche or amount made available under any of the Loan
Documents in any currency or currencies after the date of this deed for the
purposes of or in connection with any of the following: business acquisitions of
any nature; increasing working capital; enabling investor distributions to be
made; carrying out restructurings; refinancing existing facilities; refinancing
any other indebtedness; making facilities available to new borrowers; any other
variation or extension of the purposes for which any such facility, tranche or
amount might be made available from time to time (an “Incremental Facility”);
and/or

 

  (vi) any increase in any margin, fee or commission or any other amount owing
or accruing under any Loan Document or any fees, costs and/or expenses
associated with any of the foregoing.

 

  (b) Each Pledgor confirms and agrees that any right of pledge so created is
intended not to be affected by any amendment, novation, supplement, extension or
restatement of any Loan Document or any combination of the foregoing (and
including by way of an Incremental Facility); and

 

  (c) Each Pledgor confirms and agrees that if the Pledgee would transfer the
Parallel Debt to a successor administrative agent (the “New Administrative
Agent”) in accordance with the terms of the Loan Documents, it is intended that:

 

  (i) claims of the New Administrative Agent arising after the date of such
transfer and falling within the definition of Secured Obligations shall be
secured by the right of pledge;

 

  (ii) Collateral acquired by such Pledgor after the date of such transfer shall
be subject to the right of pledge (and the Cooperative agrees and confirms that
any right of pledge created by such Pledgor in advance must be deemed to have
been created also for the benefit of such New Administrative Agent); and

 

  (iii) any power of attorney or waiver granted to the Pledgee under this deed
must be deemed to have been created also for the benefit of such New
Administrative Agent and can be enforced against the Cooperative by the New
Administrative Agent.

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REPRESENTATIONS AND WARRANTIES

Representations and warranties

Each Pledgor represents and warrants to the Pledgee that:

it has full title to its Collateral to the extent acquired prior to the moment
of this representation and it has full power to dispose of and encumber that
Collateral;

its Collateral is not subject to any limited right or other encumbrance and no
offer has been made or agreement entered into to transfer or encumber, whether
or not in advance, its Collateral and no attachment has been levied on its
Collateral;

there are no outstanding options or other rights entitling the holder thereof to
the transfer of (part of) its Collateral or any of the present and future rights
relating thereto;

no rights to receive future profits or other forms of distributions with respect
to its Membership, have been granted to any party other than to the Pledgee
pursuant to this deed;

it has not given or received notice of cancellation (opzegging) of the
Membership nor has it received notice of expulsion (ontzetting) from the
Cooperative;

no depositary receipts have been issued for its Membership;

there are no outstanding or pending admissions of new members of the
Cooperative;

no resolution to dissolve the Cooperative has been adopted nor has the Chamber
of Commerce notified the Cooperative of its intention to dissolve the
Cooperative within the meaning of section 2:19a NCC;

no resolution has been adopted by the general meeting to amend the articles of
association of the Cooperative, to the extent such amendment adversely affects
the interest of the Pledgee under this deed or the other Loan Documents;

the execution and performance of this deed does not violate any agreement or
other legal relationship to which it is a party or any laws or regulation by
which it is bound;

no litigation, arbitration or administrative proceeding is taking place or
pending or, to the best of its knowledge, threatened against it, which could or
is reasonably likely to have a material adverse effect on its position under
this deed or on the economic value of the Collateral; and

no corporate action nor any other steps have been taken or legal proceedings
have been instituted or threatened against it for the entering into a
(provisional)

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suspension of payments or for bankruptcy or for the appointment of a receiver or
similar officer of it or of any or all of its assets or for its dissolution, or
for an order that it be declared en désastre or for a preliminary vesting order
over any of its assets.

Times when representations made

The representations and warranties in Clause 0 (Representations and warranties)
are deemed to be repeated by each Pledgor on the date hereof and on each date
specified in the Credit Agreement. Each representation and warranty deemed to be
made after the date of this deed shall be deemed to be made by reference to the
facts and circumstances existing at the date the representation and warranty is
deemed to be made.

UNDERTAKINGS

Information

At the Pledgee’s first reasonable request and in such form as the Pledgee may
designate, a Pledgor must provide all information, evidence and documents
relating to its Collateral which the Pledgee may deem reasonably necessary to
exercise its rights under this deed.

Restrictions on voting

No Pledgor shall without the prior written consent of the Pledgee vote its
Membership (whether in a meeting or by way of written resolution outside a
meeting) in favour of:

 

  (a) in as far as the general meeting of the Cooperative is the corporate body
authorised to resolve on these matters, the transfer of any membership in the
Cooperative, the cancellation of or expulsion from a membership of the
Cooperative or any reduction of any reserve or member account of the
Cooperative, unless permitted under the Credit Agreement;

 

  (b) a resolution to amend the articles of association of the Cooperative, to
the extent such amendment could reasonably expected to be adverse to the
interests of the Pledgee under this deed or the other Loan Documents;

 

  (c) a resolution to dissolve the Cooperative or relating to the liquidation of
the Cooperative’s business or disposal of all or a material part of the
Cooperative’s assets;

 

  (d) a resolution which would adversely affect the validity and enforceability
of the rights of pledge; or

 

  (e) a resolution for any merger (fusie) or demerger (splitsing) in which the
Cooperative is involved.

Inspection of books and records

The Pledgee shall at all times subject to Section 7.6 of the Credit Agreement be
granted access to the premises of a Pledgor to inspect that Pledgor’s books and
records relating to its Collateral.

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Duty to notify

Each Pledgor and the Cooperative shall notify the Pledgee immediately of all
circumstances of which it becomes aware which could reasonably be expected to
affect the interests of the Pledgee under this deed, including but not limited
to:

an application being filed for any Pledgor’s or the Cooperative’s bankruptcy or
(provisional) suspension of payments;

that Pledgor or the Cooperative being declared bankrupt, being granted
(provisional) suspension of payments, being unable to pay its debts in respect
of taxes or social security premiums or planning to notify the relevant
authorities thereof;

an attachment being levied on any Collateral and/or any claim or notice from any
third party with respect to any Collateral; and

an event analogous to any of the above occurring under the laws of any other
jurisdiction.

Disposal and negative pledge

Unless permitted under the Credit Agreement, no Pledgor shall without the prior
written consent of the Pledgee:

sell, transfer or otherwise dispose of its Collateral in whole or in part and
whether or not in advance;

terminate its Membership or take any other action which would result in the
Cooperative having less than two members;

create or permit to subsist whether or not in advance any limited right or other
encumbrance on its Collateral other than as envisaged under this deed or permit
to subsist any attachment over its Collateral; or

other than in the ordinary course of business and on arm’s length terms vary the
term or extend, release, determine, rescind or grant time for payment in respect
of its Collateral if that variation, extension, release, determination,
rescission or granting of time for payment in respect of its Collateral would
have a material adverse effect on the rights of pledge.

Further assurances

At the Pledgee’s first request, a Pledgor shall at its own expense execute any
further encumbrances and assurances in favour of, or for the benefit of, the
Pledgee and perform all acts as the Pledgee may reasonably deem necessary to
create, perfect or protect the rights of pledge purported to be created by that
Pledgor or to exercise or have the full benefit of its rights under or in
connection with this deed (including the right to enforce these rights).

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VOTING RIGHTS

Voting Rights vest in the Pledgee

The Voting Rights shall be vested in (toekomen aan) the Pledgee, subject to the
cumulative conditions precedent that (i) an Event of Default shall have occurred
which is continuing and (ii) the Cooperative and each Pledgor have been notified
in writing by the Pledgee that it wishes to exercise the Voting Rights. The
Cooperative confirms (and each Pledgor agrees) that a written notice from the
Pledgee to the Cooperative and each Pledgor in accordance with the provisions of
this deed, stating that an Event of Default has occurred which is continuing and
that the Pledgee wishes to exercise the Voting Rights shall be sufficient for it
to accept the Pledgee as being exclusively entitled to exercise the Voting
Rights.

Power of Attorney

To the extent that Netherlands law does not allow for the Voting Rights to vest
in the Pledgee as referred to in Clause 0 (Voting Rights vest in the Pledgee)
and without prejudice to Clause 0 (Power of Attorney), each Pledgor grants to
the Pledgee, subject to the cumulative conditions precedent referred to in
Clause 0 (Voting Rights vest in the Pledgee), an irrevocable power of attorney
with the power of sub-delegation to attend general meetings of the Cooperative
on behalf of that Pledgor and to exercise the Voting Rights on behalf of that
Pledgor (whether in or outside a meeting).

PROFITS, DISTRIBUTIONS AND OTHER PAYMENTS

Collection by Pledgee

The Pledgee is authorised to collect all profits and other forms of
distributions and other payments on the Collateral.

Collection by Pledgor

The Pledgee hereby authorises each Pledgor to collect, subject to the
restrictions on profits and other forms of distributions and other payments in
respect of the Collateral under the terms of the Credit Agreement, all profits
and other forms of distributions and other payments on the Collateral of that
Pledgor and during such period while the Pledgor is so authorised, the Pledgee
agrees not to exercise such rights. The Pledgee may revoke this authorisation of
any Pledgor upon the occurrence of an Event of Default which is continuing and
notice to each Pledgor. Upon such revocation the relevant Pledgor cannot derive
any further rights from section 3:246(4) NCC and the Pledgee may inform the
Cooperative of that revocation and that further payments must be made into a
bank account designated by the Pledgee.

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IMMEDIATE FORECLOSURE

 

  (a) Upon the occurrence of an Enforcement Event the Pledgee may, without any
further notice of default or other notice being required, sell the Collateral of
that Pledgor (in any order as the Pledgee in its sole discretion may deem
appropriate) in accordance with applicable law.

 

  (b) No Pledgor shall be entitled to file a request with an interim provisions
judge to request that its Collateral be sold in a deviating manner as provided
for in section 3:251 NCC.

 

  (c) The Pledgee shall not be obliged to give notice of an intended sale as
provided for in section 3:249 NCC, and the Pledgee shall not be obliged to give
the notice following the sale as provided for in section 3:252 NCC.

 

  (d) Each Pledgor hereby irrevocably and unconditionally waives any right it
may have under sections 3:233, 3:234, 6:139 and 6:154 NCC which waiver is hereby
accepted by the Pledgee.

 

  (e) The Pledgee is not obliged to first foreclose on any other security right
created under or in connection with the Loan Documents.

APPLICATION OF PROCEEDS

The Pledgee will apply the proceeds from the sale of any Collateral towards
satisfaction of the relevant Secured Obligations in accordance with the
provisions of Section 8(b) of the U.S. Security Agreement, subject to mandatory
provisions of Netherlands law.

CANCELLATION

The Pledgee is entitled to cancel any right of pledge under this deed in whole
or in part by notice in writing to the relevant Pledgor within the meaning of
section 3:81(2)(d) NCC.

LIABILITY

The Pledgee is not liable to any Pledgor for any loss or damage arising from any
exercise of, or failure to exercise, its rights under this deed, except for
gross negligence or wilful misconduct of the Pledgee.

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COSTS

The Pledgee may charge:

 

  (i) all reasonable and documented costs, losses, claims and expenses of
whatever nature (including legal fees) incurred by the Pledgee relating to or
arising out of this deed (including the entering into and registration of this
deed and/or any amendment of this deed), in connection with Clause 0 (Further
assurances); and/or

 

  (ii) in the event of an enforcement of the rights of pledge in connection with
this deed, charge all costs, losses, claims and expenses of whatever nature
(including legal fees) incurred by the Pledgee.

POWER OF ATTORNEY

Each Pledgor grants to the Pledgee an irrevocable power of attorney with the
power of substitution to perform all acts, including acts of disposition
(beschikkingshandelingen) on behalf of that Pledgor which in the sole opinion of
the Pledgee are necessary in order to (i) create or perfect the rights of pledge
purported to be created under this deed by that Pledgor and/or (ii) to have the
full benefit of those rights (including performing any of that Pledgor’s
obligations under this deed and exercising any of that Pledgor’s rights to and
in connection with the Collateral). The Pledgee may act as counterparty of a
Pledgor even in the event of a conflict of interest. Each Pledgor hereby waives
its rights under section 3:68 NCC which waiver is hereby accepted by the
Pledgee. The Pledgee shall only use this power of attorney if the relevant
Pledgor fails to comply with any of its obligations under or in connection with
this deed or an Event of Default has occurred which is continuing.

PLEDGOR’S RIGHTS

Creation of pledge over rights to recourse

As security for the payment when due of the Secured Obligations, each Pledgor
agrees to create and hereby creates by way of third party security in advance in
favour of the Pledgee a right of pledge over each right that Pledgor may have to
recourse against the Cooperative. The Cooperative confirms receipt of notice of
the rights of pledge created pursuant to this Clause 0. The Pledgee may, on
behalf of a Pledgor, waive or cancel by notice in writing the rights pledged
pursuant to this Clause 0.

Subordination of rights to recourse and rights of subrogation

If and to the extent that the rights of pledge purported to be created pursuant
to Clause 0 (Creation of pledge over rights to recourse) have not been created
or if these rights of pledge have been waived or cancelled, the rights a Pledgor
may have to recourse against the Cooperative and all rights of security and
other ancillary rights attached to the rights of the Pledgee or any other Lender
Party to which a Pledgor may be subrogated shall be subordinated to the Secured
Obligations.

Waiver of rights to recourse

If and to the extent that the rights of pledge purported to be created and
retained pursuant to Clause 0 (Creation of pledge over rights to recourse) have
not been created, each Pledgor hereby waives, under the condition precedent that
the Cooperative is sold to a third party, the rights it may have to recourse
against the Cooperative.

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Waiver of rights of subrogation

Each Pledgor hereby unconditionally and irrevocably waives all rights of
security and other ancillary rights attached to the rights of the Pledgee or any
other Lender Party to which that Pledgor may be subrogated.

SUBORDINATION PROVISIONS

Section 10 of the U.S. Security Agreement is hereby incorporated herein by
reference, mutatis mutandis.

MISCELLANEOUS

No rescission, nullification or suspension

To the extent permitted by law, each Pledgor hereby waives any right it may have
at any time:

 

  (a) under sections 6:228 or 6:265 NCC or any other ground (under any
applicable law) to rescind or nullify, or demand in legal proceedings the
rescission or nullification of this deed; and

 

  (b) under sections 6:52, 6:262 or 6:263 NCC or any other ground (under any
applicable law) to suspend any obligation under or in connection with this deed.

Transfer of rights and obligations

 

  (a) No Pledgor may transfer any of its rights or obligations or its
contractual relationship under or in connection with this deed without the prior
written consent of the Pledgee.

 

  (b) To the extent permitted under the Loan Documents, the Pledgee may transfer
its rights and obligations under or in connection with this deed by an
assignment, assumption of debt or transfer of contractual relationship. Each
Pledgor and the Cooperative in advance irrevocably consent to and provide their
co-operation with any such assumption of debt and/or transfer of contractual
relationship, as the case may be.

 

  (c) Upon a transfer by the Pledgee of any rights in respect of the Secured
Obligations the transferee will become entitled to the rights of relevant pledge
or to a corresponding undivided part thereof, as the case may be.

 

  (d) To the extent permitted under the Loan Documents, the Pledgee is entitled
to provide any transferee or proposed transferee with any information concerning
any Pledgor and/or the Collateral.

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Notices

Any notice or other communication given under or in connection with this deed
must be made in accordance with the Credit Agreement.

Records and calculations of the Pledgee

The books and records maintained by the Pledgee and any calculation or
determination by the Pledgee of the existence and the amount of the Secured
Obligations, are prima facie evidence (dwingend bewijs) of the existence and the
amounts of the Secured Obligations and other matters to which they relate.

Partial invalidity

If, at any time, any provision of this deed is or becomes illegal, invalid or
unenforceable with respect to a Pledgor in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions with respect to that Pledgor and with respect to any other Pledgor
nor the legality, validity or enforceability of such provision under the law of
any other jurisdiction will in any way be affected or impaired.

Amendments

This deed may only be amended by a written agreement executed by all of the
parties hereto.

No implied waiver and no forfeiture

Any waiver under this deed must be given by written notice to that effect.

Where the Pledgee does not exercise any right under or in connection with this
deed (which includes the granting by the Pledgee to a Pledgor of an extension of
time in which to perform its obligations under any of these provisions), this is
not deemed to constitute a waiver of that right and does not lead to forfeiture
of that right of the Pledgee under this deed.

The rights of the Pledgee under this deed are not deemed to constitute a waiver
of any other right the Pledgee may have under Netherlands law or any other
applicable law. In case of a conflict of the rights of the Pledgee under this
deed and the rights of the Pledgee under Netherlands law or any other applicable
law, the provisions of this deed will apply.

Confirmation of Awareness of Scope of Secured Obligations

Each Pledgor confirms that it has taken note of the content of the Credit
Agreement and the other Loan Documents and that it is aware of the scope of the
Secured Obligations and the provisions relating to the payment thereof by the
Cooperative.

GOVERNING LAW AND JURISDICTION

 

  (a) This deed and any non-contractual obligations arising out of or in
connection with it are governed by the laws of the Netherlands.

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  (b) If a Party incorporated under the laws of the Netherlands is represented
by an attorney in connection with the signing and/or execution of this deed or
any other deed, agreement or document referred to in this deed or made pursuant
to this deed, it is hereby expressly acknowledged and accepted by each other
Party that the existence and extent of the attorney’s authority and the effects
of the attorney’s exercise or purported exercise of his authority shall be
governed by the laws of the Netherlands.

 

  (c) The courts of Amsterdam, the Netherlands have exclusive jurisdiction to
settle any dispute arising from or in connection with this deed (including a
dispute regarding the existence, validity or termination of this deed) (a
“Dispute”). This paragraph (c) is for the benefit of the Pledgee only. As a
result, the Pledgee shall not be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by law, the
Pledgee may take concurrent proceedings in any number of jurisdictions.

ACKNOWLEDGEMENT AND COMPANY STATEMENTS

The Cooperative:

 

  (a) hereby confirms that it has received notice of the rights of pledge from
the Pledgors to the extent these rights are created on a Membership and hereby
acknowledges, consents to and cooperates with the creation of the rights of
pledge;

 

  (b) if the Cooperative voluntarily keeps or is obligated to keep a members’
register, will cause the rights of pledge to be duly entered in the members’
register without delay and provide the Pledgee, as soon as practically possible,
with a copy of the relevant entries in its members’ register;

 

  (c) acknowledges that it has received notice of the rights of pledge to the
extent these rights are created on present or future claims against the
Cooperative in accordance with articles 3:236(2) NCC and 3:94 NCC;

 

  (d) undertakes not to terminate a Membership or take any other action which
would result in the Cooperative having less than two members;

 

  (e) undertakes not to co-operate with the admission of new members of the
Cooperative or the transfer of the membership of any existing member;

 

  (f) confirms that there are no outstanding or pending admissions of new
members of the Cooperative;

 

  (g) co-operates in advance to any transfer of the legal relationship under and
consents in advance to any transfer of a debt vis-à-vis the Cooperative arising
from a Member Agreement in connection with a sale of Collateral as referred to
in Clause 0 (Immediate Foreclosure);

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  (h) undertakes to obtain the co-operation and consent referred to in paragraph
(g) of this Clause, in advance, from any other party to a Member Agreement which
the Cooperative causes to carry out its business; and

 

  (i) shall act in accordance with the provisions of this deed.

APPROVAL OF RIGHT OF PLEDGE

The general meeting of the Cooperative, pursuant to article 5.7 of the articles
of association of the Cooperative, by written members’ resolution dated
9 December 2014, has resolved to approve the creation of the rights of pledge by
means of this deed.

This deed has been entered into on the date stated at the beginning of this deed
and may be signed in any number of counterparts and by way of exchange of pdf or
facsimile copies of signed signature pages, all of which taken together shall
constitute one and the same deed.

[signature page follows]

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SIGNATURES

THE PLEDGORS

SPRAGUE OPERATING RESOURCES LLC

 

 

   

 

By:     By: Title:     Title:

SPRAGUE CO-OP MEMBER LLC

 

 

   

 

By:     By: Title:     Title:

--------------------------------------------------------------------------------

THE PLEDGEE

JPMORGAN CHASE BANK, N.A.

 

 

   

 

By:     By: Title:     Title:

--------------------------------------------------------------------------------

THE COOPERATIVE

SPRAGUE RESOURCES COÖPERATIEF U.A.

 

 

   

 

By:     By: Title:     Title:

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SCHEDULE 1

THE PLEDGORS

THE PLEDGORS

Name of Pledgor

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Exhibit D-1

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Sprague Operating Resources
LLC, Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. All capitalized terms used but not
defined herein have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record and beneficial
owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s))
in respect of which it is providing this certificate, (ii) it is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a
“10-percent shareholder” of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished the Administrative Agent and each Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable). By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform each Borrower and the Administrative Agent,
and (2) the undersigned shall have at all times furnished each Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF NON-EXEMPT [LENDER][AGENT]] By:  

 

  Name:   Title:

Date:                  , 201    

--------------------------------------------------------------------------------

Exhibit D-2

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Sprague Operating Resources
LLC, Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. All capitalized terms used but not
defined herein have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record and beneficial
owner of the participation in respect of which it is providing this certificate,
(ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a “10-percent shareholder” of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a “controlled foreign
corporation” related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable).
By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender in writing, and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                  , 201    

--------------------------------------------------------------------------------

Exhibit D-3

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Sprague Operating Resources
LLC, Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. All capitalized terms used but not
defined herein have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect to such participation, neither the undersigned
nor any of its direct or indirect partners/members is a “bank” extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a “10-percent shareholder” of any
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a “controlled foreign corporation”
related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form
W-8BEN or IRS Form W-8BEN-E (as applicable) from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title:

Date:                  , 201    

--------------------------------------------------------------------------------

Exhibit D-4

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Sprague Operating Resources
LLC, Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. All capitalized terms used but not
defined herein have the meanings ascribed to them in the Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record owner of the
Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect
of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such Loan(s) (as well as any
promissory note(s) evidencing such Loan(s)), (iii) with respect to the extension
of credit pursuant to this Credit Agreement or any other Loan Document, neither
the undersigned nor any of its direct or indirect partners/members is a “bank”
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a “10-percent
shareholder” of any Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (v) none of its direct or indirect partners/members is a “controlled
foreign corporation” related to any Borrower as described in
Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and each Borrower with
IRS Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or IRS Form W-8BEN-E (as applicable) or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) from each
of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform each Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished each Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF NON-EXEMPT [LENDER][AGENT]] By:  

 

  Name:     Title:  

Date:                  , 201    

--------------------------------------------------------------------------------

Exhibit E

to Credit Agreement

FORM OF SECRETARY’S CERTIFICATE

December 9, 2014

The undersigned, the Secretary of [INSERT LOAN PARTY] (the “Company”), does
hereby certify in such capacity, and not individually, as follows pursuant to
the Amended and Restated Credit Agreement, dated as of December 9, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, Kildair Service Ltd.
and Sprague Resources ULC, as Borrowers, the Lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other
agents parties thereto, that as of the date hereof:

(1) Certificate/Articles of Incorporation/Formation/Organization. Attached
hereto as “Exhibit A” is a true, correct and complete copy of the
[Certificate/Articles of Incorporation/Formation/Organization] of the Company,
together with any and all amendments thereto, as on file with the [Secretary of
State of the State of [JURISDICTION]/appropriate governmental authority in the
Company’s jurisdiction of formation, incorporation or organization], and no
action has been taken to amend, modify or repeal such [Certificate/Articles of
Incorporation/Formation/Organization], the same being in full force and effect
in the attached form as of the date hereof.

(2) Bylaws/Governing Agreements. Attached hereto as “Exhibit B” is a true,
correct and complete copy of the [By-laws/Limited Liability Company Agreement]
of the Company, together with any and all amendments thereto, and no action has
been taken to amend, modify or repeal such [By-laws/ Limited Liability Company
Agreement], the same being in full force and effect in the attached form as of
the date hereof.

(3) Resolutions/Authority. Attached hereto as “Exhibit C” is a true and correct
copy of the resolutions that have been duly adopted by the unanimous written
consent of the [Board of Directors of the Company] dated [                 ,
        ], and such resolutions have not been amended, modified, revoked or
rescinded in any respect since their adoption and remain in full force and
effect on the date hereof.

(4) Incumbency. “Exhibit D” attached hereto sets forth the names, titles, and
specimen signatures of individuals who are duly elected, qualified and acting
officers of [the general partner of][the managing member of][the members of] the
Company as of the date hereof, each of whom is authorized to execute and deliver
on behalf of the Company the Credit Agreement and the other Loan Documents as
more particularly described and defined in the resolutions attached hereto as
“Exhibit C”, and any other agreements, documents, certificates or writings in
connection therewith which are required of the Company to effect or evidence the
Credit Agreement.

(5) Good Standing/Existence. Attached hereto as “Exhibit E” [are copies of/is a
copy of a] recently dated certificate(s) issued by the Secretary of State or
other appropriate authority of each jurisdiction in which the Company was
formed, incorporated or organized or is qualified to do business, such
certificates evidencing the good standing and existence of the Company in such
jurisdictions.

--------------------------------------------------------------------------------

(6) [Unanimous Shareholders Agreement. There is no unanimous shareholders
agreement or shareholder declaration respecting the Company and the Company is
not party to any other agreement restricting the powers of the directors.]
[Attached hereto as “Exhibit F” is a true and complete copy of the shareholders’
agreement relating to the Company and all amendments relating thereto and, as of
the date hereof, such shareholders’ agreement is in full force and effect. No
proceedings have been taken or are pending to amend or supplement the same.]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has hereunto executed this Secretary’s
Certificate as of the day and year first above written.

 

 

Name:   Title:   Secretary

The undersigned,                     , does hereby certify that [he][she] is the
duly elected and presently incumbent                     of the Company referred
to above, and in such capacity does hereby certify to the Administrative Agent
that                     is the duly elected and presently incumbent Secretary
of the Company.

 

 

Name: Title:

--------------------------------------------------------------------------------

Exhibit A

[Certificate/Articles of Incorporation/Formation/Organization and all amendments
thereto]

--------------------------------------------------------------------------------

Exhibit B

[By-laws/ Limited Liability Company Agreement]

--------------------------------------------------------------------------------

Exhibit C

[Resolutions]

--------------------------------------------------------------------------------

Exhibit D

Incumbency

 

Name

  

Office

  

Date

  

Signature

--------------------------------------------------------------------------------

Exhibit E

[Good Standing Certificates]

--------------------------------------------------------------------------------

[Exhibit F]

[Shareholders’ Agreement]

--------------------------------------------------------------------------------

Exhibit F

to Credit Agreement

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

This Assignment and Acceptance Agreement (the “Assignment and Acceptance”) is
dated as of the Effective Date set forth below and is entered into by and
between the Assignor named below (the “Assignor”) and the Assignee named below
(the “Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
restated, supplemented or otherwise modified from time to time, “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including without limitation any letters of credit, guarantees and swing line
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by the Assignor to the
Assignee pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Acceptance, without representation or warranty by the Assignor.

--------------------------------------------------------------------------------

1.    Assignor:   

 

2.    Assignee:   

 

                                                                                
and is [a][an] [Subsidiary] [Affiliate] [Approved Fund]of [identify Lender]]1 3.
   Borrowers: Sprague Operating Resources LLC, Kildair Service Ltd. and Sprague
Resources ULC 4.    Administrative Agent: JPMorgan Chase Bank, N.A., as
administrative agent under the Credit Agreement 5.    Credit Agreement: The
Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time), among Sprague
Operating Resources LLC, Sprague Resources ULC and Kildair Service Ltd., as
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto. 6.   
Assigned Interest:   

 

Facility Assigned

   Aggregate
Amount of
Commitment/Loans/
Obligations for all Lenders      Amount of
Commitment/Loans/
Obligations
Assigned      Percentage
Assigned of
Commitment/Loans/
Obligations2  

Dollar Working Capital Facility Commitment

   $                    $                           % 

Multicurrency Working Capital Facility Commitment

   $                    $                           % 

Acquisition Facility Commitment

   $                    $                           % 

Effective Date:                  , 201   [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

1  Select as applicable.

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

--------------------------------------------------------------------------------

The Assignee agrees to deliver to the Administrative Agent a completed
administrative questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrowers, the other Loan Parties and their
Affiliates or their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable laws, including federal, state, provincial and territorial
securities laws.

--------------------------------------------------------------------------------

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

  Name:     Title:   ASSIGNEE [NAME OF ASSIGNEE] By:  

 

  Name:     Title:  

--------------------------------------------------------------------------------

Consented to and Accepted: JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:  

 

  Name:   Title: Consented to: [JPMORGAN CHASE BANK, N.A., as a Dollar Working
Capital Facility Issuing Lender, and a Dollar Swing Line Lender By:  

 

  Name:   Title: [                    ], as [a Dollar Working Capital Facility
Issuing Lender] [a Dollar Swing Line Lender], By:  

 

  Name:   Title: By:  

 

  Name:   Title:]3

 

3  Include for Assignments of [Dollar Working Capital Facility Commitment]
[Dollar Swing Line Facility Commitment].

--------------------------------------------------------------------------------

[JPMORGAN CHASE BANK, N.A., as a Multicurrency Working Capital Facility Issuing
Lender, and a Multicurrency Swing Line Lender] By:  

 

  Name:   Title: [                    ], as a [Multicurrency Working Capital
Facility Issuing Lender] [a Multicurrency Swing Line Lender], By:  

 

  Name:   Title: By:  

 

  Name:   Title:]4

 

4  Include for Assignments of Multicurrency Working Capital Facility Commitment.

--------------------------------------------------------------------------------

[JPMORGAN CHASE BANK, N.A., as an Acquisition Facility Issuing Lender By:  

 

  Name:   Title: [                    ], as an Acquisition Facility Issuing
Lender, By:  

 

  Name:   Title: By:  

 

  Name:   Title:]5 [Consented to: SPRAGUE OPERATING RESOURCES LLC, as Borrower
By:  

 

  Name:   Title:]6

 

5  Include for Assignments of Acquisition Facility Commitment.

6  Include if required by Section 11.7(c) of the Credit Agreement.

--------------------------------------------------------------------------------

ANNEX 1

Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
supplemented or otherwise modified from time to time (the “Credit Agreement”),
among Sprague Operating Resources LLC (the “U.S. Borrower”), Kildair Service
Ltd. (“Kildair”), Sprague Resources ULC (“AcquireCo” and, together with Kildair,
the “Initial Canadian Borrowers”), the Lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity,
the “Administrative Agent”), and the other agents parties thereto. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement.

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ACCEPTANCE AGREEMENT

1. Representations and Warranties.

(a) Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
MLP, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the MLP,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

(b) Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender and (v) attached to the Assignment and Acceptance is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

--------------------------------------------------------------------------------

3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
email or telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. This Assignment and Acceptance
shall be governed by, and construed in accordance with, the law of the State of
New York.

--------------------------------------------------------------------------------

Exhibit G

to Credit Agreement

FORM OF BORROWING BASE REPORT

 

Date:   

 

   Borrower:    Sprague Operating Resources LLC For:    Credit Agreement dated
as of December 9, 2014

This report, the schedule attached as Exhibit 1 hereto and the accompanying
supporting information (collectively, the “Report”) is delivered pursuant to the
Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC (the “U.S. Borrower”),
Kildair Service Ltd. (“Kildair”) and Sprague Resources ULC (“AcquireCo”), as
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement.

The undersigned hereby certifies to the Administrative Agent that:

(1) such Responsible Person is the [insert title] of the U.S. Borrower;

(2) the amounts set forth on the schedule attached as Exhibit 1 hereto
constitute all Collateral which has been or is being used in determining
availability for an advance or letter of credit issued under the Credit
Agreement as of [—];

(3) the sum of (i) the Total Working Capital Facility Extensions of Credit plus
(ii) the Total Acquisition Facility Working Capital Extensions of Credit, do not
exceed the Aggregate Borrowing Base Amount as of the date hereof; and

(4) the information contained in this Report is true and correct in all material
respects as of the date hereof, is based on information contained in the U.S.
Borrower’s financial accounting records, and is all of the information required
to be delivered pursuant to Section 7.2(c) of the Credit Agreement and the
definition of “Borrowing Base Report” under the Credit Agreement in relation to
the Aggregate Borrowing Base Amount.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

--------------------------------------------------------------------------------

EXHIBIT 1

CONSOLIDATED BORROWING BASE REPORT

As of [Borrowing Base Reporting Date]

U.S. BORROWING BASE AMOUNT

 

COLLATERAL TYPE    Gross
Value     Advance
Rate     Borrowing Base
Value  

Eligible Cash and Cash Equivalents

     [             ]      100 %      [             ] 

Eligible Tier 1 Accounts Receivable

     [             ]      90 %      [             ] 

Eligible Unbilled Tier 1 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Tier 2 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Unbilled Tier 2 Accounts Receivable

     [             ]      80 %      [             ] 

Eligible Hedged Petroleum Inventory

     [             ]      85 %      [             ] 

Eligible Petroleum Inventory

     [             ]      80 %      [             ] 

Eligible Hedged Natural Gas Inventory

     [             ]      85 %      [             ] 

Eligible Natural Gas Inventory

     [             ]      80 %      [             ] 

Eligible Coal Inventory

     [             ]      70 %      [             ] 

Eligible Asphalt Inventory

     [             ]      70 %      [             ] 

U.S. Prepaid Purchases

     [             ]      75 %      [             ] 

Eligible Net Liquidity in Futures Accounts

     [             ]      85 %      [             ] 

Eligible Exchange Receivables

     [             ]      80 %      [             ] 

Eligible Short Term Unrealized Forward Gains

     [             ]      80 %      [             ] 

Eligible Medium Term Unrealized Forward Gains

     [             ]      70 %      [             ] 

Eligible Long Term Unrealized Forward Gains

     [             ]      60 %      [             ] 

Eligible Letters of Credit Issued for Commodities Not Yet Received

     [             ]      80 %      [             ] 

Paid But Unexpired Letters of Credit

     [             ]      100 %      [             ] 

Eligible RINs

     [             ]      70 %      [             ] 

Less

      

First Purchaser Lien Amount

     [             ]      100 %      [             ] 

Product Taxes

     [             ]      100 %      [             ] 

Swap Amounts due to Qualified Counterparties in excess of $20,000,000.00

     [             ]      110 %      [             ] 

Overcollateralization Amount

     [             ]      100 %      [             ] 

Total U.S. Borrowing Base

         [             ] 

Less

      

--------------------------------------------------------------------------------

KILDAIR BORROWING BASE AMOUNT

 

COLLATERAL TYPE    Gross
Value     Advance
Rate     Borrowing Base
Value  

Eligible Cash and Cash Equivalents

     [             ]      100 %      [             ] 

Eligible Tier 1 Accounts Receivable

     [             ]      90 %      [             ] 

Eligible Unbilled Tier 1 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Tier 2 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Unbilled Tier 2 Accounts Receivable

     [             ]      80 %      [             ] 

Eligible Hedged Petroleum Inventory

     [             ]      85 %      [             ] 

Eligible Petroleum Inventory

     [             ]      80 %      [             ] 

Eligible Asphalt Inventory

     [             ]      70 %      [             ] 

Kilair Prepaid Purchases

     [             ]      75 %      [             ] 

Eligible Net Liquidity in Futures Accounts

     [             ]      85 %      [             ] 

Eligible Short Term Unrealized Forward Gains

     [             ]      80 %      [             ] 

Eligible Letters of Credit Issued for Commodities Not Yet Received

     [             ]      80 %      [             ] 

Paid But Unexpired Letters of Credit

     [             ]      100 %      [             ] 

Less

      

Reserves

     [             ]        [             ] 

Product Taxes

     [             ]      100 %      [             ] 

Swap Amounts due to Qualified Counterparties in excess of $5,000,000.00

     [             ]      110 %      [             ] 

Overcollateralization Amount

     [             ]      100 %      [             ] 

Total Kildair Borrowing Base

         [             ] 

--------------------------------------------------------------------------------

AGGREGATE BORROWING BASE AMOUNT

 

EXTENSIONS OF CREDIT       

U.S. Borrowing Base

     [             ] 

Kildair Borrowing Base

     [             ] 

Less

  

Dollar Working Capital Facility Letters of Credit

     [             ] 

Multicurrency Working Capital Facility Letters of Credit

     [             ] 

Dollar Working Capital Facility Loans

     [             ] 

Multicurrency Working Capital Facility Loans

     [             ] 

Acquisition Facility Working Capital Letters of Credit

     [             ] 

Acquisition Facility Working Capital Loans

     [             ] 

Dollar Swing Line obligations

     [             ] 

Multicurrency Swing Line obligations

     [             ] 

Total Extensions of Credit for calculation

     [             ]    

 

 

 

AGGREGATE BORROWING BASE AVAILABILITY

     [             ]    

 

 

 

--------------------------------------------------------------------------------

SPRAGUE OPERATING RESOURCES LLC, as Borrower By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit H-1

to Credit Agreement

FORM OF AMENDED AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT

AMENDED AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT, dated as of
                     (as amended, supplemented or otherwise modified from time
to time, this “Subordination Agreement”), by and among SPRAGUE OPERATING
RESOURCES LLC, a Delaware limited liability company (the “Company” and, together
with each other Loan Party (as defined in the Credit Agreement referred to
below) listed on the signature pages hereof or which becomes a party hereto,
each an “Obligor” and, collectively, the “Obligors”) and JPMorgan Chase Bank,
N.A., as administrative agent (together with its successors and assigns in such
capacity, the “Administrative Agent”) under the Credit Agreement (as hereinafter
defined).

RECITALS

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Company, Kildair Service Ltd.
(“Kildair”) and Sprague Resources ULC (“AcquireCo”), as Borrowers, the Lenders
from time to time parties thereto, the Administrative Agent, and the other
agents parties thereto, the Lenders have severally agreed to make Loans to and
the Issuing Lenders have agreed to issue or provide Letters of Credit for the
account of any Borrower upon the terms and subject to the conditions set forth
therein, which Loans may be evidenced by the Notes issued by any Borrower
thereunder;

WHEREAS, each Obligor has made or may make from time to time certain loans,
advances or other extensions of credit to one or more of the other Obligors; and

WHEREAS, it is a covenant under Section 8.2(b) of the Credit Agreement that each
Obligor enter into this Subordination Agreement with the Administrative Agent in
respect of all amounts from time to time owing to such Obligor (including any
interest thereon) from any other Obligor.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, the capitalized terms used
herein which are defined in, or by reference in, the Credit Agreement shall have
the meanings specified therein. In addition, as used in this Subordination
Agreement, the following terms have the following meanings:

“Payment in Full of the Senior Obligations”: (a) the indefeasible payment in
full in cash of all amounts due or to become due (whether or not all or any of
the Senior Obligations have been declared due and payable prior to the date on
which such Senior Obligations would otherwise have become due and payable) on or
in respect of all Senior Obligations, and (b) the termination of the
Commitments.

“Senior Obligations”: the collective reference to the unpaid principal of and
interest on the Loans, unpaid Reimbursement Obligations and interest thereon and
all other Obligations (for the avoidance of doubt, including, without
limitation, interest accruing after the filing of any petition in

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bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Loan Party, whether or not a claim for post filing
or post-petition interest is allowed in such proceeding) of any Loan Party to
the Lenders, the Issuing Lenders, the Cash Management Banks, Qualified Cash
Management Banks, Qualified Counterparties and the Agents (collectively, the
“Lender Parties”).

“Subordinated Obligations”: with respect to any Obligor, any and all amounts
from time to time owing to such Obligor (including any interest thereon) from
any other Obligor.

“Subordination Event”: the Senior Obligations becoming due and payable in full,
whether upon maturity, acceleration or otherwise.

2. Subordination. (a) Each Obligor agrees that the Subordinated Obligations
shall be Subordinate and Junior in Right of Payment to all Senior Obligations.

(a) As used in this Subordination Agreement the term “Subordinate and Junior in
Right of Payment” shall mean that:

(i) no part of the Subordinated Obligations shall have any claim to the assets
of any Obligor on a parity with or prior to the claim of the Senior Obligations,
and payment of all of the Subordinated Obligations is and shall be subject,
subordinate and deemed junior in right of payment to the prior Payment in Full
of the Senior Obligations;

(ii) upon the occurrence and during the continuance of an Event of Default, and
following receipt by any Loan Party of a written notice from the Administrative
Agent prohibiting the following,

(A) no Obligor will take, demand or receive from any other Obligor and no
Obligor will make, give or permit, directly or indirectly, by set off,
redemption, purchase or in any other manner, any payment of or security for the
whole or any part of the Subordinated Obligations unless otherwise permitted by
the Credit Agreement or consented to in writing by the Administrative Agent, and

(B) no Obligor will accelerate for any reason the scheduled maturities of any
Subordinated Obligations unless permitted in writing by the Administrative
Agent;

provided that, upon the occurrence and during the continuance of an Event of
Default, no payments permitted pursuant to clause (A) above shall be made into
any Deposit Account, Securities Account or Commodity Account of any Loan Party
that is not a Controlled Account (in each case as defined in the applicable
Security Agreement); provided, further, that so long as no Event of Default has
occurred and is continuing, each Obligor may make payments of interest on and
principal of the Subordinated Obligations, including, without limitation, any
payments on Subordinated Obligations consisting of customary revolving
intercompany payables consistent with past practice; and

(iii) in the event of any Subordination Event, any payment or distribution of
any kind or character, whether in cash, property or securities which, but for
the subordination provisions of this Subordination Agreement, and subject to the
proviso in the preceding subsection (ii) would otherwise be payable or
deliverable upon or in respect of the Subordinated Obligations, shall instead be
paid over or delivered to the Administrative Agent for application on account of
the Senior Obligations, and no Obligor shall receive any such payment or
distribution or any benefit therefrom.

 

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(b) Upon the occurrence of a Subordination Event arising pursuant to
Section 9.1(g) of the Credit Agreement, (i) if any Obligor shall have failed to
file claims or proofs of claim with respect to the Subordinated Obligations
earlier than thirty (30) days prior to the deadline for any such filing, such
Obligor shall execute and deliver to the Administrative Agent such powers of
attorney, assignments or other instruments as the Administrative Agent may
reasonably request to file such claims or proofs of claim and (ii) unless each
Lender Party shall otherwise agree in writing, until the Payment in Full of the
Senior Obligations, no Obligor shall be entitled to receive any payment on
account of principal of (or premium, if any) or interest on or other amounts
payable in respect of the Subordinated Obligations, and to that end, any payment
or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in respect of Subordinated
Obligations in any such case, filing, petition, plan or arrangement, proceeding,
receivership, dissolution, liquidation or other winding up proceeding (such
proceedings, collectively, “Insolvency Proceedings”) shall instead be paid or
delivered to the Administrative Agent for application to the Senior Obligations
that are due and payable until the Payment in Full of the Senior Obligations
shall have first occurred.

(c) If any Insolvency Proceeding is commenced by or against any Obligor:

(i) the Administrative Agent and each other Lender Party is hereby irrevocably
authorized and empowered (in its own name or in the name of the applicable
Obligor or otherwise), but shall have no obligation, to demand, sue for, collect
and receive every payment or distribution in respect of the Subordinated
Obligations above and give acquittance therefor and to file claims and proofs of
claim and take such other action (including voting the Subordinated Obligations
or enforcing any security interest or other lien securing payment of the
Subordinated Obligations) as such Lender Party may deem necessary or advisable
for the exercise or enforcement of any of the such Lender Party’s rights or
interests hereunder; and

(ii) each Obligor shall duly and promptly take such action as the Administrative
Agent or any other Lender Party may request in its good faith business judgment
(A) to collect the Subordinated Obligations for the account of the Lender
Parties and to file appropriate claims or proofs of claim in respect of the
Subordinated Obligations, (B) to execute and deliver to the Lender Parties such
powers of attorney, assignments, or other instruments as such Lender Parties may
request in order to enable them to enforce any and all claims with respect to,
and any security interests and other liens securing payment of, the Subordinated
Obligations and (C) to collect and receive any and all payments or distributions
which may be payable or deliverable upon or with respect to the Subordinated
Obligations.

(d) Should any payment or distribution or security, or the proceeds of any
thereof, be collected or received by any Obligor in respect of Subordinated
Obligations, and such collection or receipt is not expressly permitted hereunder
prior to the payment in full of the Senior Obligations, such Obligor will,
forthwith deliver the same to the Administrative Agent, to the extent
practicable in precisely the form received (except for the endorsement or the
assignment of the holder thereof where necessary) and, until so delivered, the
same shall be held in trust by such Obligor as the property of the Lender
Parties.

(e) Each Obligor waives any right that it may have to be subrogated to the
rights of the Lender Parties to receive payments or distributions of assets of
any other Obligor made on the Senior

 

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Obligations or to otherwise seek reimbursement, indemnity or contribution or
payment of any kind from any other Obligor in respect of amounts paid to the
Lender Parties in lieu of such Obligor by operation of this Subordination
Agreement, until such time as the Senior Obligations have been indefeasibly paid
in full in cash and the Commitments have been terminated.

(f) Each Obligor hereby waives any and all notices of renewal, extension or
accrual or increase of any of the Senior Obligations, present or future, and
agrees and consents that without notice to or assent by such Obligor:

(i) the obligations and liabilities of any other Obligor or any other party or
parties for or upon the Senior Obligations (and/or any promissory note(s),
security document or guaranty evidencing or securing any of the same) may, from
time to time, in whole or in part, be renewed, extended, modified, amended,
accelerated, compromised, supplemented, terminated, sold, exchanged, waived or
released or increased;

(ii) the Administrative Agent and each other Lender Party may exercise or
refrain from exercising any right, remedy or power granted by the Credit
Agreement, any other Loan Document or any other document creating, evidencing or
otherwise related to any of the Senior Obligations or at law, in equity, or
otherwise, with respect to any of the Senior Obligations or any collateral
security, hypothec or lien (legal or equitable) held, given or intended to be
given therefor (including, without limitation, the right to perfect or register
any lien, hypothec or security interest created in connection therewith); and

(iii) any and all Collateral or other collateral security and/or Liens (legal or
equitable) at any time, present or future, held, given or intended to be given
for any of the Senior Obligations, and any rights or remedies of any Lender
Party in respect thereof may, from time to time, in whole or in part, be
exchanged, sold, surrendered, released, modified, waived or extended by such
Lender Party;

(iv) in each case, as the Administrative Agent or any other Lender Party may
deem advisable and all without impairing, abridging, diminishing, releasing or
affecting the subordination to the Senior Obligations provided for herein.

(g) Each Obligor acknowledges and agrees that the Administrative Agent and each
other Lender Party has relied upon and will continue to rely upon the
subordination provided for herein in entering into the Credit Agreement.

3. Representations and Warranties. Each Obligor hereby represents and warrants
that, as of the date hereof, such Obligor has no material claims against any
other Obligor arising out of breach of contract or tort or otherwise.

4. Transfers of Subordinated Obligations. Each Obligor agrees that it will not
assign, transfer, sell or otherwise dispose of its right, title and interest in
any Subordinated Obligation to any other Person, other than an Affiliate or a
Subsidiary, which transferee shall agree to the terms of this Subordination
Agreement.

5. Miscellaneous. (a) No failure to exercise, and no delay in exercising, on the
part of the holders, assignees and beneficiaries from time to time of the Senior
Obligations, any right, power or privilege under this Subordination Agreement
shall operate as a waiver thereof; nor shall any single or

 

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partial exercise of any right, power or privilege under this Subordination
Agreement preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The Administrative Agent shall not be
prejudiced in its right to enforce the subordination contained herein in
accordance with the terms hereof by any act or failure to act on the part of any
Obligor. The rights and remedies provided in this Subordination Agreement and in
the other Loan Documents and in all other agreements, instruments and documents
referred to in any of the foregoing are cumulative and shall not be exclusive of
any rights or remedies provided by law.

(b) Each Obligor agrees to execute and deliver such further documents and to do
such other acts and things as the Administrative Agent may reasonably request in
order to fully effect the purposes of this Subordination Agreement.

(c) All notices, requests and demands to or upon the respective parties hereto
to be effective shall be in writing (including by facsimile transmission) and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made (i) in the case of delivery by hand, when received, (ii) in the
case of delivery by mail, when received, or (iii) in the case of delivery by
facsimile transmission, when sent, and receipt has been electronically
confirmed, (1) to any Obligor, as set forth below its name on the signature
pages hereof, and (2) to the Administrative Agent, at its address specified in
Section 11.2 of the Credit Agreement.

(d) Each Obligor agrees to give the Administrative Agent prompt notice of any
default by any other Obligor in respect of the Subordinated Obligations.

(e) Each Obligor will cause each note and instrument (if any) evidencing the
Subordinated Obligations to be endorsed with the following legend:

“The indebtedness evidenced by this instrument is subordinated to the prior
indefeasible payment in full in cash of the Senior Obligations (as defined in
the Intercompany Subordination Agreement dated as of                      by and
among the [Payor][Borrower][MLP], the [Payee][Lender], certain of their
affiliates and JPMorgan Chase Bank, N.A., as Administrative Agent, regarding
subordination) pursuant to, and to the extent provided in, such Intercompany
Subordination Agreement.”

(f) Each Obligor hereby agrees to mark its books of account in such a manner as
shall be effective to give proper notice of the effect of this Subordination
Agreement and will, in the case of any Subordinated Obligations not evidenced by
any note or instrument, following the occurrence and continuation of an Event of
Default, upon the Administrative Agent’s request, cause such Subordinated
Obligations to be evidenced by an appropriate note or instrument or instruments
endorsed with the above legend. Each Obligor will at its expense and at any time
and from time to time promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or that the
Administrative Agent may request in its good faith business judgment to protect
any right or interest granted or purported to be granted hereunder or to enable
the Lender to exercise and enforce their rights and remedies hereunder.

(g) THIS SUBORDINATION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE LENDER
PARTIES AND EACH OBLIGOR UNDER THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK. This Subordination Agreement shall be binding upon the Administrative
Agent, each Obligor and their

 

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respective successors, transferees and assigns and shall inure to the benefit of
the Administrative Agent, the other Lender Parties, each Obligor and their
respective successors, transferees and assigns; provided, that no Obligor may
assign its rights or obligations hereunder without the prior written consent of
the Administrative Agent.

(h) The subordination provisions contained herein are for the benefit of the
Administrative Agent, the other Lender Parties and their respective successors
and assigns as holders from time to time of Senior Obligations and may not be
rescinded or canceled or modified in any way, nor, unless otherwise expressly
provided for herein, may any provision of this Subordination Agreement be waived
or changed without the express prior written consent thereto of the Required
Lenders. Subject to the preceding sentence, this Subordination Agreement may be
amended or modified only by an instrument in writing signed by the parties
hereto.

(i) This Subordination Agreement may be executed by one or more of the parties
to this Subordination Agreement on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.

[SIGNATURE PAGES FOLLOW]

 

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

 

[INSERT NAME OF OBLIGOR]   By:  

 

    Name:     Title: [INSERT NAME OF OBLIGOR]   By:  

 

    Name:     Title:   Address for Notices:   [ADDRESS] JPMorgan Chase Bank,
N.A., as Administrative Agent   By:  

 

    Name:     Title:

 

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Exhibit H-2

to Credit Agreement

FORM OF AXEL JOHNSON SUBORDINATED NOTE

This Note has not been registered under the Securities Act of 1933, as amended,
and may not be sold or otherwise transferred in the absence of such registration
or an exemption therefrom under such Act. Furthermore, this Note may not be sold
or otherwise transferred other than in compliance with Section 1.4 of this Note.

This Note is, to the extent expressly described herein, subordinated to the
prior payment and satisfaction of all Senior Indebtedness, as defined herein.
[This Note is in satisfaction of the principal of that certain Note dated
                     with a maturity date of                      in the amount
of          ([C]$        ). That Note is hereby deemed to be fully matured and
satisfied, and no further payment obligation exists with respect to the
principal thereof.]

 

—

— [SPRAGUE ENTITY]

 

[U.S.][C] $[        ]    [                 , 201    ]

FOR VALUE RECEIVED, the undersigned [Sprague Entity] (the “Company”) hereby
promises to pay to [Name of Axel Johnson Affiliate], a [jurisdiction of
formation/organization] [entity type] (in such capacity as payee, the
“Investor”), or its registered assigns (collectively, the “Noteholder”), at the
Company’s principal office, or at such other place as the Noteholder shall from
time to time have designated to the Company in writing, on [                 ,
201    ] (the “Maturity Date”), [                    ] [United States Dollars
(U.S. $[        ])] [Canadian Dollars (C$[        ])]. Interest will accrue
daily (computed on the basis of a 360-day year) on the principal amount hereof
from time to time unpaid to and including the maturity hereof at a rate per
annum equal to [    ]%. Interest shall be payable in arrears on
[                    ], [                    ], [                    ] and
[                    ], commencing on [                 , 201    ], on the date
of any prepayment of this Note (in whole or in part), and at maturity, whether
by acceleration or otherwise. Interest payable after maturity of this Note (by
acceleration or otherwise) shall be payable upon demand.

 

1. PAYMENT PROVISIONS.

The Company covenants that so long as this Note is outstanding:

(a) Payment at Maturity of Note. Subject to the restrictions contained in the
Credit Agreement and in Section 3 below, on the Maturity Date, or on any
accelerated maturity of this Note, the Company will pay the entire principal
amount of this Note then outstanding, together with all accrued and unpaid
interest hereon.

 

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(b) Voluntary Prepayments. Subject to the restrictions contained in the Credit
Agreement and in Section 3 below, the Company may at any time and from time to
time prepay all or any part of the principal amount of this Note, without
premium or penalty. Upon each prepayment of this Note, in whole or in part, the
Company will pay to the Noteholder the principal amount to be prepaid and any
unpaid interest accrued thereon to the prepayment date. From and after the date
such payment is actually made, interest on the principal amount so prepaid shall
cease to accrue.

(c) Manner and Time of Payment. All payments made by the Company pursuant to
this Note shall be made without defense, set off or counterclaim, in same day
funds and delivered to the holder of this Note not later than Noon (New York
time) on the date such payment is due, with such payment to be made in the same
manner as that provided for payment of interest herein; provided that funds
received by such holders after Noon (New York time) shall be deemed to have been
paid by the Company on the next succeeding Business Day. Whenever any payment to
be made hereunder shall be stated to be due on a day which is not a Business
Day, the payment shall be made on the next succeeding Business Day and such
additional period shall be included in the computation of the payment of
interest hereunder.

(d) Transfer.

(i) Transfer of Note. The Noteholder shall have the right to sell, assign,
transfer or negotiate all or part of this Note to one or more of its Axel
Johnson Affiliates. In the case of any sale, assignment, transfer or negotiation
of all or part of this Note authorized under this Section 1.4, the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were the Noteholder with respect to such Note or the loans evidenced
thereby.

(ii) Registration of Transfer. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of this Note
and for the transfer of the same. Upon surrender for registration of transfer of
this Note at the principal office of the Company, the Company shall, at its
expense, promptly execute and deliver one or more new Notes of like tenor and of
a like principal amount, registered in the name of such transferee or
transferees and, in the case of a transfer in part, a new Note in the
appropriate amount registered in the name of such transferor.

(iii) Transferee. In connection with any sale, assignment or transfer of this
Note, the transferor shall give notice to the Company and the Administrative
Agent of the identity of the transferee.

 

2. EVENTS OF DEFAULT.

If one or more of the following events (herein referred to as “Events of
Default”) shall occur and be continuing:

(a) Payment Default. The Company shall fail to pay (i) any principal of this
Note when the same becomes due and payable, whether upon maturity, prepayment,
acceleration or otherwise or (ii) any interest on this Note, for a period of ten
days after the same shall become due and payable or (iii) any other amount due
hereunder within 30 days after demand therefore.

(b) Bankruptcy, etc. The Company or any of its Subsidiaries (each, an “Obligor”)
shall: (a) commence a voluntary case, plan, proposal or other proceeding under
the Bankruptcy Code or any

 

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Insolvency Laws or authorize, by appropriate proceedings of its board of
directors or other governing body, the commencement of such a voluntary case,
application, plan, proposal or other proceeding; (b) (i) have filed against it a
petition, notice of intention, proposal, application or plan commencing an
involuntary case, plan, proposal or other proceeding under the Bankruptcy Code
or any Insolvency Laws that shall not have been dismissed within 90 days after
the date on which such petition, notice of intention, proposal, application or
plan is filed, or (ii) file an answer or other pleading within such 90-day
period admitting or failing to deny the material allegations of such a petition
or seeking, consenting to or acquiescing in the relief therein provided, or
(iii) have entered against it an order for relief in any involuntary case,
proposal, plan or other proceeding commenced under the Bankruptcy Code or any
Insolvency Laws; (c) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the liquidation,
arrangement or reorganization of debtors or to the modification or alteration of
the rights of creditors, or consent to or acquiesce in such relief; (d) have
entered against it an order by a court of competent jurisdiction (i) finding it
to be bankrupt or insolvent, (ii) ordering or approving its liquidation,
arrangement or reorganization as a debtor or any modification or alteration of
the rights of its creditors or (iii) assuming custody of, or appointing a
receiver, trustee, receiver and manager, interim receiver or other custodian
for, all or a substantial portion of its property; or (e) make an assignment for
the benefit of, or enter into a composition with, its creditors, or appoint, or
consent to the appointment of, or suffer to exist a receiver, trustee, receiver
and manager, interim receiver or other custodian for, all or a substantial
portion of its property,

then, (i) upon the occurrence of any Event of Default described in Section 2.2
with respect to the Company, the unpaid principal amount of this Note, together
with accrued interest thereon, shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by the Company, and (ii) upon the
occurrence of any other Event of Default the Noteholder may, upon prior written
notice to the Administrative Agent (if the Credit Agreement is then still in
effect), and upon written notice to the Company, declare this Note to be due and
payable, whereupon the principal amount of this Note, together with accrued
interest thereon, shall automatically become immediately due and payable,
without any other notice of any kind, and without presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly waived by
the Company; provided, however, that the acceleration of principal and interest
with respect to this Note and the exercise of judicial and foreclosure remedies
shall be subject to the restrictions in Section 3 below.

 

3. SUBORDINATION

(a) Obligations Subordinate to Senior Indebtedness. The Company covenants and
agrees, and the Noteholder by its acceptance of this Note, likewise covenants
and agrees, that this Note shall be subject to the provisions of this Section 3;
and the Noteholder, whether a holder upon original issue or upon transfer,
assignment or exchange of this Note, accepts and agrees (i) that the payment of
all Note Obligations shall be subordinated and junior in right of payment to the
prior payment in full of all of the Senior Indebtedness from time to time
outstanding, and the Note Obligations are subordinated as a claim against the
Company, any other Obligor, any guarantor of the Senior Indebtedness or any of
their respective assets to the prior payment in full of the Senior Indebtedness,
in each case, to the extent and in the manner hereinafter set forth and whether
such claim is (a) in the ordinary course of business or (b) in the event of any
Bankruptcy Event, (ii) that the subordination is for the benefit of, and shall
be enforceable directly by, each holder of such Senior Indebtedness, and
(iii) that each holder of such Senior Indebtedness, whether now outstanding or
hereafter created, assumed or guaranteed, shall be deemed to have acquired its
Senior Indebtedness in reliance upon the covenants and provisions contained in
this Note including, without limitation, this Section 3.

 

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(b) Payment Over of Proceeds Upon Bankruptcy Event. In the event of (i) any
insolvency or bankruptcy case, petition, plan, proposal or other proceeding, or
any receivership, liquidation, reorganization, adjustment, plan of arrangement,
composition or other similar case or proceeding in connection therewith,
relative to the Company or any other Obligor or to their respective creditors,
as such, or to their respective assets, or (ii) any liquidation, dissolution or
other winding up of the Company or any other Obligor, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Company or any other Obligor (collectively, “Bankruptcy
Events”), then and in any such event:

(i) All obligations due or to become due under or with respect to all Senior
Indebtedness in such proceeding shall be paid in full, in cash, or payment
thereof in a form and manner satisfactory to the holders of Senior Indebtedness
then outstanding shall have been provided for, before the Noteholder is entitled
to receive any payment or distribution, whether in cash, securities or other
property, on account of the Note Obligations;

(ii) Any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, by set-off or otherwise, to
which the Noteholder would be entitled but for the provisions of this Section 3,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other Indebtedness of the Company being
subordinated to the payment of the Note Obligations shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, receiver, receiver and manager,
interim receiver or liquidating trustee or otherwise, directly to the
Administrative Agent, for the benefit of the holders of the Senior Indebtedness,
or its representative, ratably according to the aggregate amounts remaining
unpaid on account of the principal of, and interest on, such Senior Indebtedness
held or represented by each, for application to the Senior Indebtedness to the
extent necessary to make payment in full of all such Senior Indebtedness
remaining unpaid;

(iii) In the event that, notwithstanding the foregoing provisions of this
Section 3.2, the Noteholder shall have received after any such Bankruptcy Event
any such payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of any other
Indebtedness being subordinated to the payment of the Note Obligations before
all such Senior Indebtedness is paid in full or payment thereof provided for in
a form and manner satisfactory to the holders of Senior Indebtedness, then and
in such event such payment or distribution shall be segregated and held in trust
by the Noteholder for the benefit of the holders of the Senior Indebtedness, and
shall forthwith be paid over and delivered (together with any necessary
endorsements) directly to the Administrative Agent, for the benefit of the
holders of such Senior Indebtedness, or its representative, ratably according to
the aggregate amounts remaining unpaid on account of the principal of, and
interest on, such Senior Indebtedness held or represented by each, for
application to the Senior Indebtedness to the extent necessary to pay all such
Senior Indebtedness in full; and

(iv) The Administrative Agent, on behalf of the holders of the Senior
Indebtedness, shall have the right to request the Noteholder to file and, in the
event the Noteholder fails

 

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to do so within 10 days prior to any deadline fixed in such proceeding for the
filing of such a claim, is hereby authorized to file a proof of claim in the
form required in any Bankruptcy Event for and on behalf of the Noteholder, to
accept and receive any payment or distribution which may be payable or
deliverable at any time upon or in respect of the Note Obligations in an amount
not in excess of the Senior Indebtedness then outstanding, including without
limitation all interest and Post Petition Interest with respect thereto, and to
take such other action as may be reasonably necessary to effectuate the
foregoing. In any proceedings with respect to any Bankruptcy Event, the
Noteholder irrevocably authorizes the Administrative Agent, on behalf of the
holders of the Senior Indebtedness: (i) to vote claims comprising any Note
Obligations and to accept or reject on behalf of the Noteholder any proposal,
application or plan proposed in connection with any such Bankruptcy Event;
(ii) to accept and execute receipts for any payment or distribution made with
respect to any such Note Obligations and to apply such payment or distribution
to the payment of the Senior Indebtedness; and (iii) to take any action and to
execute any instruments necessary to effectuate the foregoing, either in the
name of the Administrative Agent or in the name of the Noteholder as the
attorney-in-fact of the Noteholder. The Noteholder shall provide to the
Administrative Agent all information and documents reasonably necessary to
present such claims or seek enforcement as aforesaid.

(c) Restricted Payments.

(i) Notwithstanding any other provision of this Note, the Company will not make,
and the Noteholder will not accept or receive, any payment of any Note
Obligations, whether in cash, securities or other property or by way of
conversion, exchange or set-off or otherwise, and no such payment shall become
due; provided, however, that the Company may make any payment of Note
Obligations, and the Noteholder may accept any such payment, if at the time of
such payment and after giving effect thereto, no “Default” or “Event of Default”
(each as defined and used in the Credit Agreement) has occurred and is
continuing and the Company is in compliance with the covenants set forth in
Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

(ii) In the event that any payment shall be received by the Noteholder which is
prohibited by the foregoing provisions of this Section 3.3, then in such event
such payment shall be segregated and held in trust by the Noteholder for the
benefit of the holders of Senior Indebtedness, and shall forthwith be paid over
and delivered (together with any necessary endorsements) directly to the
Administrative Agent or its representative, for the benefit of holders of the
Senior Indebtedness, ratably according to the aggregate amounts remaining unpaid
on account of the principal of, and interest on, such Senior Indebtedness held
or represented by each, for application to the Senior Indebtedness to the extent
necessary to pay all such Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness. The provisions of this Section 3.3 shall not apply to any payment
with respect to which Section 3.2 would be applicable.

 

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(d) Manner of Exercise.

(i) Subject to the provisions of the Credit Agreement and the other Loan
Documents, the Administrative Agent may take any actions to enforce Obligations
under the Senior Indebtedness:

 

  (i) in any manner in its sole discretion in compliance with applicable law;

 

  (ii) without consultation with the Noteholder;

 

  (iii) regardless of whether a proceeding during a Bankruptcy Event has been
commenced; and

 

  (iv) regardless of whether such exercise is adverse to the interest of the
Noteholder.

(ii) The rights of the Administrative Agent to enforce any provision of this
Note will not be prejudiced or impaired by:

 

  (i) any act or failure to act of the Company; or

 

  (ii) noncompliance by any Person other than the Administrative Agent with any
provision of this Note,

regardless of any knowledge thereof that the Administrative Agent may have or
otherwise be charged with.

(iii) The Noteholder, in such capacity, will not contest, protest or object to,
or take any action to hinder, and it waives any and all claims with respect to,
any action taken by the Administrative Agent to enforce Obligations under the
Senior Indebtedness.

(e) Remedies Standstill. Without the Administrative Agent’s prior written
consent, the Noteholder shall not institute judicial or foreclosure proceedings
to enforce any Note Obligations and the Noteholder shall not commence or join
with any other creditor of the Obligors in commencing any proceeding against the
Obligors seeking to effect an involuntary bankruptcy, receivership or similar
arrangement until the acceleration of maturity of the Senior Indebtedness.

(f) Restrictions on Acceleration. Notwithstanding any contrary provision of this
Note, any Note Obligations or any Note Agreement, (a) no Note Obligations (other
than payments permitted by Section 3.3(a)) shall become or be declared to be due
and payable prior to the date on which the Senior Indebtedness becomes or is
declared to be due and payable and (b) if any Senior Indebtedness shall have
become or been declared to be due and payable prior to its stated maturity, the
Note Obligations shall become immediately due and payable.

(g) Subrogation to Rights of Holders of Senior Indebtedness. If the Noteholder
pays or distributes cash, property or other assets to the Administrative Agent
or another holder of Senior Indebtedness, the Noteholder will be subrogated to
the rights of the Administrative Agent and/or such other holder of Senior
Indebtedness, as applicable, with respect to the value of such payment or
distributions; provided, that the Noteholder agrees not to assert or enforce any
such rights of subrogation it may acquire as a result of any such payment or
distribution until the payment in full of all Senior

 

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Indebtedness. For purposes of such subrogation, no payments or distributions to
the holders of such Senior Indebtedness of any cash, property or securities to
which the Noteholder would be entitled except for the provisions of this
Section 3, and no payments over pursuant to the provisions of this Section 3 to
the Administrative Agent, for the benefit of the holders of such Senior
Indebtedness, by the Noteholder shall, as among the Company, its creditors
(other than holders of such Senior Indebtedness) and the Noteholder, be deemed
to be a payment or distribution by the Company to or on account of such Senior
Indebtedness.

(h) Provisions Solely to Define Relative Rights. The provisions of this
Section 3 are and are intended solely for the purpose of defining the relative
rights of the Noteholder on the one hand and the holders of Senior Indebtedness
on the other hand. Nothing contained in this Section 3 or elsewhere in this Note
is intended to or shall (a) impair, as among the Company, its creditors (other
than holders of Senior Indebtedness) and the Noteholder, the obligation of the
Company, which is absolute and unconditional, to pay to the Noteholder the
principal of, and interest on, and any other amount payable by the Company
hereunder as and when the same shall become due and payable in accordance with
its terms; or (b) affect the relative rights against the Company of the
Noteholder and its creditors (other than the holders of Senior Indebtedness); or
(c) except to the extent provided in Section 3.5 and 3.6 above, prevent the
Noteholder from accelerating this Note and exercising all other remedies
otherwise permitted by applicable law upon default under this Note, in each case
subject to the notice requirements provided in Section 2 hereof, and to the
rights, if any, under this Section 3 of the holders of Senior Indebtedness with
respect to the turnover of assets received upon the exercise of any such remedy.

(i) No Waiver of Subordination Provisions. No right of any present or future
holder of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Note, regardless of any knowledge thereof any
such holder may have or be otherwise charged with. Without in any way limiting
the generality of the foregoing, the holders of Senior Indebtedness may at any
time and from time to time, without the consent of or notice to the Noteholder,
without incurring responsibility to the Noteholder and without impairing or
releasing the subordination provided in this Section 3 or the obligations
hereunder of the Noteholder to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged, hypothecated or otherwise securing Senior Indebtedness;
(iii) take security in any form for the Senior Indebtedness; (iv) release any
Person liable in any manner for the collection of Senior Indebtedness; and
(v) exercise or refrain from exercising or waiving any rights, powers or
remedies against the Company or any other Person.

(j) Reinstatement. The provisions of this Note shall continue to be effective or
be reinstated, as the case may be, if at any time, upon the occurrence of a
Bankruptcy Event or otherwise, any payment of any of the Senior Indebtedness is
rescinded, invalidated, avoided, declared to be fraudulent or preferential, set
aside or must otherwise be returned by any holder of Senior Indebtedness (a
“Recovery”), all as though such payment had not been made. If the provisions of
this Note are terminated prior to any such Recovery, the provisions of this Note
will be reinstated in full force and effect, and such prior termination will not
diminish, release, discharge, impair or otherwise affect the obligations of the
parties hereto from the date of reinstatement. Upon any such reinstatement, the
Noteholder will deliver to the Administrative Agent any proceeds or other
payments made by Company between the purported payment in full of the Senior
Indebtedness and their reinstatement in accordance with this Section 3. The

 

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Noteholder may not benefit from any Recovery, and any distribution made to it as
a result of any Recovery will be paid over to the Administrative Agent for
application to the Senior Indebtedness in accordance with this Section 3.

(k) Amendment. The subordination provisions of this Section 3 are solely for the
benefit of the holders of the Senior Indebtedness and may not be rescinded,
canceled, amended or modified in any way without the prior written consent of
the Required Lenders to be affected by such rescission, cancellation, amendment
or modification.

(l) Refinancing. If the Company issues other indebtedness in exchange or
replacement for the Senior Indebtedness, in whole or in part (a “Refinancing”),
then the Senior Indebtedness will automatically be deemed not to have been
discharged or paid in full for all purposes of this Section 3. Upon Noteholder’s
receipt of a notice stating that the Company has entered into a new loan or
credit document with respect to a Refinancing and identifying the new agent
thereunder (the “New Agent”),

(i) the indebtedness and obligations under such new credit or loan documents
will be treated as Senior Indebtedness for all purposes under this Note; and

(ii) the New Agent under such new credit or loan documents will be the
Administrative Agent for all purposes under this Note.

(m) Remedies. The Administrative Agent, on behalf of the holders of Senior
Indebtedness, shall be entitled to enforce their rights under this Section 3
specifically, to recover damages by reason of any breach of any provision of
this Section 3 and to exercise all other rights existing in their favor. The
Noteholder and the Company each acknowledges and agrees that money damages may
not be an adequate remedy for any breach of the provisions of this Section 3 and
that the Administrative Agent, on behalf of holders of Senior Indebtedness, may
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Section 3.

(n) No Collateral. The Obligors shall not grant, and the Noteholder shall not
demand, accept or receive, any collateral, direct or indirect, for any Note
Obligation.

(o) Payment in Full. For the purposes of this Note, no Senior Indebtedness shall
be deemed to have been paid in full unless the holder thereof shall have
received immediately available cash equal to the amount thereof then
outstanding, all commitments to extend credit that would be Senior Indebtedness
have been irrevocably terminated or have expired and the termination or cash
collateralization of all letters of credit that, if drawn upon, would constitute
Senior Indebtedness; provided, however, that if the holders of the Senior
Indebtedness are required by reason of a judgment or order of any court or
administrative authority having competent jurisdiction to repay any amounts or
property received by the Administrative Agent, on behalf of the holders of the
Senior Indebtedness, or the holders of the Senior Indebtedness, on account of
the Obligations, and the Administrative Agent, on behalf of the holders of the
Senior Indebtedness, or the holders of the Senior Indebtedness, repay or return
such amounts or property, then the subordination provisions of this Note shall
be reinstated retroactively with respect to the amounts so repaid or property so
returned as if such amounts or property had never been received by the
Administrative Agent, on behalf of the holders of the Senior Indebtedness, or
the holders of the Senior Indebtedness notwithstanding any termination thereof
or the cancellation of any instrument or agreement evidencing any of the
Obligations.

 

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(p) Effectiveness during Bankruptcy Event Proceedings. The provisions of this
Section 3, which the parties hereto expressly acknowledge constitute a
“subordination agreement” under section 510(a) of the Bankruptcy Code, will be
effective before, during and after the commencement of proceedings under a
Bankruptcy Event. All references in this Note to the Company will include such
Person as a debtor-in-possession and any receiver, receiver and manager, interim
receiver or trustee for such Person in any proceedings during a Bankruptcy
Event.

3.17 Acknowledgment. The Company acknowledges that the Investor has executed
that certain Acknowledgment and Agreement, dated as of [                    ],
pursuant to which the Investor has acknowledged and agreed to the provisions of
this Section 3, and the Company shall use its best efforts to cause any
additional Noteholder to execute an Acknowledgment and Agreement in the form of
Exhibit A attached hereto.

 

4. DEFINITIONS.

Capitalized terms defined in the Credit Agreement and not otherwise defined in
this Note shall have the meanings provided in the Credit Agreement. The
following terms used in this Note shall have the following meanings:

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Credit Agreement, together with any successors or
assigns thereof.

“Bankruptcy Code” means Title 11 of the United States Code and any successor
statute.

“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in New York, New York, are authorized or required
by law or other governmental action to close.

“Credit Agreement” shall mean the Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, extended, renewed, increased,
supplemented, refinanced, replaced or otherwise modified and in effect from time
to time), among Sprague Operating Resources LLC, Kildair Service Ltd. and
Sprague Resources ULC, as Borrowers, the lenders from time to time party
thereto, the Administrative Agent and the other agents parties thereto.

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

“Insolvency Laws” means each of the Bankruptcy and Insolvency Act (Canada), the
Companies’ Creditors Arrangement Act (Canada), and the Winding-Up and
Restructuring Act (Canada), each as now and hereafter in effect, any successors
to such statutes and any other applicable insolvency law, corporate law or other
similar law of any jurisdiction, including any law of any jurisdiction
permitting a debtor to obtain a stay, compromise, reorganization or arrangement
of the claims of its creditors against it.

“Note Agreement” means any agreement pursuant to which this Note was issued and
any other present or future agreement or instrument from time to time entered
into among the Company or any other Obligor relating to, amending or modifying
such agreement referred to above, each as from time to time in effect.

 

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“Note Obligations” mean any and all obligations of the Company under this Note
or under any Note Agreement with respect to this Note, including without
limitation the obligation to pay principal, interest, expenses, attorneys’ fees
and disbursements, indemnities and other amounts payable thereunder or in
connection therewith or related thereto.

“Obligations” has the meaning ascribed thereto in the Credit Agreement.

“Post Petition Interest” means interest accruing in respect of Senior
Indebtedness after any Bankruptcy Event at the rate applicable to such Senior
Indebtedness pursuant to the Credit Agreement, whether or not such interest is
allowed as a claim enforceable against the Company or any other Loan Party in a
bankruptcy or insolvency case, petition, filing, plan of arrangement or
proceeding under the Bankruptcy Code or any Insolvency Laws, and any other
interest that would have accrued but for the occurrence of such Bankruptcy
Event.

“Senior Indebtedness” means the Obligations and any other amounts owing to the
Administrative Agent or the Lenders (as defined in the Credit Agreement)
pursuant to the Credit Agreement or any other Loan Document and all interest,
including without limitation Post Petition Interest, with respect to the
Obligations and such other amounts.

 

5. GENERAL

(a) Amendments and Waivers. Subject to the restrictions set forth in
Section 3.11, any provision of this Note may be amended, modified, terminated or
waived only with the written consent of the Noteholder, the Administrative Agent
and the Company. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on the Company in any case shall entitle the Company to any further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 5.1
shall be binding upon the Noteholder at the time outstanding and each future
holder thereof.

(b) Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitation of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

(c) Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing and shall be sent by facsimile, overnight courier,
registered mail or certified mail. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given, as applicable, (a) upon
confirmation of facsimile, (b) one business day following the date sent when
sent by overnight delivery or (c) five business days following the date mailed
when mailed by registered or certified mail return receipt requested and postage
prepaid at the following address:

If to the Company, to:

Sprague Entity

185 International Drive

Portsmouth, New Hampshire 03801

Attention: Paul Scoff, Esq.

Fax: (603) 430-5324

 

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If to the Noteholder, to:

[Name of Axel Johnson Affiliate]

[Address of Axel Johnson Affiliate]

Attention: [                    ]

Telephone: [                    ]

Fax: [                    ]

If to the Administrative Agent, to:

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

Notwithstanding the foregoing, the Company or the Noteholder may send any
notice, request, demand, claim, or other communication hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, expedited courier, messenger service, facsimile, telex,
ordinary mail, or electronic mail); provided, however, that no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. The
Company and the Noteholder may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other party notice in the manner herein set forth.

(d) Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of the Noteholder in the exercise of any power, right or privilege
hereunder or under this Note shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Note are cumulative to and not exclusive
of, any rights or remedies otherwise available.

(e) Severability. In the event that any provision of this Note would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
(to the extent permitted by applicable law) be construed by modifying or
limiting it so as to be valid and enforceable to the maximum extent compatible
with, and possible under, applicable law. The provisions of this Note are
severable, and in the event any provision of this Note should be held invalid or
unenforceable in any respect, it shall not invalidate, render unenforceable or
otherwise affect any other provision of this Note.

(f) Headings. The headings contained in this Note are inserted only as a matter
of convenience and for reference only and in no way define, limit or describe
the scope or intent of this Note.

(g) Governing Law, etc. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United States of
America located in the Borough of Manhattan for any actions, suits or
proceedings arising out of or relating to this Note and the transactions
contemplated hereby, and each of the

 

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parties hereto agrees not to commence any action, suit or proceeding relating
hereto or thereto except in such courts. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Note or the transactions
contemplated hereby or thereby, in the courts of the State of New York or the
United States of America located in the Borough of Manhattan, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. In any action or suit to enforce any
right or remedy under this Note or to interpret any provision of this Note, the
prevailing party shall be entitled to recover its costs, including reasonable
attorneys’ fees.

(h) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS NOTE OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 5.8 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

(i) Delivery. Delivery of an executed signature page of this Note by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart hereof. A set of the executed copies of this
Note shall be lodged with the U.S. Borrower and the Administrative Agent.

[The rest of this page intentionally left blank]

 

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The undersigned has caused this Note to be executed by its duly authorized
officer as of the date first written above.

 

[SPRAGUE ENTITY] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

EXHIBIT A

ACKNOWLEDGMENT AND AGREEMENT

Reference is made to that certain Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, extended, renewed, increased,
supplemented, refinanced, replaced or otherwise modified and in effect from time
to time, the “Credit Agreement”), among Sprague Operating Resources LLC, (the
“U.S. Borrower”), Kildair Service Ltd. (“Kildair”) and Sprague Resources ULC
(“AcquireCo”), as Borrowers, the lenders from time to time party thereto,
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, together
with its successors and assigns, the “Administrative Agent”) and the other
agents parties thereto. Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Credit Agreement.

The undersigned, [Name of Axel Johnson Affiliate] (the “Noteholder”), hereby
acknowledges and agrees to the subordination provisions of Section 3 of each
note or instrument entered into by any of the Loan Parties with respect to any
Axel Johnson Subordinated Indebtedness. Further, the Noteholder shall cause each
successor or assign of any of the Noteholder’s rights or obligations under any
such note or instrument to execute an acknowledgment and agreement in
substantially the form hereof.

This Acknowledgment and Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Acknowledgment and Agreement may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Acknowledgment and Agreement by telecopy
or electronic transmission (in .pdf format) shall be effective as delivery of a
manually executed counterpart of this Acknowledgment and Agreement. THIS
ACKNOWLEDGMENT AND AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

[Signature Page Follows]

--------------------------------------------------------------------------------

The terms set forth in this Acknowledgment and Agreement are hereby agreed to:

 

[NAME OF AXEL JOHNSON AFFILIATE] By:  

 

  Name:   Title:

 

ACKNOWLEDGED: SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit I

to Credit Agreement

RISK MANAGEMENT POLICY

[Provided Separately]

Sprague Operating Resources LLC

Risk Management Policy

December 5, 2011

- This information is confidential and proprietary to Sprague Operating
Resources LLC

--------------------------------------------------------------------------------

Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

TABLE OF CONTENTS

 

1.   RISK MANAGEMENT PHILOSOPHY, OBJECTIVES AND PROCESS      4   

1.1      OVERVIEW

     4   

1.2      RISK MANAGEMENT PHILOSOPHY

     5   

1.3      RISK MANAGEMENT OBJECTIVES AND PROCESS

     5    2.   ORGANIZATIONAL STRUCTURE ROLES AND RESPONSIBILITIES      7   

2.1

 

OVERVIEW

     7   

2.2

 

BOARD OF DIRECTORS

     7   

2.3

 

RISK MANAGEMENT COMMITTEE

     8   

2.4

 

CHIEF RISK OFFICER

     9   

2.5

 

QUANTITATIVE ANALYSIS

     10   

2.6

 

CREDIT RISK

     11   

2.7

 

MIDDLE OFFICE

     11   

2.8

 

CONTRACT ADMINISTRATION

     12   

2.9

 

SUPPLY / TRADING AND MARKETING

     13     

2.9.1

 

Front Office

     13     

2.9.2

 

Trading and Marketing Officers

     13     

2.9.3

 

Pricing

     13     

2.9.4

 

Trading Leaders

     14     

2.9.5

 

Traders

     14     

2.9.6

 

Market Leaders

     15     

2.9.7

 

Marketers

     15   

2.10      SUPPORT FUNCTIONS

     16   

  2.10.1

 

Back Office

     16   

  2.10.2

 

Operations Accounting

     16   

  2.10.3

 

Information Technology

     16   

  2.10.4

 

Legal

     17   

  2.10.5

 

Tax

     18   

  2.10.6

 

Internal Audit

     18    3.   COMPLIANCE AND ENFORCEMENT      19   

3.1      REPORTING INCIDENTS OF NON-COMPLIANCE

     19   

3.2      SANCTIONS

     19     

3.2.1

 

Examples of Sanctions

     20     

3.2.2

 

Fraud or Willful Acts of Misrepresentation

     20    4.   VALUATION, RISK MEASUREMENT AND CONTROL      22   

4.1

 

VALUATION FREQUENCY

     22   

4.2

 

VALUATION DATA SOURCES

     22   

4.3

 

VALUATION RESERVES

     22   

4.4

 

PORTFOLIO DEFINITIONS

     22   

4.5

 

MARKET RISK LIMITS

     24   

4.6

 

POSITION LIMITS

     25   

4.7

 

STOP LOSS LIMITS

     28   

4.8

 

VALUE AT RISK LIMITS

     28   

4.9

 

CREDIT LIMITS

     28   

 

2

--------------------------------------------------------------------------------

Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

 

CREDIT RISK

     29     

CONTROL PROCESSES

     30     

6.1

 

MANAGEMENT REPORTING

     30     

6.2

 

OFF-PREMISES / AFTER HOURS TRANSACTIONS

     30     

6.3

 

CONFIRMATIONS

     30     

6.4

 

PERSONAL ACCOUNTS

     30     

6.5

 

CONTRACT SIGNATURE AUTHORIZATION

     30     

PROCESSES FOR NEW PRODUCTS, NON-STANDARD TRANSACTIONS, AND ELECTRONIC TRADING
SYSTEMS

     32   

7.1      NEW PRODUCT

     32     

7.1.1

 

Definition of New Product

     32     

7.1.2

 

New Product Objectives

     32     

7.1.3

 

New Product Approval Process

     33   

7.2      NON-STANDARD TRANSACTION

     34     

7.2.1

 

Definition of Non-Standard Transaction

     34     

7.2.2

 

Non-Standard Transaction Approval Process

     35     

7.2.3

 

Electronic Trading Systems

     36   

EXHIBIT 1 — APPROVED PRODUCTS LIST

     38   

EXHIBIT 1 — APPROVED PRODUCTS LIST (CONT.)

     39   

EXHIBIT 2 — PRODUCT DEFINITIONS

     40   

EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

     41   

EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

     42   

EXHIBIT 3 — MARKET RISK LIMIT STRUCTURE

     43   

EXHIBIT 4 — SAMPLE NEW PRODUCT APPROVAL FORM

     44   

EXHIBIT 4 — SAMPLE NEW PRODUCT APPROVAL FORM (CONT.)

     45   

EXHIBIT 5 — EMPLOYEE CONFIRMATION

     46   

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES

     47   

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES (CONT.)

     48   

ATTACHMENT 1 — SPRAGUE RISK MANAGEMENT ORGANIZATION

     49   

ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

     50   

ATTACHMENT 3 — AUTHORIZED OIL TRADERS AND INSTRUMENTS LIST

     61   

ATTACHMENT 4 — AUTHORIZED NAT GAS TRADERS AND INSTRUMENTS LIST

     66   

ATTACHMENT 5 — APPROVED MATERIALS HANDLING PRODUCTS

     70   

 

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I. RISK MANAGEMENT PHILOSOPHY, OBJECTIVES AND PROCESS

 

  1.1 Overview

Sprague Operating Resources LLC (“Sprague” or “the Company”) is a Delaware
limited liability company engaged in the purchase, storage, distribution and
sale of refined petroleum products, and natural gas and also provides storage
and handling services for a broad range of materials. We are one of the largest
independent wholesale distributors of refined products in the Northeast United
States based on aggregate terminal capacity. We own and/or operate a large
network of 15 refined products and materials handling terminals strategically
located throughout the Northeast. We also have access to approximately 50
third-party terminals in the Northeast through which we sell or distribute
refined products.

Sprague operates its business and reports results under three business segments:
refined products, natural gas and materials handling. The refined products
segment purchases a variety of refined products, such as heating oil, diesel
fuel, residual fuel oil, kerosene, jet fuel and gasoline (primarily from
refining companies, trading organizations and producers) and sells them to our
customers. The wholesale customers resell the refined products we sell to them
and commercial customers consume the refined products we sell to them. The
wholesale customers consist largely of home heating oil retailers and diesel
fuel and gasoline resellers. The commercial customers include federal and state
agencies, municipalities, regional transit authorities, large industrial
companies, hospitals and educational institutions. Although for internal
purposes Sprague separates its refined products and natural gas businesses into
smaller components (e.g. Supply and Marketing), it consolidates results of these
groups for reporting purposes.

With respect to its refined products (a.k.a. oil) and natural gas businesses,
Sprague enters into a variety of transactions including exchange-traded futures
and options contracts and various over-the-counter derivative instruments that
may result in physical delivery or are settled financially. In order to manage
the risks associated with its core business activities, Sprague has centralized
its supply and trading activities into its Portsmouth, NH headquarters.

The Supply and Trading mandate consists of the following:

 

1. System Related Activities: Management of commodity supply requirements and
commitments (and the associated price risks) arising from the following core
business activities:

Refined Products (Oil) Marketing: As indicated, Sprague has an extensive network
of refined products terminals along the U.S. East Coast, providing the
foundation for its refined products marketing activities. As indicated, in
addition to the Sprague-operated terminals, Sprague markets products from a
range of 3rd-party facilities. Sprague’s annual Oil Marketing sales are nearly
30 million barrels.

Refined Products (Oil) Supply: The key role of the Oil Supply group is to
provide supply to support Sprague’s Oil Marketing system requirements. Included
is supply at the facilities owned or operated by Sprague as well as a large
number of third-party locations. A significant part of Sprague’s Oil Supply
profitability is typically related to meeting system supply requirements, e.g.
optimizing the timing of purchases in the physical (a.k.a. cash) markets when
oil product basis levels are lower than sales that have been or will be
completed by Oil Marketing. In addition, a key focus of Oil Supply is management
of the hedges and associated futures / swaps contract rolls associated with the
refined products inventory.

Natural Gas Marketing: Sprague’s Natural Gas Marketing business is focused on
delivering natural gas to industrial and commercial customers, primarily in the
Northeast United States. Marketing obtains its supply exclusively from Sprague’s
Natural Gas Supply group and sells natural gas via a range of contract types,
including various kinds of forward contracts. Annual Natural Gas Marketing sales
are over 50 BCF.

 

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  d. Natural Gas Supply: A primary role for the Natural Gas Supply group is to
procure and deliver the supply needed for Marketing’s industrial and commercial
customers. All of Natural Gas Marketing’s supply requirements are met by Natural
Gas Supply.

 

2. Discretionary Trading: Entering into contracts with the objective of
generating profits on or from the exposure to shifts in market prices. In
general, this is a limited activity at Sprague, as described below.

 

  a. Oil Supply: Oil Supply can take discretionary positions, including both
physical and financial. These positions are generally based on capitalizing on
Sprague’s analysis and assessment of the fundamental supply / demand environment
and other pertinent market knowledge leading to a view of the forward market,
though are not specifically required to meet system supply requirements.

 

  b. Natural Gas Supply: In addition to meeting Natural Gas Marketing’s
requirements, Natural Gas Supply also sells natural gas to wholesale customers
(resellers) as well as to gas utilities and power generation facilities. Natural
Gas Supply does not undertake discretionary trading, rather focuses on meeting
wholesale supply commitments in a timely and cost effective manner.

 

  1.2 Risk Management Philosophy

It is the general philosophy of Sprague to hedge risks associated with its core
business activities. Additionally, Sprague may assume risk within approved
limits in order to grow the business and increase earnings. However, taking
risks outside of approved limits is not permitted without prior approval of the
Risk Management Committee (“RMC”).

 

  1.3 Risk Management Objectives and Process

The objective of the risk management program at Sprague is to identify, measure,
monitor, and control Sprague’s major risks (primarily market, credit and
operational risk, recognizing that physical operations risks, liquidity risks,
and business risks are not explicitly addressed in this policy) on a timely
basis to better manage the business, thereby optimizing the Company’s financial
performance. See Section 2.3 for definitions of the major risks.

Managing of these risks is achieved through determination of the Company’s
financial objectives and risk tolerance, optimal allocation of risk capital to
the Company’s business activities, an appropriate system of internal control
systems and processes and the prudent actions of Sprague’s management, traders
and staff.

Sprague’s Risk Management Policy and related documents i.e., policies,
procedures, model documentation, etc. (collectively the “Risk Management and
Control Documents”) establish standards for monitoring and controlling the
financial risks associated with Sprague’s core businesses. The policy includes
controls associated with asset optimization, hedging, marketing and
discretionary trading activities. These documents codify Sprague’s control
practices and therefore reduce the likelihood of sustaining material
unanticipated losses. It is expected that the policy will be updated as
necessary based on developments either within or outside the company. This
Policy does not constitute a contract or agreement with employees or contract
workers and may be modified or withdrawn at any time at the Risk Management
Committee’s sole discretion, consistent with any obligations contained in
Sprague’s credit facility.

The risk management process includes the following key elements:

 

  A. Identifying risks;

 

  B. Measuring and assessing risks;

 

  C. Establishing risk limits and guidelines;

 

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  D. Executing transactions and strategies properly, consistent with Sprague’s
risk tolerance;

 

  E. Recording positions and processing transactions properly;

 

  F. Validating policies, guidelines, procedures, methodologies, and models on
an ongoing basis; and

 

  G. Monitoring performance against approved limits and targets.

 

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2. ORGANIZATIONAL STRUCTURE ROLES AND RESPONSIBILITIES

 

  2.1 Overview

In accordance with prevailing industry practice, lines of authority and
responsibility for managing and controlling risk for trading, commercial and
operations are clearly delineated. In particular, the appropriate separation
between the transacting, risk monitoring/reporting and settlement/accounting
functions is maintained through a three-office structure (front, middle and back
offices). In addition, the Risk Analysis and Control function (“Middle Office”)
will report and monitor exposures and limits independent of the commercial
business functions. It is the responsibility of senior management and the RMC to
ensure that appropriate segregation of duties is maintained in the context of
organizational changes.

Risk monitoring of operational, health, safety and environmental matters is
divided between operational line management, senior management of Sprague and
the Legal Department.

Risk management and internal control are the responsibility of all Company
personnel. An essential element of a strong risk control framework is the
recognition by all employees of the need to carry out their responsibilities
effectively and to communicate to the appropriate level of management any
problems in operations, instances of non-compliance, or other violations. As it
relates to Sprague’s transacting activities, prohibited activities include, but
are not limited to the following:

Wash sales2, roundtrip trades, offsetting transactions, or transactions that
attempt to artificially inflate volume or revenue;

Transactions or strategies specifically prohibited by the various regulatory
agencies having jurisdiction over our business.

Any employee that becomes aware of such behavior or is contacted by a third
party and requested to engage in such behavior should report such incidents in
accordance with Section 3.1 of this Policy.

 

  2.2 Board of Directors

The Axel Johnson, Inc. (“AJI”) Board of Directors (“Board of Directors”) is
ultimately responsible for overseeing all activities of Sprague. In the context
of risk management oversight, this body will define the risk tolerance (overall
limits) of the Company and ensure that appropriate systems, processes and
internal controls are in place to measure, monitor and manage the Company’s risk
exposure, in particular market, credit and operational risk.

The Board of Directors has in turn delegated authority and responsibility to the
Risk Management Committee and certain Officers of the Company for the bulk of
the risk oversight function (see section 2.3). Changes in the overall risk
exposure limits (e.g., VaR, stop loss, outright positions) and maximum credit
limits must still be approved by the Board of Directors. Note that although
discussions and communication with the Board of Directors is referenced in this
policy, the common approach will be for Sprague to conduct the direct
communication with Axel Johnson, Inc. President or designee. Subsequent
communication with other Board of Directors members will be either done directly
or managed by the AJI President.

I This document refers to specific positions and titles currently in place
within Sprague. If the titles change due to factors such as promotions or
changes in scope, the title changes would not affect the defined roles,
responsibilities, etc.

 

2 FERC defines such transactions as those involving the intentional and
simultaneous purchase and sale of an energy product to another company at the
same price at the same delivery point

 

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  2.3 Risk Management Committee

The Risk Management Committee (“RMC”) maintains general oversight of all risk
taking and risk management activities of the Company, including:

Market risk related to commodity prices, foreign exchange rates and interest
rates. The primary component of this risk for Sprague is the exposure to
commodity price volatility and the potential for financial losses;

Credit risk. This risk reflects the exposure to credit quality of Sprague’s
counterparties and the potential for non-performance of their obligations;

Physical operations risk. This risk reflects the range of exposures that are
associated with Sprague’s physical operations, primarily within terminals and
trucking. Key exposures include health, safety, and environmental areas as well
as the risks associated with not meeting customer obligations;

Operational risk. This risk refers to having inadequate systems and control
processes as well as explicit items such as fraud and human error;

Liquidity risk. This is essentially a financial risk due to uncertain liquidity,
e.g., if cash outflows are too large relative to cash inflows and available
credit lines. Liquidity issues can also occur due to significant ownership of
assets with low liquidity; and

Business risk. This reflects the range of standard risks of operating a
business, including factors such as uncertainty in product demand, legal risk,
and regulatory risk.

The RMC has authority and responsibility for:

Monitoring all risk taking and risk management activities of the Company;

Ensuring development and communication of appropriate Risk Management and
Control Policies and ensuring that such documents are updated periodically, as
needed;

Ensuring that Risk Management and Control Documents are adhered to;

Ensuring that appropriate internal control processes are established and adhered
to;

Reviewing and approving new products, trading instruments and entry into new
markets;

Reviewing and approving proposed interest rate risk management strategy, e.g.
proportion of fixed and floating instruments;

Monitoring adequacy of staffing of resources devoted to commercial and risk
management activities and ensuring that clear lines of authority and
responsibility exist for assessing, measuring, and managing risks;

Curtailing or suspending trading activities, if necessary due to out of
compliance actions, processes or results;

Ensuring that RMC actions and decisions are properly documented and acted upon
in a timely manner;

Ensuring the development of appropriate systems for recording, monitoring and
reporting the results of trading and exposure management activities; and

Reviewing and approving all changes to the Risk Management Policy, with the
following exceptions.

RMC changes requiring approval of the Board of Directors:

Overall risk exposure limits (e.g., VaR, stop loss, outright positions); and

Maximum credit limits.

The Sprague Operating Resources LLC President and CEO is authorized to appoint a
Chairperson and a Secretary to the Risk Management Committee to be confirmed by
the Board of Directors. The current makeup of the RMC is as follows:

President and CEO (committee chairperson);

 

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Chief Operating Officer / Chief Financial Officer (committee vice-chairperson);

General Counsel (committee secretary);

VP, Oil Trading, Pricing and Customer Service

VP, Sales

VP, Operations,

VP and Chief Information Officer; and

Chief Risk Officer.

Other participants can be invited for particular meetings depending on the
planned topics. Potential participants include employees with direct
responsibility for key elements of risk within the Company such as the VP Oil
Trading, VP Natural Gas, and Managing Director(s) Sales. In addition, the AJI
President and CEO is expected to be a frequent participant, depending on
scheduling constraints and the planned discussion topics.

The RMC is expected to meet approximately bi-monthly, or more frequently as
needed. A meeting may be conducted in person or via conference call. Five RMC
members or their designees must be present in order to constitute a quorum. The
members required to be present in order to constitute a quorum are:

Chief Risk Officer (CRO);

President and CEO (or designee);

Chief Operating Officer / Chief Financial Officer (COO / CFO) [or designee];

VP, Oil Trading, Pricing and Customer Service (or designee); and

VP, Sales (or designee).

Note that any overlap in the designees is limited to a maximum of two of the
five “quorum” members, i.e. a minimum of three of the five members listed above
must participate in the bi-monthly meeting either in person or by phone. If
there are time sensitive issues that need to be addressed, the CRO can address
directly with the President / CEO and/or the COO / CFO outside of the regular
meetings. For these discussions other Sprague participants will be included as
appropriate.

Agendas for each RMC meeting are determined by its members. At any time, a
member has the right to call a meeting by giving advance notice to the other
members. A quorum must be present for any business of the RMC to take place. RMC
actions may be approved by a positive vote from the Chief Risk Officer along
with a simple majority vote of the quorum and shall be recorded in the minutes
of the meeting. Minutes will be taken by the Secretary and distributed to
Committee members and other appropriate personnel with a copy to be kept on file
in the Legal Department. If the General Counsel or a designee is not a
participant at the meeting, it is the responsibility of the Chief Risk Officer
to take and distribute minutes from the meeting.

 

  2.4 Chief Risk Officer

The Chief Risk Officer assists the RMC in fulfilling its responsibilities and
serves management and the Board of Directors through the following risk control
responsibilities:

Providing risk management oversight including identifying and classifying
material risks facing the company;

Establishing uniform standards within the Company for risk assessment and
measurement, including reporting requirements and valuation techniques
(excluding valuation standards of acquisitions / investments which are the
responsibility of the COO / CFO);

Developing and implementing an effective and efficient risk control
infrastructure and improving the effectiveness and efficiency of internal
controls;

 

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  D. Designing and implementing market risk and credit risk measurement
methodologies, procedures, and report formats with the assistance of Front
Office, Back Office and Support personnel;

 

  E. Overseeing model development, validation and testing processes to ensure
that market and credit risks are appropriately quantified;

 

  F. Responding to risk assessment by assisting Front Office personnel in
devising strategies for mitigation and/or transfer of risk;

 

  G. Validating and approving (with assistance from third parties, if necessary)
valuation models/algorithms, forward price curves, price models (where market
quotes are not available) and related assumptions and providing independent
valuation of Supply / Trading and Marketing activities;

 

  H. Overseeing compliance with this Policy and related procedures and
communicating any deviations and limit breaches to the RMC as appropriate;

 

  I. Working with Trading Leaders, ensuring that appropriate immediate and
short-term portfolio actions are taken in the event that a risk limit is
exceeded;

 

  J. Presenting the status of risk management and risk monitoring systems and
processes to the RMC on a regular basis; and

 

  K. Leading the risk assessment of business opportunities such as acquisitions
/ divestments.

The Chief Risk Officer also leads the Risk Management Department (ATTACHMENT 1).
This group’s primary direct risk role is for the Middle Office activities,
though Insurance also reports into Risk as well as the Financial Planning and
Analysis function. In addition to the Sprague organization and reporting
structure, the Chief Risk Officer also has a direct reporting relationship to
the Board of Directors. In this structure, the Chief Risk Officer has the
ability to report any issues directly to the Board of Directors without
additional Sprague review if the Chief Risk Officer considers it necessary.

 

  2.5 Quantitative Analysis

The Supply / Trading and Marketing groups are expected to work with the Middle
Office and Quantitative Analysis to develop report formats and methodologies for
transaction valuation and risk measurement. The Chief Risk Officer will review
and approve such formats and methodologies. The Middle Office will, in turn, use
the approved methodologies and formats for accurate transaction valuation, risk
measurement, and reporting.

Responsibilities include the following:

Facilitating development of reports of appropriate risk measures covering Supply
/ Trading and Marketing activity including, but not limited to, Risk positions,
MTM, option Greeks, and VaR; ;

Validating valuation models through backtesting and/or other reasonable methods;

Recommending improvements to risk measurement techniques;

Providing independent analysis of Non-Standard deals as necessary;

Developing pricing models including forward curves methodologies and new product
valuations;

Providing analytical support as appropriate to support Company initiatives;

Coordinating with IT, Front and Middle Offices and other relevant stakeholders
prior to utilizing new software to ensure stability of Information Services
infrastructure; and

 

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  H. When necessary, participating in the formal review and approval process of
new products and trading instruments to ensure that they can be measured and
managed.

 

  2.6 Credit Risk

The Credit Department is responsible for evaluating the creditworthiness of
potential and existing transacting partners and establishing counterparty credit
risk limits. Additional responsibilities include establishing credit risk
measurement methodologies and monitoring counterparty credit exposure on a daily
basis to ensure that counterparty credit limits are adhered to and utilized in a
manner consistent with the Company’s risk tolerance. Refer to Sprague’s Credit
Management Policy and related documentation for measurement, management and
reporting of Credit Risks. The Credit function reports to Treasury.

 

  2.7 Middle Office

The Middle Office provides a significant level of control and monitoring of the
Front Office’s activities and, therefore, is independent of the Front Office,
reporting to the Chief Risk Officer. The Middle Office function includes
assuring data integrity through deal validation and executing the risk
monitoring requirements authorized by the RMC. The important control areas and
responsibilities include the following:

 

  A. Collecting market data (prices, volatilities, interest rates, etc.) from
independent sources for mark-to-market assessment;

 

  B. Validating and modeling forward curves for all commodity exposures (market
analysis);

 

  C. Ensuring that the transactions in the Company’s Trading and Risk Management
System(s) accurately reflect each day’s activity by performing daily check out
with the daily transaction summary from Supply / Trading and Marketing personnel
and broker statements;

 

  D. Calculating mark-to-market and VaR on a daily basis;

 

  E. Monitoring compliance with risk limits;

 

  F. Reporting suspected violations of the Company’s Risk Management and Control
Documents to the Chief Risk Officer;

 

  G. Identifying weaknesses and opportunities for enhancement in the control
environment, developing solutions and implementing strategies;

 

  H. Managing the reporting of results by “book” structure to accomplish both
Front and Back Office objectives;

 

  I. Producing and distributing reports on a daily basis showing net positions;

 

  J. Reporting the realized and unrealized (forward mark-to-market) P&L of
executed transactions on a daily, month-to-date, and year-to-date basis; and

 

  K. Working with Accounting to ensure understanding of any differences in P&L
reported by Risk and Accounting results;

A strong segregation of duties must exist between Trading/Marketing and Middle
Office activities. The activities of the Middle Office do not replace the
traders’ and marketers’ primary responsibility for assessing the risks
associated with their positions and the timely and accurate recording of all
transactions with written confirmations and/or on recorded phone lines in
accordance with the Company’s Contract Administration and Confirmations
procedures.

 

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  2.8 Contract Administration

Contract Administration has primary responsibility for the administration and
maintenance of contracts and agreements related to the trading of all approved
commodities. These contracts and agreements include: (i) Master Agreements,
(ii) Confirmations based upon such Master Agreements, (iii) Stand-alone
Agreements, (iv) One-off Agreements, (v) ISDA Master Agreements for financial
derivatives, (vi) Confirmations based upon such ISDA Master Agreements, and
(vii) ISDA Long Form Confirmation Agreements for financial derivatives.
Additionally, Contract Administration is responsible for the development,
negotiation as appropriate, administration and maintenance of other Company
contracts and agreements including, but not necessarily limited to,
(i) Throughput and or Exchange Agreements, (ii) Electronic Trading Platform
Agreements, (iii) Natural Gas Transportation and Storage Agreements,
(iv) Assignment and Assumption Agreements, and (v) Other contracts and
agreements needed and requested by various Front Office departments. Contracts
Administration will work in conjunction with the Legal Department to ensure the
contracts conform to all Sprague requirements.

Primary responsibilities include:

Ensuring implementation of the contractual terms and conditions developed and
negotiated by the Commercial and Legal departments (and consistent with
guidelines provided by the Credit Department) for the above-listed contracts and
ensuring the agreements are implemented in the final executed contracts;

Confirming in writing all term transactions with assistance from Front Office
Traders and Marketers;

Collecting and monitoring third-party trade confirmations, securing assistance
from the Front Office where necessary to obtain missing information;

Coordinating communications and information flow between Sprague traders,
marketers, credit, accounting, billing and legal groups and from counterparties;

Obtaining and maintaining signed copies of daily transactions from Supply
personnel confirming that all activity is complete and accurate;

Initiating and monitoring the development, negotiations, review and execution of
agreements and contracts;

Ensuring that new and existing counterparties have the proper documentation in
place;

Developing and maintaining effective Contract Administration and Confirmations
practices;

Maintaining copies of contracts and confirmations in accordance with the
document retention policy.

Developing procedures for routing and approving counterparties’ contracts and
making changes to the company’s standard contracts; and

Maintaining various data fields in the Company’s Risk Management and Trading
systems.

 

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  2.9 Supply / Trading and Marketing

 

  2.9.1 Front Office

Supply / Trading and Marketing (the “Front Office”) executes the Company’s risk
taking and risk mitigation strategies. The Front Office’s functions include deal
execution, buying and selling, and hedging of physical commodities or financial
instruments. The Front Office is responsible for the initial capturing and
logging of a transaction’s specific terms and conditions, as well as the support
role of scheduling. The duties and responsibilities of the Front Office are
described below under Trading and Marketing Officers, Pricing, Trading Leaders,
Traders, Marketing Leaders and Marketers. Note that the focus of these lists is
responsibilities with respect to risk management.

 

  2.9.2 Trading and Marketing Officers

The VP Oil Trading, Pricing and Customer Service, VP Natural Gas and VP Sales
(“Trading and Marketing Officers”) are responsible for overseeing and directing
Front Office line managers to ensure that day-to-day operations are in
compliance with the Company’s Risk Management and Control Documents. The VP
Trading, Pricing and Customer Service, VP Natural Gas and VP Sales report to the
Company President and CEO.

Responsibilities include the following:

 

  A. Ensuring that overall marketing, hedging and trading strategies are
consistent with the Company’s risk tolerance, profitability targets, limit
structure, and control policies;

 

  B. Managing and guiding Front Office line management to ensure that commodity
supply commitments and requirements are achieved;

 

  C. Ensuring that unwanted market risk is hedged in accordance with the
allocation of risk to the business;

 

  D. Reviewing the effectiveness of hedges on a regular basis;

 

  E. Directing the overall operations of various segments of the Front Office to
achieve defined objectives;

 

  F. Describing short and long-term market views, business strategies, and
corresponding risks to the Board of Directors and the RMC;

 

  G. Developing and communicating proposed aggregate risk limits and transacting
scope to the RMC for approval;

 

  H. Monitoring market conditions and proactively managing positions in the
context of market volatility; and

 

  I. Maintaining adequate depth and competency of personnel assigned to
operating groups.

2.9.3 Pricing

The Front Office pricing desks (oil marketing and natural gas marketing) are
responsible for creating a structure for origination deals that optimizes
risk-reward profile in accordance with corporate guidelines. This is
accomplished by characterizing risks (credit risk, price risk, volumetric risk,
etc.) and appropriately pricing transactions to the Company’s customers.

 

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Responsibilities of the Front Office pricing desks include:

Ensuring the integrity of transaction pricing, contract structuring and
transaction confirmations;

Capturing all transactions in the Company’s trade capture and risk management
systems in a timely manner; and

Communicating openly with Traders, Middle Office and Credit to facilitate
exchange of critical information regarding markets or customers in a timely
fashion.

 

  2.9.4 Trading Leaders

Responsibilities of the V.P. Oil Trading, Pricing and Customer Service, VP Oil
Supply and V.P. Natural Gas include:

Overseeing all trading activities in their respective departments;

Ensuring that transactions are executed in accordance with approved procedures;

Ensuring the integrity of transaction pricing, contract structuring and
transaction confirmations;

Capturing all transactions in the Company’s trade capture and risk management
systems in a timely manner;

Implementing risk management strategies consistent with the Company’s overall
hedging policy and approved risk limits;

Developing and implementing same-commodity and cross-commodity hedges and trades
to maximize profit potential within such approved limits;

Ensuring traders verify and sign off on position and other appropriate risk
management reports;

Ensuring traders remain within their limits; and

Informing the CRO of any suspected violations.

2.9.5 Traders

Responsibilities of Traders include:

 

  A. Signing off on End of Day reports on a daily basis as required;

 

  B. Inputting all executed transactions in the Company’s Trading and Risk
Management System(s) on the calendar day of execution unless it is an approved
exception which can apply to non-discretionary trading activity only;

 

  C. Following up with floor brokers as necessary to address any outstanding
issues;

 

  D. Resolving transaction discrepancy notices received from the Middle Office
or Contract Administration by the end of the following business day;

 

  E. Adhering to all specified limits, e.g., individual transaction authority,
open position, VaR, Stop Loss, Credit;

 

  F. Transacting only with approved brokers and counterparties (approved credit
and contracts);

 

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  G. Checking with Contract Administration to ensure that proper documentation
is in place prior to trading; and securing approval from the Manager of Contract
Administration when documentation is not in place;

 

  H. Checking the Approved Product List and Authorized Instruments List prior to
trading to ensure that contemplated transaction falls within product or risk
type approved by the RMC;

 

  I. Ensuring the counterparty, broker (where applicable) and transaction type
have been approved for the respective counterparty;

 

  J. Conducting all trade execution and trade processing on Company premises
utilizing the standard transaction execution script unless the activity is part
of normal business practices or they are given explicit authority by their
Trading Leader to do otherwise; and

 

  K. Informing the CRO and the appropriate Trading Leader and Trading and
Marketing Officer of any known or suspected violation of this Risk Management
Policy.

2.9.6 Market Leaders

Responsibilities of the VP of Sales and Market Leaders include:

 

  A. Overseeing all marketing activities to ensure transactions are executed in
accordance with the Company’s Risk Management and Control Documents;.

 

  B. Establishing and optimizing a profitable portfolio of rack and contract
business utilizing approved commodities, products and locations;

 

  C. Avoiding any participation in outright or discretionary trading;

 

  D. Pursuing strategies with the objective of optimizing risk to reward for all
business activities;

 

  E. Providing sufficient advance notice of anticipated new customers, delivery
locations, products or instruments to Supply / Trading and Marketing Officers,
Chief Risk Officer and Middle Office;

 

  F. Ensuring that all marketing transactions are appropriately priced and
documented in accordance with the Company’s Contract Administration and
Confirmations practices; and

 

  G. Informing the CRO of any suspected violations.

2.9.7 Marketers

Responsibilities of Marketers include:

 

  A. Ensuring that all transactions are appropriately priced, taking into
account the best information available with respect to all material risk factors
including credit and volumetric risks. The Company recognizes that in
establishing this pricing the trade-off of prices and material risks may often
be based significantly on qualitative assessments;

 

  B. Ensuring that all transactions are appropriately documented in writing in
accordance with the Company’s Risk Management and Control Documents, including
the Contract Administration and Confirmations processes;

 

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  C. Ensuring that all transactions are executed only with pre-approved
counterparties, for pre-approved products and at pre-approved locations; and

 

  D. Informing the CRO and the appropriate Market Leader and Trading and
Marketing Officer of any known or suspected violation of this Risk Management
Policy.

 

  2.10 Support Functions

2.10.1 Back Office

The functions of the Back Office include performing processes in support of the
Front Office such as accounting, invoicing, dispute resolution, broker
reconciliation, accounts receivable and payable, tax reporting and management
reporting. The duties and responsibilities of the Back Office are described in
the support functions listed below.

2.10.2 Operations Accounting

The Operations Accounting group is responsible for management reporting,
transaction processing, billing, and invoice processing. To ensure proper
segregation of duties all cash settlements are processed by the Treasury
Department. Moreover, Operations Accounting does not control the recording in or
reconciliation of the general ledger, but provides assistance in a transparent
manner to the Financial Accounting Department which determines the appropriate
financial accounting treatment and disclosure for Supply / Trading and Marketing
transactions and related exposures. The responsibilities of Operations
Accounting encompass comprehensive support of Front Office transactional
activities other than position valuation, which is performed by the Middle
Office group as discussed earlier in Section 2.7. Specific responsibilities
include:

 

  A. Facilitating the Financial Accounting Department’s understanding of Middle
Office valuation and related reserves in a transparent manner;

 

  B. Reconciliation of broker statements with trade information captured in
Sprague’s systems including to support of month-end reporting requirements;

 

  C. Completing any hedge accounting requirements if applicable;

 

  D. Providing management report(s) of monthly P&L and supporting Financial
Planning and Analysis (FP&A) and Operating Groups as necessary to develop
narrative explanations of significant changes in volumes, margins and
mark-to-market amounts;

 

  E. Reviewing Risk Management & Trading System prior to billing and informing
the Middle Office of discrepancies; and

 

  F. Producing and processing invoices based upon Supply / Trading and Marketing
activity and reporting such activity to the Treasury Department for cash
collection/distribution.

2.10.3 Information Technology

Responsibilities of (“IT”) include:

Providing business analysis of Front/Middle/Back Office system needs, ensuring
balance with the varied interests throughout the corporation;

Developing business process flow, ensuring efficient, timely, and accurate
information to all applicable corporate business units;

 

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  C. Developing design requirements for Information Services (“IS”) software
development;

 

  D. Approving any software that interfaces or will interface with the Company’s
Risk Management and Trading Systems to ensure integration and enable successful
support of Supply / Trading and Marketing activities;

 

  E. Managing various system interfaces, providing focused direction of current
support and future needs, recognizing that the business continuity needs will
require adequate capital support;

 

  F. Ensuring all control features established in Risk Management and Trading
Systems are fully functional at all times and notifying the Chief Risk Officer
and appropriate Supply / Trading and Marketing Officer and Trading Leader when
any control feature is not fully functional;

 

  G. Supporting all IT applications regardless of whether they were involved in
the development or not; and

 

  H. Providing the RMC with updated timetables detailing system improvements
that are in development and expected completion dates for each item.

IT provides critical support to the Supply / Trading and Marketing and Risk
Management functions by providing:

 

  A. Voice and data networks;

 

  B. Data management;

 

  C. Software architecture development and support;

 

  D. Physical and logical security of networks, data and applications; and

 

  E. Business continuity:

Change control;

Redundancies; and

Disaster recovery.

2.10.4 Legal

The Legal Department is responsible for oversight and direction of all legal
matters that impact the Company as well as providing advice to Senior
Management, business units and supporting departments regarding mergers,
acquisitions, divestitures, human resource matters, benefit issues, insurance,
contracts, litigation, regulatory compliance, legislative initiatives, new
business products and markets. The General Counsel is responsible for oversight
and direction of the Health, Safety and Environmental Department and developing
appropriate compliance training for the Company at all levels.

Primary responsibilities include:

Ensuring the Company is in compliance with all laws and regulations in the
jurisdictions in which the Company operates;

Ensuring the Company maintains adequate policies and procedures and training
programs to comply with relevant laws and regulations pertaining to the
Company’s Supply / Trading and Marketing businesses and it Operating, Financial
and Human Resource units;

 

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Developing and overseeing the Company’s Document Retention Policy as it relates
to the Company’s Supply / Trading and Marketing businesses and other
departments;

Participating in the preparation and review of regulatory filings to ensure
compliance with reporting requirements;

Administering licensing programs, file renewals and new license applications
with the appropriate federal, state or local agencies or private entities, e.g.,
marketing licenses;

Drafting, negotiating and reviewing all trade agreements and contracts and
ensuring compliance with all laws, regulations, Sprague Policies and changes in
market practices;

Advising the Contract Administration and Credit departments on applicable
bankruptcy or insolvency laws;

Advising the Contract Administration and Credit departments regarding the
procedures necessary to ensure enforceable transactions and adequate
documentation;

Developing and administering Confidentiality Agreements; and

Advising Commercial groups and Sprague Management on key contractual exposures.

2.10.5 Tax

Responsibilities and duties include:

 

  A. Determining the effect of changes in tax laws as it relates to the
Company’s Trading and Marketing businesses;

 

  B. Developing hedge identification procedures that meet tax documentation
requirements as needed;

 

  C. Determining the tax effect of transactions; and

 

  D. Determining the most efficient tax structure for transactions.

2.10.6 Internal Audit

Responsibilities and duties include:

Working with management to understand and enhance as necessary key internal
controls;

Coordinate efforts with external auditors, especially in relation to compliance
with requirements associated with Sarbanes-Oxley Act; and

Lead efforts to complete independent internal financial and business process
audits.

 

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3. COMPLIANCE AND ENFORCEMENT

All corporate officers, members of the Supply and Trading groups, marketers
involved with futures / forward transactions, Middle Office staff and managerial
personnel in Back Office functions involved with risk management activities are
required to sign the Risk Management Policy. Signing the Employee Confirmation
form for this Risk Management Policy confirms that the employee has read and
understands the risk controls and standards as they relate to Sprague’s Supply /
Trading and Marketing business. Signing of new Employee Confirmations will be
required whenever a significant update of the Risk Management Policy is
completed. The CRO will work with the various applicable managers to ensure that
all pertinent staff members meet this requirement.

Compliance with these standards is an employment requirement and will be
considered in each individual’s overall performance evaluation. This includes
the execution of day-to-day responsibilities by all personnel discussed as
having energy risk management duties, as well as compliance with the Risk
Management and Control Documents in their entirety. Any incidence of
non-compliance with this Policy may be considered a violation, and subject to
possible sanctions as outlined in Section 3.2.

 

  3.1 Reporting Incidents of Non-Compliance

All incidents of non-compliance and misconduct are to be reported to the Chief
Risk Officer as soon as practicable after the incidence of non-compliance is
detected. Failure on the part of a leader to report an incidence of
non-compliance by a direct report will itself be considered a violation. Such
reports must document the reason why non-compliance occurred.

All violations will be reported to the Sprague President, COO / CFO, General
Counsel and Senior Commercial Manager. In addition, they will be reported to the
RMC. Those violations considered fraudulent, conscious, willful and/or
intentional violation of Company Policy or Procedures are considered severe and
must be communicated to the RMC immediately. Note that notification of the
President, COO / CFO and General Counsel meets this RMC notification
requirement. Examples of such violations are described in Section 3.2.2 below.

To the extent that the Chief Risk Officer does not feel that appropriate actions
have been taken to correct violations, the Chief Risk Officer is obligated to
communicate these concerns to the RMC. If the condition persists, the Chief Risk
Officer should concurrently notify the Sprague President and the Board of
Directors.

In the case of a credit risk limit violation, please refer to the Sprague’s
Credit Management Policy Manual and related documentation.

 

  3.2 Sanctions

Any violation of this Policy may result in an employees’ termination. Nothing
contained in these Guidelines alters the At-Will employment relationship between
an employee and the Company. The Management of Sprague may impose whatever
sanction it deems necessary for a violation of this Policy up to and including
termination. Lesser sanctions, such as those discussed in this section, are also
available to management for use at Sprague Management’s discretion.

In cases where non-compliance with this Policy is reported, the RMC may use an
independent party to determine whether the breakdown in compliance occurred, and
collect any evidence as to who was aware of the non-compliance. A meeting would
then be held with the employee’s supervisor prior to discussing the issue with
RMC.

 

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The Supply / Trading and Marketing Officers and Chief Risk Officer
(“Management”) are responsible for imposing sanctions on their respective
personnel for instances of non-compliance, considering recommendations by Human
Resources and the Legal Department. The Chief Risk Officer will inform the
Sprague President, COO / CFO, and General Counsel of all instances of
non-compliance and the planned sanctions. If there is a disagreement with the
planned sanctions, the Chief Risk Officer will coordinate a discussion leading
to agreement on the sanctions to be put in place. The outcome of the transaction
or situation is not relevant to the determination of sanctions or disciplines.
Following are examples of sanctions that could be used.

 

  3.2.1 Examples of Sanctions

Examples of possible sanctions include, but are not limited to the following:

 

  A. Verbal counseling to employee by supervisory personnel. A record of such
counseling will be maintained in the employee’s personnel file and consideration
given during annual performance evaluation process;

 

  B. Written warning and verbal counseling to the employee by supervisory
personnel. A record will be maintained in the employee’s personnel file and
consideration given during the annual performance evaluation process;

 

  C. Suspension from active trading for up to thirty (30) business days,
including pay adjustments if deemed appropriate;

 

  D. Pre-approval of all transacting activity prior to execution by designated
supervisory personnel;

 

  E. Suspension from participation in the bonus structure, incentive
compensation plan, etc.; and

 

  F. Termination.

 

  3.2.2 Fraud or Willful Acts of Misrepresentation

Certain severe violations are explicitly classified as such and must be reported
to the RMC immediately. Employees should be made aware that violations of this
magnitude would, subject only to the RMC’s discretion, result in immediate
termination. Examples include but are not limited to the following:

Violating a Confidentiality Agreement willfully;

Transacting in physical or financial transactions for the employee’s own (or
friends / family member’s) account or providing information to others for
transacting on the employee’s behalf. Note that this restriction is applicable
only to Sprague’s approved products, i.e. non-approved products and/or other
trading instruments are not part of this restriction;

Engaging in transactions knowingly that are in violation of Federal or State
regulations (including but not limited to the Securities and Exchange
Commission, Commodity Futures Trading Commission and Federal Energy Regulatory
Commission);

Falsifying transactions/positions or concealing losses deliberately; and

Violating a position limit deliberately.

 

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Sprague may pursue legal action against those employees who conduct an illegal
or criminal act(s) while employed by Sprague which, directly or indirectly,
affects the Company and / or its reputation.

Notwithstanding these guidelines, management retains all rights as an At-Will
employer to terminate employment with or without cause.

 

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4. VALUATION, RISK MEASUREMENT AND CONTROL

 

  4.1 Valuation Frequency

The Middle Office performs daily valuation of the Company’s Supply portfolios by
marking-to-market each transaction. The valuation of those transactions that are
difficult to value or are valued outside of the Risk Management and Trading
Systems may be estimated for daily purposes. Such transactions must be valued at
least weekly. A list of all transactions that reside outside of the Risk
Management and Trading Systems will be distributed by the Middle Office Manager
on a monthly basis to the Chief Risk Officer, Supply / Trading and Marketing
Officers, Trading Leaders and Chief Financial Officer / Chief Operating Officer.
An example of a transaction that would fit into this category is a financial
derivative whose price is not readily available from standard publications or
other industry sources. A digital (a.k.a. binary) option with no published
pricing would be a specific example.

 

  4.2 Valuation Data Sources

Data used for mark-to-market calculations must be accurate and consistent. All
price and volatility information should be taken at approximately the same time
of day (e.g., close of day), preferably from a public data source. If such
information must be provided by the Front Office, it will be periodically
audited or checked by the Middle Office against the most readily available
reasonable proxy.

 

  4.3 Valuation Reserves

Market valuation reserves represent adjustments to estimates of value in order
to arrive at an amount that reflects fair market value. Reserves may be required
for positions in illiquid markets or for cases where subjective estimates are
required. In such cases an appropriate valuation reserve will be made
considering bid/ask spreads in nearby markets, the number of players in a given
market, etc. Valuation reserves may also be required for complex transactions to
consider fully the future costs required in fulfilling the obligations of the
transaction.

A form of valuation reserve is the Credit Reserve which is intended to provide a
cushion to protect against losses that may be incurred from the insolvency or
default of a trading counterparty. Refer to Sprague’s Credit Policy and related
documentation for more information.

The establishment of valuation reserves will be determined by the Chief Risk
Officer in conjunction with the Chief Operating Officer / Chief Financial
Officer.

 

  4.4 Portfolio Definitions

All transactions will be assigned to one of eight portfolios:

1) Natural Gas

a) Supply / Trading

 

  i) System Supply

 

  ii) System Optimization

 

  iii) Discretionary

b) Marketing

 

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2) Refined Products

a) Supply / Trading

 

  i) System Supply

 

  ii) System Optimization

 

  iii) Discretionary

 

  b) Marketing

 

  A. System Supply Portfolios: System supply transactions arise from Sprague’s
management of the volume and underlying price risk associated with its inventory
and/or marketing obligations. Included in this category are: Inventory;
Throughputs; Exchanges; 3rd Party Storage; Purchases, Sales; Buy/Sell
Transactions; Transportation Agreements and In-house transactions to balance the
Marketing Portfolios. Also included in the system supply portfolio are the
related financial hedges and forward spread transactions that are used to
“pre-roll” inventory or as precursors to subsequent “summerfill” transactions.

 

  B. System Optimization Portfolios: The system optimization portfolios include
a range of financial and physical transactions that are used to fine tune system
operations and performance. Included in this category can be financial
transaction types such as futures, swaps and options or physical activity such
as volumes transported by pipeline from the U.S. Gulf Coast. These transactions
can be done on either a stand-alone basis or in combinations such as spreads
that result in a net balanced volume position. An example would be a Gulf Coast
swap transaction put in place with the opportunity to lower the cost on an
expected future product delivery requirement. Currently, the System Optimization
Portfolio is only relevant for oil transactions, though if the natural gas
system (e.g. inventory) grows substantially in the future, there may be a
justification to isolate the system supply and optimization portfolio in natural
gas also.

 

  C. Discretionary Portfolios: Transactions and positions taken in anticipation
of profiting from a market view. In general, this is a limited activity at
Sprague with no discretionary trading currently undertaken in support of the
natural gas business and modest discretionary activity for oil. As discussed
above, there are various transactions undertaken to procure and optimize oil
supplies. There will remain some modest volume imbalances, however, since the
daily hedges are based on projected sales. In addition to these modest
imbalances, there may be some other positions taken within the specified
position limits that are not intended as part of a system or hedging
requirement. These discretionary positions can be characterized in two high
level categories:

Outright positions, i.e. net positions that result in an unbalanced position.
Although Sprague tracks the outright positions on a daily basis, it handles long
and short positions differently when identifying discretionary outright
positions.

 

  •   Sprague has ongoing sales requirements as part of its sales activities. As
long as the outright long position remains within the risk limits (maximum of
500 KB or 500 NYMEX contract equivalents for oil and 250 NYMEX contract
equivalents for natural gas), this position is not considered discretionary, as
expected sales requirements can readily consume this volume in a relatively
short time period. Consistent with our understanding of tax regulations, these
outright long positions are considered part of Sprague’s system / system
optimization requirements.

 

  •   In contrast, outright short positions can be discretionary. If Sprague is
going to take a short discretionary position, the transaction(s) are identified
as discretionary on the day the positions are taken. The profitability
associated with these positions will be tracked separately as discretionary
until the positions are closed out.

 

  •  

In addition to the discretionary short position trades undertaken as a specific
strategy, there can be modest short volume imbalances due primarily to the
projected daily sales not meeting actual customer volume requirements. These
resultant positions will not be part of the discretionary portfolio, as any
discretionary trades will be

 

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identified as such on the day the transactions are undertaken. For oil,
Sprague’s approach to assess any short imbalances is to separate the refined
products outright positions into three categories, i.e. distillates, gasolines,
and heavy oils (primarily residual fuels). For each of these three groups, an
allowable operating tolerance of 100,000 barrels is allowed. If this operating
tolerance is exceeded on any day (again noting that each product group is
treated separately), then Sprague will take all reasonable commercial steps to
promptly balance the position within the tolerance levels, with an expectation
that this balancing will generally occur by the close of the next business day.
However, if it isn’t practical to balance the positions during the next business
day due to market conditions or other factors, up to three business days is
allowed to get the short positions within the defined operating tolerances. All
positions that are part of this operating tolerance will remain part of the
system / system optimization portfolios as originally classified.

Other discretionary oil positions are ones that are not associated with either
the system supply or system optimization portfolios. As an example, a crack
spread (net balanced position between crude oil and refined products such as
RBOB and / or heating oil) would generally not be part of a system requirement
and would be considered discretionary. Again, these positions will be
specifically identified as a discretionary position on the day the trade is
undertaken.

As indicated, there are no new discretionary natural gas positions now being
taken, with the exception of ones associated with a small legacy leased storage
position in the U.S. Gulf Coast. Since there are no new discretionary positions,
the full natural gas Supply / Trading portfolio is used when comparing positions
with the specified limits. Although no discretionary natural gas positions are
taken the positions are still tracked on a daily basis. If an outright short
position inadvertently exceeds 100 NYMEX contract equivalents on any day, the
same general approach as used for oil will be used to balance the position
within the operating tolerance. Again, the expectation is that the position will
be brought within the 100 contract tolerance by the close of the next business
day, with a maximum of three business days allowed to meet this requirement.

 

  D. Marketing Portfolios: The marketing portfolio houses all transactions
associated with the Company’s marketing directly to its customers. Transactions
in this portfolio include both the direct obligation to the customer as well as
the hedging transactions (in-house transactions between Supply and Marketing) to
maintain a balanced portfolio. The residual volume and price exposure of the
marketing portfolio will be a reflection of any mismatch of the customized
wholesale products, which the marketing customers require, and the standardized
products available in the wholesale market for hedging. These positions will be
minimal and only tracked for internal purposes, as the reported results are
consolidated at the Refined Products and Natural Gas levels.

 

  4.5 Market Risk Limits

The market risk measurement methodologies described in this section are the
agreed methods for measuring and assessing market risk by the RMC. Such
methodologies will be used to ensure that all significant sources of market risk
are identified, quantified and reported. Furthermore, the Company has
established a risk limit system consistent with the Company’s risk management
philosophy as defined in section 1.2.

The aggregate limit for the amount of risk to be incurred by Sprague Resources,
and the broad structure of the limits is approved by the Board of Directors. The
allocation of the aggregate limit to the business units and the structure of
more specific limits are approved by the RMC. The Supply / Trading and Marketing
Officers determine the further allocation of risk limits across trading and
marketing books.

If any of the aggregate limits of the Senior Commercial / Trading Managers are
exceeded without obtaining a waiver prior to the breach, a violation occurs and
the Chief Risk Officer or designee will notify the

 

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President and COO / CFO. Based on this discussion, the Chief Risk Officer will
determine whether to convene a special meeting of the total RMC or a subset of
this group to discuss a course of action with the appropriate senior commercial
/ trading manager(s). Depending on the results of this discussion, a
determination will be made regarding any specific steps to cure the violation,
either by getting the position within the approved limits (typically within the
next day) or by obtaining a waiver from the President/CEO up to his control
limit. As long as the aggregate level remains under the Sprague President’s
limit, there is no requirement that specific actions be taken to adjust the
position, though a waiver must always be granted until the position is brought
within limits. System Supply and System Optimization activities (refer to
Portfolio Definitions above) that are considered necessary to mitigate risk
and/or meet obligations can also continue without restriction. If the losses
exceed the President’s limit, the Board of Directors must also be notified.
Depending on the Board of Directors response, actions may or may not be
required. Any violation beyond the President/CEO’s limit must be cured by the
next day unless authorization is provided by the AJI Board of Directors’
President or designee.

The following table summarizes the limit authorizations that are required and
reporting frequency/responsibility:

 

Limit Structure

  

Approved By

  

Reporting

Responsibility

  

Reporting

Frequency

Position Limits    Board of Directors    Middle Office    Daily Stop Loss Limit
*    Board of Directors    Middle Office    Daily Value-at-Risk*    Board of
Directors    Middle Office    Daily Specific Portfolio Limits    RMC    Middle
Office    Daily Credit Limits    Board of Directors    Director of Credit   
Daily

 

* Discretionary and system optimization trading only

 

  4.6 Position Limits

The oil position limits are divided into outright positions, as well as a range
of spread and individual position limits. The outright position limits refers to
the net risk position, i.e. includes all physical and financial (e.g. futures
and swaps) positions. Examples of outright oil positions would include the
following:

 

  •   Exchange transactions, such as Heating Oil, Gasoil, RBOB, Natural Gas, and
WTI;

 

  •   Over-the-Counter (OTC) swaps positions; and

 

  •   Cash (physical) positions.

The outright positions for both oil and natural gas are measured on a daily
basis, with the limits in place applying to the total portfolio, i.e. the
combination of system supply, system optimization and discretionary positions.
All of the other position limits in place apply to the combination of the system
optimization and discretionary portfolios.

As per of the determination of the positions, Sprague defines “standard” hedging
products. In general, basis refers to the price differential between the cash or
spot price of a commodity and the price of the nearest month futures or swaps
contract. Basis may reflect different time periods, qualities or locations.
Consistent with common market practice, for the oil business Sprague uses basis
to refer to quality differences. As indicated below, Sprague treats location
spreads for oil separate from basis (quality). Note that for the natural gas
business, basis typically refers to location, since quality differences are
generally not pertinent.

 

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Similar to the oil location spreads, Sprague treats system positions with
potential basis exposure differently than discretionary positions. Sprague
generally runs a balanced book with the system positions largely hedged with
what is considered to be the most appropriate trading instrument. The current
“base” hedging instruments are as indicated below, recognizing that they may
change in the future depending on product availability and considerations such
as liquidity.

 

Oil Product Group    Base Hedging Instrument Gasolines    NYMEX RBOB futures
contract* Ethanol    NYMEX RBOB future contract or CBOT ethanol futures
contract* Distillates    NYMEX Heating Oil (HO) futures contract* Fuel Oils   
NYH 1% Sulfur Residual Fuel Oil Swaps

 

* Could also use comparable swaps contracts

There is no basis spread recorded for any system position hedged with the base
hedging instrument. For fuel oil there can also periodically be a strong
rationale to use an alternative instrument such as Gulf Coast 3% sulfur fuel oil
swaps or crude oil (either WTI or Brent futures or swaps) as a hedge. These
instruments could be preferred due to considerations such as liquidity or
quality differences. If these alternative instruments are used as a hedge then a
cross commodity as well as a location spread (if applicable) is recorded for the
position Note, however, that up to 500,000 barrels of residual fuel oil can be
hedged with crude oil without counting against the approved cross commodity and
location spread limits. Any positions beyond this 500,000 barrel limit would
count against the pertinent position limits.

Spreads are defined as offsetting positions which net to a balanced overall
position. Although the positions offset, there can still be substantial
exposure. As indicated, the oil spread position limits apply to the system
optimization and discretionary trading portfolios, i.e. any activities
associated with the system supply portfolio are not subject to these additional
spread limits. The most notable system supply example for Sprague is the use of
forward (a.k.a. deferred) spreads when the heating oil market is in a contango
or carry structure. These spreads are completed in anticipation of a subsequent
filling of a corresponding volume of oil inventory in the tanks, frequently
called summerfill. When the oil is purchased to put in the tanks, the long
position of the spread can be closed out, with the remaining short position
acting as the hedge on the physical inventory. Another example of a system
transaction is a “pre-roll” of the distillate inventory hedge. As indicated
earlier, Sprague operates with a substantially balanced book, with the inventory
hedged within limited tolerances. For light oil products, the base assumption is
that inventory is hedged with the prompt month NYMEX position of the most
appropriate oil commodity (see table above). As an example, during the month of
December, the base distillate inventory hedge would be a corresponding volume of
January NYMEX heating oil contracts. Since these January NYMEX contracts would
expire at the end of December, it is necessary to exit the positions prior to
month-end. The exit from these contracts is generally accomplished by either
closing the position if the hedge volume is no longer needed or “rolling” it to
the next month, e.g. in this case purchasing the short January contract(s) and
selling a corresponding volume of February contract(s). This process whereby the
prompt month hedges are “rolled” to the next month prior to expiration is
considered part of the requisite system activity and the positions are included
in the System Supply portfolio.

There can also be strong incentive to “pre-roll” an inventory hedge beyond the
next month. For example, if the inter-month price spreads appear attractive, a
pre-roll can either lock in a gain (when in contango) or limit a loss (when in
backwardation) to what is considered an acceptable level. Sprague can pursue
this strategy depending on the current and expected market conditions. Since
these pre-rolls are pursued in

 

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support of the system requirements, they are also included in the System Supply
positions. The position limits recognize this pre-roll option up to a maximum of
three million barrels (President’s limit) and up to two additional months
forward beyond the prompt month roll. Based on the example cited in the
paragraph above, the January inventory hedge could be pre-rolled up to April and
be considered a system supply pre-roll rather than a system optimization
position. Any pre-roll beyond this time frame is considered part of the System
Optimization portfolio and subject to the additional position limits imposed on
the combination Discretionary plus System Optimization positions.

Note that the pre-rolls are in concept quite similar to the forward spreads
discussed above. A key difference is that the pre-rolls refer to positions where
the “long” side of the spread is a cash position rather than a forward month
paper position.

The oil spread limits on the combination Discretionary plus System Optimization
positions are divided into four categories, again with potential positions on
the exchanges, OTC, or cash markets:

 

  •   Time spreads, i.e. based on the same commodity in different time periods;

 

  •   Location or geographical spreads, based on the same or similar (e.g.
heating oil and gasoil are considered similar) commodity in different locations;

 

  •   Basis spreads, based on a spread between the same or similar physical
commodity and futures or swaps contract; and

 

  •   Cross Commodity spreads, based on different commodities, e.g. heating oil
/ crude oil positions or a heating oil / natural gas spread. Note that if
residual fuel oil is hedged with crude oil (WTI or Brent), no cross commodity
spread is calculated as these instruments can be the preferred hedge instrument
due to liquidity or other considerations.

Option trading is approved for exchange (NYMEX or ICE) and OTC options for Oil
Supply / Trading. Natural Gas Supply / Trading has natural gas options trading
approval, though only for system transactions.

The Oil group is authorized to trade natural gas cross commodity spreads, though
only as part of a hedge. As an example, a residual fuel oil / natural gas spread
trade could be used to “lock in” the economics of a capital project designed to
convert fuel usage from residual fuel to natural gas. This type of transaction
would be measured as part of the system trading portfolio, though would need to
be specifically documented as such.

In addition to the total oil spread limits, Sprague recognizes individual spread
position limits on the System Optimization plus Discretionary positions. These
limits are put in place to help recognize that concentration in individual
spread positions can carry additional risk compared to a more diversified
portfolio.

Similar to many other companies, Sprague aggregates all forward natural gas
market risk into high level components for position management and hedging
purposes. This approach groups positions with similar risk profiles to establish
market exposure. The position limits are based on this breakdown:

 

  •   Fixed Position: All forward positions containing risk that is impacted by
the settlement of the NYMEX Natural Gas contract. This risk can be offset using
NYMEX Natural Gas futures or OTC look-alike instruments;

 

  •   Basis Positions: Forward positions that contain risk impacted by the
location differential between a published index point and the NYMEX natural gas
futures settlement; and

 

  •   Index Positions: Forward physical positions and swaps that are priced
relative to a published index, e.g. Platts IFERC.

The Company utilizes VaR limits (see section 4.8), but not as the sole measure
and control of market risk. In both oil and natural gas, the VaR limits are
based on the system optimization plus discretionary positions only (i.e. system
supply excluded). Note that the oil book can have a large system position due to
the substantial physical infrastructure. The VaR associated with the oil system
may not be routinely calculated, though the overall market risks are primarily
monitored through the use of items such as the outright and

 

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basis positions, inventory levels, forward sales commitments and the product mix
distribution. VaR limits are supplemented with additional risk measures and
position limits with respect to particular strategies and commodities. These can
include duration (tenor) limits, and limits related to specific stress tests.
The structure of specific market risk limits for oil and natural gas is
presented in EXHIBIT 3. In addition, the Company monitors the trends in the VaR
values to help assess any major changes in the level of market risk in place.
The Middle Office can propose additional or alternative limits as appropriate.
Any changes which potentially increase the level of overall risk will require
approval by the Board of Directors.

 

  4.7 Stop Loss Limits

For the Oil Supply / Trading business areas, an aggregate threshold is set on
cumulative margin losses for the combination of System Optimization and
Discretionary positions on a monthly basis. The System Supply activities that
directly support the oil system (primarily Sprague-owned terminals) requirements
are not subject to a daily VaR limit. In contrast, the complete Natural Gas
Supply / Trading positions are part of the daily VaR calculation, as they
essentially represent the existing imbalances that exist within the daily
position balancing activities, since there are no specific discretionary
positions taken. For the purposes of the above thresholds, losses (or reserves)
due to a counterparty’s failure to perform will be excluded. Both realized
losses and unrealized (“mark to market”) losses in the Supply / Trading
portfolios will be taken into account when computing the cumulative loss.

For purposes of the threshold, the losses will begin to accumulate on the first
day of a calendar month. A net loss from the prior calendar month will be
carried forward and added to the current month’s losses. However, gains in the
prior calendar month will not carry forward to the current month for stop loss
purposes. After a month occurs with a positive margin, all carryforward losses
from prior months for this calculation will be reset to zero. In addition, the
carryforward losses from prior months are reset to zero following any month when
a Stop Loss limit is breached (i.e. a MAT occurs).

In an instance when the aggregate Stop Loss limit exceeds the President’s
authority level, the Chief Risk Officer will also notify the AJI President on
the background of the losses and any remedial actions.

 

  4.8 Value at Risk Limits

In the Oil Supply area, Sprague currently applies a $1.5 million daily
“Value-at-Risk” (VaR) metric to the combination of the System Optimization and
Discretionary portfolios. This limit is based on a 95% confidence interval and a
one-day holding period to calculate daily VaR. The Natural Gas Supply group uses
a $0.75 million daily VaR for its daily Natural Gas Supply/ Trading positions,
again based on a 95% confidence interval and a one-day holding period. The
System Supply activities that support the Oil business (primarily Sprague-owned
terminals) requirements are not subject to a daily VaR limit. In contrast, the
complete Natural Gas Supply / Trading positions are part of the daily VaR
calculation, as they simply represent the existing imbalances that exist within
the daily position balancing activities, since there are no discretionary
positions taken. If there are any instances where the daily VaR calculation is
unavailable, the Middle Office will rely on the previous calculation and also
consider the approximate impact of any major position or market price changes
when assessing VaR compared to the approved limit.

 

  4.9 Credit Limits

Credit limits are established and approved as per the standard Sprague Credit
Management Policy and processes.

 

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5. CREDIT RISK

In order to protect the capital allocated to its transacting activities, Sprague
Energy Corp. has developed guidelines for measuring, monitoring and managing the
inherent credit risks across the various activities of its Supply / Trading and
Marketing. Refer to the Sprague Credit Policy Manual and related documentation
for information pertaining to Credit Risk Management.

 

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6. CONTROL PROCESSES

 

  6.1 Management Reporting

The Board of Directors may request periodic reports prepared by the Chief Risk
Officer which indicate the levels of risk being undertaken by the Company, the
degree of compliance with policies, procedures and limits, and the financial
performance of the various physical and financial transacting activities.

In addition, internal or external audit reports covering the Supply / Trading
and Marketing and/or Risk Management functions may be reviewed by the Audit
Committee of the Board of Directors and, based upon their review significant
issues of concern should be drawn to the attention of the Board of Directors.

EXHIBIT 6 summarizes standard reports to be produced, their frequency,
responsibility for production, and distribution.

 

  6.2 Off-Premises / After Hours Transactions

All Natural Gas and Oil Supply Traders and Schedulers are granted authority to
complete transactions within their normal course of business outside of the
office and outside of normal business hours. This authority can also be extended
to specific Oil Marketers or Traders that would regularly conduct futures /
forward transactions outside of normal business hours. It is the responsibility
of the specific employee to ensure that all transactions are entered into the
appropriate commercial system as soon as practical, in all cases expected by at
least the end of the next business day.

If a trader or marketer who does not fit into the category identified above and
is not normally authorized to transact off-premises or after hours, he/she must
receive pre-authorization from his/her Trading Leader. The Trading Leader will
grant such authorization on a case by case basis and document the specific
exception to this procedure.

 

  6.3 Confirmations

The use of written confirmations and/or other appropriate documentation such as
e-mail or other on-line communication tools are generally used to confirm
transactions, supported if available by recorded phone lines. Exceptions must be
approved and documented by the responsible Trading Leader and reported to the
Chief Risk Officer. Unless there is an appropriate reason for an exception, the
standard protocol is for the signed confirmations from 3rd-parties to be sent to
the Contract Administration group.

 

  6.4 Personal Accounts

Traders must not engage in trading any of the commodities listed in EXHIBIT 1
outside of their responsibilities at Sprague Energy Corp. This policy does not
restrict trading of other instruments such as equities, equity options or
non-approved commodities and related trading instruments. It also does not
restrict trading in funds that utilize commodities in their portfolio of assets.

 

  6.5 Contract Signature Authorization

The following information identifies the signature authority typically
applicable for key contract types. Note that it is not intended to override any
signature authority already provided by the Board of Directors. Also note that
the Sprague President / CEO has authority to sign all of the contracts
identified below and the CRO can sign all contracts listed below with the
exception of ones that require COO / CFO or President / CEO approval.

 

  A. Vice President of Oil Trading, Pricing and Customer Service: Signature
authority for all Oil Supply / Trading Agreements, with the exception of those
requiring AJI Guarantees (requires AJI signature) and margin (collateral)
provisions (requires COO / CFO signature). The VP of Oil Trading, Pricing and
Customer Service can delegate signature authority to the VP Oil Supply for
contracts in the Oil Supply area.

 

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  B. Vice President of Sales: Signature authority for all Oil Marketing
Agreements, with the exception of those requiring AJI Guarantees (requires AJI
signature) and margin (collateral) provisions (requires COO / CFO signature).
The VP of Sales can delegate signature authority to the Managing Directors of
Oil Marketing for contracts in their respective areas.

 

  C. Vice President Marketing and Materials Handling: Signature authority for
all Materials Handling Agreements, with the exception of those requiring AJI
Guarantees (requires AJI signature) and margin (collateral) provisions (requires
COO / CFO signature).

 

  D. Manager of Contract Administration:3 Signature authority for all
confirmations, including ones which have been reconciled with the deal
information entered by the Front Office or are electronically generated based on
data entered by the appropriate member of the Front Office. Note that in
practice the confirmations will typically be signed by the appropriate Front
Office member with signature authority.

 

  E. Responsible Trader or Marketer: Review all Confirmations, including ISDA
Long Form Confirmation Agreements and One-off agreements, regardless of which of
the above individuals signs the agreement, which shall include a review/approval
and a related signature by the responsible Trader or Marketer.

 

3  For backup purposes, if the Manager of Contract Administration is not
available the Treasurer, Chief Risk Officer or Chief Operating Officer / Chief
Financial Officer can sign all agreements listed under the authority of the
Manager of Contract Administration.

 

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7. PROCESSES FOR NEW PRODUCTS, NON-STANDARD TRANSACTIONS, AND ELECTRONIC TRADING
SYSTEMS

 

  7.1 New Product

 

  7.1.1 Definition of New Product

A New Product is defined as any physical or financial transaction or exposure
that: 1) is not listed on EXHIBIT 1: APPROVED PRODUCTS LIST; or 2) exposes
Sprague to risks (e.g., Market, Liquidity, Credit, Operational, Legal,
Regulatory, Accounting, Tax) to which the Company has not been previously
exposed. Exposure to pre-existing approved risk types in significantly different
ways (e.g., significantly different geographic location, market structure, or
contract terms) would also constitute a New Product. For example, trading
refined products in Singapore would constitute a new geographic location, which
would require review through the new product process. Note that although adding
a new customer always exposes the company to new credit risk, this stand-alone
activity does not constitute a new product. An example form that can be used by
the sponsor of a new product is included as EXHIBIT 4.

The APPROVED PRODUCTS LIST as shown in EXHIBIT 1 is separated into Oil, Natural
Gas, and Materials Handling. In addition to the general listing of the products,
more detailed matrices are included in ATTACHMENTS 2 through 5. The oil and gas
product matrices in ATTACHMENTS 3 and 4 list approved instruments by trader or
marketer. The approved Materials Handling products matrix in ATTACHMENT 5 is
shown by terminal and based on products that have been previously, are
currently, or are now under consideration for handling at specific terminals.

 

  7.1.2 New Product Objectives

The Supply / Trading and Marketing Officers are responsible for identifying the
exposures of New Products and services and ensuring that the following
objectives have been met:

The risks and rewards associated with the product or service are identified,
analyzed and understood;

Any conflicts or overlaps with existing business are identified and evaluated in
relation to the new product or service before proceeding;

The necessary support and control infrastructure can be put in place in a timely
manner to permit smooth and well-controlled operation; and

The pace of expansion is consistent with the capacity to measure, monitor and
manage the associated risks.

The responsible Supply / Trading and Marketing Leader will review and consider
these and other pertinent issues. If, in his/her opinion, the request meets the
stated objectives and is consistent with the Company’s stated business vision
and strategies, the Supply / Trading and Marketing Leader will request approval
identifying the type of information included in the example New Product Approval
Form (EXHIBIT 4). The Chief Risk Officer will perform a high level review of the
New Product request to determine if the proposed New Product is not covered on
the Approved Products list and needs to go through the New Product Process. As
part of this review the CRO will discuss with the President and/or the COO / CFO
as deemed necessary. The guidelines defined below will be used if the proposed
product needs to go through a formal New Product Approval process.

 

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  7.1.3 New Product Approval Process

The appropriate Supply / Trading and Marketing Officer will sponsor any New
Product request. Once the sponsor has reviewed the request and desires to
proceed with a formal review and request for approval, it is the responsibility
of the Supply / Trading and Marketing Officer and the Chief Risk Officer to
coordinate the New Product Approval process.

The following departments will generally be required to review and understand
the New Product request, though in some cases the Chief Risk Officer may
determine that the review of a specific department(s) is not required. Each
department will be required to identify any concerns and, where appropriate,
identify necessary changes to address those concerns in order to accommodate the
new product:

 

  A. Credit

 

  B. Legal

 

  C. Tax

 

  D. Accounting (financial accounting, operations accounting, invoicing/billing,
tax)

 

  E. Contract Administration

 

  F. Trading Leader(s)

 

  G. Operations (logistics, scheduling, nominations)

 

  H. IT

 

  I. Treasury

 

  J. Insurance

 

  K. Middle Office

 

  L. Operations

 

  M. Health, Safety, and Environmental

If a representative of these departments has concerns with the New Product,
these concerns must be communicated to the sponsor of the transaction and the
Chief Risk Officer. Among the information that may be required on the New
Product Approval request are the following items:

 

  A. Product overview, features, benefits to Sprague (including target market,
expected/upside/downside scenarios);

 

  B. Start-up costs (infrastructure/system changes, new hires, licenses,
collateral);

 

  C. Description of risks (types of market risks, types of credit risks, etc.),
measurement and reporting methods and required controls;

 

  D. Proposed limit structure (e.g. volumetric, tenor, VaR, stress, other);

 

  E. Source(s) of physical supply, where applicable;

 

  F. Transportation and/or storage requirements, where applicable;

 

  G. Target market, list of potential counterparties;

 

  H. Credit issues;

 

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  I. Legal issues;

 

  J. Tax issues;

 

  K. Regulatory issues;

 

  L. Credit support requirements (guarantee, L/C, Collateral);

 

  M. Liquidity issues (including cash requirements);

 

  N. Hedging strategy; and

 

  O. Exit strategy.

The responsibility for initially suggesting appropriate risk measurement
methodologies, limits and controls (collectively referred to as “parameters”)
for a New Product lies with the New Product sponsor. The New Product sponsor and
the Chief Risk Officer will then review their understanding of the risks,
rewards, related assumptions and appropriate limits. If the sponsor and the CRO
are in agreement and all pertinent departments have reviewed and agreed to the
New Product, it is approved subject to concurrence by the President and COO /
CFO. The CRO will ensure that the President and COO / CFO are informed and in
conjunction with the sponsor address any questions or concerns. Following
approval by the President and COO / CFO, the product becomes part of the
Approved Products list. Once the product and any pertinent parameters have been
approved, the Chief Risk Officer should ensure that they are appropriately
considered in report formats, as well as transaction recording processes and
valuation methodologies. Some examples of offerings that would normally
constitute a New Product consistent with the definition above include:

A marketing product that exposes the company to a different set of market risks,
e.g. Oil Marketing’s Heat Curve and Free Range products were new products when
first introduced. Similarly, the Natural Gas Accelerated Collar product was a
new product when introduced; and

A Materials Handling product to be handled at a terminal that is dissimilar to
past Materials Handling experience.

Ultimate responsibility for verification that risks have been identified and,
mitigated where appropriate, rests with the Chief Risk Officer. This new product
requirement is only required when the product in question is not part of the
current portfolio, e.g., is not required when new marketing products are added
that are simply different blends of existing grades in inventory or minor
variations due to changing product quality regulations. Materials Handling
products that are comparable to ones previously or currently handled also do not
need to go through the new product approval process. In addition, if a new
product is added to Sprague’s portfolio via an acquisition or other third-party
mechanism (joint venture, etc.), a specific new product approval process is not
required. For these situations, the new products will be evaluated as part of
the transaction process.

 

  7.2 Non-Standard Transaction

 

  7.2.1 Definition of Non-Standard Transaction

A “Non-Standard transaction” will include multiple classes of transactions for
which approval will be required before execution. The various classes of
transactions falling into this category will be as follows:

 

  A. All transactions with tenor greater than: contract length of 24 months or
position duration of 32 months;

 

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  B. Transactions which are outside the authority levels of the Trading
Leader(s); and / or

 

  C. Transactions that cannot be automatically captured in Company’s Trading and
Risk Management System(s).

Examples of non-standard transactions would include:

 

  •   Natural Gas Supply Transportation deal covering five year period;

 

  •   Individual discretionary location spread position in Oil Supply of over
400 KB; and

 

  •   Transaction requiring mark-to-model approach (i.e. does not have
transparent arms-length pricing mechanism) to provide daily valuations.

Transactions that hedge the initial non-standard transaction do not require
explicit approval as long as the hedge is within the established credit and
market risk limits. Other transactions that are excluded from this category
include Material Handling deals (where tenor frequently exceeds the limits
indicated above) and bid opportunities covering longer time periods that obtain
Senior Management approval via an explicit bid process.

 

  7.2.2 Non-Standard Transaction Approval Process

Any trader or marketer seeking approval for a non-standard transaction will be
required to notify his/her Trading Leader or Market Leader. Once the responsible
Trading Leader or Market Leader concurs that they wish to submit the
Non-Standard Transaction for approval, either the Trading Leader or Market
Leader must notify the Chief Risk Officer. Note that the CRO can also be
notified directly by the trader or marketer. Depending on the details of the
proposed transaction, the Chief Risk Officer will determine what additional
information and review is required. The appropriate Middle Office Manager will
coordinate the Non-Standard Transaction Approval process as necessary in
conjunction with the Chief Risk Officer.

The requirements for assessment can vary from simply obtaining concurrence from
the person(s) with the appropriate authority level, e.g. the Sprague President
or the AJI President to completing a more detailed analysis. The Chief Risk
Officer will coordinate the approval process. For the opportunities that require
detailed analysis, the Middle Office Manager, in conjunction with the Senior
Quantitative Analyst, will provide a high level risk and valuation assessment
while the following departments will be included on an as needed basis as
determined by the Chief Risk Officer:

Credit

Legal

Tax

Accounting

Contract Administration

Trading Leader(s)

Operations (logistics, scheduling, nominations)

IT

 

  1. Treasury

 

  J. Insurance

 

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  K. Middle Office

 

  L. Operations

 

  M. Health, Safety, and Environmental

If concerns arise from representatives of these departments, they should be
communicated immediately to the Non-Standard Transaction Sponsor and the Chief
Risk Officer or Middle Office Manager. Types of information that may be required
to complete the Non-Standard Transaction evaluation include:

Critical terms (term, price, volume, location, etc.)

Description of transaction

Notional value

Cash flow analysis

Source of physical supply

Counterparty details

Credit issues

Legal issues

Transmission or transportation requirements

Effect on position limits

Tax issues

Regulatory issues

Liquidity issues (including cash requirements)

Hedging strategy

 

  O. Exit strategy

 

  P. Separate risk limits required

If concerns arise that cannot be resolved in a timely manner, the Supply /
Trading and Marketing Officer and Chief Risk Officer will attempt to find a
resolution and either: 1) proceed with the transaction; or 2) deny the request.
Ultimate responsibility for determination that material issues have been
adequately addressed rests with the Chief Risk Officer.

 

  7.2.3 Electronic Trading Systems

Contract Administration shall coordinate the review and approval of new
electronic trading systems by the Front Office. This approval will be granted
following review of the business case (developed by the Front Office) and the
control issues associated with the specific product. This process will include
review by the Credit, Contracts and Legal departments, as well as the
responsible Trading Leader(s), IT and the Middle Office Manager. Once approved
for use by the Front Office, the Credit department will be responsible for
maintaining control of the approved counterparty list and trading limits on
electronic systems. Procedures for the use of Electronic Trading Systems will be
maintained in the Front Office.

 

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EXHIBITS

 

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EXHIBIT 1 - APPROVED PRODUCTS LIST

I. Oil Supply and Marketing

Logistics

Barge / Ship

Pipeline

Truck

Railcar

Trading / Hedging

Futures (NYMEX and ICE)

EFPs

Fixed-for-Float Swaps

Basis Swaps

Options (Futures and OTC)

Sales / Marketing / System Supply

Buy / Sell

Thruputs

Exchange Agreements

3rd - Party Storage

Reseller

Fixed Forwards

Unpriced Guaranteed Differentials (UGDs)

Heat Curves

Downside Protection

Rack Sales

Prompts (including E-Commerce)

E-Commerce Forwards

Collars

Forward Basis

II. Natural Gas Supply and Marketing:

Logistics / Storage

Transportation

Storage

Trading / Hedging

Futures (NYMEX and ICE), Natural Gas and Oil Products

Index Swaps

Swing Swaps

Financial Basis (a.k.a. Basis Swaps)

Physical Basis

Fixed-for-Float Swaps

Options (futures and OTC)

Spreads (time, basis)

Cross Commodity Spreads

Note: ATTACHMENTS 2-5 provide more details on approved products breakdown

 

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EXHIBIT 1— APPROVED PRODUCTS LIST (CONT.)

 

Marketing / Sales

Forwards (fixed, index, or basis)

Trigger

Caps

Collar

Accelerated Collar

III. Materials Handling

Product Name

Aggregates

Asphalt

Aviation Fuel

Calcium Chloride

Caustic Soda

Cement

China Clay

Coal

Furnace Slag

Government Petroleum

Gypsum

Heavy Lift

Iron Oxide

Logs

Lumber

Paper (rolled or bundled)

Petcoke

Pulp (baled)

Recycled Oil

Salt

Scrap

Seaweed

Sugar

Tallow

Tapioca

Urea

Veg Oil

Wood Pellets

Note: ATTACHMENTS 2-5 provide more details on approved products breakdown

 

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EXHIBIT 2 — PRODUCT DEFINITIONS

 

   Note that the following definitions are in some cases in reference to
specific Sprague offerings / terminology and are not considered general industry
definitions Accelerated Collar:    Specific product offered by Natural Gas to
its customers. Product is more complex than a standard collar deal (see below),
providing the customer upside price protection and downside price participation
with potential discounts to the market price. Basis:    Differential between the
cash or spot price of a commodity and the price of the nearest futures contract.
Basis may reflect different time periods, qualities / grades, or locations.    •
     Natural Gas Basis: Generally refers to location differences, i.e. the price
of natural gas at a physical location less the prompt month natural gas futures
contract.    •      Oil Basis: Generally refers to quality / grade and possibly
location differences, typically the price of the physical commodity less the
prompt month of the most similar futures contract. Basis Swap:    A contract in
which two parties exchange cash flows linked to the difference between the price
of a specific quantity of commodities at a particular physical location or
quality / grade and the price of the same quantity of commodities on an
organized exchange at a different physical location or of a different
quality/grade. Cap:    Contract which has a maximum price. This is generally
purchased by customers that want the opportunity to benefit from expected future
price declines, though want to limit their exposure to future price increases.
Collar:    Contract where the buyer is guaranteed a maximum price and the seller
a minimum price. These transactions are supported by purchase and sale of
options positions. A Costless Collar is where buying and selling respectively
the related Call and Put are used to finance the Collar. Downside Protection:   
Contract designed to allow the customer to benefit from declining market prices.
Sprague generally completes an option transaction(s) to limit the risk
associated with this offering. E-commerce    Contract offered by Oil Marketing
whereby the customer purchases oil either on a prompt or forward basis via an
electronic platform. EFP *    A transaction in which two parties agree to
exchange a specified amount of futures contracts for the same physical quantity
of commodities, with the price of the commodities determined by reference to the
market price of the futures. Forward:    Contract that commits a party to buying
or selling a specific quantity of commodities at a price specified at the
origination of the contract, with delivery and settlement at a specified future
date and location. Futures:    A standardized Forward that is traded on a
domestically regulated organized exchange such as the New York Mercantile
Exchange (NYMEX) or Intercontinental Exchange (ICE). Heat Curve:    Contract
offered by Oil Marketing whereby the customer purchases a specified volume of
heating oil over several forward months, with the monthly volume distribution
reflecting the typical seasonal demand pattern. Index:    Published price that
is intended to represent the market price for that particular commodity and
location for the specified time period. Different pricing services used
different methodologies to establish their pricing indices.

 

* Exchange of Futures for Physical

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EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

 

Index Swap:    This contract essentially represents a combination of a fixed for
floating swap and basis swap, with the floating component being an index price.
   A contract that gives the purchaser (holder) the right, but not the
obligation, to buy (call) or sell (put) a specific quantity of commodities at an
agreed-on price, during a specified period or at a specified date. Option:   
There are a range of option settlement alternatives, including:    •     
American Option: Option which may be exercised at any time during its lifetime,
up to and including the expiration date.    •      Asian Option: Option whose
payoff depends on an average of prices for the underlying commodity over a
period of time, rather than the price of the commodity on a single date. The
averaging period may correspond to the entire life of the option, or may be
shorter.    •      European Option: Option which may only be exercised on its
expiration date. Over-the-Counter:    Trading of financial instruments such as
commodities or derivatives directly between two parties. Regulations are more
limited for OTC transactions compared to trades completed on an organized
exchange. Prompt:    Contract offered by Oil Marketing for a specified volume of
oil to be lifted over a short time period (e.g. maximum of 10 days). Rack:   
Oil Marketing transaction where customer purchases oil on a non-delivered basis
at a terminal loading facility or “rack”. Spread:    Transaction that involves a
corresponding purchase and sale with volumes that offset to a net zero position.
Spread Option:    Option written on the differential between the prices of two
commodities, e.g.,       Basis (location) Spread: Based on the difference
between the prices of the same commodity at two different locations. As
indicated above, this basis definition is largely used in for natural gas
transactions;       Calendar or Time Spread: Based on the difference between the
price of the same commodity at two different points in time;       Processing
Spread: Based on the difference between the price of inputs to, and outputs
from, a production process (e.g. a crack spread);       Quality or Grade Spread:
Based on the difference between the prices of different grades of the same
commodity. Swap:    A contract by which the parties agree to exchange one
product for another. The products can be either physical or financial. A common
type of swap is the fixed for floating swap, which can include various
alternatives such as futures, basis, index, and swing swaps. Swing Option:   
Option which grants the right to take more or less of a specified commodity. The
opportunity to swing up is effectively a call option on the commodity specified
in the contract, and the opportunity to swing down is a put option on the
commodity, subject to obligations to take certain quantities over the entire
life of the contract. Swing Swap:    Refers to a gas contract that is based on a
fixed-for-floating index swap that references an average of daily prices. This
is generally used for interruptible gas contracts. Trigger:    A physical
transaction that is priced at a differential to a futures or swap contract where
the price can be locked in or “triggered” at a later date.

 

41

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

 

UGD:    Unpriced Guaranteed Differential contract offered by Oil Marketing. In
this contract, the customer agrees to purchase a specified volume of oil at an
agreed to price differential compared to a specified futures contract price(s).
The customer fixes (see trigger) the price of the futures component of the price
at some point prior to expiration of the relevant futures contract. Volatility:
   Typically refers to the standard deviation of the change in value of a
financial instrument with a specified time horizon. Volatility is tracked
heavily in options trading. Historical volatility is based on how much prices
have changed in the past, based on settlement levels. Implied volatility is a
theoretical value based on the premium of an option and is intended to represent
the expected level of price changes in the future. In general, increasing
volatility leads to higher options prices.

 

42

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 3 — MARKET RISK LIMIT STRUCTURE

 

Control Levels1

   President     Senior Commercial /
Trading Manager  

Oil Supply Discretionary + System Optimization

    

*Contract Term

     60 months        24 months   

Term of Positions

     68 months        32 months   

Outright (Thousand Bbls)

     500        300   

Total Spreads (Thousand Bhls)

    

Time

     2,500        1,750   

Location

     1,500 3      1,000 3 

Basis

     2,500        1,750   

Cross Commodity

     500 3      300 3 

Individual Spread Positions (Thousand Bbls)

    

Time

     1,250 2      600 2 

Location

     800 3      400 3 

Basis

     1,000        500   

Cross Commodity (e.g. oil/gas, crude oil / resid)

     500 3      300 3 

Daily VaR (Value at Risk)

   $ 1.5 million      $ 1.5 million   

Oil Supply System

    

Seasonal Hedged Storage4

     4,000        2,000   

Hedge Pre-Roll

     3,000        1,500   

Natural Gas

    

Contract Term

     60 months        24 months   

Term of Positions

     68 months        32 months   

Total Position (10,000 MM BTU’s)

    

Fixed Price

     250        150   

Basis

     2,000        1,000   

Index

     4,000        3,000   

Individual Month Positions (10,000 MM BTU’s)

    

Fixed Price

     125        75   

Individual Month and Location Positions (10,000 MM BTU’s)

    

Basis

     400        200   

Index

     700        350   

Daily VaR

   $ 1.5 million      $ 0.75 million   

Oil and Gas

    

Total $ Gross Margin Loss

    

Daily MAT (Mgm’t Action Trigger)

   $ 2 million      $ 500 K NG/ $500 K Oil   

Monthly MAT

   $ 3 million      $ 1 million NG /$1 million Oil   

 

1 Composite of overall group’s limits.

2  For distillates. Limits for other products are 50% of distillate levels.

3  Up to 500,000 barrels of residual fuel oil can be hedged with crude oil
without counting against the cross commodity and location spread limits.

4  Hedged storage strategy will be agreed to with Sprague management prior to
execution.

Note: Other limits will be established as necessary in conjunction with business
requirements

 

43

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 4 — SAMPLE NEW PRODUCT APPROVAL FORM

 

NAME OF PRODUCT:     CURRENT DATE:

 

   

 

Sponsor       Date  

 

A.    PRODUCT OVERVIEW:    Describe features and benefits of this product to
business unit and Sprague Energy Corp. B.    RISK ASSESSMENT:    Describe risks,
measurement and reporting methods, risk mitigation strategies and potential
controls.

 

 

 

   

 

  Credit     Date    

 

   

 

  Legal     Date    

 

   

 

  Tax     Date    

 

   

 

  Operations Accounting     Date    

 

   

 

  Contract Administration     Date    

 

   

 

  Trading Leader     Date    

 

   

 

  IT     Date    

 

   

 

  Treasury     Date    

 

   

 

  Insurance     Date  

 

Note: Chief Risk Officer will determine which groups are required to sign-off on
a new product approval form

44

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 4 - SAMPLE NEW PRODUCT APPROVAL FORM (CONT.)

 

 

 

   

 

  Middle Office     Date    

 

   

 

  Physical Operations (logistics, scheduling, nominations)   Date    

 

   

 

  Terminals and Trucking     Date    

 

   

 

  Health, Safety, and Environmental     Date  

 

C    PROJECTED IMPACT:      

 

Start-up Cost:

 

Price Schedule:

 

Accounting Treatment and Tax Implications:

 

Additional IT resource requirements

D.    RECOMMENDATION:    The proposed New Product meets the New Product
Objectives as outlined in the Risk Management Policy. All material risks have
been identified and addressed in this document. RMC approval of this New Product
request is recommended.

 

 

 

   

 

  Trading and Marketing Officer     Date    

 

   

 

 

Chief Operating Officer/

Chief Financial Officer

    Date    

 

   

 

  Chief Risk Officer     Date  

 

E.    APPROVAL:   

 

 

   

 

RMC Chairperson     Date  

Note: Chief Risk Officer will determine which groups are required to sign-off on
a new product approval form

 

45

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 5 — EMPLOYEE CONFIRMATION

Sprague Operating Resources LLC

Risk Management Policy

EMPLOYEE CONFIRMATION

As an employee of Sprague Operating Resources LLC (“Company”) or any successor
thereto, I hereby acknowledge that I:

Have received and read a copy of the Risk Management Policy dated December 5,
2011, and understand my responsibilities and required participation in the
procedures described;

Understand and agree to comply with the Risk Management Policy, as the same may
be amended from time to time, and will conduct business activities in a manner
consistent with its terms, philosophy and spirit;

Understand that my personal involvement or direct or indirect actions resulting
in violations of the Policies and Procedures constitute grounds for termination
of employment and or criminal prosecution; and

Agree to report all violations of the Risk Management Policy to the Chief Risk
Officer.

 

 

   

 

EMPLOYEE SIGNATURE     DATE

 

   

 

PRINTED EMPLOYEE NAME     DATE

 

   

 

VICE PRESIDENT     DATE

 

46

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES

 

DAILY FREQUENCY

Report

  

Responsibility

  

Distribution

Daily Position Report

 

Open volume (nominal and delta adjusted) and daily change in open volume by
commodity and contract month.

   Middle Office Manager    Traders RMC1

Daily Profit & Loss Report

 

Includes daily, month-to-date and year-to-date profit and loss.

   Middle Office Manager    Traders RMC1

Daily Portfolio Risk Profile

 

VaR by risk group (i.e.

natural gas and oil).

   Middle Office Manager    Traders RMC1

 

1  Reports distributed to select RMC members

 

47

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -    12/5/2011    

 

 

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES (CONT.)

 

MONTHLY FREQUENCY

Report

  

Responsibility

  

Distribution

Monthly Operations Review

 

Including month-to-date, year-to-date profit and loss, including narrative
explanations of significant changes in volumes and mark-to-market amounts

   Financial Planning and Analysis in conjunction with Operations Accounting
Manager    Traders RMC1

Manual Valuation Report

 

List of all transactions which reside and are valued outside the Risk Management
and Trading System

   Sr. Quantitative Analyst    Traders RMC1

Monthly Limit Notice

 

Statement of compliance or noncompliance with all limits

   Chief Risk Officer    Traders RMC1

AS NEEDED FREQUENCY

Report

  

Responsibility

  

Distribution

Stop-Loss Limit (MAT) Report    Chief Risk Officer    Traders RMC1 Violation
Report    Middle Office Manager    Traders RMC1 Other Reports as Necessary   
Chief Risk Officer    To Be Determined by Chief Risk Officer

 

1  Reports distributed to select RMC members

 

48

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ATTACHMENT 1 - Risk Management & Strategic Planning Org.

 

 

 

LOGO [g836858ex10_1pg612.jpg]

Effective Date: 12/5/2011

 

49

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ATTACHMENT 2 – APPROVED PHYSICAL OIL PRODUCTS

Table 1 - Data Warehouse Code #2

 

Product Name

 

Product Abbreviation

HEAT   200 #2 Diesel Fuel - Dyed   201 #2 H/S Wintrzd Dsl 50/50-Dyed   203 #2
H/S Marine Prem Dsl - Dyed   204 #2 H/S Diesel - Dyed   205 #2 H/S Premium
Diesel - Dyed   206 #2 H/S Wintrzd Heating Oil 70/30-Dyed   209 HeatForce Prem
Heating Oil   210 #2 H/S Wntrzd Diesel 60/40 Dyed   211 #2 Oil .25% Sulfur -
Dyed   214 #2 H/S Marine Dsl - Dyed   216 MGO   227 MDO   228 #2 Marine Diesel
.25S w/VT - Dyed   279 #2 HS GForce Prem Heating Oil   3034 #2 H/S Heating Oil -
Dyed   3039 GC Jet - HO Basis   GC Jet - HO GC No. 2 - HO Basis   GC No. 2 - HO
30 Gallon Drum Heatforce   HF30 5 Gallon Pail Heatforce   HF5 55 Gallon Drum
Heatforce   HF55 Russian Gas Oil   RGO Undyed Heating Oil   Undyd Heat Oil

Table 2 - Data Warehouse Code #4

 

Product Name

 

Product Abbreviation

#4 Oil - 0.3% Sulfur   403 #4 Oil - 0.5% Sulfur   405 #4 Oil - 0.6% Sulfur   406
#4 Oil - 1.0% Sulfur   410 #4 Oil - 1.3% Sulfur   413 #4 Oil - 1.5% Sulfur   415
#4 Oil - 2.0% Sulfur   420 450 ( IFO 180 )   450 451 (IFO 380)   451 #4 Oil -
.25 Nitrogen   4OIL-.25N #4 Oil - .28 Nitrogen   4OIL-.28N IFO 180   IFO 180 IFO
380   IFO 380 IFO 40   IFO 40

 

50

--------------------------------------------------------------------------------

ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

Table 3 - Data Warehouse Code #5

 

Product Name

 

Product Abbreviation

#5 Oil - 0.5% Sulfur   505 #5 Oil - 0.6% Sulfur   506 #5 Oil - 0.7% Sulfur   507
#5 Oil - 1.0% Sulfur   510 #5 Oil - 1.4% Sulfur   514

Table 4 - Data Warehouse Code #6

 

Product Name

 

Product Abbreviation

#6 Oil - 0.3%   603 #6 Oil - 0.5% Sulfur   605 #6 Oil - 0.7% Sulfur   607 #6 Oil
- 1.0% Sulfur   610 #6 Oil - 1.3% Sulfur   613 #6 Oil - 1.5% Sulfur   615 #6 Oil
- 1.6% Sulfur   616 #6 Oil - 1.7% Sulfur   617 #6 Oil - 1.8% Sulfur   618 #6 Oil
- 1.9% Sulfur   619 #6 Oil - 2.0% Sulfur   620 #6 Oil - 2.1% Sulfur   621 #6 Oil
- 2.2% Sulfur   622 #6 Oil - 3% Sulfur   630 #6 Oil - 3.5% Sulfur   635 #6 Oil -
1.75% Sulfur   675 #6 Oil - 1.76% Sulfur   676 #6 Oil - 0.3% Sulfur High Pour  
603HP #6 Oil - 0.3% Sulfur Low Pour   603LP #6 Oil - 0.5% Sulfur Low Pour  
605LP #6 Oil - 1.5% Sulfur IP   615 IP NYH 6 1.0% - CL Basis   NYH 610 - CL

Table 5 - Data Warehouse Code BIO

 

Product Name

 

Product Abbreviation

#2 Heating Oil Dyed B-20 Bio   207 #2 Heating Oil B-2 Bio Dyed   212 #2 Heating
Oil Dyed B-5 Bio   213 #2 Heating Oil Dyed B-99.9 Bio   215 #2 Heating Oil Dyed
B-40 Bio   217 S15 USLD #2 40 / ULSK 40 / BIO 20   237 S500 #2 47.5 LS Dsl B-5
Clear   240 S500 #2 47.5 LS Dsl B-5 Dyed   241

 

51

--------------------------------------------------------------------------------

ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

S500 No.2 LS Diesel B-10 Dyed   245 S500 No.2 LS Diesel B-10 Clear   246 #2
Heating Oil B-10 Bio Dyed   247 S500 #2 Prm 47.5 LSD B-5 Clear   248 S500 #2 Prm
47.5 LSD B-5 Dyed   249 S500 No.2 LS Diesel B-40 Dyed   265 S500 No.2 LS Diesel
B-40 Clear   266 HeatForce Prem #2 Dyed B99.9 Bio   267 HeatForce Prem #2 Dyed
B-2 Bio   269 HeatForce Prem #2 Dyed B-5 Bio   272 HeatForce Prem #2 Dyed B-20
Bio   275 HeatForce Prem #2 Dyed B-40 Bio   276 S15 #2 PRM ULSD CLEAR B-50   277
S15 #2 PRM ULSD DYED B-50   278 S500 No.2 RFC Pr LSD B-5 Clr   283 S500 No.2 RFC
Pr LSD B-2 Clr   284 S500 No.2 LS Diesel B-20 Dyed   285 S500 No.2 LS Diesel B-2
Dyed   286 S500 No.2 LS Diesel B-2 Clear   287 S500 No.2 RFC Pr LSD B-20 Clr  
288 S500 No.2 LS Diesel B-5 Dyed   289 S500 No.2 LS Diesel B-5 Clear   293
Biodiesel B-100   295 Bio Diesel (b20) - Dyed   296 S500 No.2 LS Diesel B-20
Clear   297 S500 LS Kero Dyed - B-2 Bio   300 S500 LS Kero Dyed - B-5 Bio   301
S500 LS Kero Dyed - B-20 Bio   302 S500 LS Kero Clear - B-2 Bio   303 S500 LS
Kero Clear - B-5 Bio   304 S500 LS Kero Clear - B-20 Bio   305 S500 No.2 RFC Pr
LSD B-2 Dyed   306 S500 No.2 RFC Pr LSD B-5 Dyed   307 S500 No.2 RFC Pr LSD B-20
Dyed   308 S15 #1ULS Diesel - B-50 Bio Clear   309 S15 ULS Kero Dyed - B-2 Bio  
310 S15 ULS Kero Dyed - B-5 Bio   311 S15 ULS Kero Dyed - B-20 Bio   312 S15 ULS
Kero Clear - B-2 Blo   313 S15 ULS Kero Clear - B-5 Bio   314 S15 ULS Kero Clear
- B-20 Blo   315 S15 No.2 RFC Pr ULSD B-2 Dyed   316 S15 No.2 RFC Pr ULSD B-5
Dyed   317 S15 No.2 RFC Pr ULSD B-20 Dyed   318 S15 #2 ULSD Clear - B-50   324
S500 LSD 50/50 B20 CLR   326 S500 LSD 50/50 B20 DYED   327 S15 #2 ULSD Dyed -
B-50   328 S15 #1ULS Diesel - B-50 Bio Dyed   329

 

52

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

S15 Prem ULSD #2 B-20 Clear   337 S15 No.2 47.5 ULSD Clear B-5   340 S15 No.2
47.5 ULSD Dyed B-5   341 S15 No.2 ULS Diesel B-10 Dyed   345 S15 No.2 ULS Diesel
B-10 Clear   346 S15 No.2 ULS Diesel Clear B-99.9 Bio   347 S15 No.2 Prm 47.5
ULSD Clear B-5   348 S15 No.2 Prm 47.5 ULSD Dyed B-5   349 LSD / Kero Clear B-20
Bio-blend   355 S15 #2 RdFrc Prm ULSD Clr B-10   359 S15 No.1 ULSD Clear - B-10
Bio   365 S15 No.1 ULSD Dyed - B-10 Bio   366 S15 No.2 ULS Diesel B-40 Dyed  
367 S15 No.2 ULS Diesel B-40 Clear   368 S15 #2 RdFrc Prm ULSD Dyd B-10   369
S15 No. 2 Prem ULSD B-5 Clear   372 S15 No.1 ULSD B-5 Bio Clear   375 S15 No.1
ULSD Dyed - B-5 Bio   376 S15 No.1 ULSD B-20 Bio Clear   377 S15 No.1 ULSD Dyed
- B-20 Bio   378 S15 No.1 ULSD Clear B-2 Bio   379 No. 1 ULS Diesel Dyed B-2 Bio
  380 515 No.2 RFC Pr ULSD B-5 Clr   383 S15 No.2 RFC Pr ULSD B-2 Clr   384 S15
No.2 ULS Diesel B-20 Dyed   385 S15 No.2 ULS Diesel B-2 Dyed   386 S15 No.2 ULS
Diesel B-2 Clear   387 S15 No.2 RFC Pr ULSD B-20 Clr   388 S15 No.2 ULS Diesel
B-5 Dyed   389 S15 No2 56/24/B-20 ULSD Clr   391 S15 No2 56/24/B-20 ULSD Dyed  
392 S15 No.2 ULS Diesel B-5 Clear   393 S15 No2 Prm 56/24/B20 ULSD Clr   394 S15
No2 Prm 56/24/B20 ULSD Dyd   395 Diesel Fuel - ULS Dyed B-20 Bio   396 S15 No.2
ULS Diesel B-20 Clear   397 S15 No2 66.5/28.5/B5 ULSD Clr   3001 S15 No2
66.5/28.5/B5 ULSD Dyed   3002 S15 No 1 ULSD Clr B-5 w/detergent   3003 S15 No. 2
ULS Diesel B-80 Clear   3004 S15 No. 2 ULS Diesel B-80 Dyed   3005 S500 NRLM
Winter Dsl 25Isd/55kero/B20   3006 S15 NRLM WntrBld 25 ulsd/55 ulsk/B20   3009
HeatForce Prem #2 Dyed B-10 Bio   3010 S15 No 1 ULSD Clr B-10 w/detergent   3014
B-99.9 Heating Fuel - Clear   3015 B-99.9 Bio   3016 #2 Heating Oil .2% Dyed B-5
Bio   3017

 

53

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

#2 Heating Oil .2% Dyed B-20 Bio   3018 S15 No. 2 Prem ULSD B-5 Dyed   3020 S15
ULS Kero Dyed - B-10 Bio   3022 S15 ULS Kero Clear - B-10 Bio   3023 S15 No. 1
ULSD Clear B-10 Bio   3024 S15 No. 1 ULSD Dyed B-10 Bio   3025 S15 No2
66.5/28.5/B5 Prm ULSD Clr   3026 S15 No2 66.5/28.5/B5 Prm ULSD Dyed   3027 S15
No2 54/36/B10 ULSD Clr   3028 S15 No2 54/36/B10 ULSD Dyed   3029 S15 No2
57/38/B5 ULSD Clr   3033 S15 No2 Prm 48/32/B20 ULSD Clr   3037 S15 ULS Prm Clr
40 / 40 / B-20   3038 B 100 Renewable Diesel   B 100 Renew Dsl B 99.9 Blendstock
  B 99.9 Bldsk B-100 Biodiesel   B-100 B-100 Blendstock   B100 Blendstock Retail
BioDiesel   B2 B-5 Heating Oil   B-5 Heat B-5 ULSD   B-5 ULSD B-99.9 Biodiesel  
B-99.9 B99.9 Renewable Diesel   B99.9 Rnw Dsl Bio Blendstock   Bio Blendstock
Bio Heavies   Bio Heavy Bio Heavies AFM   Bio Heavy AFM BioHeat Blendstock  
BioHeat Blndsk Renewable Diesel   Renew Dsl

Table 6 - Data Warehouse Code CON

 

Product Name

 

Product Abbreviation

CONV Reg Gas - 87Oct   103 CONV Reg Gas - 87Oct-7.8 RVP   108 CONV Plus Gas -
89Oct   132 CONV Plus Gas 89Oct - 7.8 RVP   138 CONV Prem Gas - 91 Oct - 9.0 RVP
  147 CONV Prem Gas - 91 Oct - 7.8 RVP   149 CONV Prem Gas - 93Oct   164 CONV
Gas - 93Oct-7.8 RVP   169 CONV Gas - 92Octane   179 100 Low Lead Aviation
Gasoline   199 CONV   CONV LS CONV   LS CONV MID CONV   MID CONV PREM CONV  
PREM CONV PREM LS CONV   PREM LS CONV

 

54

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

Table 7 - Data Warehouse Code DSL

 

Product Name

 

Product Abbreviation

S500 No.2 90/10 LSD Clear   218 S500 No.2 RdForce Pr LSD Clr   230 S500 No.2
RdForce Pr LSD Dyed   231 S500 No.2 Premium LSD Clear   232 S500 No.2 Premium
LSD Dyed   233 S500 No.2 Prm 80/20 LSD Clear   234 S500 No.2 Prm 50/50 LSD Clear
  235 S500 No.2 Prm 75/25 LSD Clear   236 S500 No.2 Prm 70/30 LSD Clear   238
S500 No.2 Prm 70/30 LSD Dyed   239 S500 No.2 Prm 60/40 LSD Clear   242 S500 No.2
Prm 90/10 LSD Clear   243 S500 No.2 80/20 LSD Dyed w/add   244 LSD   250 S500
No.2 LS Diesel Dyed   251 S500 No.2 LS Htg Fuel Dyed   252 S500 No.2 75/25 LS
Diesel Clr   253 S500 No.2 80/20 LS Diesel Clr   254 S500 No.2 50/50 LS Diesel
Clear   256 S500 No.2 70/30 LS Diesel Dyed   257 S500 No.2 70/30 LS Diesel Clr  
258 S500 No.2 Winterized LSD Clr   260 S500 No.2 85/15 LSD Clear   261 S500 No.2
60/40 LSD Clear   262 S500 No.2 60/40 LSD Dyed   263 S500 No.2 90/10 LSD Dyed  
264 Marine Diesel - L/S - Clear   280 Marine Diesel - L/S - Dyed   281 S500 No.2
Retail LS Diesel   290 S500 No.2 Wntrz 70/30 LSD Dyed   298 S500 No. 2 50/50 LS
Diesel Dyed   2000 S500 HeatForce LS Htg Fuel Dyed   3007 Marine Diesel - L/S
Prem Dyed   3008 LSD - OFF ROAD   LSD OFF RD

Table 8 - Data Warehouse Code ETH

 

Product Name

 

Product Abbreviation

5.7% RBOB - Summer   105 RFG/OXY 87Oct-10% Eth VOC CTRL   109 RFG/OXY 87Oct-10%
Eth VT VOC CTRL   110 RFG/OXY 87Oct-10% Eth   111 RFG/OXY 87Oct-10% Eth VT   112
RFG/OXY 87Oct-5.7%Eth VOC CTRL   114

 

55

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

RFG/OXY 870ct-5.7% Eth W/VT VOC CTRL   115 RFG/OXY 870ct-5.7% Eth   116 RFG/OXY
870ct-5.7%Eth VT   117 5.7% RBOB - Winter   118 10% RBOB - Summer   119 10% RBOB
- Winter   120 RFG/OXY 890ct-10% Eth VOC CTRL   130 RFG RBOB Gas - 890ct.-9.0
RVP   137 RFG/OXY 890ct-10% Eth VT VOC CTRL   139 RFG/OXY 890ct-10% Eth   140
RFG/OXY 890ct-10% Eth VT   141 RFG/OXY 890ct-5.7% Eth VT VOC CTRL   142 RFG/OXY
890ct-5.7%Eth VT   143 RFG/OXY 890ct-5.7% Eth VOC CTRL   144 RFG/OXY
890ct-5.7%Eth   145 RFG/OXY 910ct-10% Eth VOC CTRL   150 RFG/OXY 910ct-10%Eth VT
VOC CTRL   151 RFG/OXY 920ct-10% Eth VOC CTRL   152 RFG/OXY 920ct-10% Eth VT VOC
CTRL   153 RFG/OXY 930ct-10% Eth VOC CTRL   154 RFG/OXY 930ct-10% Eth VT VOC
CTRL   155 RFG/OXY 930ct-10% Eth   156 RFG/OXY 930ct-10% Eth VT   157 RFG/OXY
920ct-10% Eth   158 RFG/OXY 920ct-10% Eth VT   159 5.7% PBOB - Summer   165
RFG/OXY 910ct-10% Eth   174 RFG/OXY 910ct-10% Eth VT   180 RFG/OXY 930ct-5.7%
Eth VOC CTRL   181 RFG/OXY 930ct-5.7% Eth VT VOC CTRL   182 RFG/OXY 920ct-5.7%
Eth VOC CTRL   183 RFG/OXY 920ct-5.7% Eth VT VOC CTRL   184 RFG/OXY 910ct-5.7%
Eth VOC CTRL   185 RFG/OXY 910ct-5.7% Eth VT VOC CTRL   186 RFG/OXY 930ct-5.7%
Eth   187 RFG/OXY 930ct-5.7%Eth VT   188 E85 (85% Ethanol, 15% NL87)   191
RFG/OXY 920ct-5.7%Eth VT   192 RFG/OXY 910ct-5.7% Eth   193 RFG/OXY
910ct-5.7%Eth VT   194 5.7% PBOB - Winter   195 10% PBOB - Summer   196 10% PBOB
- Winter   197 E70 (70% Ethanol, 30% NL87)   198 Ethanol E-100   1000 CONV Reg
870ct - 10% Eth   1001 CONV Prem 930ct - 10% Eth   1002 CONV MidGas 890ct - 10%
Eth   1003

 

56

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

CONV PremGas 91Oct - 10% Eth   1004 CBOB   CBOB Retail #E70   E7 Retail #E85  
E8 Ethanol   Ethanol Gasoline Blendstock   Gas Blendstock GAS BLND   GAS BLND
MID RBOB   MID RBOB Retail Midgrade Gasoline   N+ Retail Regular Gasoline   NL
Retail Premium Gasoline   NP PBOB   PBOB Premium CBOB   PREM CBOB PREM E-10  
PREM E-10 RBOB   RBOB REG E-10   REG E-10

Table 9 - Data Warehouse Code JET

 

Product Name

 

Product Abbreviation

Jet Fuel   320 Jet Fuel JP-5   325 JET   JET

Table 10 - Data Warehouse Code KER

 

Product Name

 

Product Abbreviation

Kerosene - High Sulfur - Dyed   219 S500 No.1 LS Kero Dyed   220 S500 No.1 LS
Diesel Clear   221 S500 No.1 LS Kerosene Clear   222 S500 No.1 Prm LS Diesel
Dyed   223 Kerosene-Dyed Ultra-K   224 S500 No. 1 LS Kero/Heating Fuel Dyed  
3035 Retail Kerosene   KE KERO   KERO

Table 11 - Data Warehouse Code LCO

 

Product Name

 

Product Abbreviation

LCO   LCO LS LCO   LS LCO

 

57

--------------------------------------------------------------------------------

ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

 

Table 12 - Data Warehouse Code RFG

 

Product Name

 

Product Abbreviation

Base 87   100 RFG Reg Gas - 870ct-Oxy/MTBE   101 RFG Reg Gas-87 OCT   102 RFG
Reg Gas-870ct - W/VT   104 RFG Reg Gas-870ct-W/VT VOC CTRL   106 RFG Economy Gas
- 870ct   107 RFG Reg Gas-870ct-VOC CTRL   113 RFG Mid Gas -890ct-Oxy/MBTE   131
RFG Mid Gas-890CT   133 RFG Mid Gas -890ct-W/VT   134 RFG MidGas-890ct-W/VT VOC
CTRL   135 RFG Mid Gas -890ct-VOC CTRL   136 Oxy RFG Prem Gas-930ct-13.5RVP  
160 Oxy RFG Prem Gas-930ct-9.0RVP   161 RFG Prem Gas-930CT   162 RFG Prem
Gas-92OCTa   163 RFG Prem Gas-920CT W/VT   166 RFG PremGas-930ct-W/VT   167 RFG
Ultra Gas - 940ct   168 RFG Prem Gas-910ct W/VT   170 RFG Prem Gas-920CT   171
RFG PremGas-930ct-W/VT VOC CTRL   172 RFG PremGas-910ct-VOC CTRL   173 RFG Prem
Gas-91OCT   175 RFG Prem Gas-910CT W/VT VOC CTRL   176 RFG PremGas920CT-W/VT VOC
CTRL   177 RFG PremGas-930ct-VOC CTRL   178 MID RFG   MID RFG PREM RFG   PREM
RFG RFG   RFG

Table 13 - Data Warehouse Code ULK

 

Product Name

 

Product Abbreviation

S15 No 1 ULS Diesel Clr w/detergent   259 # 1 ULSD   270 Ultra Low Sulfur Diesel
- Dyed   271 Ultra LS Diesel w/add -Clear   273 Ultra LS Diesel w/add - Dyed  
274 S15 No.1 ULS Kero Dyed   319 No.1 ULS Diesel - Clear   321 S15 No.1 ULS
Kerosene Clear   322 S15 No.1 Prm ULS Diesel Dyed   323 S15 No.1 ULS Diesel
Clear   370 S15 No.1 ULS Diesel Dyed   371 S15 No.1 ULS Diesel w/add Clear   373
S15 No.1 ULS Diesel w/add Dyed   374 # 1 ULSK   ULSK #1

 

58

--------------------------------------------------------------------------------

ATTACHMENT 2 – APPROVED PHYSICAL OIL PRODUCTS

 

Table 14 - Data Warehouse Code ULS

 

Product Name

 

Product Abbreviation

S15 No.2 RdForce Pr ULSD Clr   330 S15 No.2 RdForce Pr ULSD Dyed   331 S15 No.2
Premium ULSD Clear   332 S15 No.2 Premium ULSD Dyed   333 S15 No.2 Prm 80/20
ULSD Clear   334 S15 No.2 Prm 50/50 ULSD Clear   335 S15 No.2 Prm 75/25 ULSD
Clear   336 S15 No.2 Prm 70/30 ULSD Clear   338 S15 No.2 Prm 70/30 ULSD Dyed  
339 S15 No.2 Prm 60/40 ULSD Clear   342 S15 No.2 Prm 90/10 ULSD Clear   343 S15
No.2 80/20 ULSD Dyed w/add   344 S15 No.2 ULS Diesel Clear   350 S15 No.2 ULS
Diesel Dyed   351 S15 No.2 ULS Htg Fuel Dyed   352 S15 No.2 75/25 ULS Diesel Clr
  353 S15 No.2 80/20 ULS Diesel Clr   354 S15 No.2 50/50 ULS Diesel Clr   356
S15 No.2 70/30 ULS Diesel Dyed   357 S15 No.2 70/30 ULS Diesel Clr   358 S15
No.2 Winterized ULSD Clr   360 S15 No.2 85/15 ULSD Clear   361 S15 No.2 60/40
ULSD Clear   362 S15 No.2 60/40 ULSD Dyed   363 S15 No.2 90/10 ULSD Dyed   364
S15 No.2 Marine Diesel ULS Dyd   381 S15 No.2 Marine Diesel ULS Clr   382 S15
No.2 Retail ULS Diesel   390 S15 No.2 Wntrz 70/30 ULSD Dyed   398 S15 No 2 RdFrc
70/30 ULSD Clear   3011 S15 No 2 RdFrc 70/30 ULSD Dyed   3012 S15 #2 Retl
ULSD-Off Rd-Co Use   3013 S15 No 2 ULS Diesel Clr w/detergent   3019 S15 No 2
ULS Dsl Dyed w/detergent   3021 S15 No 2 ULSD Clr w/detrg & cold flow   3030 S15
No.2 Winterized ULSD Dyed   3031 S15 No 2 ULSD Dyd w/detrg & cold flow   3032
S15 No.2 Wntrzd Retail ULS Diesel   3036 S15 #2 ULS Diesel Clear   3040 S15 #2
ULS Diesel Dyed   3041 S15 No. 2 80/20 ULS Diesel Dyed   3042 S15 No. 2 90/10
ULS Diesel Clear   3043

 

59

--------------------------------------------------------------------------------

ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

 

Retail #2Diesel   D2 # 2 ULSD   ULSD #2 #2 ULSD Dyed   ULSD #2 Dyed

 

60

--------------------------------------------------------------------------------

Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

                   

Logistics

Employee

 

Position

 

Group

 

Commodity1

     

Barge

 

Pipeline

 

Truck

 

Railcar

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   Oil/NG     X   X   X   X John Bischoff   VP, Oil Supply  
Oil Supply   Oil/NG     X   X   X   X Steve Dunn   Manager, USAC Light Products
  Oil Supply   Oil/NG     X   x   x   x Kevin Grant   Director, Business
Development   Oil Supply   Oil     X   X   X   X Shamus Martin   Manager,
International Petroleum   Oil Supply   Oil/NG     X   x   x   x Linda Theberge  
Oil Trader   Oil Supply   Oil     X   X   X   X Lindsay Perret   Scheduler   Oil
Supply   Oil     X   X   X   X Ken Fonseca   Senior Scheduler   Oil Supply   Oil
    X   X   X   X Kathy Trottner   Senior Scheduler   Oil Supply   Oil     X   X
  X   X Tom Flaherty2   VP, Sales   Oil Sales   Oil           David Daoust  
Managing Director, Sales & E-Com   Oil Sales   Oil           Jess Albert  
Pricing Analyst   Oil Sales   Oil           Natalie Hebert   Desk Marketing,
E-Commerce   Oil Sales   Oil           Taylor Hudson   Programs Development
Manager   Oil Sales   Oil           Hugh MacNaughton   Manager, Desk Marketing  
Oil Sales   Oil           Krislyn Schweitzer   Desk Marketing, E-Commerce   Oil
Sales   Oil           Kristine Sullivan   Desk Marketing Associate   Oil Sales  
Oil           Bob Gilleco   Managing Director, Sales   Oil Sales   Oil          
Barry Botman   Account Manager   Oil Sales   Oil           Steve Parise  
Managing Director, Wholesale Accounts   Oil Sales   Oil           Mike Zampano  
Director, Industrial & Asphalt Sales   Oil Sales   Oil           Burr Mosher  
Director, Bid/Contract Management   Pricing and Customer Service   Oil          

Tom Van De Water

  Director, Pricing & Customer Service  

Pricing and Customer

Service

  Oil          

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2 Authorization for rack and forward sales can be provided to sales staff as
appropriate

3 In addition to 24 month contract term, term of forward positions limited to 32
months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

61

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                   

Trading / Hedging Instruments

Employee

 

Position

 

Group

 

Commodity1

     

NYMEX

Futures

 

ICE
Futures

 

EFP’s

 

Fixed-for-
Float Swap

 

Basis
Swap

 

Futures
Options

 

OTC
Options

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   Oil/NG     X   X   X   X   X   X   X John Bischoff   VP,
Oil Supply   Oil Supply   Oil/NG     X   x   x   x   x   x   x Steve Dunn  
Manager, USAC Light Products   Oil Supply   Oil/NG     X   X   X   X   X   X   X
Kevin Grant   Director, Business Development   Oil Supply   Oil     X   X   X  
X   X     Shamus Martin   Manager, International Petroleum   Oil Supply   Oil/NG
    X   X   X   X   X   X   X Linda Theberge   Oil Trader   Oil Supply   Oil    
X   x   x   x   x   x   x Lindsay Perret   Scheduler   Oil Supply   Oil     X  
X   X   X   X   X   X Ken Fonseca   Senior Scheduler   Oil Supply   Oil        
        Kathy Trottner   Senior Scheduler   Oil Supply   Oil                 Tom
Flaherty2   VP, Sales   Oil Sales   Oil                 David Daoust   Managing
Director, Sales & E-Com   Oil Sales   Oil     X     X         Jess Albert  
Pricing Analyst   Oil Sales   Oil     X     X         Natalie Hebert   Desk
Marketing, E-Commerce   Oil Sales   Oil     X     x         Taylor Hudson  
Programs Development Manager   Oil Sales   Oil     X     X         Hugh
MacNaughton   Manager, Desk Marketing   Oil Sales   Oil     X     X        
Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil Sales   Oil     X     X  
      Kristine Sullivan   Desk Marketing Associate   Oil Sales   Oil     X     X
        Bob Gillece   Managing Director, Sales   Oil Sales   Oil                
Barry Botman   Account Manager   Oil Sales   Oil                 Steve Parise  
Managing Director, Wholesale Accounts   Oil Sales   Oil                 Mike
Zampano   Director, Industrial & Asphalt Sales   Oil Sales   Oil                
Burr Mosher   Director, Bid/Contract Management   Pricing and Customer Service  
Oil                 Tom Van De Water   Director, Pricing & Customer Service  
Pricing and Customer Service   Oil     X     X        

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

62

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                   

Sales / Marketing / System Supply Instruments

Employee

 

Position

 

Group

 

Commodity1

     

Buy/Sell

   

Thruput

 

Exchange
Agreement

 

3rd Party
Storage

 

Reseller

 

Fixed
Forward

 

UGD

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   Oil/NG       X      X   X   X       John Bischoff   VP, Oil
Supply   Oil Supply   Oil/NG       X      X   X   X       Steve Dunn   Manager,
USAC Light Products   Oil Supply   Oil/NG       X      X   X   X       Kevin
Grant   Director, Business Development   Oil Supply   Oil       X          X    
X   Shamus Martin   Manager, International Petroleum   Oil Supply   Oil/NG      
X      X   X   X       Linda Theberge   Oil Trader   Oil Supply   Oil       X   
  X   X   X       Lindsay Perret   Scheduler   Oil Supply   Oil       X      X  
X   X       Ken Fonseca   Senior Scheduler   Oil Supply   Oil         X   X    
  Kathy Trottner   Senior Scheduler   Oil Supply   Oil         X   X       Tom
Flaherty2   VP, Sales   Oil Sales   Oil       X      X   X   X   X   X   X David
Daoust   Managing Director, Sales & E-Com   Oil Sales   Oil       X      X     X
  X   X   X Jess Albert   Pricing Analyst   Oil Sales   Oil       X             
X   X Natalie Hebert   Desk Marketing, E-Commerce   Oil Sales   Oil       X     
        X   X Taylor Hudson   Programs Development Manager   Oil Sales   Oil    
  X              X   X Hugh MacNaughton   Manager, Desk Marketing   Oil Sales  
Oil               X   X Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil
Sales   Oil       X              X   X Kristine Sullivan   Desk Marketing
Associate   Oil Sales   Oil       X              X   X Bob Gillece   Managing
Director, Sales   Oil Sales   Oil       X      X   X   X   X   X   X Barry
Botman   Account Manager   Oil Sales   Oil       X              X   X Steve
Parise   Managing Director, Wholesale
Accounts   Oil Sales   Oil       X            X   X   X Mike Zampano   Director,
Industrial & Asphalt Sales   Oil Sales   Oil       X              X   X Burr
Mosher   Director, Bid/Contract Management   Pricing and Customer Service   Oil
      X              X   Tom Van De Water   Director, Pricing & Customer Service
  Pricing and Customer Service   Oil               X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

63

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                   

Sales / Marketing / System Supply Instruments

Employee

 

Position

 

Group

 

Commodity1

     

Heat
Curve

 

Downside
Protection

 

Rack
and
Prompt

 

E-Commerce
Forwards

 

Collar

 

Forward
Basis

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   Oil/NG               John Bischoff   VP, Oil Supply   Oil
Supply   Oil/NG               Steve Dunn   Manager, USAC Light Products   Oil
Supply   Oil/NG               Kevin Grant   Director, Business Development   Oil
Supply   Oil         X       Shamus Marlin   Manager, International Petroleum  
Oil Supply   Oil/NG               Linda Theberge   Oil Trader   Oil Supply   Oil
              Lindsay Perret   Scheduler   Oil Supply   Oil               Ken
Fonseca   Senior Scheduler   Oil Supply   Oil               Kathy Trottner  
Senior Scheduler   Oil Supply   Oil               Tom Flaherty2   VP, Sales  
Oil Sales   Oil     X   X   X     X   X David Daoust   Managing Director, Sales
& E-Com   Oil Sales   Oil     X   X   X   X   X   X Jess Albert   Pricing
Analyst   Oil Sales   Oil     X   X   X   X   X   X Natalie Hebert   Desk
Marketing, E-Commerce   Oil Sales   Oil     X   x   x   x   x   x Taylor Hudson
  Programs Development Manager   Oil Sates   Oil     X   X   X   X   X   X Hugh
MacNaughton   Manager, Desk Marketing   Oil Sales   Oil     X   X   X   X   X  
X Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil Sales   Oil     X   x  
x   x   x   x Kristine Sullivan   Desk Marketing Associate   Oil Sales   Oil    
X   X   X   X   X   X Bob Gillece   Managing Director, Sales   Oil Sales   Oil  
  X   x   x     x   x Barry Botman   Account Manager   Oil Sales   Oil     X   x
  x     x   x Steve Parise   Managing Director, Wholesale Accounts   Oil Sales  
Oil     X   X   X     X   X Mike Zampano   Director, Industrial & Asphalt Sales
  Oil Sales   Oil     X   X   X     X   X Burr Mosher   Director, Bid/Contract
Management   Pricing and Customer Service   Oil         X   X     X
Tom Van De Water   Director, Pricing & Customer Service   Pricing and Customer
Service   Oil     X   X   X   X   X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

64

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                   

Contract Term3

                    Balance   1 Month   2.8 Months   7-12
Months   13-18
Months   19-24
Months

Employee

 

Position

 

Group

 

Commodity1

     

Next day of Month

 

Forward

 

Forward

 

Forward

 

Forward

 

Forward

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   OiliNG       X   X   X   X   X   X John Bischoff   VP, Oil
Supply   Oil Supply   Oil/NG     X   X   X   X   X   X   X Steve Dunn   Manager,
USAC Light Products   Oil Supply   OiUNG     X   X   X   X   X   X   X Kevin
Grant   Director, Business Development   Oil Supply   Oil     X   X   X   X   X
  X   X Shamus Martin   Manager, International Petroleum   Oil Supply   OiUNG  
  X   X   X   X   X   X   X Linda Theborge   Oil Trader   Oil Supply   Oil     X
  X   X   X   X   X   X Lindsay Perret   Scheduler   Oil Supply   Oil     X   X
  X   X   X   X   X Ken Fonseca   Senior Scheduler   Oil Supply   Oil     X   X
  X   X       Kathy Trottner   Senior Scheduler   Oil Supply   Oil     X   X   X
  X       Tom Flaherty2   VP, Sales   Oil Sales   Oil       X   X   X   X   X  
X David Daoust   Managing Director, Sales & E-Com   Oil Sales   Oil       X   X
  X   X   X   X Jess Albert   Pricing Analyst   Oil Sales   Oil       X   X   X
  X   X   X Natalie Hebert   Desk Marketing, E-Commerce   Oil Sales   Oil      
X   X   X   X   X   X Taylor Hudson   Programs Development Manager   Oil Sales  
Oil       X   X   X   X   X   X Hugh MacNaughton   Manager. Deck Marketing   Oil
Sales   Oil       X   X   X   X   X   X Kristyn Schweitzer   Desk Marketing,
E-Commerce   Oil Sales   Oil       X   X   X   X   X   X Kristine Sullivan  
Desk Marketing Associate   Oil Sales   Oil       X   X   X   X   X   X Bob
Gilles°   Managing Director, Sales   Oil Sales   Oil       X   X   X   X   X   X
Barry Botman   Account Manager   Oil Sales   Oil       X   X   X   X   X   X
Steve Parise   Managing Director, Wholesale Accounts   Oil Sales   Oil       X  
X   X   X   X   X Mike Zampano   Director, Industrial & Asphalt Sales   Oil
Sales   Oil       X   X   X   X   X   X Burr Mosher   Director, Bid/Contract
Management   Pricing and Customer Service   Oil       X   X   X   X   X   X

Tom Van De Water

  Director, Pricing & Customer Service   Pricing and Customer Service   Oil    
  X   X   X   X   X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

65

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                 

Logistics/ Storage

Employee

  

Position

  

Commodity

     

Transport

 

Storage1

Brian Weep    VP, Natural Gas    NG     X   x Sorter Pasalic    Director, Nat
Gas Pricing and Supply    NG     X   X Bill Nvahnv    Manager, Financial Trading
   NG     X   X Tom Withka    Trader    NG     X   X Shaun Kennedy    Trader   
NG     X   X Andrew Ronald2    Manager, Nat Gas Scheduling & Logistics    NG    
X   X Marlene Manning    Team Lender, Nat Goo Logistics    NG     X   X Elaine
Moron    Team Leader, Not Gas Logistics    NG     X   X Dan Smith    Director,
Not Gas Opt; & Business Analysis    NG     X   x Tana Ream    Manager, Nat Otis
Forecasting & Asset Mgmt    NO     X   x Mark Roberts    Managing Director, Not
Gas Sales & Marketing    NG       Claude Peyrot    Director. Nat Gas Mid Market
Sales    NG       Dave Pickens    Director, Nat Gas Commercial & Industrial
Stiles    NG       Kevin Piotrowski    Manager. Nat Gas Desk Sales    NG      

 

1 -   Storage includes park and loans, firm or interruptible, leased or owned.
2 -   Authority can be extended to staff as necessary 3 -   Includes NYMEX
look-a-likes and Gas Daily options 4 -   Includes time, basis, and cross
commodity Nat Gas / Oil futures spreads 5 -   Transactions with contract term of
more than 24 months (term of positions more than 32 months) can be undertaken as
hedges of transportation contracts or customer sales commitments, noting that
sales to customers with contract terms of over 24 months (term of positions more
than 32 months require Sprague President (or designee if President unavailable)
approval.

 

66

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

                   

Trading I Hedging Instruments

Employee

 

Position

 

Commodity

         

Index /
Fixed
Price
Futures

 

Physicals

 

Index
Physicals

 

Swing
Swaps

 

Financial
Basis

 

Fixed-
for-
Float
Swaps

 

Future
Options

 

OTC
Options3

 

Spreads4

Brian Meg   VP, Natural Goa   NG       X   X   X   X   X   X   X   X   X Senor
Pasalic   Director, Nat Gus Pricing and Supply   NG       X   x   x   x   X   X
  X   X   X Bill Nvahay   Manager, Financial Trading   NG       X   X   X   X  
    X   X   X Tom Wilhka   Trader   NG       X   X   X   X   X   X   X   X   X
Shaun Kennedy   Trader   NG       X   X   X   X   X   X   X   X   X Andrew
Ronald2   Manager, Nat Gas Scheduling & Logistics   NG         X   X     X   X  
    Marlene Manning   Team Loader, Nat Gas Logistics   NG         X   X        
    Elaine Moran   Team Leader, Nat Gas Logistics   NG         X   X            
Dan Smith   Director, Nat Gas Cps & Business Analysis   NG         X   X        
    Tana Ream   Manager, Nat Gas Forecasting & Asset Wall   NG                  
    Mark Roberts   Managing Director, Nat Gas Sales & Marketing   NC            
          Claude Peyrot   Director, NM Gas Mid Market Sales   NG                
      Dave Pickens   Director, Nat Gas Commercial & Industrial Sales   NG      
                Kevin Piotrowski   Manager, Nat Gas Desk Salon   NG            
         

 

1 -   Storage includes park and loans, firm or interruptible, leased or owned. 2
-   Authority can be extended to staff as necessary 3 -   Includes NYMEX
look-a-likes and Gas Daily options 4 -   Includes time, basis, and cross
commodity Nat Gas I Oil futures spreads 5 -   Transactions with contract term of
more than 24 months (term of positions more than 32 months) can be undertaken as
hedges of transportation contracts or customer sales commitments, noting that
sales to customers with contract terms of over 24 months (term of positions more
than 32 months require Sprague President (or designee if President unavailable)
approval.

 

67

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 3 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

Employee

  

Position

  

Commodity

Brian Wengo    VP, Natural Gas    NC Senor Pasalic    Director, Nat Goa Pricing
and Supply    NG Bill Nvahay    Manager. Financial Trading    NG Tom Withka   
Trader    NG Shaun Kennedy    Trader    NG Andrew Ronald2    Manager, Not Gas
Scheduling & Logistics    NG Marlene Manning    Team Leader. Nat Gas; Logistics
   NG Elaine Moran    Team Leader, Nat Gas Logistics    NG Dan Smith   
Director, Nat Gas Opt; & Business Analysis    NG Tana Ream    Pi/tanager, Nat
Goa Forecasting & Asset Mgm’t    NG Mark Roberto    Managing Director, Not Can
Sales & Marketing    NG Claude Peyrot    Director, Nat Gas Mid Market Sales   
NG Dave Pickens    Director, Nat Can Commercial & Industrial Sales    NG Kevin
Piotrowski    Manager, Nat Can Desk Sales    NG

 

1 -   Storage includes park and loans, firm or interruptible, teased or owned. 2
-   Authority can be extended to staff as necessary 3 -   Includes NYMEX
look-a-likes and Gas Daily options 4 -   Includes time, basis, and cross
commodity Nat Gas / Oil futures spreads 5 -   Transactions with contract term of
more than 24 months (term of positions more than 32 months) can be undertaken as
hedges of transportation contracts or customer sales commitments, noting that
sales to customers with contract terms of over 24 months (term of positions more
than 32 months require Sprague President (or designee if President unavailable)
approval.

 

68

--------------------------------------------------------------------------------

Sprague Operating Resources LLC    ATTACHMENT 4 - Authorized Oil Traders and
Instruments List    Effective Date: 12/5/2011

 

           

Contract Term5

Employee

 

Position

 

Commodity

 

Balance

Next Day

 

of Month

 

1 Month

Forward

 

2.32

Months

Forward

Brian Weego   VP, Natural Gas   NG   X   X   X   X Senor Pasalic   Director, Nat
Gat; Pricing and Supply   NO   X   X   X   X Bill Nyahay   Manager, Financial
Trading   NO   X   X   X   X Tons Withka   Trader   NG   X   X   X   X Shaun
Kennedy   Trader   NG   X   X   X   X Andrew Ronald2   Manager, Nat Otto
Scheduling & Logistics   NO   X   X     Marlene Manning   Team Leader, Nat Gat
Logistics   NG   X   X     Elaine Moran   Team Leader. Nat Gas Logistics   NG  
X   X     Dan Smith   Director, Nat Gas Opt & Business Analysis;   NO   X   X  
X   X Tana Roam   Manager, Nat Gas Forecasting & Asset Mgm’t   NO   X   X    
Mark Roberts   Managing Director, Nat One Sales & Marketing   NG   X   X   X   X
Claude Peyrot   Director, Nat GU Mid Market Sales   NO   X   X   X   X Dave
Pickens   Director, Nat Gas Commercial & Industrial Sales   NO   X   X   X   X
Kevin Piotrowski   Manager, Nat Gas Desk Sales   NG   X   x   x   x

 

1 -   Storage includes park and loans, film or interruptible, leased or owned.
2 -   Authority can be extended to staff as necessary 3 -   Includes NYMEX
look-a-likes and Gas Daily options 4 -   Includes time, basis, and cross
commodity Nat Gas I Oil futures spreads 5 -   Transactions with contract term of
more than 24 months (tens of positions more than 32 months) can be undertaken as
hedges of transportation contracts or customer sales commitments, noting that
sales to customers with contract terms of over 24 months (term of positions more
than 32 months require Sprague President (or designee if President unavailable)
approval.

 

69

--------------------------------------------------------------------------------

Sprague Energy Corp.    ATTACHMENT 5 - Approved Materials Handling Products  
Effective Date: 12/5/2011

 

-PRODUCT NAME

  Avery Lane   Everett   Oswego   Portland Merrill   Providence   Quincy  
River Road   Searsport   South Portland   TRT Aggregates         X         X    
Asphalt   X   X   X     X     X   X   X   Aviation Fuel   X                 X  
Calcium Chloride       X           X     Caustic Soda               X   X     X
Cement               X   X     China Clay                 X   X   Coal         X
  X       X   X   Furnace Slag         X         X     Government Petroleum    
        X       X   Gypsum         X       X   X     Heavy Lift         X      
  X     Iron Oxide         X         X     Logs         X         X     Lumber  
      X         X     Paper (rolled or bundled)         X         X     Petcoke
        X         X     Pulp (baled)         X         X     Recycled Oil      
        X       Salt         X   X     X   X   X   Scrap         X         X    
Seaweed         X         X     Sugar         X             Tallow              
X       Tapioca         X         X     Urea         X         X     Veg Oil    
                X Wood Pellets - Bagged         X         X     Wood Pellets -
Bulk                 X     Wood Chips - Bulk               X   X    

 

70

--------------------------------------------------------------------------------

Exhibit J

to Credit Agreement

[Reserved]

--------------------------------------------------------------------------------

Exhibit K

to Credit Agreement

FORM OF CASH COLLATERAL DOCUMENTATION FOR LETTERS OF CREDIT

FOR VALUE RECEIVED, the undersigned, [    ] (the “Borrower”) hereby assigns,
transfers and pledges to JPMORGAN CHASE BANK, N.A., as administrative agent for
the benefit of the Secured Parties (the “Administrative Agent”) under the
Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC, Kildair Service Ltd. and
Sprague Resources ULC, as borrowers, the Lenders from time to time parties
thereto, the Administrative Agent, and the other agents parties thereto, and
grants to the Administrative Agent for the ratable benefit of the Secured
Parties a security interest in, all of such Borrower’s right, title and interest
in and to the following accounts maintained by the Administrative Agent (the
“Accounts”):

 

[                ]   [                    ]  

[                    ]

[                ]  

[                    ]

 

[                    ]

or such other number as may be subsequently assigned or maintained by the
undersigned with the Administrative Agent, together with any subaccounts
relating thereto and together with all monies or proceeds due or to become due
thereunder or deposited therein, any and all additional or renewed deposit of
said monies or proceeds, any and all property of whatever kind and nature in the
account or in which such monies or proceeds may be invested, and all sums due or
to become due on, or with respect to, such account by way of interest, dividend,
bonus, redemption or otherwise and the proceeds of all of the foregoing (all
hereinafter collectively known as the “Collateral”).

Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement.

This assignment, pledge, transfer and security interest is given and made to the
Administrative Agent by the Borrower as collateral security for the Obligations.

The Borrower represents, warrants and covenants that: (i) the Collateral is not
subject to any other security interest, except in favor of the Administrative
Agent and as permitted under the Credit Agreement; and (ii) the Borrower shall
not, at any time during which any Obligations are outstanding, assign, pledge or
grant a security interest in any of the Collateral, except as permitted under
the Credit Agreement.

The Borrower further represents and warrants that (a) it is the legal owner of
the Collateral, subject to this agreement and Liens permitted under the Credit
Agreement; (b) it has full power, authority and legal right to pledge and grant
the security interests in and liens upon the Collateral; (c) this agreement has
been duly authorized, executed and delivered by it and constitutes its legal,
valid and binding obligation enforceable in accordance with its terms; (d) no
consent of any other person (including, without limitation, its stockholders or
creditors) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, domestic or foreign, is required to be obtained by
it in connection with the execution, delivery and performance of this agreement,
other than as set forth in Section 5.4 of the Credit Agreement; and (e) the
execution, delivery or performance of this agreement (i) will not violate any
Requirement of Law, including any rules or regulations promulgated by the FERC,
in each case to the

--------------------------------------------------------------------------------

extent applicable to or binding upon the Borrower, except where such violation
could not reasonably be expected to have a Material Adverse Effect and except as
set forth in Section 5.4 of the Credit Agreement and (ii) will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation
(other than as created hereunder and Liens permitted by the Credit Agreement).

The Borrower hereby irrevocably authorizes and empowers the Administrative Agent
at any time, and from time to time, during the existence of any Event of
Default, either in its own name or in the name of the undersigned: (i) to apply,
demand, set-off, collect and receive payment of any and all monies, property or
proceeds due or to become due in respect of the Collateral; (ii) to execute any
and all instruments required for the application, withdrawal or repayment of the
same, or any part thereof; (iii) to insert in any instrument for the application
or withdrawal of funds signed by the undersigned, the date and amount due under
the Collateral or any part thereof and to complete such instrument in any
respect; and (iv) to have dominion and control over the Collateral in all
respects and to deal with the Collateral as the sole holder thereof, and the
undersigned hereby irrevocably constitutes and appoints the Administrative Agent
as its attorney-in-fact to do any and all of the aforesaid. The rights of the
Administrative Agent hereunder are in addition to the rights of the
Administrative Agent under any other security or similar agreement. Without
limitation of the foregoing, the Administrative Agent shall apply any of the
Collateral for the reimbursement of all or any portion of any (i) Reimbursement
Obligation with respect to any Letter of Credit that has been Cash
Collateralized or (ii) L/C Participation Obligation of any Defaulting Lender
with respect to any Letter of Credit that has been Cash (100%) Collateralized,
in each case, pursuant to the terms of the Credit Agreement and then to any
other Obligations.

The Borrower will, at its own expense, promptly execute and deliver all further
instruments and documents, and take all further action, including, without
limitation, the execution and filing of financing statements and amendments to
financing statements under the Uniform Commercial Code that the Administrative
Agent may from time to time reasonably deem necessary or desirable in order to
create, perfect and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to enforce its rights and
remedies hereunder with respect to any Collateral. The Administrative Agent may,
at its discretion and without the undersigned’s signature where permitted by
applicable law, file one or more financing statements and amendments to
financing statements under the Uniform Commercial Code naming the undersigned as
debtor and the Administrative Agent as secured party and indicating therein the
types or describing the items of Collateral herein specified; provided, however
that, the Administrative Agent shall, if practical under the circumstances,
provide to the Borrower three (3) Business Days prior written notice of the
right to review any such filings and the Administrative Agent shall provide the
Borrower with copies of such filings.

So long as no Default or Event of Default shall have occurred and be continuing,
the Administrative Agent shall release to the Borrower any cash from time to
time held in the Accounts not required to be Cash Collateralized or Cash
(100%) Collateralized pursuant to the Credit Agreement, including without
limitation, pursuant to Sections 3.4(b), 3.6(c), 4.7, 4.18 and 9, as applicable,
and upon the indefeasible payment in full in cash of all Obligations, the
termination of all Letters of Credit, and the termination of all Commitments,
the Administrative Agent shall release all cash held in the Accounts and
delivery of such cash shall discharge in full the Administrative Agent’s
obligations to the Borrower with respect to release and return of the
Collateral.

The Borrower agrees to indemnify the Administrative Agent for any costs and
expenses, including, without limitation, reasonable counsel’s fees and
disbursements, which the Administrative Agent may incur in connection with any
enforcement of its security interest, liens and other rights hereunder.

--------------------------------------------------------------------------------

No delay on the Administrative Agent’s part in exercising any power or right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right. The rights, remedies and
benefits herein expressly specified are cumulative and not exclusive of any
rights, remedies or benefits that the Administrative Agent may otherwise have.
This agreement shall be binding upon the assigns and successors of the Borrower
(except that the Borrower may not assign this agreement without the
Administrative Agent’s prior written consent) and shall constitute a continuing
agreement, applying to all future as well as existing transactions in connection
with the Credit Agreement or any Obligations, whether or not of the character
contemplated as of the date of this agreement.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. BY ITS EXECUTION HEREOF, THE BORROWER HEREBY SUBMITS TO THE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN THE COUNTY OF NEW YORK,
NEW YORK AND CONSENTS TO THE SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING
BROUGHT AGAINST IT BY THE ADMINISTRATIVE AGENT BY MEANS OF REGISTERED MAIL TO
THE ADDRESS OF THE UNDERSIGNED SET FORTH IN SECTION 11.2 OF THE CREDIT
AGREEMENT. NOTHING HEREIN, HOWEVER, SHALL PREVENT SERVICE OF PROCESS BY ANY
OTHER MEANS RECOGNIZED AS VALID BY LAW. NONE OF THE TERMS HEREOF MAY BE WAIVED,
ALTERED OR AMENDED EXCEPT BY A WRITING DULY SIGNED BY THE BORROWER. IF ANY TERMS
HEREOF SHALL BE HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY OF
ALL OTHER TERMS SHALL IN NO WAY BE AFFECTED THEREBY.

THE BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Borrower has caused this agreement to be executed this
     day of             ,         .

 

[SPRAGUE OPERATING RESOURCES LLC ] By:  

 

  Name:   Title: [SPRAGUE RESOURCES ULC] By:  

 

  Name:   Title: [KILDAIR SERVICE LTD.] By:  

 

  Name:   Title:

ACKNOWLEDGED AND AGREED:

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit L

to Credit Agreement

FORM OF U.S. MORTGAGE AND SECURITY AGREEMENT

 

After recording please return to:   Simpson Thacher & Bartlett LLP   425
Lexington Avenue   New York, New York 10017   Attention: Elaine Cronin   Quincy,
Massachusetts

 

 

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING

made by

SPRAGUE OPERATING RESOURCES LLC, as Mortgagor,

to

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Mortgagee

Dated as of [            ], 2014

 

 

 

Location:  

  

   

 

  

   

 

  

   

 

 

     County   

[Maximum Principal Amount of Obligations. Notwithstanding anything contained
herein to the contrary, the maximum principal amount of Obligations secured by
this Mortgage at the time of execution hereof or which under any contingency may
become secured by this Mortgage at any time hereafter is                     
plus all interest payable on such principal amount under the Credit Agreement
and all amounts expended by Mortgagee in accordance with the Credit Agreement
and this Mortgage for the payment of (a) taxes, charges, or assessments which
may be imposed by law upon the premises; (b) premiums on insurance policies
covering the premises; (c) expenses incurred in upholding the lien of this
Mortgage, including, but not limited to (1) the expenses of any litigation to
prosecute or defend the rights and lien created by this Mortgage; (2) any
amount, cost or charges to which the Mortgage becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority and (3) interest at the rate of interest provided for in the Credit
Agreement.]

--------------------------------------------------------------------------------

MORTGAGE, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING

THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE
FILING, dated as of [            ], 2014, is made by SPRAGUE OPERATING RESOURCES
LLC, a Delaware limited liability company (“Mortgagor”), whose address is 185
International Drive, Portsmouth, New Hampshire 03801, to JPMORGAN CHASE BANK,
N.A., as administrative agent under the Credit Agreement referred to below (in
such capacity, together with its successors and assigns, “Mortgagee”), whose
address is 277 Park Avenue, 22nd Floor, New York, New York 10172. References to
this “Mortgage” or “Security Document” shall mean this instrument and any and
all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.

BACKGROUND

Reference is made to that certain Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, supplemented or otherwise modified from
time-to-time, the “Credit Agreement”), with Mortgagor, Kildair Service Ltd.
(“Kildair”), Sprague Resources ULC (“AcquireCo”, and together with Kildair and
the Mortgagor, the “Borrowers”), the several lenders party thereto from time to
time (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent,
JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, JPMorgan Chase
Bank, N.A. and BNP Paribas, as co-collateral agents, and certain other Persons
named as agents therein as a party thereto. The terms of the Credit Agreement
are incorporated by reference in this Mortgage as if the terms thereof were
fully set forth herein. In the event of any conflict between the provisions of
this Mortgage and the provisions of the Credit Agreement, the applicable
provisions of the Credit Agreement shall govern and control.

Pursuant to the Credit Agreement, the Lenders have severally agreed to make
loans to and participate in letters of credit issued for the account, and the
Issuing Lenders have agreed to issue letters of credit for the account of, the
Borrowers upon the terms and subject to the conditions set forth therein.

In consideration of the Lenders agreement to make their respective Loans and the
Issuing Lenders to issue their Letters of Credit to or for the account of the
Borrowers under the Credit Agreement, Mortgagor has agreed to execute and
deliver this Mortgage, as security for the Obligations, to Mortgagee for the
ratable benefit of the Secured Parties.

GRANTING CLAUSES

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Mortgagor agrees that to secure complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations;

SUBJECT TO THE TERMS AND CONDITIONS HEREIN, MORTGAGOR DOES HEREBY IRREVOCABLY
MORTGAGE, GRANT, BARGAIN, SELL, PLEDGE, ASSIGN, WARRANT, TRANSFER AND CONVEY TO
MORTGAGEE, IN EACH CASE FOR THE RATABLE BENEFIT OF THE SECURED PARTIES, THE
FOLLOWING PROPERTY, RIGHTS, INTERESTS AND ESTATES NOW OWNED, OR HEREAFTER
ACQUIRED BY MORTGAGOR:

All of the estate, right, title, claim or demand whatsoever of Mortgagor, in
possession or expectancy, in and to those certain tracts of land, described in
Exhibit A, attached hereto and made a part hereof (the “Land”);

--------------------------------------------------------------------------------

The rights, interests and estates created under those certain servitudes,
easements, rights of way, privileges, franchises, prescriptions, licenses,
leases, permits and/or other rights described in Exhibit A, attached hereto and
made a part hereof, and all of Mortgagor’s right, title and interest (whether
now owned or hereafter acquired by operation of Law or otherwise) in any
servitudes, easements, rights of way, privileges, franchises, prescriptions,
licenses, leases, permits and/or other rights in and to any land, in any county
and section shown on Exhibit A even though they may be incorrectly described in
or omitted from such Exhibit A relating to the Land, together with any
amendments, renewals, extensions, supplements, modifications or other agreements
related to the foregoing, and further together with any other servitudes,
easements, rights of way, privileges, prescriptions, franchises, licenses,
permits and/or other rights (whether presently existing or hereafter created and
whether now owned or hereafter acquired by operation of Law or otherwise) used,
held for use in connection with, or in any way related to the Land;

All of Mortgagor’s right, title and interest (whether now owned or hereafter
acquired by operation of Law or otherwise) in and to any and all buildings,
improvements, structures, fixtures, or any other real property (collectively,
the “Improvements”; together with the Land, the “Real Estate”) located on the
Land;

All rights, estates, powers and privileges appurtenant to the rights, interests
and properties set forth in clauses (a)-(c) above;

without limiting any other provision of these granting clauses, all right, title
and interest of Mortgagor in, to and under all easements, rights of way,
licenses, operating agreements, abutting strips and gores of land, streets,
ways, alleys, passages, sewer rights, waters, water courses, water and flowage
rights, development rights, air rights, mineral and soil rights, plants,
standing and fallen timber, and all estates, rights, titles, interests,
privileges, licenses, tenements, hereditaments and appurtenances belonging,
relating or pertaining to the Real Estate, and any reversions, remainders,
rents, issues, profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Land to the center line
thereof;

all right, title and interest of Mortgagor in, to and under all of the fixtures,
chattels, business machines, machinery, apparatus, equipment, furnishings,
fittings, appliances and articles of personal property of every kind and nature
whatsoever, and all appurtenances and additions thereto and substitutions or
replacements thereof (together with, in each case, attachments, components,
parts and accessories) currently owned or subsequently acquired by Mortgagor and
now or subsequently attached to, or contained in or used or usable in any way in
connection with any operation or letting of the Mortgaged Property (as defined
below), including but without limiting the generality of the foregoing, all
screens, awnings, shades, blinds, curtains,

 

-2-

--------------------------------------------------------------------------------

draperies, artwork, carpets, rugs, storm doors and windows, furniture and
furnishings, heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading and
unloading equipment and systems, stoves, ranges, laundry equipment, cleaning
systems (including window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers, sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, hoses, pumps, tanks,
loading racks, wharves, docks, pipelines, conduits, appliances, fittings and
fixtures of every kind and description held in connection with the operation of,
and located on, the Mortgaged Property, and all licenses and permits of whatever
nature, including, but not limited to, that now or hereafter used or held for
use in connection with the Mortgaged Property, and all renewals or replacements
of the foregoing or substitutions for the foregoing provided that the foregoing
items described in this clause (f) shall not include any rights or property
excluded as collateral in the Security Agreement or the Credit Agreement (all of
the foregoing non-excluded rights or property in this paragraph (f) being
referred to as the “Equipment”);

all right, title and interest of Mortgagor in and to all substitutes and
replacements of, and all additions and improvements to, the Mortgaged Property
and the Equipment, subsequently acquired by Mortgagor (or released from the lien
of any equipment financing after the date hereof) or constructed, assembled or
placed by Mortgagor on the Mortgaged Property, immediately upon such
acquisition, release, construction, assembling or placement, including, without
limitation, any and all building materials whether stored at the Mortgaged
Property or offsite, and, in each such case, without any further deed,
conveyance, “assignment or other act by Mortgagor provided that the foregoing
items described in this clause (g) shall not include any rights or property
excluded as collateral in the Security Agreement or the Credit Agreement;

all right, title and interest of Mortgagor in, to and under all leases,
subleases, underlettings, concession agreements, management agreements, licenses
and other similar agreements granting to a third party a right to use or
occupancy of the Mortgaged Property or the Equipment or any part thereof, now
existing or subsequently entered into by Mortgagor and whether written or oral
and all guarantees of any of the foregoing (collectively, as any of the
foregoing may be amended, restated, extended, renewed or modified from time to
time, the “Leases”), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect the
revenues, income, rents, issues and profits thereof, together with all other
rents, royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the “Rents”);

all unearned premiums under insurance policies now or subsequently obtained by
Mortgagor relating to the Mortgaged Property or Equipment and Mortgagor’s
interest in and to all proceeds of any such insurance policies (including title
insurance policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth below; and
all awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any subsequent
owner of the Mortgaged Property or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Mortgaged Property or any
easement or other right therein subject to the provisions set forth below; and

 

-3-

--------------------------------------------------------------------------------

to the extent the grant of a Lien therein is not prohibited under the applicable
contract, consent, license or other item unless the appropriate consent has been
obtained and not prohibited by applicable law, all right, title and interest of
Mortgagor in and to (i) all contracts from time to time executed by Mortgagor or
any manager or agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the Mortgaged
Property or Equipment or any part thereof and all agreements and options
relating to the purchase or lease of any portion of the Mortgaged Property or
any property which is adjacent or peripheral to the Mortgaged Property which are
appurtenant to the ownership of the Mortgaged Property, together with the right
to exercise such options and all leases of Equipment, (ii) all consents,
licenses, building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or operation of
the Mortgaged Property or any part thereof, and (iii) all drawings, plans,
specifications and similar or related items relating to the Mortgaged Property.

(All of the foregoing property and rights and interests now owned or held or
subsequently acquired by Mortgagor and described in, and not excluded from, the
foregoing clauses (a) through (j) are collectively referred to as the “Mortgaged
Property”).

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby
granted unto Mortgagee, its successors and assigns for the uses and purposes set
forth, until the Obligations are fully paid and fully performed and the
Commitments no longer remain in effect.

TERMS AND CONDITIONS

Mortgagor further represents, warrants, covenants and agrees with Mortgagee and
the Secured Parties as follows:

 

  •   Defined Terms. Capitalized terms used herein (including in the
“Background” and “Granting Clauses” sections above) and not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement.
References in this Mortgage to the “Default Rate” shall mean the interest rate
applicable pursuant to Section 4.2(c)(iii) of the Credit Agreement.

 

  •   Warranty of Title. Mortgagor warrants that it has good record title in fee
simple to the Real Estate, and good title to the rest of the Mortgaged Property,
subject only to the matters that are set forth in Schedule B of the title
insurance policy or policies being issued to Mortgagee to insure the lien of
this Mortgage and any other lien or encumbrance as permitted by Section 8.3 of
the Credit Agreement (collectively, the “Permitted Exceptions”). Mortgagor shall
warrant, defend and preserve such title and the lien of this Mortgage against
all claims of all persons and entities (not including the holders of the
Permitted Exceptions). Mortgagor represents and warrants that it has the right
and authority to mortgage the Mortgaged Property.

 

  •   Payment Pursuant to the Loan Documents. Mortgagor shall pay and perform
the Obligations which it is obligated to pay and perform at the times and
places, and in the manner specified, in the Loan Documents to which it is a
party.

 

-4-

--------------------------------------------------------------------------------

 

  •   Requirements. a) Subject to the applicable provisions of the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all Requirements of Law of all Governmental Authorities which
have jurisdiction over the Mortgaged Property, and all covenants, restrictions
and conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property, except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

  •   From and after the date of this Mortgage, Mortgagor shall not by act or
omission permit any building or other improvement on any premises not subject to
the lien of this Mortgage or owned or operated by Mortgagor or any other Loan
Party to rely on the Mortgaged Property or any part thereof or any interest
therein in order to fulfill any Requirement of Law; provided, that the foregoing
shall not prevent, restrict or otherwise limit any such reliance to the extent
existing on of the date of this Mortgage to fulfill any Requirement of Law.
Mortgagor shall not by act or omission impair in any material respect the
integrity of any of the Real Estate as a single zoning lot(s) and tax lot(s)
separate and apart from all other premises not owned or operated by Mortgagor or
another Loan Party and are not covered by a mortgage or deed of trust in favor
of Mortgagee.

 

  •   Payment of Taxes and Other Impositions. b) Except as permitted by
Section 7.12 of the Credit Agreement, promptly when due or prior to the date on
which any fine, penalty, interest or cost may be added thereto or imposed,
Mortgagor shall pay and discharge all real property taxes and assessments of
every kind and nature, all charges for any easement or agreement maintained for
the benefit of any of the Mortgaged Property, all general and special real
property assessments, levies, permits, inspection and license fees, all water
and sewer rents and charges, vault taxes, and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as
“Impositions”). If there is an Event of Default which is continuing, Mortgagor
shall within thirty (30) days after each due date deliver to Mortgagee
(i) original or copies of receipted bills and cancelled checks evidencing
payment of such Imposition if it is a real estate tax or other public charge and
(ii) evidence reasonably acceptable to Mortgagee showing the payment of any
other such Imposition. If by law any Imposition, at Mortgagor’s option, may be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.

 

  •   If the Mortgagor has failed to pay an Imposition within thirty (30) days
of when it is due, Mortgagee with notice to Mortgagor may pay any such
Imposition at any time thereafter. Any sums paid by Mortgagee in discharge of
any Impositions shall be payable on demand by Mortgagor to Mortgagee and the
amount so paid shall be added to the Obligations. Any sums paid by Mortgagee in
discharge of any Impositions shall be (i) a lien on the Mortgaged Property
secured hereby prior to any right or title to, interest in, or claim upon the
Mortgaged Property subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate.

 

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  •   Mortgagor shall have the right before any delinquency occurs to contest or
object in good faith to the amount or validity of any Imposition by appropriate
legal proceedings, but such right shall not be deemed or construed with respect
to any material Imposition, in any way as relieving, modifying, or extending
Mortgagor’s covenant to pay any such material Imposition at the time and in the
manner provided in this Section unless (i) Mortgagor has given prior written
notice to Mortgagee of Mortgagor’s intent so to contest or object to a material
Imposition, and (ii) Mortgagor shall either (x) furnish a good and sufficient
bond or surety as requested by and reasonably satisfactory to Mortgagee or
(y) maintain adequate reserves in conformity with GAAP on Mortgagor’s books, in
each case in the amount of the material Imposition which is being contested plus
any interest and penalty which may be imposed thereon and which could become a
lien against the Real Estate or any part of the Mortgaged Property.

 

  •   Insurance. c) Subject to the applicable provisions of the Credit
Agreement, Mortgagor shall maintain or cause to be maintained on all of the
Mortgaged Property, in such form and in such amounts as, from time to time,
shall be acceptable to Mortgagee, in its sole reasonable discretion, the
following insurance:

 

  •   property insurance against loss or damage by fire, lightning, windstorm,
tornado, water damage, flood, earthquake and by such other further risks and
hazards as now are or subsequently may be covered by an “all risk” policy or a
fire policy covering “special” causes of loss, and the policy limits shall be
automatically reinstated after each loss in amounts customary for companies in
similar businesses similarly situated;

 

  •   commercial general liability insurance under a policy including the “broad
form CGL endorsement” (or which incorporates the language of such endorsement),
covering claims for personal injury, bodily injury or death, or property damage
occurring on, in or about the Mortgaged Property with respect to injury and
property damage relating to any one occurrence in amounts customary for
companies in similar businesses similarly situated; and

 

  •   such other insurance in such amounts as Mortgagee may reasonably request
from time to time against loss or damage by any other risk commonly insured
against by persons occupying or using like properties for similar businesses in
the locality or localities in which the Real Estate is situated.

 

  •   Each property insurance policy shall (x) be provided by insurance
companies which have a Best’s rating of at least “AXII”, (y) provide that it
shall not be cancelled, non-renewed or materially amended without at least
thirty (30) days’ prior written notice to Mortgagee, and (z) with respect to all
property insurance, provide for deductibles in an amount reasonably satisfactory
to Mortgagee, and contain a “Replacement Cost Endorsement” without any deduction
made for depreciation and with no co-insurance penalty (or attaching an agreed
amount endorsement reasonably satisfactory to Mortgagee), without contribution,
under a “standard” or “New York” mortgagee clause reasonably acceptable to
Mortgagee. Liability insurance policies shall name Mortgagee for the ratable
benefit of the Secured Parties, as an additional insured and contain a waiver of
subrogation against Mortgagee and the other Secured Parties. Each policy of
property insurance shall expressly provide that any proceeds which are payable
to Mortgagee shall be paid by check payable to the order of Mortgagee only and
requiring the endorsement of Mortgagee only.

 

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  •   Mortgagor shall deliver to Mortgagee a certificate of such insurance
reasonably acceptable to Mortgagee. Mortgagor shall (i) pay as they become due
all premiums for such insurance and (ii) not later than fifteen (15) days prior
to the expiration of each policy to be furnished pursuant to the provisions of
this Section, deliver a renewed policy or policies, or duplicate original or
originals thereof, marked “premium paid,” or accompanied by such other evidence
of payment reasonably satisfactory to Mortgagee.

 

  •   If Mortgagor is in default of its obligations to insure or deliver any
such prepaid policy or policies, then Mortgagee, at its option and with notice
to Mortgagor, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee, within thirty
(30) days of Mortgagee’s demand therefor, such premium or premiums so paid by
Mortgagee with interest from the time of payment at the Default Rate.

 

  •   Mortgagor promptly shall comply with and conform to (i) all material
provisions of each such insurance policy, and (ii) all material requirements of
the insurers applicable to Mortgagor or to any of the Mortgaged Property or to
the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of any of the Mortgaged Property. Mortgagor shall not use
or permit the use of the Mortgaged Property in any manner which would not allow
the Mortgagor to obtain the insurance policies required pursuant to this
Section 6.

 

  •   If the Mortgaged Property, or any material part thereof, shall be
destroyed or damaged, Mortgagor shall give notice thereof to Mortgagee. All
insurance proceeds shall be paid and applied pursuant to Section 4.7(c) of the
Credit Agreement (subject to any right set forth therein of Mortgagor to use the
proceeds to repair or replace the Mortgaged Property). Notwithstanding the
preceding sentence, provided that no Event of Default shall have occurred and be
continuing, but expressly subject to the provisions of Section 4.7(c) of the
Credit Agreement, Mortgagor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss shall be paid over to Mortgagor.

 

  •   In the event of foreclosure of this Mortgage or other transfer of title to
the Mortgaged Property to the Mortgagee, all right, title and interest of
Mortgagor in and to any insurance policies, solely with respect to the Mortgaged
Property, then in force shall pass to the purchaser or grantee.

 

  •  

Mortgagor may maintain insurance required under this Mortgage by means of one or
more blanket insurance policies maintained by Mortgagor; provided, however, that
(A) any such policy shall specify, or Mortgagor shall furnish to Mortgagee a
written statement from the insurer so specifying, the maximum amount of the
total insurance afforded by such blanket policy that is allocated to the
Mortgaged Property and the other Mortgaged Property and any sublimits in such
blanket policy applicable to the Mortgaged Property and the other Mortgaged
Property, (B) each such blanket policy shall include an endorsement providing
that, in the event of a loss resulting from an insured peril, insurance proceeds
shall be allocated to the Mortgaged Property in an amount equal to the coverages
required to be maintained by Mortgagor

 

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as provided above and (C) the protection afforded under any such blanket policy
shall be no less than that which would have been afforded under a separate
policy or policies as required hereunder relating only to the Mortgaged
Property.

 

  •   Restrictions on Liens and Encumbrances. Except for the lien of this
Mortgage and the Permitted Exceptions, and except as expressly permitted under
the Credit Agreement or this Mortgage, Mortgagor shall not, without the prior
written consent of Mortgagee, further mortgage, nor otherwise encumber the
Mortgaged Property nor create or suffer to exist any lien, charge or encumbrance
on the Mortgaged Property, or any part thereof, whether superior or subordinate
to the lien of this Mortgage and whether recourse or non-recourse.

 

  •   Due on Sale and Other Transfer Restrictions. Except as expressly permitted
under the Credit Agreement, Mortgagor shall not, without the prior written
consent of Mortgagee, sell, transfer, convey or assign all or any portion of, or
any interest in, the Mortgaged Property. Notwithstanding anything herein to the
contrary, so long as no Event of Default has occurred and is continuing, the
Mortgagor may use, lease and dispose of all or any part of the Mortgaged
Property in the ordinary course of its business, subject to the terms of the
Credit Agreement and the provisions of this Mortgage.

 

  •   Condemnation/Eminent Domain. Subject to the Credit Agreement, upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Mortgaged Property, or any portion thereof, Mortgagor will notify
Mortgagee of the pendency of such proceedings. Mortgagee is hereby authorized
and empowered by Mortgagor to settle or compromise any claim in connection with
such condemnation and to receive all awards and proceeds thereof to be applied
pursuant to Section 4.7(c) of the Credit Agreement. Notwithstanding the
preceding sentence, provided no Event of Default shall have occurred and be
continuing, but expressly subject to the provisions of Section 4.7(c) of the
Credit Agreement (including any right set forth therein of Mortgagor to use the
proceeds to repair or replace the Mortgaged Property), (i) Mortgagor shall, at
its expense, diligently prosecute any proceeding relating to such condemnation,
(ii) Mortgagor may settle or compromise any claims in connection therewith and
(iii) Mortgagor may receive any awards or proceeds thereof, provided that
Mortgagor shall (a) in the event of a partial taking of an individual Mortgaged
Property and to the extent reasonably possible promptly repair and restore
Mortgaged Property to its condition prior to such condemnation, regardless of
whether any award shall have been received or whether such award is sufficient
to pay for the costs of such repair and restoration or (b) otherwise comply with
the provisions of the Credit Agreement relating to the disposition of Net Cash
Proceeds from a Recovery Event or otherwise.

 

  •   Leases. Except as expressly permitted under the Credit Agreement,
Mortgagor shall not (a) execute an assignment or pledge of any Lease relating to
all or any portion of the Mortgaged Property other than in favor of Mortgagee,
or (b) during the continuance of an Event of Default, execute any Lease of any
of the Mortgaged Property without the written consent of Mortgagee. Mortgagor
shall deliver to Mortgagee copies of all leases promptly upon the request of
Collateral Agent.

 

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  •   Further Assurances. To further assure Mortgagee’s rights under this
Mortgage, Mortgagor agrees upon written demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
reasonably required by Mortgagee to confirm the lien of this Mortgage and all
other rights or benefits conferred on Mortgagee by this Mortgage.

 

  •   Mortgagee’s Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor contained herein, within the applicable
grace period, if any, provided for in the Credit Agreement, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage may, (but shall be under no obligation to) at any time upon delivery of
written notice to Mortgagor pay or perform the same, and the amount or cost
thereof, with interest at the Default Rate, shall be due on demand from
Mortgagor to Mortgagee and the same shall be secured by this Mortgage and shall
be a lien on the Mortgaged Property prior to any right, title to, interest in,
or claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Section shall
be deemed or construed to cure Mortgagor’s default or waive any right or remedy
of Mortgagee.

 

  •   Representations and Warranties.

 

  •   As of the date hereof, to the knowledge of Mortgagor, the Real Estate, and
the use and operation thereof, comply in all material respects with all
Requirements of Law, including, without limitation, building and zoning
ordinances and codes and the Americans with Disabilities Act except for such
noncompliance as does not and will not, in the aggregate, result in any Material
Adverse Effect. There has not been committed by Mortgagor or, to Mortgagor’s
knowledge, any other Person in occupancy of or involved with the operation or
use of the Mortgaged Property any act or omission affording any Governmental
Authority the right of forfeiture as against the Mortgaged Property or any part
thereof.

 

  •   As of the date hereof, Mortgagor has not received notice of the
commencement of any condemnation or other eminent domain proceeding and, to
Mortgagor’s knowledge, no such proceeding is threatened or contemplated with
respect to all or any portion of the Real Estate or for the relocation of
roadways providing access to the Real Estate which would have a Material Adverse
Effect.

 

  •   As of the date hereof, there are adequate rights of access to public ways
from the Real Estate and the Real Estate is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service the Mortgaged Property for
full utilization of the Mortgaged Property for its intended uses. All public
utilities necessary to the full use and enjoyment of the Mortgaged Property as
currently used and enjoyed are located either in the public right-of-way
abutting the Real Estate (which are connected so as to serve the Real Estate
without passing over other property) or in recorded easements serving the Real
Estate and such easements are set forth in and insured by the Title Insurance
Policy. All roads necessary for the use of the Real Estate for its current
purposes either (i) have been completed and dedicated to public use and accepted
by all Governmental Authorities or (ii) the use thereof is provided by private
easement adequate for the present use of the Mortgaged Property. The Real Estate
has, or to the knowledge of Mortgagor, is served by, parking to the extent
required to comply with all Requirements of Law.

 

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  •   The Real Estate is assessed for real estate tax purposes as one or more
wholly independent tax lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot or lots, and no other land or
improvement is assessed and taxed together with the Real Estate or any portion
thereof.

 

  •   As of the date hereof, to Mortgagor’s knowledge after due inquiry, there
are no pending or proposed special or other assessments for public improvements
or otherwise affecting the Mortgaged Property, nor are there any contemplated
improvements to the Mortgaged Property that may result in such special or other
assessments.

 

  •   All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under any Requirements of Law currently in
effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, any Mortgage and Security Agreement, have been paid or will
be paid.

 

  •   As of the date hereof, except to the extent waived by Collateral Agent,
the survey for the Real Estate delivered to Lender in connection with this
Mortgage accurately reflects the Real Estate, and to the knowledge of the
Mortgagor does not fail to reflect any material matter affecting the Real Estate
or the title thereto, except as set forth in Exhibit B attached hereto.

 

  •   As of the date hereof, there are no Leases affecting the Mortgaged
Property except as provided on Schedule I hereof.

 

  •   Covenants.

 

  •   Access to Property. Subject to the applicable provisions of the Credit
Agreement, the Mortgagor shall permit agents, representatives and employees of
the Collateral Agent to inspect the Mortgaged Property or any part thereof at
reasonable intervals upon reasonable advance notice during regular business
hours.

 

  •   Awards; Insurance Proceeds. The Mortgagor shall cooperate with the
Collateral Agent in obtaining for the Collateral Agent the benefits of any Net
Cash Proceeds lawfully or equitably payable in connection with any Recovery
Event to the extent required by the Credit Agreement, and the Collateral Agent
shall be reimbursed for any expenses incurred in connection therewith (including
reasonable, actual attorneys’ fees and disbursements, as to any Approved
Acquisition Asset, the payment by Mortgagor of the expense of an appraisal on
behalf of the Collateral Agent in case of a casualty or condemnation affecting
the Property or any part thereof) out of such Net Cash Proceeds.

 

  •   Zoning. Mortgagor shall not initiate or consent to any zoning
reclassification of any portion of the Real Estate or seek any variance under
any existing zoning ordinance or use or permit the use of any portion of the
Real Estate in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior written consent of the Collateral
Agent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

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  •   No Joint Assessment. Mortgagor shall not suffer, permit or initiate the
joint assessment of the Real Estate with (a) any other real property
constituting a tax lot separate from the Real Estate, or (b) any portion of the
Real Estate which may be deemed to constitute personal property, or any other
procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Real Estate.

 

  •   Reciprocal Easement Agreements. Mortgagor shall not enter into, terminate
or modify any reciprocal easement agreement (“REA”) without the Collateral
Agent’s prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Mortgagor shall enforce, comply with, and cause each of
the parties to any REA to comply with all of the material economic terms and
conditions contained in the REA.

 

  •   Defense of Title. The Mortgagor will preserve its interest in and title to
the Mortgaged Property and shall cause this Mortgage, and each amendment,
modification or supplement hereto, to be recorded and filed and to be kept
recorded and filed in such manner and in such places, as may be required by law
in order to establish, preserve and protect the validity and priority of the
Lien and security interest created herein against the claims of all Persons
whomsoever claiming by, through or under the Mortgagor).

 

  •   Remedies.

 

  •   Upon the occurrence and during the continuance of any Event of Default,
Mortgagee may immediately take such action, without notice or demand (except as
otherwise provided herein) only to the extent permitted by applicable law, it
deems reasonably necessary to protect and enforce its rights against Mortgagor
and in and to the Mortgaged Property, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise to the
extent permitted by applicable law, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:

 

  •   Mortgagee may at its option, in addition to other remedies provided at law
and to the extent permitted under the Credit Agreement, declare all sums secured
by this Mortgage immediately due and payable without presentment, demand,
protest, notice of protest and non-payment or other notice of default or notice
of acceleration or notice of intention to acceleration or other notice of any
kind, all of which are hereby waived by Mortgagor and all other parties
obligated in any manner whatsoever to pay and/or perform the Obligations (except
to the extent required hereunder or under the Credit Agreement or any other Loan
Document, or under any provision of applicable law that cannot be waived).

 

  •  

To the extent permitted under applicable law, Mortgagee may elect to sell the
Mortgaged Property or any part thereof to be at such place or places and
otherwise in the manner and upon such notice or notices as may be required under
any Requirements of Law (and Mortgagor hereby waives, to the extent permitted
under applicable law, any

 

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right it may have under Requirements of Law to direct the order of sale);
provided, however, that Mortgagee may offset its bid at any such sale to the
extent of the full amount owed to Mortgagee under the Credit Agreement,
including, without limitation, expenses of sale, and costs, expenses, and
attorney fees incurred by or on behalf of Mortgagee in connection with
collecting, litigating, or otherwise enforcing any right under the Credit
Agreement. Mortgagee may postpone the sale of all or any portion of the
Mortgaged Property by public announcement made at the initial time and place of
sale, and from time to time later by public announcement made at the time and
place of sale fixed by the preceding postponement. Mortgagee shall deliver to
the purchaser at such public auction its deed conveying the Mortgaged Property
sold, but without any covenant or warranty, express or implied. The recital in
such deed of any matter of fact shall be conclusive proof of its truthfulness.
Any person, including Mortgagor or Mortgagee, may purchase at such sale.

 

  •   The proceeds or avails of any sale made under or by virtue of this
Mortgage, together with any other sums secured by this Mortgage, which then may
be held by the Mortgagee or any other person, shall be applied pursuant to
Section 15(e) hereof and the Credit Agreement.

 

  •   Mortgagee may, to the extent permitted by applicable law, (A) institute
and maintain an action of judicial or non-judicial foreclosure against all or
any part of the Mortgaged Property, (B) institute and maintain an action on the
Credit Agreement, the Guarantee, or any other Loan Document, or (C) take such
other action at law or in equity for the enforcement of this Mortgage or any of
the Loan Documents as the law may allow. Mortgagee may proceed in any such
action to final judgment and execution thereon for all sums due hereunder,
together with interest thereon at the applicable Default Rate or a lesser amount
if required by law and all costs of suit, including, without limitation,
reasonable attorneys’ fees and disbursements. To the fullest extent permitted by
applicable law and the Credit Agreement, interest at the Default Rate shall be
due on any judgment obtained by Mortgagee from the date of judgment until actual
payment is made of the full amount of the judgment.

 

  •   Mortgagee may, to the extent permitted by applicable law, personally, or
by its agents, attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral as security for the
Obligations enter into and upon the Mortgaged Property and each and every part
thereof and exclude Mortgagor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Mortgagor hereby agreeing to
surrender possession of the Mortgaged Property to Mortgagee upon demand at any
such time) and use, operate, manage, maintain and control the Mortgaged Property
and every part thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or parts of
the Mortgaged Property for such periods of time and upon such conditions as
Mortgagee may, in its discretion, deem proper, (y) to enforce, cancel or modify
any Lease subject to the rights of any existing tenants and (z) generally to
execute, do and perform any other act, deed, matter or thing concerning the
Mortgaged Property as Mortgagee shall deem appropriate as fully as Mortgagor
might do.

 

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  •   If Mortgagor remains in possession after demand by Mortgagee for surrender
of possession of the Mortgaged Property, such continued possession by Mortgagor
shall be as tenant of Mortgagee, and Mortgagor agrees to pay monthly in advance
to Mortgagee such rent for the Mortgaged Property so occupied as Mortgagee may
demand, and in default of doing so, Mortgagor may also be dispossessed by
summary proceedings or otherwise. In case of the appointment of a receiver of
the Rents, the foregoing agreement of Mortgagor to pay rent shall inure to the
benefit of such receiver.

 

  •   In case of a foreclosure sale, the Mortgaged Property may be sold, at
Mortgagee’s election, in one parcel or in more than one parcel and Mortgagee is
specifically empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Mortgaged
Property to be held as more particularly described in Section 15(a)(ii), to the
extent permitted under the terms of the Credit Agreement.

 

  •   In the event of any breach of any of the covenants, agreements, terms or
conditions contained in this Mortgage and the expiration of any applicable
notice and/or grace period, Mortgagee shall be entitled to enjoin such breach
and obtain specific performance of any covenant, agreement, term or condition
and Mortgagee shall have the right to invoke any equitable right or remedy as
though other remedies were not provided for in this Mortgage.

 

  •   To the extent permitted by applicable law, upon completion of any sale or
sales made by Mortgagee under or by virtue of this Mortgage and upon
satisfaction of any redemption period required by law, Mortgagee shall execute
and deliver to the purchaser or purchasers at such sale or sales a good and
sufficient instrument, or good and sufficient instruments, conveying, assigning
and transferring all estate, right, and title and interest of Mortgagor in and
to the property and rights sold. To the extent permitted by applicable law, any
such sale or sales made by virtue of nonjudicial or judicial proceedings or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of Mortgagor in and to the properties and rights to be sold, and
shall be a perpetual bar both at law and in equity, of Mortgagor and against any
and all persons claiming or who may claim the same, or any part thereof from
through or under Mortgagor. To the extent permitted by applicable law, the
purchaser at any foreclosure sale hereunder may disaffirm any easement granted
or lease made in violation of any provision of this Mortgage, and may take
immediate possession of the Mortgaged Property free from, and despite the terms
of, such grant of easement or rental or lease agreement.

 

  •   It is agreed that if an Event of Default shall occur and be continuing,
any and all proceeds of the Mortgaged Property received by Mortgagee shall be
held by Mortgagee for the benefit of the Secured Parties as collateral security
for the Obligations (whether matured or unmatured), and shall be applied in
payment of the Obligations in the manner and in the order set forth in
Section 8(b) of the Security Agreement.

 

  •  

Right of Mortgagee to Credit Sale. To the extent permitted under applicable law,
upon the occurrence of any sale made under this Mortgage in connection with the
exercise of remedies hereunder upon the occurrence and during the continuation
of any Event of Default, whether made by virtue of judicial or nonjudicial
proceedings or of a judgment or

 

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decree of foreclosure and sale, Mortgagee may bid for and acquire the Mortgaged
Property or any part thereof. In lieu of paying cash therefor, Mortgagee may
make settlement for the purchase price by crediting upon the Obligations or
other sums secured by this Mortgage, the net sales price after deducting
therefrom the expenses of sale and the cost of the action and any other sums
which Mortgagee is authorized to deduct under this Mortgage. In such event, this
Mortgage, the Credit Agreement, the Guarantee and the Security Documents
evidencing expenditures secured hereby may be presented to the person or persons
conducting the sale in order that the amount so used or applied may be credited
upon the Obligations as having been paid.

 

  •   Appointment of Receiver. If an Event of Default shall have occurred and be
continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral or the interest
of Mortgagor therein as security for the Obligations, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers or
other manager of the Mortgaged Property, without requiring the posting of a
surety bond, and without reference to the adequacy or inadequacy of the value of
the Mortgaged Property or the solvency or insolvency of Mortgagor or any other
party obligated for payment of all or any part of the Obligations, and whether
or not waste has occurred with respect to the Mortgaged Property, and Mortgagor
hereby irrevocably consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any such receiver or
receivers or manager shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Mortgagee in case of
entry as provided in this Mortgage, including, without limitation and to the
extent permitted by law, the right to enter into leases of all or any part of
the Mortgaged Property, (subject to the rights of Tenants under the Leases) and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.

 

  •   Extension, Release, etc. d) Without affecting the lien or charge created
by this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Obligations,
Mortgagee may, from time to time and without notice (but subject to the terms of
the Credit Agreement (including, without limitation, Section 11.2 thereof),
agree to (i) release any person liable for the indebtedness borrowed or
guaranteed under the Loan Documents, (ii) extend the maturity or alter any of
the terms of the indebtedness borrowed or guaranteed under the Loan Documents or
any other guaranty thereof, (iii) grant other indulgences, (iv) release or
reconvey, or cause to be released or reconveyed at any time at Mortgagee’s
option any parcel, portion or all of the Mortgaged Property, (v) take or release
any other or additional security for any obligation herein mentioned, or
(vi) make compositions or other arrangements with debtors in relation thereto.

 

  •   No recovery of any judgment by Mortgagee and no levy of an execution under
any judgment upon the Mortgaged Property or upon any other property of Mortgagor
shall affect the lien created by this Mortgage or any liens, rights, powers or
remedies of Mortgagee hereunder, and such liens, rights, powers and remedies
shall continue unimpaired.

 

  •  

If Mortgagee shall have the right to foreclose this Mortgage, Mortgagor
authorizes Mortgagee at its option to foreclose the lien created by this
Mortgage subject to the

 

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rights of any tenants of the Mortgaged Property, to the extent permitted by
applicable law. To the extent permitted by applicable law, the failure to make
any such tenants parties defendant to any such foreclosure proceeding and to
foreclose their rights, or to provide notice to such tenants as required in any
statutory procedure governing a foreclosure of the Mortgaged Property, or to
terminate such tenant’s rights in such foreclosure will not be asserted by
Mortgagor as a defense to any proceeding instituted by Mortgagee to collect the
Obligations or to foreclose the lien created by this Mortgage.

 

  •   Unless expressly provided otherwise, in the event that Mortgagee’s
interest in this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.

 

  •   Security Agreement under Uniform Commercial Code. e) It is the intention
of the parties hereto that this Mortgage shall constitute a “security agreement”
within the meaning of the Uniform Commercial Code (the “UCC”) of the State in
which the Mortgaged Property is located. If an Event of Default shall occur and
be continuing, then in addition to having any other right or remedy available at
law or in equity, Mortgagee shall have the option of either (i) proceeding under
the UCC and exercising such rights and remedies as may be provided to a secured
party by the UCC with respect to all or any portion of the Mortgaged Property
which is personal property (including, without limitation, taking possession of
and selling such property) or (ii) to the extent permitted by applicable law,
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Mortgaged Property in accordance
with Mortgagee’s rights, powers and remedies with respect to the real property
(in which event the default provisions of the UCC shall not apply). If Mortgagee
shall elect to proceed under the UCC, and unless otherwise required by the
Security Agreement, then ten (10) days’ notice of sale of the personal property
shall be deemed reasonable notice and the reasonable expenses of retaking,
holding, preparing for sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, reasonable attorneys’ fees and legal expenses.
At Mortgagee’s request, Mortgagor shall assemble the personal property and make
it available to Mortgagee at a place designated by Mortgagee which is reasonably
convenient to both parties.

 

  •   Certain portions of the Mortgaged Property are or will become “fixtures”
(as that term is defined in the UCC) on the Mortgaged Property, and this
Mortgage, upon being filed for record in the real estate records of the county
wherein such fixtures are situated, shall operate also as a financing statement
filed as a fixture filing in accordance with the applicable provisions of said
UCC upon such portions of the Mortgaged Property that are or become fixtures.
The addresses of the Mortgagor, as debtor, and Mortgagee, as secured party, are
set forth in the first page of this Mortgage.

 

  •  

The real property to which the fixtures relate is described in Exhibit A
attached hereto. The name, type of organization and jurisdiction of organization
of the debtor for purposes of this financing statement are the name, type of
organization and jurisdiction of organization of the Mortgagor set forth in the
first paragraph of this Mortgage, and the name of the secured party for purposes
of this financing statement is the name of the Mortgagee set forth in the first
paragraph of this Mortgage. The mailing address of the Mortgagor/debtor is the

 

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address of the Mortgagor set forth in the first paragraph of this Mortgage. The
mailing address of the Mortgagee/secured party from which information concerning
the security interest hereunder may be obtained is the address of the Mortgagee
set forth in the first paragraph of this Mortgage. Mortgagor’s organizational
identification number is 2140249.

 

  •   Assignment of Rents. f) Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment and performance of the Obligations, and
Mortgagor grants to Mortgagee the right to enter the Mortgaged Property for the
purpose of collecting the same and to let the Mortgaged Property or any part
thereof, (subject to the rights of tenants under the Leases) and to apply the
Rents on account of the Obligations. The foregoing assignment and grant is
present and absolute and shall continue in effect until the Obligations secured
hereby are paid in full and the Commitments no longer remain outstanding, but
Mortgagee hereby waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents and Mortgagor shall be entitled to collect,
receive, use and retain the Rents until the occurrence and during the
continuation of an Event of Default; such right of Mortgagor to collect,
receive, use and retain the Rents may be revoked by Mortgagee upon the
occurrence and during the continuance of any Event of Default by giving not less
than ten (10) days’ written notice of such revocation to Mortgagor; in the event
such notice is given, Mortgagor shall pay over to Mortgagee, or to any receiver
appointed to collect the Rents, any lease security deposits and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy of
such part of the Mortgaged Property as may be in the possession of Mortgagor or
any affiliate of Mortgagor, and upon default in any such payment Mortgagor and
any such affiliate will vacate and surrender the possession of the Mortgaged
Property to Mortgagee or to such receiver, and in default thereof may be evicted
by summary proceedings or otherwise. Mortgagor shall not accept prepayments of
installments of Rent to become due for a period of more than one month in
advance (except for security deposits and estimated payments of percentage rent,
if any).

 

  •   Mortgagor has not affirmatively done any act which would prevent Mortgagee
from, or limit Mortgagee in, acting under any of the provisions of the foregoing
assignment.

 

  •   Except for any matter disclosed in the Credit Agreement, no action has
been brought or, to Mortgagor’s knowledge, is threatened, which would interfere
in any way with the right of Mortgagor to execute the foregoing assignment and
perform all of Mortgagor’s obligations contained in this Section and in the
Leases.

 

  •  

Additional Rights. To the extent permitted by applicable law, the holder of any
subordinate lien or subordinate mortgage on the Mortgaged Property shall have no
right to terminate any Lease whether or not such Lease is subordinate to this
Mortgage nor shall Mortgagor consent to any holder of any subordinate lien or
subordinate mortgage joining any tenant under any Lease in any action to
foreclose the lien or modify, interfere with, disturb or terminate the rights of
any tenant under any Lease. By recordation of this Mortgage all subordinate
lienholders and the trustees and beneficiaries under subordinate mortgages are
subject to and notified of this provision, and any action taken by any such
lienholder contrary to this provision shall be null and void. Upon the
occurrence and during the continuance of any Event of Default, Mortgagee, in its
sole discretion and without regard to the adequacy of its

 

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security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Obligations.
Any such application shall not be construed to cure or waive any Default or
Event of Default or invalidate any act taken by Mortgagee on account of such
Default or Event of Default.

 

  •   Notices. All notices, requests, demands and other communications hereunder
shall be given in accordance with the provisions of Section 11.2 of the Credit
Agreement to Mortgagor and to Mortgagee as specified therein.

 

  •   No Oral Modification. This Mortgage may not be amended, supplemented or
otherwise modified except in accordance with the provisions of Section 11.1 of
the Credit Agreement. To the extent permitted by applicable law, any agreement
made by Mortgagor and Mortgagee after the date of this Mortgage relating to this
Mortgage shall be superior to the rights of the holder of any intervening or
subordinate lien or encumbrance.

 

  •   Partial Invalidity. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.

 

  •   Mortgagor’s Waiver of Rights. g) Mortgagor hereby voluntarily and
knowingly releases and waives any and all rights to retain possession of the
Mortgaged Property after the occurrence and during the continuance of an Event
of Default and any and all rights of redemption from sale under any order or
decree of foreclosure (whether full or partial), pursuant to rights, if any,
therein granted, as allowed under any applicable law, on its own behalf, on
behalf of all persons claiming or having an interest (direct or indirectly) by,
through or under each constituent of Mortgagor and on behalf of each and every
person acquiring any interest in the Mortgaged Property subsequent to the date
hereof, it being the intent hereof that any and all such rights or redemption of
each constituent of Mortgagor and all such other persons are and shall be deemed
to be hereby waived to the fullest extent permitted by applicable law or
replacement statute. Each constituent of Mortgagor shall not invoke or utilize
any such law or laws or otherwise hinder, delay, or impede the execution of any
right, power, or remedy herein or otherwise granted or delegated to Mortgagee,
but shall permit the execution of every such right, power, and remedy as though
no such taw or laws had been made or enacted.

 

  •  

To the fullest extent permitted by law, Mortgagor waives the benefit of all laws
now existing or that may subsequently be enacted providing for (i) any
appraisement before sale of any portion of the Mortgaged Property, (ii) any
extension of the time for the enforcement of the collection of the Obligations
or the creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Mortgaged Property from
attachment, levy or sale under execution or exemption from civil process. To the
full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any
time insist upon, plead, claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement, valuation, stay,
exemption, extension or redemption, or requiring foreclosure of this Mortgage
before exercising any other remedy granted hereunder and Mortgagor, for
Mortgagor and its successors and assigns, and for any and all persons ever
claiming any interest

 

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in the Mortgaged Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of execution,
notice of election to mature (except as expressly provided in the Credit
Agreement) or declare due the whole of the secured indebtedness and marshalling
in the event of a sale by Mortgagee, or other rights hereby created. Mortgagor
waives all rights of redemption.

 

  •   Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment of
the Obligations and performance of the Obligations and to exercise all rights
and powers under this Mortgage or under any of the other Loan Documents or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Obligations may now or hereafter be otherwise secured, whether by deed of
trust, mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, shall prejudice or
in any manner affect Mortgagee’s right to realize upon or enforce any other
security now or hereafter held by Mortgagee, it being agreed that Mortgagee
shall be entitled to enforce this Mortgage and any other security now or
hereafter held by Mortgagee in such order and manner as Mortgagee may determine
in its absolute discretion. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Loan Documents
to Mortgagee or to which Mortgagee may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee as the case may be. To the extent permitted by applicable
law, in no event shall Mortgagee, in the exercise of the remedies provided in
this Mortgage (including, without limitation, in connection with the assignment
of Rents to Mortgagee, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
“Mortgagee in possession,” and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.

 

  •  

Multiple Security. If (a) the Mortgaged Property shall consist of one or more
parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold or be the beneficiary of one or more additional mortgages, liens, deeds of
trust, mortgages or other security (directly or indirectly) for the Obligations
upon other property in the State in which the Mortgaged Property is located
(whether or not such property is owned by Mortgagor or by others) or (c) both
the circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Obligations (including the Mortgaged Property),
which action may be brought or consolidated in the courts of, or sale conducted
in, any county in which any of such collateral is located. Mortgagor
acknowledges that the right to maintain a consolidated foreclosure action is a
specific inducement to Lenders to extend the indebtedness borrowed pursuant to
or guaranteed by the Loan Documents, and Mortgagor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now or hereafter have.
Mortgagor further agrees that if Mortgagee shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Mortgaged Property or
against any collateral other than the

 

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Mortgaged Property, which collateral directly or indirectly secures the
Obligations, or if Mortgagee shall have obtained a judgment of foreclosure and
sale or similar judgment against such collateral, then, whether or not such
proceedings are being maintained or judgments were obtained in or outside the
State in which the Mortgaged Property is located, Mortgagee may commence or
continue any foreclosure proceedings and exercise its other remedies granted in
this Mortgage against all or any part of the Mortgaged Property and Mortgagor
waives, to the extent permitted by applicable law, any objections to the
commencement or continuation of a foreclosure of this Mortgage or exercise of
any other remedies hereunder based on such other proceedings or judgments, and
waives, to the extent permitted by applicable law, any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage, nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee’s right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Mortgaged Property is
located) which directly or indirectly secures the Obligations, and Mortgagor
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other sales or proceedings or exercise of any
remedies in such sales or proceedings based upon any action or judgment
connected to this Mortgage, and Mortgagor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other sales or
proceedings or any sale or action under this Mortgage on such basis. It is
expressly understood and agreed that to the fullest extent permitted by law,
Mortgagee may, at its election, cause the sale of all collateral which is the
subject of a single foreclosure action at either a single sale or at multiple
sales conducted simultaneously and take such other measures as are appropriate
in order to effect the agreement of the parties to dispose of and administer all
collateral securing the Obligations (directly or indirectly) in the most
economical and least time-consuming manner.

 

  •   Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in the sole discretion of either of
them such a waiver is deemed advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, to the extent permitted by applicable law, and shall inure
to the benefit of Mortgagee and its successors and assigns. The word “Mortgagor”
shall be construed as if it read “Mortgagors” whenever the sense of this
Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.

 

  •  

No Waivers, etc. Any failure by Mortgagee to insist upon the strict performance
by Mortgagor of any of the terms and provisions of this Mortgage shall not be
deemed to be a waiver of any of the terms and provisions hereof, and Mortgagee,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by Mortgagor of any and all of the terms and provisions
of this Mortgage to be performed by Mortgagor. Mortgagee may release, regardless
of consideration and without the

 

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necessity for any notice to or consent by the beneficiary of any subordinate
mortgage or the holder of any subordinate lien on the Mortgaged Property, any
part of the security held for the obligations secured by this Mortgage without,
as to the remainder of the security, in any way impairing or affecting the lien
of this Mortgage or the priority of this Mortgage over any subordinate lien or
mortgage.

 

  •   Governing Law, etc. The Obligations secured hereby were incurred in
connection with a multi-state transaction governed by the laws of the State of
New York and pursuant to various documents which were executed and accepted by
the Mortgagee in the State of New York. This Mortgage and all substantive terms
and provisions hereof shall be governed by and construed according to the laws
of the State of New York, except with respect to perfection of security
interests and liens hereunder and enforcement thereof, which shall be governed
by the laws of the State in which the Real Estate is located.

 

  •   Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
“Mortgagor” shall mean “each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein,” the word
“Mortgagee” shall mean “Mortgagee or any successor collateral agent for the
Secured Parties,” and the word “person” shall include any individual,
corporation, partnership, limited liability company, trust, unincorporated
association, government, governmental authority, or other entity. Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.

 

  •   Release. All or a portion of the Mortgaged Property may be released in
accordance with Section 11.5 of the Credit Agreement.

 

  •   Last Dollars Secured; Priority. To the extent that this Mortgage secures
only a portion of the Obligations owing or which may become owing by Mortgagor
to the Secured Parties, the parties agree that any payments or repayments of any
Extensions of Credit shall be and be deemed to be applied first to the portion
of the Extensions of Credit that are not secured hereby, it being the parties’
intent that the portion of the Extensions of Credit last remaining unpaid shall
be secured hereby. If at any time this Mortgage shall secure less than all of
the principal amount of the Obligations, it is expressly agreed that any
repayments of the principal amount of the Obligations shall not reduce the
amount of the lien of this Mortgage until such lien amount shall equal the
principal amount of the Obligations outstanding.

 

  •   Receipt of Copy. The Mortgagor acknowledges that it has received a true
copy of this Mortgage.

 

  •   Maturity. The last of the Extensions of Credit (and therefore, the
Obligations) to mature is scheduled to mature on December 9, 2019.

 

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  •   Maximum Principal Amount of Obligations. Notwithstanding anything
contained herein to the contrary, the maximum principal amount of Obligations
secured by this Mortgage at the time of execution hereof or which under any
contingency may become secured by this Mortgage at any time hereafter is
             plus all interest payable on such principal amount under the Credit
Agreement and all amounts expended by Mortgagee in accordance with the Credit
Agreement and this Mortgage for the payment of (a) taxes, charges, or
assessments which may be imposed by law upon the premises; (b) premiums on
insurance policies covering the premises; (c) expenses incurred in upholding the
lien of this Mortgage, including, but not limited to (1) the expenses of any
litigation to prosecute or defend the rights and lien created by this Mortgage;
(2) any amount, cost or charges to which the Mortgage becomes subrogated, upon
payment, whether under recognized principles of law or equity, or under express
statutory authority and (3) interest at the rate of interest provided for in the
Credit Agreement.

 

  •   State Specific Provisions. This Mortgage is granted with Mortgage
Covenants and upon the Statutory Condition, for any breach of which the
Mortgagee shall have the Statutory Power of Sale. Upon the occurrence and during
the continuance of any Event of Default, the Mortgagee shall have the Statutory
Power of Sale.

 

  •   Further Assurances. Should any deed, conveyance, or instrument of any
nature be required from Mortgagor by Mortgagee to more fully and certainly vest
in and confirm to the Mortgagee such estates rights, powers, and duties, then,
upon request by the Mortgagee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be
caused to be recorded and/or filed by Mortgagor.

 

  •   Revolving Credit Loans. (a) The Indebtedness secured hereby includes, in
part, revolving credit loans. The outstanding balance of such revolving credit
loans may increase and decrease from time to time, and sums may be advanced,
repaid and readvanced thereunder until final maturity of such revolving credit
loans. This Mortgage is intended to secure all the Obligations, regardless of
such repayments and readvances and regardless of whether the balance of such
revolving credit loans may be reduced, from time to time, to zero.

(b) In addition to all other Indebtedness secured by this Mortgage, this
Mortgage shall also secure, and constitute a first lien on the Mortgaged
Property to secure, subject only to the Permitted Exceptions, all future
advances whether such advances are obligatory or are to be made at the option of
Mortgagee or the Lenders, or otherwise, made by Mortgagee or the Lenders under
the Credit Agreement for any purpose within twenty (20) years from the date of
this Mortgage (unless the Credit Agreement shall be earlier terminated) to the
same extent as if such advances were made on the date of the execution of this
Mortgage. The total amount of principal indebtedness, including future advances,
that is secured by this Mortgage, may increase or decrease from time to time,
but shall not exceed $         at any one time, together with interest thereon
at the rates provided in the Credit Agreement and any disbursement made by
Mortgagee or any of the Lenders to protect the security of this Mortgage, with
interest on such disbursement at the Default Rate.

 

  •  

No Assumption of Obligations. In the event of a foreclosure of this Mortgage,
neither Mortgagee nor any other Secured Party shall assume any liability of

 

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Mortgagor for Mortgagor’s violation of any environmental laws, statutes, codes,
regulations, or practices relating to the Mortgaged Property arising prior to
the date of the foreclosure sale and Mortgagor’s indemnifications as contained
herein and in the other Loan Documents shall survive said foreclosure, to the
extent provided therein.

[No further text on this page. Signature page follows.]

 

-22-

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This Mortgage has been duly executed by Mortgagor as of the date first set forth
above.

 

SPRAGUE OPERATING RESOURCES LLC, a Delaware limited liability company By:  

 

  Name:   Title: By:  

 

  Name:   Title:

State of New Hampshire

County of Rockingham

On this      day of             , 2014, before me, the undersigned notary
public, personally appeared             , proved to me through satisfactory
evidence of identification, which were New Hampshire driver’s license, to be the
person whose name is signed on the preceding or attached document, and
acknowledged to me that he signed it voluntarily for its stated purpose as
             of SPRAGUE OPERATING RESOURCES LLC.

 

 

Notary Public My commission expires:

State of New Hampshire

County of Rockingham

On this      day of             , 2014, before me, the undersigned notary
public, personally appeared             , proved to me through satisfactory
evidence of identification, which were New Hampshire driver’s license, to be the
person whose name is signed on the preceding or attached document, and
acknowledged to me that he signed it voluntarily for its stated purpose as
             of SPRAGUE OPERATING RESOURCES LLC.

 

 

Notary Public My commission expires:

--------------------------------------------------------------------------------

SCHEDULE I

[LEASES]

--------------------------------------------------------------------------------

Exhibit A

Applicable Legal Description(s)

See attached.

--------------------------------------------------------------------------------

EXHIBIT B

[MATERIAL MATTERS NOT REFLECTED ON SURVEY]

--------------------------------------------------------------------------------

Exhibit M

to Credit Agreement

FORM OF POSITION REPORT

JPMorgan Chase Bank N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

The Relationship Managers at each Lender

 

  Re: Position Report

Reference is made to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC,
Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders from
time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. Capitalized terms used herein but
not defined herein shall have the meanings provided in the Credit Agreement.
This Position Report has been prepared pursuant to Section 7.2(d) of the Credit
Agreement and the undersigned hereby certifies on behalf of the [U.S. Borrower]
[Canadian Borrower] to the Administrative Agent and the Lenders, as follows:

1. attached hereto as Schedule A is the Position Report of the [Loan Parties
(other than the Canadian Borrower and its Subsidiaries)] [Canadian Borrower and
its Subsidiaries];

2. the [Loan Parties (other than the Canadian Borrower and its Subsidiaries)]
[Canadian Borrower and its Subsidiaries] are in compliance with the applicable
position limits in the Risk Management Policy and attached hereto as Schedule B
are the computations supporting such certification; and

3. the information contained herein and scheduled hereto is true and correct in
all material respects as of the date hereof.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Position Report as of the
date set forth below.

Dated:                  , 201  

 

[SPRAGUE OPERATING RESOURCES LLC, as U.S. Borrower By:  

 

  Name:   Title:] [KILDAIR SERVICE LTD., as Canadian Borrower By:  

 

  Name:   Title:]

--------------------------------------------------------------------------------

Schedule A to

Position Report

Position Report

[See attached]

--------------------------------------------------------------------------------

Schedule B to

Position Report

Calculations Supporting Compliance

[See attached]

--------------------------------------------------------------------------------

Exhibit N

to Credit Agreement

FORM OF GUARANTEE

AMENDED AND RESTATED GUARANTEE, dated as of December 9, 2014 (the “Guarantee”),
made by Sprague Operating Resources LLC (the “U.S. Borrower”), Sprague Resources
ULC (“AcquireCo”), Kildair Service Ltd. (“Kildair”), Sprague Resources LP (the
“MLP”) and each other signatory hereto (each a “Subsidiary Guarantor”,
collectively, together with each Person which may, from time to time, become
party hereto as a Guarantor, the Borrowers and the MLP, the “Guarantors” or the
“Loan Parties”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity, the “Administrative Agent”) for the Secured Parties as
defined in the Credit Agreement described below.

RECITALS

WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the U.S. Borrower, AcquireCo and
Kildair, as borrowers, the several banks and other financial institutions or
entities from time to time parties thereto (the “Lenders”), the Administrative
Agent and certain other agents party thereto, the Lenders have severally agreed
to make loans to and participate in letters of credit issued on behalf of, and
certain Lenders (the “Issuing Lenders”) have agreed to issue letters of credit
for the account of, the Borrowers (as defined in the Credit Agreement) upon the
terms and subject to the conditions set forth therein;

WHEREAS, the Borrowers and the other Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit to the Borrowers; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective loans to and participate in letters of credit issued on behalf
of the Borrowers, and of the Issuing Lenders to issue their letters of credit,
under the Credit Agreement that each Guarantor shall have executed and delivered
this Guarantee to the Administrative Agent on behalf and for the ratable benefit
of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Lenders and the Issuing Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective loans to and
participate in letters of credit issued on behalf of the Borrowers, and of the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
each Guarantor hereby agrees with the Administrative Agent, on behalf and for
the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

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The following terms shall have the following meanings:

“Corresponding Obligations”: each Dutch Loan Party’s Obligations as they may
exist from time to time other than its Parallel Debt.

“Dutch Loan Party”: Sprague Resources Coöperatief U.A., the U.S. Borrower and
Sprague Co-op Member LLC.

“Parallel Debt”: as defined in Section 28(a).

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

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

(b) The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and section and paragraph references
are to this Guarantee unless otherwise specified.

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

2. Guarantee.

(a) Each Guarantor hereby, unconditionally and irrevocably, guarantees to the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties and their respective successors and permitted assigns, the prompt and
complete payment and performance by each of the Loan Parties when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations (other
than (i) with respect to any Guarantor, any Excluded Swap Obligations of such
Guarantor and any Primary Obligations of such Guarantor and (ii) with respect to
any Guarantor that is an Exempt CFC or a Subsidiary thereof, any U.S.
Obligations) (the “Guaranteed Obligations”).

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(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under any
other guarantee of the Obligations shall in no event exceed the amount which can
be guaranteed by such Guarantor under applicable federal, state, provincial and
territorial laws relating to the insolvency of debtors and fraudulent
conveyances or transfers.

(c) Each Guarantor further agrees (i) to pay any and all documented expenses
(including, without limitation, all documented fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or any
Secured Party in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, any Guarantor under
this Guarantee and (ii) to indemnify each Secured Party as set forth in
Section 11.6 of the Credit Agreement as if such Guarantor were a Borrower.
Except as otherwise provided in the definition of “Obligations” contained in the
Credit Agreement, this Guarantee shall remain in full force and effect until the
Obligations are paid in full, no Letters of Credit remain outstanding (unless
such Letters of Credit have been fully Cash Collateralized) and the Commitments
are terminated, notwithstanding that from time to time prior thereto the Loan
Parties may be free from any Obligations.

(d) As an original and independent obligation under this Guarantee, each
Guarantor shall: (a) indemnify each Secured Party and keep each Secured Party
indemnified against any cost, loss, expense or liability of whatever kind (other
than (i) with respect to any Guarantor, any Excluded Swap Obligations of such
Guarantor and any Primary Obligations of such Guarantor and (ii) with respect to
any Guarantor that is an Exempt CFC or a Subsidiary thereof, any U.S.
Obligations) resulting from the failure by the Borrowers to make due and
punctual payment of any of the Obligations or resulting from any of the
Obligations being or becoming void, voidable, unenforceable or ineffective
against the Borrowers (or any Borrower) (including, but without limitation, all
reasonable and documented legal and other costs, charges and expenses incurred
by any Secured Party in connection with preserving or enforcing, or attempting
to preserve or enforce, its rights under this Guarantee); and (b) pay on demand
the amount of such cost, loss, expense or liability whether or not any Secured
Party has attempted to enforce any rights against the Borrowers or any other
person or otherwise.

(e) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.

(f) No payment or payments made by any Borrower, any Guarantor, any other Loan
Party, any other guarantor or any other Person or received or collected by the
Administrative Agent or any Secured Party from any Borrower, any Guarantor, any
other Loan Party, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantors hereunder which shall, notwithstanding any such payment or payments
other than payments made by any Guarantor in respect of the Guaranteed
Obligations or payments received or collected from any Guarantor in respect of
the Guaranteed Obligations, remain liable for the Obligations up to the maximum
liability of each Guarantor hereunder until the Obligations are paid in full, no
Letters of Credit remain outstanding (unless such Letters of Credit have been
fully Cash Collateralized) and the Commitments are terminated.

(g) Each Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Secured Party on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.

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(h) Each Guarantor shall pay additional amounts to, and indemnify, each Secured
Party (including for purposes of this Section 2, any assignee, successor or
participant) with respect to Taxes imposed on payments pursuant to this
Guarantee to the same extent as the Borrowers would have paid additional amounts
and indemnified such Secured Party with respect to Taxes under Section 4.10 and
4.11 of the Credit Agreement, if such Guarantor were a Borrower under the Credit
Agreement. For the avoidance of doubt, any such payments are in addition to each
Guarantor’s obligation to pay any amounts required to be paid by the Loan
Parties to any Secured Party. The agreements in this Section 2(h) shall survive
the termination of this Guarantee and the payment of the Loans, Reimbursement
Obligations, the Obligations and all other amounts payable under the Credit
Agreement.

(i) Each Guarantor further agrees that any payment to the Administrative Agent
or any Secured Party on account of its liability hereunder will be made without
withholding for any Taxes, unless such withholding is required by law. If any
Guarantor determines, in its sole discretion exercised in good faith, that it is
so required to withhold Taxes, then such Guarantor may so withhold and shall
timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law.

(j) Each Guarantor agrees to assume all responsibility for being and keeping
itself informed of each Loan Party’s financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that each Guarantor assumes and incurs
under this Guarantee, and agrees that neither the Administrative Agent, any
Issuing Lender nor any Lender shall have any duty to advise any Guarantor of
information known to it regarding those circumstances or risks.

3. Right of Contribution. Each Subsidiary Guarantor hereby agrees that, to the
extent a Subsidiary Guarantor shall have paid more than its proportionate share
of any payment made hereunder or in respect of the Guaranteed Obligations, such
Subsidiary Guarantor shall be entitled to seek and receive contribution from and
against any other Subsidiary Guarantor hereunder which has not paid its
proportionate share of such payment; provided that no Subsidiary that is an
Exempt CFC or a Subsidiary thereof shall be required to make such payment with
respect to any U.S. Obligations. The provisions of this Section 3 shall be
subject to the terms and conditions of Section 5. The provisions of this
Section 3 shall in no respect limit the obligations and liabilities of any
Subsidiary Guarantor to the Administrative Agent and the Secured Parties, and
each Subsidiary Guarantor shall remain liable to the Administrative Agent and
the Secured Parties for the full amount guaranteed by it hereunder.

4. Right of Set-off. In addition to any rights and remedies of the Secured
Parties provided by Law, each Secured Party shall have the right, without prior
notice to the Guarantors, any such notice being expressly waived by the
Guarantors to the extent permitted by applicable Law, during the existence of an
Event of Default, upon any amount becoming due and payable by any Guarantor
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Secured Party or any branch or agency thereof to or for
the credit or the account of such Guarantor. Each Secured Party agrees promptly
to notify the Guarantors and the Administrative Agent after any such set-off and
application made by such Secured Party; provided that the failure to give such
notice shall not affect the validity of such set-off and application.

5. No Subrogation. Notwithstanding any payment or payments made by the
Guarantors hereunder or any set-off or application of funds of any Guarantor by
any Secured Party, no

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Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Secured Party against any Loan Party or any other
guarantor or any collateral security or guarantee or right of offset held by any
Secured Party for the payment of any of the Obligations, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from any Loan
Party or any other guarantor in respect of payments made by any Guarantor
hereunder, until all amounts owing to the Administrative Agent and the Secured
Parties by the Loan Parties on account of the Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full or any Letter of Credit remains outstanding (other
than any Letter of Credit which has been fully Cash Collateralized), such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Secured Parties, segregated from other funds of the Guarantors unless on deposit
in a Controlled Account, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in like form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent and the Secured Parties may determine.

6. Amendments, etc. with respect to the Obligations; Waiver of Rights. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against such Guarantor and without notice to or further
assent by such Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Secured Party may be rescinded by such party
and any of the Obligations continued, and any of the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Secured Party, and the Credit Agreement, the Notes and the other
Loan Documents and any other documents executed and delivered in connection
therewith or in connection with any other Obligations may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or other requisite Secured Parties, as the case may be) may
deem advisable from time to time in accordance with the provisions thereof, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Secured Party for the payment of any of the
Obligations may be sold, exchanged, waived, surrendered or released in
accordance with the provisions of the Loan Documents. Neither the Administrative
Agent nor any Secured Party shall have any obligation to protect, secure,
perfect, publish, register or insure any Lien at any time held by it as security
for any of the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any Guarantor, the
Administrative Agent or any Secured Party may, but shall be under no obligation
to, make a similar demand on any Loan Party, any other guarantor or any other
Person, and any failure by the Administrative Agent or any Secured Party to make
any such demand or to collect any payments from any such Loan Party, any such
other guarantor or any such other Person or any release of such Loan Party, such
other guarantor or such other Person shall not relieve any Guarantor of its
obligations or liabilities hereunder, and shall not impair or affect the rights
and remedies, express or implied, or as a matter of law, of the Administrative
Agent or any Secured Party against such Guarantor. For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.

7. Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon this Guarantee or acceptance of this Guarantee, the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Loan Parties, on the one hand, and the
Administrative Agent and the Secured

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Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon any Borrower, any other Guarantor or any other Person with
respect to the Obligations. Each Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of the Credit Agreement, any Note, any other Loan Document or any
other document relating to any Obligations, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Loan Parties against the Administrative Agent or any Secured Party, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
any Loan Party) which constitutes, or might be construed to constitute, an
equitable or legal discharge of any Loan Party or any other Person for any of
the Obligations, or of any Guarantor under this Guarantee, in bankruptcy,
insolvency or in any other instance. When pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent and any Secured Party
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against any Loan Party or any other Person or against any collateral
security or guarantee for any of the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Secured
Party to pursue such other rights or remedies or to collect any payments from
any such Loan Party or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of any such Loan Party or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent and the Secured Parties against any Guarantor.

8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Loan Party, or upon or as a
result of the appointment of a receiver, interim receiver, manager, intervenor
or conservator of, or trustee or similar officer for, any Loan Party or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

9. Not Affected by Bankruptcy. Notwithstanding any modification, discharge or
extension of any of the Obligations or any amendment, modification, stay or cure
of any Secured Party’s rights which may occur in any reorganization, bankruptcy
or insolvency filing, proceeding, case, petition, application or plan of
arrangement with respect to any Borrower or any other Guarantor, whether
permanent or temporary, and whether or not assented to by any of the Secured
Parties, each of the Guarantors hereby agrees that the Guarantors shall be
obligated hereunder to pay and perform the Guaranteed Obligations and discharge
their other obligations in accordance with the terms of the Obligations and the
terms of this Guarantee. Each Guarantor understands and acknowledges that, by
virtue of this Guarantee, it has specifically assumed any and all risks of a
reorganization, bankruptcy or insolvency filing, proceeding, case, petition,
application or plan of arrangement with respect to any Borrower or any other
Guarantor. Without in any way limiting the generality of the foregoing, any
subsequent modification of any of the Obligations in any reorganization,
bankruptcy or insolvency filing, proceeding, case, petition, application or plan
of arrangement concerning any Loan Party shall not affect the obligation of any
Guarantor to pay and perform the Guaranteed Obligations in accordance with the
original terms thereof.

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10. Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without set-off or counterclaim in the
applicable currency in which the Borrower’s applicable obligations are
denominated at the office of the Administrative Agent specified in Section 11.2
of the Credit Agreement.

11. Keepwell. Each Qualified Keepwell Provider hereby jointly and severally
absolutely, unconditionally, and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations under this Guarantee in respect of any Swap
Obligation (other than with respect to any Qualified Keepwell Provider that is
an Exempt CFC or a Subsidiary thereof, any Swap Obligations that are U.S.
Obligations) (provided, however, that each Qualified Keepwell Provider shall
only be liable under this Section 11 for the maximum amount of such liability
that can be hereby incurred without rendering its obligations under this
Section 11, or otherwise under this Guarantee, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified Keepwell Provider under this
Section 11 shall remain in full force and effect until the Obligations are paid
in full, no Letters of Credit remain outstanding (except for Letters of Credit
which have been fully Cash Collateralized) and the Commitments are terminated.
Each Qualified Keepwell Provider intends that this Section 11 constitute, and
this Section 11 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of section
1a(18)(A)(v)(II) of the Commodity Exchange Act.

12. Representations and Warranties. Each Guarantor hereby represents and
warrants that:

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

(b) it has the corporate (or analogous) power and authority, and the legal
right, to execute, deliver and perform the Loan Documents to which it is a party
and has taken all necessary corporate (or analogous) action to authorize the
execution, delivery and performance of this Guarantee and the other Loan
Documents to which it is a party. Except for (i) the filing or registration of
UCC or PPSA financing statements, publication under the Civil Code of Québec and
equivalent filings for foreign jurisdictions and the taking of applicable
actions referred to in Section 5.16 of the Credit Agreement and (ii) the filings
or other actions listed on Schedule 5.4 to the Credit Agreement (and including,
without limitation, such other authorizations, approvals, registrations,
actions, notices, or filings as have already been obtained, made or taken and
are in full force and effect), no consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person, including without limitation the FERC, to which a Guarantor or
other Loan Party is subject, is required in connection with the borrowings under
the Credit Agreement or with the execution, delivery, validity or enforceability
of the Loan Documents to which each Guarantor is a party; provided that approval
by the FERC may be required for the transfer of direct or indirect ownership or
control of FERC Contract Collateral; provided, further, that no approval of the
FERC is required for the granting of the security

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interest in the FERC Contract Collateral to the Administrative Agent pursuant to
the Security Documents. As of the Restatement Effective Date, the only contracts
comprising FERC Contract Collateral of the Guarantors and their Subsidiaries as
to which further consent of the FERC may be required in connection with the
exercise of remedies by the Administrative Agent under the Loan Documents are
contracts for the transportation and storage of certain Eligible Commodities;

(c) this Guarantee (i) has been, and each other Loan Document to which such
Guarantor is a party will be, duly executed and delivered on behalf of the
Guarantors and (ii) constitutes, and each other Loan Document to which it is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;

(d) the execution, delivery and performance of this Guarantee and the other Loan
Documents to which such Guarantor is a party (i) will not violate any
Requirement of Law, including any rules or regulations promulgated by the FERC,
in any material respect or where a waiver has not been obtained, in each case to
the extent applicable to or binding upon such Guarantor or its Properties,
(ii) will not violate a material Contractual Obligation (including, for the
avoidance of doubt, Governing Documents) of any Guarantor, except where such
violation could not reasonably be expected to have a Material Adverse Effect and
(iii) will not result in, or require, the creation or imposition of any Lien on
any of such Guarantor’s properties or revenues pursuant to any such Requirement
of Law or Contractual Obligation (other than Liens created by the Security
Documents in favor of the Administrative Agent and Liens permitted by
Section 8.3 of the Credit Agreement);

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

(f) except for matters disclosed on the title reports and surveys, including
without limitation, minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes, except where the failure to
have such title could not reasonably be expected to have a Material Adverse
Effect, it has defensible title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its tangible personal property, and none of such property is subject to any
Lien except as permitted by Section 8.3 of the Credit Agreement; and

(g) it and each of its Subsidiaries has timely filed or caused to be filed all
material Tax returns required to be filed by it and has timely paid all material
Taxes due and payable by it or imposed with respect to any of its property and
all other material fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any Taxes the amount or validity of which
are currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on its
books). There are no Liens for Taxes and no claim is being asserted with respect
to Taxes, except for statutory liens for Taxes not yet due and payable or for
Taxes the amount or validity of which are currently being contested in good
faith by appropriate proceedings and, in each case, with respect to which
reserves in conformity with GAAP have been provided on the books of such
Guarantor.

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The MLP hereby makes the representations and warranties set forth in Section 5
of the Credit Agreement as if fully set forth herein.

Each Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by each Guarantor on the date of each borrowing by any
Borrower and the date of each issuance of a Letter of Credit under the Credit
Agreement on and as of such date of borrowing or issuance, as the case may be,
as though made hereunder on and as of such date.

13. Covenants. Each Guarantor hereby covenants and agrees with the
Administrative Agent and each Secured Party that, from and after the date of
this Guarantee until the Obligations are paid in full, no Letters of Credit
remain outstanding (except for Letters of Credit which have been fully Cash
Collateralized) and the Commitments are terminated:

(a) if any Guarantor shall at any time acquire any shares of Capital Stock of
any direct or indirect Subsidiary (other than an Exempt CFC or any Subsidiary
thereof) which is not a Guarantor hereunder, such Guarantor and such Subsidiary
shall promptly deliver to the Administrative Agent an addendum to this
Guarantee, substantially in the form of Exhibit A to this Guarantee, duly
completed; and

(b) each Guarantor shall comply with each of the covenants and other obligations
set forth in the Credit Agreement (including Sections 7 and 8 thereof) to the
extent such covenants and obligations relate to such Guarantor.

14. Authority of Administrative Agent. Each Guarantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Guarantee
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
guarantee shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and each Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

15. Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by overnight mail or delivery by
hand, when received, (b) in the case of delivery by mail, three (3) Business
Days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been
electronically confirmed, addressed as follows:

(a) if to the Administrative Agent or any Secured Party, at its address or
transmission number for notices provided in Section 11.2 of the Credit
Agreement; and

(b) if to any Guarantor, to it care of the U.S. Borrower at the address or
transmission number for notices provided in Section 11.2 of the Credit
Agreement.

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The Administrative Agent, each Secured Party and any Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
Section 11.2 of the Credit Agreement.

16. Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

17. Integration. This Guarantee represents the agreement of each Guarantor with
respect to the subject matter hereof and there are no promises or
representations relative to the subject matter hereof not reflected herein.

18. Amendments in Writing; No Waiver; Cumulative Remedies.

(a) Neither this Guarantee nor any terms hereof may be amended, supplemented or
modified except in accordance with the provisions of Section 11.1 of the Credit
Agreement.

(b) No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law.

19. Judgment Currency.

(a) The Guarantors’ obligations hereunder and under the other Loan Documents to
make payments in United States Dollars or Canadian Dollars, as applicable, shall
not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than United States
Dollars or Canadian Dollars, as applicable, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent
or the respective Lender or Issuing Lender of the full amount of United States
Dollars or Canadian Dollars, as applicable, expressed to be payable to the
Administrative Agent or the Canadian Agent or such Lender or Issuing Lender
under this Guarantee or the other Loan Documents. If, for the purposes of
obtaining or enforcing judgment against any Guarantor in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than United States Dollars or Canadian Dollars, as applicable, (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in United States Dollars or Canadian Dollars, as applicable, the conversion
shall be made at the Dollar Equivalent or Canadian Dollar Equivalent, as
applicable, determined as of the Business Day immediately preceding the day on
which the judgment is given (such Business Day being hereinafter referred to as
the “Judgment Currency Conversion Date”).

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Guarantors shall pay, or cause to be paid, such additional amounts, if any (but
in any event not a lesser amount) as may be necessary to ensure that the amount
paid in the Judgment Currency, when converted at the rate of

--------------------------------------------------------------------------------

exchange prevailing on the date of payment, will produce the amount of United
States Dollars or Canadian Dollars, as applicable, which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or
judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

(c) For purposes of determining the Dollar Equivalent or Canadian Dollar
Equivalent, as applicable, or any other rate of exchange for this Section 19,
such amounts shall include any premium and costs payable in connection with the
purchase of United States Dollars or Canadian Dollars, as applicable.

20. Section Headings. The section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

21. Successors and Assigns. This Guarantee shall be binding upon and inure to
the benefit of the Guarantors, the Administrative Agent and the other Secured
Parties and their respective successors and assigns, except that no Guarantor
may assign or transfer any of its rights or obligations under this Guarantee
without the prior written consent of the Administrative Agent and the requisite
Lenders pursuant to the Credit Agreement (and any purported such assignment or
transfer by a Guarantor without such consent of the Administrative Agent and
such requisite Lenders shall be null and void).

22. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

23. Submission To Jurisdiction; Waivers. Each Guarantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Guarantor at its
address set forth under its signature below or at such other address of which
the Administrative Agent shall have been notified pursuant hereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

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24. Acknowledgments. Each Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Guarantee and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any Secured Party has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Guarantee or any of the other Loan Documents to which it is a party, and
the relationship between the Loan Parties, on one hand, and the Administrative
Agent and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among any of the Loan Parties and the Secured Parties.

25. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

26. Counterparts. This Guarantee may be executed by one or more of the parties
to this Guarantee on any number of separate counterparts (including by facsimile
transmission or other electronic transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Guarantee by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart hereof. A set of the copies of this Guarantee
signed by all the parties shall be lodged with the U.S. Borrower and the
Administrative Agent.

27. Language. The parties hereto confirm that it is their wish that this
Guarantee, as well as any other documents relating to this Guarantee, including
notices, schedules and authorizations, have been and shall be drawn up in the
English language only. Les signataires confirment leur volonté que la présente
convention, de même que tous les documents s’y rattachant, y compris tout avis,
annexe et autorisation, soient rédigés en anglais seulement.

28. Parallel Debt.

(i) Each Dutch Loan Party hereby irrevocably and unconditionally undertakes to
pay to the Administrative Agent an amount equal to the aggregate amount due by
such Dutch Loan Party in respect of the Corresponding Obligations as they may
exist from time to time. The payment undertaking of each of the Dutch Loan
Parties under this Section 28 (Parallel Debt) is to be referred to as its
“Parallel Debt”.

(ii) The Parallel Debt of each of the Dutch Loan Parties will be payable in the
currency or currencies of its Corresponding Obligations and will become due and
payable as and when and to the extent one or more of its Corresponding
Obligations become due and payable. An Event of

--------------------------------------------------------------------------------

Default in respect of the Corresponding Obligations shall constitute a default
(verzuim) within the meaning of Section 3:248 of the Dutch Civil Code with
respect to the Parallel Debts without any notice being required.

(iii) Each of the parties to this Agreement hereby acknowledges that:

8. each Parallel Debt constitutes an undertaking, obligation and liability to
the Administrative Agent which is separate and independent from, and without
prejudice to, the Corresponding Obligations of the relevant Dutch Loan Party;
and

9. each Parallel Debt represents the Administrative Agent’s own separate and
independent claim to receive payment of the Parallel Debt from the relevant
Dutch Loan Party,

it being understood, in each case, that pursuant to this Section 28(c), the
amount which may become payable by each of the Dutch Loan Parties as its
Parallel Debt shall never exceed the total of the amounts which are payable
under or in connection with its Corresponding Obligations.

(iv) The Administrative Agent hereby confirms and accepts that to the extent the
Administrative Agent irrevocably receives any amount in payment of a Parallel
Debt, the Administrative Agent shall distribute that amount among the
Administrative Agent and the Lenders that are creditors of the relevant
Corresponding Obligations in accordance with the Agreement. The Administrative
Agent and each Lender hereby agrees and confirms that upon irrevocable receipt
by the Administrative Agent of any amount in payment of a Parallel Debt (a
“Received Amount”), the Corresponding Obligations of the relevant Dutch Loan
Party toward the Administrative Agent and the Lenders shall be reduced, if
necessary pro rata in respect of the Administrative Agent and each Lender
individually, by amounts totaling an amount (a “Deductible Amount”) equal to the
Received Amount in the manner as if the Deductible Amount were received by the
Administrative Agent and the Lenders as a payment of the Corresponding
Obligations owed by the relevant Dutch Loan Party on the date of receipt by the
Administrative Agent of the Received Amount.

(v) For the purpose of this Section 28, the Administrative Agent acts in its own
name and on behalf of itself and not as agent, representative or trustee of any
other Lender.

29. Kildair Subsidiaries. Notwithstanding anything to the contrary contained in
this Guarantee, neither Wintergreen Transport Corporation ULC nor Transit P.M.
ULC shall have any obligations under this Guarantee with respect to the
Obligations or the Guaranteed Obligations (including under Sections 2, 3 or 11
of this Guarantee) prior to the Kildair Subsidiary Election.

30. Amendment and Restatement. This Guarantee amends and restates the Guarantee
(as defined under the Existing Credit Agreement).

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as a Guarantor By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC, as a Guarantor By:  

 

  Name:   Title: KILDAIR SERVICE LTD., as a Guarantor By:  

 

  Name:   Title: SPRAGUE RESOURCES LP, as a Guarantor By:  

 

  Name:   Title: SPRAGUE ENERGY SOLUTIONS INC., as a Guarantor By:  

 

  Name:   Title:

 

Signature Page to Guarantee

--------------------------------------------------------------------------------

SPRAGUE TERMINAL SERVICES LLC, as a Guarantor By:  

 

  Name:   Title: SPRAGUE RESOURCES FINANCE CORP, as a Guarantor By:  

 

  Name:   Title: SPRAGUE RESOURCES COÖPERATIEF U.A., as a Guarantor By:  

 

  Name:   Title: SPRAGUE CO-OP MEMBER LLC, as a Guarantor By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC, as a Guarantor By:  

 

  Name:   Title:

 

Signature Page to Guarantee

--------------------------------------------------------------------------------

WINTERGREEN TRANSPORT CORPORATION ULC, as a Guarantor By:  

 

  Name:   Title: TRANSIT P.M. ULC, as a Guarantor By:  

 

  Name:   Title:

 

Signature Page to Guarantee

--------------------------------------------------------------------------------

EXHIBIT A

To Guarantee

ADDENDUM TO GUARANTEE

Each of the undersigned,                     , a              [corporation],
(each, a “New Guarantor”, together the “New Guarantors”):

(i) agrees to all of the provisions of the Guarantee, dated as of December 9,
2014 (as amended, supplemented or otherwise modified prior to the date hereof,
the “Guarantee”), made by signatories thereto as Guarantors (collectively, the
“Guarantors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity, the “Administrative Agent”), pursuant to the Amended and
Restated Credit Agreement, dated as of December 9, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among SPRAGUE OPERATING RESOURCES LLC, as the U.S. Borrower, SPRAGUE RESOURCES
ULC, KILDAIR SERVICE LTD., the several banks and other financial institutions or
entities from time to time parties thereto, the Administrative Agent, and the
other agents party thereto; and

(ii) effective on the date hereof becomes a party to the Guarantee, as a
Guarantor, with the same effect as if each of the undersigned were an original
signatory to the Guarantee (with the representations and warranties contained
therein being deemed to be made by each New Guarantor on and as of the date
hereof).

Terms defined in the Guarantee and the Credit Agreement shall have such defined
meanings when used herein. This Addendum to Guarantee and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

--------------------------------------------------------------------------------

By its acceptance hereof, each of the undersigned Guarantors hereby ratifies and
confirms its obligations under the Guarantee, as supplemented hereby.

 

[NAME OF NEW GUARANTOR] By:  

 

  Name:   Title:

 

Date: ACCEPTED AND AGREED: [                                ]7 By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

 

7  To be signed by all Loan Parties.

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Exhibit O

to Credit Agreement

FORM OF COMPLIANCE CERTIFICATE

                 , 201  

This Compliance Certificate is delivered pursuant to Section 7.2(b) of the
Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC, Kildair Service Ltd. and
Sprague Resources ULC, as Borrowers, the Lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other
agents parties thereto. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

The undersigned, solely in his/her capacity as a Responsible Person of the U.S.
Borrower and not in his/her individual capacity, hereby certifies to the
Administrative Agent and the Lenders as follows:

1. I am a Responsible Person of the U.S. Borrower.

2. I have reviewed and am familiar with the contents of this Certificate.

3. I have reviewed the terms of the Credit Agreement and the Loan Documents and
have made or caused to be made under my supervision, a review in reasonable
detail of the transactions and conditions of each Loan Party during the
accounting period covered by the financial statements attached hereto as
Attachment 1 (the “Financial Statements”). Based on such review, I have no
knowledge of the existence, as of the date of this Certificate, of any condition
or event which constitutes a Default or Event of Default, in each case except as
disclosed on Schedule 1 hereto.

4. The Loan Parties are in material compliance with the Risk Management Policy.

5. Attached hereto as Attachment 2 are the computations showing compliance with
the financial covenants set forth in Section 8.1(a) [,(b), (c) and (d)]8 and
Section 8.7 of the Credit Agreement

6. The following information is true and correct in all material respects as of
the date hereof.

[SIGNATURE PAGE FOLLOWS]

 

8  Include in Compliance Certificates delivered for a period that ends on a date
which is also the end date of a fiscal quarter.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of the date set forth below.

Dated:                  , 201  

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower By:  

 

  Name:   Title:

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Attachment 1

Financial Statements

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Attachment 2

Covenant Calculations

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Exhibit P

to Credit Agreement

FORM OF INCREASE AND NEW LENDER AGREEMENT

This INCREASE AND NEW LENDER AGREEMENT, dated as of                  , 201  
(this “Agreement”), prepared pursuant to Section 4.1(b) of the Amended and
Restated Credit Agreement, dated as of December 9, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC (the “U.S. Borrower”), Kildair Service
Ltd. and Sprague Resources ULC, as Borrowers, the Lenders from time to time
parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the
other agents parties thereto.

RECITALS

WHEREAS, pursuant to Section 4.1 of the Credit Agreement, the undersigned
Lenders party to the Credit Agreement (the “Increasing Lenders”) have agreed to
increase their [Dollar Working Capital Facility] [Multicurrency Working Capital
Facility] [Acquisition Facility] Commitments as governed by the Credit Agreement
on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, pursuant to Section 4.1 of the Credit Agreement, the undersigned
Persons not party to the Credit Agreement (the “New Lenders”) have agreed to
make [Dollar Working Capital Facility] [Multicurrency Working Capital Facility]
[Acquisition Facility] Commitments under the Credit Agreement on the terms and
subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
U.S. Borrower, the Administrative Agent, the Increasing Lenders and the New
Lenders hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.

2. Increase Agreement and New Lender Agreement.

(a) Each Increasing Lender party to this Agreement hereby agrees to increase its
respective [Dollar Working Capital Facility] [Multicurrency Working Capital
Facility] [Acquisition Facility] Commitment, in the amount set forth on
Schedule 1.0, such increase to be effective as of                  , 201   (the
“Increase Effective Date”).

(b) Each New Lender party to this Agreement hereby agrees to make [Dollar
Working Capital Facility] [Multicurrency Working Capital Facility] [Acquisition
Facility] Loans to the Borrower and participate in [Dollar Working Capital
Facility] [Multicurrency Working Capital Facility] [Acquisition Facility]
Letters of Credit from time-to-time in an aggregate principal amount at any one
time outstanding not to exceed its respective [Dollar Working Capital Facility]
[Multicurrency Working Capital Facility] [Acquisition Facility] Commitment (as
set forth on Schedule 1.0), such agreement to be effective as of the Increase
Effective Date. From and after the Increase Effective Date, each New Lender
shall be a party to the Credit Agreement and, to the extent provided in this
Agreement, have the rights and obligations of a [Dollar Working Capital
Facility] [Multicurrency Working Capital Facility] [Acquisition Facility] Lender
under the Credit Agreement and under the other Loan Documents and shall be bound
by the provisions thereof.

--------------------------------------------------------------------------------

3. Maximum Credit Limit; Increasing Lenders; New Lenders. Effective upon the
Increase Effective Date, the [Dollar Working Capital Facility] [Multicurrency
Working Capital Facility] [Acquisition Facility] Commitment for each Increasing
Lender and each New Lender shall be as set forth on Schedule 1.01.

4. Conditions Precedent. This Agreement shall become effective upon the
satisfaction of the following conditions precedent:

(a) Increase Documents. The Administrative Agent shall have received (each of
the following documents being referred to herein as an “Increase Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
U.S. Borrower, the Administrative Agent and each New Lender and Increasing
Lender;

(ii) for the account of each such New Lender and Increasing Lender requesting
the same, a Note of the Borrowers conforming to the requirements of the Credit
Agreement, and reflecting the [Dollar Working Capital Facility] [Multicurrency
Working Capital Facility] [Acquisition Facility] Commitment of such Lender after
giving effect to this Agreement, executed by a duly authorized officer of each
Borrower;

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

(iv) a reaffirmation of each Security Document, executed and delivered by a duly
authorized officer of each party thereto; and

(v) the Administrative Agent shall have received in respect of each Mortgaged
Property (A) such amendments to the Mortgage and Security Agreements as are in
form and substance reasonably satisfactory to the Administrative Agent, in each
case, executed and delivered by a duly authorized officer of the relevant Loan
Party to the extent necessary to reflect the increase in the Dollar Working
Capital Facility, Multicurrency Working Capital Facility or the Acquisition
Facility, as applicable, (it being understood that, unless requested by the
Administrative Agent, no amendment shall increase the amount secured thereby if
the same will result in the payment of additional mortgage recording tax),
(B) with respect to each such Mortgage and Security Agreement, a date-down
endorsement to the title insurance policy covering such Mortgaged Property (or
if a date-down is not available in a particular jurisdiction, a new title
insurance policy in the same insured amount as originally issued or marked up
unconditional title commitment, pro forma policy or binder for such insurance)
in each case in form and substance not materially less favorable to the
Administrative Agent or the Lenders as such title policies or marked up
unconditional title commitments, pro forma policies or binders delivered on or
prior to the Restatement Effective Date, (C) evidence satisfactory to it that
all premiums in respect of the related date-down endorsement or title policy (or
policies) have been paid, and (D) to the extent required by applicable Law a
standard flood hazard determination for each Mortgaged Property located in the
United States, and with respect to any Mortgaged Property located in the United
States that is located in a special flood hazard area and in respect of
Mortgaged Property located in Canada in a flood plain, evidence of flood
insurance in form and substance reasonably satisfactory to the Administrative
Agent.

 

1  The Increase Amount shall be in a minimum amount of $5,000,000. Such amount
shall not cause the aggregate respective facility commitment to exceed (1) for
the Dollar Working Capital Facility Commitment, $1,200,000,000, (2) for the
Multicurrency Working Capital Facility Commitment, $320,000,000 or (3) for the
Acquisition Facility Commitment, $600,000,000, in each case in the aggregate
during the Increase Period.

--------------------------------------------------------------------------------

(b) Increasing Lenders; New Lenders. The Administrative Agent shall have
received from each Increasing Lender and each New Lender the amounts required to
be paid by such Increasing Lenders and New Lenders pursuant to Section 4.1 of
the Credit Agreement.

(c) Secretary’s Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated as of the Increase Effective Date,
substantially in the form of Exhibit E to the Credit Agreement, with appropriate
insertions and attachments (provided that, any such Person may certify on such
certificate that its Governing Documents have not changed since the Restatement
Effective Date in lieu of attaching such Governing Documents to such
certificate), reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Person, or, if applicable, of the
general partner or managing member or members of such Person, on behalf of such
Person.

(d) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Board of Directors (or
analogous body) of each Loan Party authorizing as applicable to such Person
(i) the execution, delivery and performance of this Agreement and the Notes
delivered on the Increase Effective Date and the other Increase Documents, and
the reaffirmations of the applicable Loan Documents to which it is a party, and
(ii) the reaffirmation by it of the Liens created pursuant to the Security
Documents, certified by the Secretary or an Assistant Secretary of such Person,
or, if applicable, of the general partner or managing member or members of such
Person as of the Increase Effective Date, which certification shall be included
in the certificate delivered in respect of such Person pursuant to Section 4(c),
shall be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.

(e) Incumbency Certificates. To the extent the following have been amended,
supplemented or otherwise modified since the Restatement Effective Date, the
Administrative Agent shall have received a certificate of each Loan Party, dated
the Increase Effective Date, as to the incumbency and signature of the officers
of such Person or, if applicable, of the general partner or managing member or
members of such Person, executing any Increase Document, or having authorization
to execute any certificate, notice or other submission required to be delivered
to the Administrative Agent or a Lender pursuant to this Agreement, which
certificate shall be included in the certificate delivered in respect of such
Person pursuant to Section 4(c) and shall be reasonably satisfactory in form and
substance to the Administrative Agent.

(f) Organizational Documents. To the extent the following have been amended,
supplemented or otherwise modified since the Restatement Effective Date, the
Administrative Agent shall have received true and complete copies of the
Governing Documents of each Loan Party, certified as of the date hereof as
complete and correct copies thereof by the Secretary or an Assistant Secretary
of such Person, or, if applicable, of the general partner or managing member or
members of such Person, on behalf of such Person, which certification shall be
included in the certificate delivered in respect of such Person pursuant to
Section 4(c) and shall be in form and substance reasonably satisfactory to the
Administrative Agent.

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

--------------------------------------------------------------------------------

(h) Consents, Licenses and Approvals. The Administrative Agent shall have
received a certificate of a Responsible Person of each Borrower either
(i) attaching copies of all consents, authorizations and filings referred to in
Section 5.4 of the Credit Agreement, and stating that such consents,
authorizations and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance reasonably satisfactory
to the Administrative Agent or (ii) stating that no such consents,
authorizations or filings are so required.

(i) Legal Opinions. The Administrative Agent shall have received the executed
legal opinion of counsel to the Borrowers, in form and substance reasonably
satisfactory to the Administrative Agent. The legal opinion shall cover such
matters incident to the transactions contemplated by this Agreement as the
Administrative Agent, the Increasing Lenders and the New Lenders may reasonably
require in accordance with customary opinion practice.

(j) Other Conditions. Each of the other conditions to the Increase Effective
Date provided in Section 4.1(b) of the Credit Agreement shall have been
satisfied.

5. Representations and Warranties. To induce the New Lenders and Increasing
Lenders to enter into this Agreement, the U.S. Borrower hereby represents and
warrants to the undersigned Lenders that, after giving effect to the increase of
the [Dollar Working Capital Facility] [Multicurrency Working Capital Facility]
[Acquisition Facility] Commitment and the other modifications to the Credit
Agreement provided for herein, the representations and warranties contained in
the Credit Agreement and the other Loan Documents will be true and correct in
all material respects as of the date hereof, except for those representations
and warranties that by their terms were made as of a specified date which shall
be true and correct on and as of such date, and that no Default or Event of
Default has occurred and is continuing.

6. Availability Certification. The undersigned hereby, solely in his capacity as
a Responsible Person of the U.S. Borrower and not in his individual capacity,
certifies that he is a Responsible Person of the U.S. Borrower and further
certifies as follows that, after giving effect to any extension of credit being
made on the Increase Effective Date:

 

  (a) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Aggregate Borrowing Base Amount as of such date;

 

  (b) the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value;

 

  (c) the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments;

 

  (d) the Total Dollar Working Capital Facility Extensions of Credit shall not
exceed the aggregate Dollar Working Capital Facility Commitments;

 

  (e) the Total Multicurrency Working Capital Facility Extensions of Credit
shall not exceed the aggregate Multicurrency Working Capital Facility
Commitments;

--------------------------------------------------------------------------------

  (f) such extension of credit shall not result in any Applicable Sub-Limit
(with each Applicable Sub-Limit calculated including the Dollar Equivalent of
any included Extensions of Credit denominated in Canadian Dollars) being
exceeded, and

 

  (g) with respect to any such extension of credit under the Acquisition
Facility, the U.S. Borrower shall be in compliance with the covenants set forth
in Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

The foregoing certifications and the representations contained in Section 6
hereof shall collectively be deemed to constitute the Availability Certificate
required to be delivered in connection with this Agreement pursuant to
Section 4.1(b)(iii)(E) of the Credit Agreement, and such requirements shall be
deemed satisfied upon receipt of this Agreement by the Administrative Agent.

7. Disclaimer. Each New Lender and each Increasing Lender acknowledges and
agrees that no Lender party to the Credit Agreement (i) has made any
representation or warranty and shall have no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto; or (ii) has made any representation or warranty and shall have
no responsibility with respect to the financial condition of any Borrower or any
other obligor or the performance or observance by any Borrower or any obligor of
any of their respective obligations under the Credit Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto. Each Increasing Lender and each New Lender represents and warrants that
it is legally authorized to enter into this Agreement, and each New Lender
(i) confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements most recently delivered pursuant to
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (ii) agrees that it will, independently and without reliance upon the
Lenders, the Administrative Agent or any other Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iii) appoints and authorizes each Agent to take such action
as agent on its behalf and to exercise such powers and discretion under the
Credit Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to such Agent by the terms
thereof, together with such powers as are incidental thereto; and (iv) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.

8. No Other Amendments or Waivers. Except as expressly amended or waived hereby,
the Credit Agreement, the Notes and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms, without any
waiver, amendment or modification of any provision thereof.

9. Counterparts. This Agreement may be executed by one or more of the parties
hereto on any number of separate counterparts (including by facsimile
transmission or other electronic transmission) and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed page of this Agreement by facsimile transmission or
other electronic transmission shall be effective as delivery of a manually
executed counterpart hereof.

--------------------------------------------------------------------------------

10. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURE PAGES FOLLOW]

--------------------------------------------------------------------------------

Execution Version

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

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

LENDERS [NAME OF LENDER] By:  

 

  Name:   Title:

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule 1.0

to Increase and New Lender Agreement

INCREASING LENDERS

 

Lender

  

Commitment

  

Applicable Lending Office

                                                           

NEW LENDERS

 

Lender

  

Commitment

  

Applicable Lending Office

                                                           

--------------------------------------------------------------------------------

Exhibit Q

to Credit Agreement

FORM OF PERFECTION CERTIFICATE

December 9, 2014

Reference is made to (i) that certain Amended and Restated Credit Agreement
dated as of December 9, 2014 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Sprague Operating
Resources LLC (the “U.S. Borrower”), Sprague Resources ULC (“Sprague Resources”)
and Kildair Service Ltd. (“Kildair” and, together with Sprague Resources, the
“Canadian Borrowers” and, together with the U.S. Borrower, the “Borrowers”) as
Borrowers, the Lenders from time to time party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “U.S. Agent”), JPMorgan
Chase Bank, N.A., Toronto Branch, as Canadian Agent (in such capacity, the
“Canadian Agent” and together with the U.S. Agent, the “Administrative Agents”)
and the other agents party thereto, (ii) that certain Amended and Restated
Security Agreement, dated as of December 9, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “U.S. Security
Agreement”), among the grantors party thereto (the “U.S. Grantors”) and the U.S.
Agent, (iii) that certain Canadian Security Agreement, dated as of December 9,
2014 (as amended, restated, supplemented or otherwise modified from time to
time, the “Canadian Security Agreement”), among the grantors party thereto (the
“Canadian Grantors”) and the U.S. Agent, (iv) that certain Dutch Security
Agreement, dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Dutch Security Agreement” and
together with the U.S. Security Agreement and Canadian Security Agreement, the
“Security Agreements”), among the grantors party thereto (the “Dutch Grantors”
and together with the U.S. Grantors and Canadian Grantors, the “Grantors”) and
the U.S. Agent, (v) that certain Amended and Restated Pledge Agreement, dated as
of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “U.S. Pledge Agreement”), among the pledgors parties
thereto (the “U.S. Pledgors”) and the U.S. Agent, (vi) that certain Canadian
Pledge Agreement, dated as of December 9, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Canadian Pledge
Agreement”), among the pledgors parties thereto (the “Canadian Pledgors”) and
the U.S. Agent and (vii) that certain Dutch Pledge Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Dutch Pledge Agreement” and together with the U.S. Pledge
Agreement and Canadian Pledge Agreement, the “Pledge Agreements”), among the
pledgors parties thereto (the “Dutch Pledgors” and together the U.S. Pledgors
and Canadian Pledgors, the “Pledgors”) and the U.S. Agent.

Capitalized terms used but not defined herein have the meanings assigned in the
Credit Agreement, the applicable Security Agreement and the applicable Pledge
Agreement.

--------------------------------------------------------------------------------

As of the date hereof, the undersigned hereby certify to the Administrative
Agents as follows:

1. Names; Jurisdiction; Current Locations.

(a) The full and exact legal name of each Grantor, as such name appears in its
respective certificate or articles of incorporation, limited liability
membership agreement or similar organizational documents, in each case as
amended to date, is set forth in Schedule 1(A) of the Information Certificate
attached hereto (the “Information Certificate”). Also set forth in Section I(A)
is the type of organization, the jurisdiction of organization (or formation, as
applicable), and the organizational identification number of each Grantor.

(b) The chief executive office address and the preferred mailing address (if
different than chief executive office or reside) of each Grantor is set forth in
Schedule 1(B) of the Information Certificate.

(c) All trade names or assumed names currently used by any Grantor or by which
any Grantor is known or is transacting any business are set forth in Schedule
1(C) of the Information Certificate.

(d) Except as set forth in Schedule 1(D) of the Information Certificate, no
Grantor has changed its name, jurisdiction of organization or its corporate
structure in any way within the past five (5) years. Changes in identity or
corporate structure would include mergers, consolidations, changes in corporate
form and changes in jurisdiction of organization.

(e) Except as set forth in Schedule 1(E) of the Information Certificate, no
Grantor has changed its chief executive office within the past five (5) years.

(f) Except as set forth in Schedule 1(F) of the Information Certificate, no
Grantor has acquired the equity interests of another entity (other than another
Grantor) or substantially all the assets of another entity (other than another
Grantor) within the past five (5) years.

(g) Exhibit A to the Information Certificate is a true and correct chart showing
the ownership relationship of the Borrowers and all of their Subsidiaries and
Affiliates.

2. Tangible Personal Property; Real Property.

(a) Set forth in Schedule 2(A) of the Information Certificate are all the
locations where any Grantor currently maintains or has maintained any material
amount of its tangible personal property (including but not limited to Goods,
Inventory and Equipment) whether or not in the possession of such Grantor within
the past five (5) years.

(b) Set forth in Schedule 2(B) of the Information Certificate are all the
locations where any Grantor currently maintains or has maintained any material
books or records of such Grantor (whether or not in the possession of such
Grantor and including, without limitation, all books and records pertaining to
accounts receivable, inventory, contract rights and other assets) within the
past five (5) years.

(c) Set forth in Schedule 2(C) to the Information Certificate is:

(i) each street address and county and state or similar jurisdiction where each
Grantor owns real property, the nature and current use of such property and
whether such property includes fixtures;

--------------------------------------------------------------------------------

(ii) each street address and county and state or similar jurisdiction where each
Grantor leases real property, the name and current mailing address of the lessor
of such property, the nature and current use of such property, the scheduled
date of expiration of the lease with respect to such property and whether such
property includes fixtures; and

(iii) the name and current mailing address of each lessee or sublessee with
respect to all or any portion of any real property described in paragraphs
(i) or (ii) above, a description of the leased property, the scheduled date of
expiration of the lease with respect to such real property and the monthly
rental payments receivable by any Grantor with respect to such property.

(d) Except as set forth in Schedule 2(D) of the Information Certificate, no
persons (including warehousemen and bailees) other than another Grantor have
possession of any material amount of assets of any Grantor.

3. Commercial Tort Claims. Set forth in Schedule 3 of the Information
Certificate is a true and correct list of all commercial tort claims held by any
Grantor, including a brief description thereof.

4. Stock Ownership and Other Equity Interests. Set forth in Schedule 4 of the
Information Certificate is a true and correct list, for each Grantor, of all the
issued and outstanding stock, partnership interests, limited liability company
membership interests or other equity interests owned, beneficially or of record,
by such Grantor, specifying (i) the issuer, (ii) the type of organization of the
issuer, (iii) the number of shares owned, (iv) the total number of shares
outstanding, (v) the percentage of interested pledged pursuant to the Pledge
Agreement, (vi) the certificate number (if any) and (vii) the par value of such
equity interests.

5. Securities Accounts and Deposit Accounts.

(a) Set forth in Schedule 5(a) of the Information Certificate is a true and
correct list of all securities accounts in which each Grantor customarily
maintains securities or other assets, including the name and address of the
intermediary institution and the type of account.

(b) Set forth in Schedule 5(b) of the Information Certificate is a true and
correct list of all depository accounts maintained by each Grantor, including
the name and address of the depository institution and the type of account.

6. Debt Instruments. Set forth in Schedule 6 of the Information Certificate is a
true and correct list, for each Grantor, of all instruments (including, without
limitation, promissory notes) owed to any Grantor in a principal amount that is
greater than $1,000,000, specifying the issuer, the principal amount and the
maturity date, of the instrument and whether such instrument is secured or
unsecured.

--------------------------------------------------------------------------------

7. Intellectual Property. Set forth in Schedule 7 of the Information Certificate
is a true and correct list, with respect to each Grantor, of (i) all copyrights
and copyright applications, (ii) all patents and patent applications, (iii) all
trademark registration and applications and (iv) all other material intellectual
property owned or used, or hereafter adopted, held, licensed or used, by such
Grantor, including to the extent available, the filing date, status and the
registration, application or publication number, as applicable.

[The remainder of this page has been intentionally left blank]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
the first date written above.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, Chief
Compliance Officer and Secretary SPRAGUE ENERGY SOLUTIONS INC. By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel and Secretary
SPRAGUE TERMINAL SERVICES LLC By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, Chief
Compliance Officer and Secretary SPRAGUE CONNECTICUT PROPERTIES LLC By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, and Secretary
SPRAGUE RESOURCES LP By:   Sprague Resources GP LLC, its general partner By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, Chief
Compliance Officer and Secretary

--------------------------------------------------------------------------------

SPRAGUE CO-OP MEMBER LLC By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, Chief
Compliance Officer and Secretary SPRAGUE RESOURCES FINANCE CORP By:  

 

  Name:   Paul A. Scoff   Title: Vice President, General Counsel, Chief
Compliance Officer and Secretary SPRAGUE RESOURCES COÖPERATIEF U.A. By:  

 

  Name:     Title:   SPRAGUE RESOURCES ULC By:  

 

  Name:   Jacques Ferraro   Title: Vice President, Finance and Administration
KILDAIR SERVICE LTD. By:  

 

  Name:   Jacques Ferraro   Title: Vice President, Finance and Administration

--------------------------------------------------------------------------------

WINTERGREEN TRANSPORT CORPORATION ULC By:  

 

  Name:   Jacques Ferraro   Title: Vice President, Finance and Administration
TRANSIT P.M. ULC By:  

 

  Name:   Jacques Ferraro   Title: Vice President, Finance and Administration

--------------------------------------------------------------------------------

  SCHEDULE 1: CURRENT INFORMATION

A. Legal Names, Organizations, Jurisdictions of Organization and Organizational
Identification Numbers.

B. Chief Executive Offices and Mailing Addresses.

C. Trade Names/Assumed Names.

D. Changes in Names, Jurisdiction of Organization or Corporate Structure.

E. Prior Addresses.

F. Acquisitions of Equity Interests or Assets.

G. Corporate Ownership and Organizational Structure.

Attached as Exhibit A is a true and correct chart showing the ownership
relationship of the Borrowers and all of their Subsidiaries and Affiliates.

--------------------------------------------------------------------------------

  SCHEDULE 2: TANGIBLE PERSONAL PROPERTY; REAL PROPERTY

A. Tangible Personal Property. See Annex A attached hereto.

B. Books and Records.

C. Real Property. Please see Annex B attached hereto.

D. Warehousemen and Bailees. Please see Annex C attached hereto.

--------------------------------------------------------------------------------

SCHEDULE 3: COMMERCIAL TORT CLAIMS

--------------------------------------------------------------------------------

  SCHEDULE 4: INVESTMENT RELATED PROPERTY

--------------------------------------------------------------------------------

SCHEDULE 5. SECURITIES ACCOUNTS AND DEPOSIT ACCOUNTS.

A. Securities Accounts. Please see Annex D attached hereto.

B. Deposit Accounts. Please see Annex D attached hereto.

--------------------------------------------------------------------------------

SCHEDULE 6. DEBT INSTRUMENTS.

--------------------------------------------------------------------------------

SCHEDULE 7: INTELLECTUAL PROPERTY - See Annex E.

--------------------------------------------------------------------------------

Exhibit A

[See Attached Organizational Chart]

--------------------------------------------------------------------------------

Annex A

Personal Property

--------------------------------------------------------------------------------

Annex B

Real Property

 

A. Owned Real Property

 

B. Leased Real Property

 

C. Lessees and Sublessees

--------------------------------------------------------------------------------

Annex C

Third Parties in Possession of Collateral

--------------------------------------------------------------------------------

Annex D

Deposit Accounts, Commodity Accounts, Securities Accounts

--------------------------------------------------------------------------------

Annex E

Intellectual Property

--------------------------------------------------------------------------------

Exhibit R

to Credit Agreement

FORM OF MARKED-TO-MARKET REPORT

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

The Relationship Managers at each Lender

 

  Re: Marked-to-Market Report

Reference is made to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC
(the “U.S. Borrower”), Kildair Service Ltd. and Sprague Resources ULC, as
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto. Capitalized
terms used herein but not defined herein shall have the meanings provided in the
Credit Agreement. This Marked-to-Market Report has been prepared pursuant to
Section 7.2(d) of the Credit Agreement and the undersigned, solely in his/her
capacity as a Responsible Person of the U.S. Borrower and not in his/her
individual capacity, hereby certifies on behalf of the U.S. Borrower to the
Administrative Agent and the Lenders, as follows:

1. attached hereto as Schedule A is a report identifying (i) all positions for
all future time periods, (ii) all instruments that create either an obligation
to purchase or sell Product or that generate price exposure and (iii) the
unrealized marked-to-market margin for the position considered; and

2. the information contained herein and scheduled hereto is true and correct in
all material respects as of the date hereof.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Marked-to-Market Report as
of the date set forth below.

Dated:                  , 201    

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Schedule A

to Marked-to-Market Report

[To be provided]

--------------------------------------------------------------------------------

Exhibit S

to Credit Agreement

FORM OF U.S. BORROWER’S CERTIFICATE

Pursuant to Sections 6.1(h), (i) and (m) of the Amended and Restated Credit
Agreement dated as of December 9, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; terms defined
therein being used herein as therein defined), among Sprague Operating Resources
LLC (“U.S. Borrower”), Kildair Service Ltd. and Sprague Resources ULC, as
Borrowers, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”),
and the other agents parties thereto, the undersigned, solely in his/her
capacity as a Responsible Person of the U.S. Borrower and not in his/her
individual capacity, hereby certifies as follows:

 

  (i) the representations and warranties contained in Section 5 of the Credit
Agreement and in each of the other Loan Documents are true and correct in all
material respects on and as of the date hereof, as though made on and as of such
date;

 

  (ii) no Default or Event of Default exists as of the date hereof;

 

  (iii) there has not occurred since December 31, 2013, (x) a Material Adverse
Effect or (y) a development or an event that has resulted in a material adverse
change in the operations, business, assets, properties or condition (financial
or other condition) of Kildair and its Subsidiaries taken as a whole;

 

  (iv) attached as Exhibit A hereto is a true and correct copy of the Risk
Management Policy in full force and effect as of the Restatement Effective Date;
and

 

  (v) except for the filing of Uniform Commercial Code financing statements and
PPSA financing statements and financing change statements, the publication of
registration forms at the Register of Personal and Movable Real Rights (Québec),
the publication of hypothecs at the applicable registration divisions of the
Québec Land Registry Office and equivalent filings for foreign jurisdictions and
the taking of applicable actions referred to in Section 5.16 of the Credit
Agreement, [attached as Exhibit B hereto is a list of all consents,
authorizations and filings referred to in Section 5.4 of the Credit Agreement,
all of which are in full force and effect as of the date hereof.][no consents,
licenses, or approvals referred to in Section 5.4 of the Credit Agreement are
required.]

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Borrower’s Certificate as
of the date and year first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit A

to Borrower’s Certificate

RISK MANAGEMENT POLICY

[To be provided]

--------------------------------------------------------------------------------

Exhibit B

to Borrower’s Certificate

CONSENTS, AUTHORIZATIONS AND FILINGS

[To be provided]

--------------------------------------------------------------------------------

Exhibit T

to Credit Agreement

FORM OF HEDGING AGREEMENT QUALIFICATION NOTICE

                 , 201    

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

 

  Re: Hedging Agreement Qualification Notification

Reference is made to the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC,
Kildair Service Ltd. and Sprague Resources ULC, as Borrowers, the Lenders from
time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. Capitalized terms used herein but
not defined herein shall have the meanings provided in the Credit Agreement.

(a) This Hedging Agreement Qualification Notification is being delivered
pursuant to the terms of the Credit Agreement, and the undersigned (the “Hedging
Counterparty”) hereby represents to the Administrative Agent that:

 

  1. It is a counterparty to a [Financial Hedging][Commodity OTC] Agreement with
[                    ], dated as of                  , 20    (the “Hedging
Agreement”).

 

  2. At the time the Hedging Agreement was entered into, the Hedging
Counterparty was a Lender under the Credit Agreement or if the Hedging Agreement
was entered into prior to the Restatement Effective Date, the Hedging
Counterparty was a lender under the Existing Credit Agreement or the Previous
Credit Agreement at the time the Hedging Agreement was entered into and was a
Lender on the Restatement Effective Date.

 

  3. It is not a Defaulting Lender under the Credit Agreement.

 

  4. The aggregate unrealized amounts due to it under the Hedging Agreement as
of the date hereof is:

$        .

(b) The Hedging Counterparty hereby acknowledges and agrees to the terms of the
Loan Documents, including, without limitation, Section 10 of the Credit
Agreement and Sections 8 and 10 of the U.S. Security Agreement and Sections 8
and 10 of the Canadian Security Agreement.

--------------------------------------------------------------------------------

The Hedging Counterparty hereby further acknowledges and agrees that:

This Hedging Agreement Qualification Notification shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this Hedging
Agreement Qualification Notification by telecopy or electronic transmission (in
.pdf format) shall be effective as delivery of a manually executed counterpart
of this Hedging Agreement Qualification Notification. THIS HEDGING AGREEMENT
QUALIFICATION NOTIFICATION AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Very truly yours, [QUALIFIED COUNTERPARTY] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit U

to Credit Agreement

FORM OF JOINDER AGREEMENT10

JOINDER AGREEMENT, dated as of                  , 20    (this “Agreement”),
among the U.S. Borrower, the Canadian Borrower, the MLP, the Borrowers’ Agent,
the New Borrower and the Administrative Agent (as each such term is defined
below).

RECITALS

Pursuant to Section 11.19 of that certain Amended and Restated Credit Agreement,
dated as of December 9, 2014 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Sprague Operating
Resources LLC (the “U.S. Borrower”), Kildair Service Ltd. and Sprague Resources
ULC, the Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent, and the other agents parties thereto, the undersigned
Person not party to the Credit Agreement (the “New Borrower”) is a Subsidiary of
the U.S. Borrower and has agreed to become party to the Credit Agreement on the
terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
U.S. Borrower, the Canadian Borrower, the New Borrower and the Administrative
Agent hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.

2. Joinder.

(a) The New Borrower hereby agrees to be bound by all of the provisions of the
Credit Agreement, and effective on the date hereof becomes a party to the Credit
Agreement as a Borrower (the “Joinder Effective Date”) with the same effect as
if it were an original signatory to the Credit Agreement. [Subject to
Section 11.24 of the Credit Agreement,] All obligations of the Borrowers under
the Credit Agreement shall be joint and several. All references to the
“Borrower” in the Credit Agreement shall be deemed to refer to each of the U.S.
Borrower, the Canadian Borrower and the New Borrower or the New Borrower, in
each case as necessary or advisable to permit the New Borrower to borrow Loans
and request Letters of Credit under the Credit Agreement and as otherwise
required or advisable in connection therewith. From and after the Joinder
Effective Date, the New Borrower shall have the rights and obligations of a
Borrower under the Credit Agreement and under the other Loan Documents and shall
be bound by the provisions thereof.

(b) All notices to the New Borrower required to be delivered pursuant to the
Credit Agreement and all other notices or correspondence shall be directed to
Sprague Operating Resources LLC (in such capacity, the “Borrowers’ Agent”),
acting as the designated agent of the U.S. Borrower, the Canadian Borrower and
the New Borrower for receipt of all such notices. Each of the Borrower and the
New Borrower hereby appoints the Borrowers’ Agent to act on its behalf under the
Credit Agreement and

 

10  NTD: Subject to review and comment by Dutch Counsel.

--------------------------------------------------------------------------------

the other Loan Documents and has authorized the Borrowers’ Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Borrowers’ Agent by the terms hereof, together with such actions and powers as
are reasonably incidental thereto, and that the Borrowers’ Agent hereby accepts
such appointment. Such appointment shall not be terminated or revoked without
the consent of the Administrative Agent and the Required Lenders.

3. Conditions Precedent. This Agreement shall become effective upon the
satisfaction of the following conditions precedent:

(a) Documents. The Administrative Agent shall have received (each of the
following documents being referred to herein as an “Additional Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
U.S. Borrower, the Canadian Borrower, the MLP, the Borrowers’ Agent and the New
Borrower;

(ii) if the New Borrower is organized under the Laws of the United States, any
State thereof, or the District of Columbia and is not a Loan Party immediately
prior to the effectiveness of this Agreement, an Addendum to the U.S. Security
Agreement in form and substance substantially similar to Annex D to the U.S.
Security Agreement, executed and delivered by a duly authorized officer of the
New Borrower, pursuant to which the New Borrower becomes a Grantor;

(iii) if the New Borrower is organized under the Laws of Canada or a political
subdivision thereof and is not a Loan Party immediately prior to the
effectiveness of this Agreement, an Addendum to the Canadian Security Agreement
in form and substance substantially similar to Annex E to the Canadian Security
Agreement, executed and delivered by a duly authorized officer of the New
Borrower pursuant to which the New Borrower becomes a Pledgor;

(iv) [if the New Borrower is organized under Dutch Laws and is not a Loan Party
immediately prior to the effectiveness of this Agreement, an Addendum to the
Dutch Security Agreement in form and substance substantially similar to Annex E
to the Dutch Security Agreement, executed and delivered by a duly authorized
officer of the New Borrower pursuant to which the New Borrower becomes a
Pledgor;]

(v) if the New Borrower is organized under the laws of the United States, any
State thereof, or the District of Columbia and is not a Loan Party immediately
prior to the effectiveness of this Agreement, a Supplement to the U.S. Pledge
Agreement in form and substance substantially similar to Exhibit A of the U.S.
Pledge Agreement, executed and delivered by a duly authorized officer of the New
Borrower, pursuant to which the New Borrower becomes a Pledgor;

(vi) if the New Borrower is organized under the Laws of Canada or a political
subdivision thereof and is not a Loan Party immediately prior to the
effectiveness of this Agreement, a Supplement to the Canadian Pledge Agreement
in form and substance substantially similar to Exhibit A to the Canadian Pledge
Agreement, executed and delivered by a duly authorized officer of the New
Borrower, pursuant to which the New Borrower becomes a Pledgor;

(vii) [if the New Borrower is organized under Dutch Laws or a political
subdivision thereof and is not a Loan Party immediately prior to the
effectiveness of this Agreement, a Supplement to the Dutch Pledge Agreement in
form and substance substantially similar to Exhibit A to the Dutch Pledge
Agreement, executed and delivered by a duly authorized officer of the New
Borrower, pursuant to which the New Borrower becomes a Pledgor;]

--------------------------------------------------------------------------------

(viii) [reserved];

(ix) for each Dollar Working Capital Facility Lender or Multicurrency Working
Capital Facility Lender, as applicable, requesting the same, a Note of the New
Borrower substantially in the form of Exhibit A-1 or A-2 (as applicable) and
conforming to the requirements of the Credit Agreement and executed by a duly
authorized officer of the New Borrower;

(x) [reserved];

(xi) for each Dollar Swing Line Lender or Multicurrency Swing Line Lender, as
applicable, requesting the same, a Note of the New Borrower substantially in the
form of Exhibit A-3 or A-4 (as applicable) and conforming to the requirements of
the Credit Agreement and executed by a duly authorized officer of the New
Borrower; and

(xii) for each Acquisition Facility Lender requesting the same, a Note of the
New Borrower substantially in the form of Exhibit A-5 and conforming to the
requirements of the Credit Agreement and executed by an authorized officer of
the New Borrower.

(b) Secretary’s Certificate. The Administrative Agent shall have received a
certificate of the New Borrower, dated as of the Joinder Effective Date,
substantially in the form of Exhibit E to the Credit Agreement, with appropriate
insertions and attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the New Borrower, or, if applicable, of
the general partner or managing member or members of the New Borrower.

(c) Proceedings. The Administrative Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors (or analogous body) of the New Borrower
authorizing the execution, delivery and performance of this Agreement [and any
Notes] delivered on the Joinder Effective Date and the other Additional
Documents.

(d) Incumbency Certificate. The Administrative Agent shall have received a
certificate of the New Borrower, dated as of the date hereof, as to the
incumbency and signature of the officers of the New Borrower executing any
Additional Document, which certificate shall be included in the certificate
delivered pursuant to Section 3(b), shall be reasonably satisfactory in form and
substance to the Administrative Agent, and shall be executed by the President or
any Vice President and the Secretary or any Assistant Secretary of the New
Borrower, or, if applicable, of the general partner or managing member or
members of the New Borrower.

(e) Organizational Documents. The Administrative Agent shall have received true
and complete copies of the Governing Documents of the New Borrower, certified as
of the date hereof as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the New Borrower, or, if applicable, of the general
partner or managing member or members of the New Borrower, which certification
shall be included in the certificate delivered pursuant to Section 3(b) and
shall be in form and substance reasonably satisfactory to the Administrative
Agent.

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

--------------------------------------------------------------------------------

(g) Consents, Licenses and Approvals. The Administrative Agent shall have
received a certificate of an authorized officer of the New Borrower either
(i) attaching copies of all consents, authorizations and filings referred to in
Section 5.4 of the Credit Agreement, and stating that such consents, licenses
and filings are in full force and effect, and each such consent, authorization
and filing shall be in form and substance reasonably satisfactory to the
Administrative Agent or (ii) stating that no such consents, licenses or
approvals are so required.

(h) Certification of the Borrowers’ Agent. The Borrowers’ Agent confirms that no
Default or Event of Default is continuing or would occur as a result of the New
Borrower becoming a Borrower and each of the representations and warranties
relating to the New Borrower and the Loan Parties in the Credit Agreement (other
than the representations and warranties set forth in Sections 5.1, 5.4, 5.6,
5.7, 5.17 and 5.20) is true and not misleading in any material respect (except
that any representation and warranty that is qualified by “materiality” or
“Material Adverse Effect” shall be true and correct in all respects as so
qualified) as if made on the date of accession of the New Borrower.

(i) Legal Opinions. The Administrative Agent shall have received an executed
legal opinion of counsel to the New Borrower with respect to the jurisdiction of
incorporation, organization or formation of the New Borrower, in form and
substance reasonably satisfactory to the Administrative Agent.

(j) PATRIOT Act; CAML. The Administrative Agent shall have received all
documentation and other information requested by it that are required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act and CAML.

5. No Other Amendments or Waivers. Except as expressly amended or waived hereby,
the Credit Agreement, any Notes issued thereunder and the other Loan Documents
shall remain in full force and effect in accordance with their respective terms,
without any waiver, amendment or modification of any provision thereof.

6. Effect on Credit Agreement. From and after the Joinder Effective Date, the
New Borrower shall be a party to the Credit Agreement and, to the extent
provided in this Agreement, have the rights and obligations of a Borrower
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof.

7. Loan Document. Each of the parties hereto agree that this Agreement
constitutes a “Loan Document” for all purposes under the Credit Agreement and
the other Loan Documents.

8. Counterparts. This Agreement may be executed by one or more of the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

9. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURE PAGES FOLLOW]

--------------------------------------------------------------------------------

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

 

[NAME OF NEW BORROWER], as a Borrower By:  

 

  Name:   Title: SPRAGUE OPERATING RESOURCES LLC, as a Borrower and as
Borrower’s Agent By:  

 

  Name:   Title: SPRAGUE RESOURCES ULC, as a Borrower By:  

 

  Name:   Title:] KILDAIR SERVICE LTD., as a Borrower By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A. as Administrative Agent By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit V

to Credit Agreement

FORM OF SOLVENCY CERTIFICATE

December 9, 2014

Pursuant to Section 6.1(v) of the Amended and Restated Credit Agreement, dated
as of December 9, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”; terms defined therein being used
herein as therein defined), among Sprague Operating Resources LLC, a Delaware
limited liability company (the “U.S. Borrower”), Kildair Service Ltd., a
Canadian corporation (“Kildair”), Sprague Resources ULC, an unlimited liability
company formed under the laws of British Columbia (“AcquireCo”), the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”) and the other agents
parties thereto, the undersigned Chief Financial Officer of [Sprague Resources
LP, a Delaware limited partnership (the “MLP”)] [Sprague Resources GP LLC, a
Delaware limited liability company (the “General Partner”)] hereby certifies on
behalf of the MLP and its Subsidiaries, in the undersigned’s capacity as an
officer of the [MLP] [General Partner] and not in any individual capacity, as
follows:

As of the date hereof, the MLP and its Subsidiaries, considered as a whole after
giving effect to the transactions contemplated by the Credit Agreement, are
Solvent. As used in this paragraph, “Solvent” means (a) the amount of the
“present fair saleable value” of the assets of the MLP and its Subsidiaries,
considered as a whole, as of the date hereof, exceed the amount of all
“liabilities of the MLP and its Subsidiaries, considered as a whole, contingent
or otherwise”, as of such date, as such quoted terms are determined in
accordance with applicable federal, state, provincial and territorial laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of the MLP and its Subsidiaries, considered as a
whole, as of the date hereof, is greater than the amount that is required to pay
the liabilities of the MLP and its Subsidiaries, considered as a whole, on its
debts as such debts become absolute and matured, (c) the MLP and its
Subsidiaries, considered as a whole, do not have, as of the date hereof, an
unreasonably small amount of capital with which to conduct its business, and
(d) the MLP and its Subsidiaries, considered as a whole, are able to pay its
debts as they mature. For purposes of this definition, (i) “debt” means
“liability on a claim”, and (ii) “claim” means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
set forth above.

 

 

Name: Title:

--------------------------------------------------------------------------------

Annex I

to Credit Agreement

FORM OF BORROWING NOTICE11

COMPANY NAME/HEADER

 

Borrowing Notice   Date:

 

[JPMorgan Chase Bank, N.A.

10 S. Dearborn Street, 22nd Floor

Chicago, IL 60603

Attention:                     - Operations]

[JPMorgan Chase Bank, N.A., Toronto Branch

[                    ]

Attention: ]

Ladies and Gentlemen:

This Borrowing Notice is furnished pursuant to Section 2.5 of that certain
Amended and Restated Credit Agreement dated as of December 9, 2014 (as amended,
modified, renewed or extended from time to time, the “Credit Agreement”) among
Sprague Operating Resources LLC (the “U.S. Borrower”), Kildair Service Ltd.
(“Kildair”), Sprague Resources ULC (“AcquireCo”), the lenders party thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders (in such
capacity, the “Administrative Agent”), and the other agents parties thereto.
Unless otherwise defined herein, capitalized terms used in this Borrowing Notice
have the meanings ascribed thereto in the Credit Agreement. [Each of the] [The]
[U.S. Borrower [and [                    ]] represents that, as of this date,
the conditions precedent set forth in Section [6.1 and]12 6.2 of the Credit
Agreement have been satisfied.

1. Borrowing Notice. [The U.S. Borrower] [                    ] hereby notifies
the Administrative Agent of its request for the following borrowing (the
“Borrowing”):

The Borrowing shall be a[n] [Acquisition Facility] [Dollar Working Capital
Facility] [Multicurrency Working Capital Facility] [Dollar Swing Line]
[Multicurrency Swing Line] Loan

[The Borrowing shall [be] [not be] a [Dollar] [Multicurrency] Working Capital
Facility Non-Maintenance Cap-Ex Extension of Credit]13

[The Borrowing shall be an [Acquisition Facility Acquisition Extension of
Credit] [Acquisition Facility Working Capital Extension of Credit] [Acquisition
Facility Maintenance Cap-Ex Extension of Credit]]14

[The purpose of the Borrowing is [                    ]]15

 

11 With respect to the Loans to be made on the Restatement Effective Date, the
form of Borrowing Notice shall be as agreed by the Administrative Agent.

12 Applicable to initial Loans only.

13 To be completed if the Loan is a Dollar Working Capital Facility Loan or
Multicurrency Working Capital Facility Loan.

14 To be completed if the Loan is an Acquisition Facility Loan.

15 To be completed if the Loan is a Working Capital Facility Loan or an
Acquisition Facility Loan.

--------------------------------------------------------------------------------

The Borrowing shall be a                     Base Rate Loan or
            Eurocurrency Loan or             Base Rate Loan in an aggregate
amount of [$][C$]         and Eurocurrency Loan in an aggregate amount of
[$][C$]        16

The Borrowing shall be a                     Prime Rate Loan or
            Eurocurrency Loan or             Prime Rate Loan in an aggregate
amount of [$][C$]         and Eurocurrency Loan in an aggregate amount of
[$][C$]        .17

Borrowing Date of the Borrowing (must be a Business Day):                     

Aggregate amount of the Borrowing: [$][C$]        

The Borrowing shall be in [United States Dollars] [Canadian Dollars]18

If any portion of the Borrowing is a Eurocurrency Loan, the duration of Interest
Period:

 

One Month  

 

     Three Months     

 

   Two Months    

 

     Six Months   

 

  

Bank Name

City, State

ABA#

Account Name

Account #

2. Availability Certification. The undersigned hereby, solely in his capacity as
a Responsible Person of the U.S. Borrower and not in his individual capacity,
certifies that he is a Responsible Person of the U.S. Borrower and further
certifies as follows that, after giving effect to the extension of credit
required pursuant to this Borrowing Notice:

 

  1. the sum of Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Aggregate Borrowing Base Amount as of such date;

 

  2. the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value;

 

  3. the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments;

 

  4. the Total Dollar Working Capital Facility Extensions of Credit shall not
exceed the aggregate Working Dollar Capital Facility Commitments;

 

  5. the Total Multicurrency Working Capital Facility Extensions of Credit shall
not exceed the aggregate Multicurrency Working Capital Facility Commitments,

 

  6. such extension of credit shall not result in any Applicable Sub-Limit (with
each Applicable Sub-Limit calculated including the Dollar Equivalent of any
included Extensions of Credit denominated in Canadian Dollars) being exceeded;
and

 

  7. with respect to any such extension of credit under the Acquisition
Facility, the Loan Parties shall be in compliance with the covenants set forth
in Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

  

 

16 If borrowing a Eurocurrency Loan, please also complete Exhibit A attached
hereto.

17 To be completed if the Loan is a Multicurrency Working Capital Facility Loan.

18 To be completed if the Loan is a Multicurrency Working Capital Facility Loan
or a Multicurrency Swing Line Loan.

--------------------------------------------------------------------------------

The foregoing certifications and representations shall collectively be deemed to
constitute the Availability Certification required to be delivered in connection
with this Borrowing Notice pursuant to Section 6.2(e) of the Credit Agreement,
and such requirements shall be deemed satisfied upon receipt of this Borrowing
Notice by the Administrative Agent.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: [                    ] By:  

 

  Name:   Title:

Do not write below. For bank purposes only

    Customer’s signature(s) verified

 

          Call-back performed   Holds       By:  

 

 

    CFC Used       Phone Number:  

 

 

    Hold Placed/Pre-Approved       Spoke to:  

 

 

    Same-day Credit/Pre-Approved       Date:  

 

 

      Time:  

 

 

RECEIVED BY (Print Name/Phone(Request Only))    INITIALS    PROCESSED BY (Print
name)    INITIALS          AUTHORIZED APPROVAL (Print Name)    AUTHORIZED
SIGNATURE    AUTHORIZED APPROVAL (Print Name)    AUTHORIZED SIGNATURE   

--------------------------------------------------------------------------------

Exhibit A

to Borrowing Notice

[Request for Eurocurrency Loan]

Please see attached.

--------------------------------------------------------------------------------

Annex II

to Credit Agreement

FORM OF CONTINUATION/CONVERSION NOTICE

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

[JPMorgan Chase Bank, N.A., Toronto Branch

[                    ]

Attention: ]

[Date]

Ladies and Gentlemen:

This Continuation/Conversion Notice is delivered to you pursuant to Section 4.3
of the Amended and Restated Credit Agreement, dated as of December 9, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC (the “U.S.
Borrower”), Kildair Service Ltd. (“Kildair”), Sprague Resources ULC
(“AcquireCo”), the Lenders from time to time parties thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the other agents parties thereto.
Unless otherwise defined herein or the context otherwise requires, capitalized
terms used herein have the meanings provided in the Credit Agreement.

[The U.S. Borrower] [AcquireCo] [Kildair] hereby requests that on
[                    ](the “Continuation/Conversion Date”),

1. $[        ] of the presently outstanding principal amount of the [Dollar
Working Capital Facility] [Multicurrency Working Capital Facility] [Acquisition
Facility] Loans originally made on [                    ],

2. and all presently being maintained as [Base Rate Loans] [Eurocurrency Loans
with an Interest Period of [one][two][three][six] months]19,

3. be [Converted into][Continued as],

4. [Base Rate Loans] [Eurocurrency Loans with an Interest Period of
[one][two][three][six] months]20.

 

19 If continuing a Eurocurrency Loan, please also complete Exhibit A attached
hereto.

20  If converting to a Eurocurrency Loan, please also complete Exhibit A
attached hereto.

--------------------------------------------------------------------------------

The undersigned, solely in his capacity as a Responsible Person of [the U.S.
Borrower] [AcquireCo] [Kildair] and not in his individual capacity, hereby
certifies that the following statements are true on the date hereof, and will be
true on the proposed Continuation/Conversion Date, both before and after giving
effect thereto and to the application of the proceeds therefrom:

(i) the foregoing Continuation or Conversion complies with the terms and
conditions of the Credit Agreement (including, without limitation, Section 4.3
and Section 4.4 of the Credit Agreement); and

(ii) no Default or Event of Default has occurred and is continuing, or would
result from such proposed continuation or conversion.

[Signature page follows]

--------------------------------------------------------------------------------

The undersigned has caused this Continuation/Conversion Notice to be executed
and delivered, and the certification and warranties contained herein to be made,
by its duly authorized officer this      day of             , 201    .

 

[SPRAGUE OPERATING RESOURCES LLC, as Borrower] By:  

 

  Name:   Title: [SPRAGUE RESOURCES ULC, as Borrower] By:  

 

  Name:   Title: [KILDAIR SERVICE LTD., as Borrower] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Exhibit A

to Continuation/Conversion Notice

[Request for Continuation of /Conversion to a Eurocurrency Loan]

Please see attached.

--------------------------------------------------------------------------------

Annex III to

Credit Agreement

FORM OF NOTICE OF PREPAYMENT

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

[JPMorgan Chase Bank, N.A., Toronto Branch

[                    ]

Attention: ]

[Date]

Ladies and Gentlemen:

This Notice of Prepayment is delivered to you pursuant to Section 4.6 of the
Amended and Restated Credit Agreement, dated as of December 9, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC (the “U.S. Borrower”),
Kildair Service Ltd. (“Kildair”), Sprague Resources ULC (“AcquireCo”), the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. Unless otherwise
defined herein or the context otherwise requires, capitalized terms used herein
have the meanings provided in the Credit Agreement.

[The U.S. Borrower] [AcquireCo] [Kildair] hereby notifies the Administrative
Agent that it shall prepay [Dollar Working Capital Facility] [Multicurrency
Working Capital Facility] [Acquisition Facility] [Dollar Swing Line]
[Multicurrency Swing Line] Loans, on             , 201    , in aggregate
principal amount[s] of [$[        ] of [Dollar Working Capital Facility]
[Multicurrency Working Capital Facility] [Acquisition Facility] [Dollar Swing
Line] [Multicurrency Swing Line] Loans outstanding as Base Rate Loans]
[and][$[        ] of [Dollar Working Capital Facility] [Multicurrency Working
Capital Facility] [Acquisition Facility] Loans outstanding as Eurocurrency
Loans].

[Signature page follows]

--------------------------------------------------------------------------------

The undersigned has caused this Notice of Prepayment to be executed and
delivered by its duly authorized officer this      day of             , 201    .

 

[SPRAGUE OPERATING RESOURCES LLC, as Borrower] By:  

 

  Name:   Title: [SPRAGUE RESOURCES ULC, as Borrower] By:  

 

  Name:   Title: [KILDAIR SERVICE LTD., as Borrower] By:  

 

  Name:   Title:

--------------------------------------------------------------------------------

Annex IV to

Credit Agreement

FORM OF CREDIT UTILIZATION SUMMARY SCHEDULE

[INSERT LETTERHEAD OF ISSUING LENDER]

[Date]

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

Ladies and Gentlemen:

This Credit Utilization Summary Schedule is delivered to you pursuant to
Section 4.13 of the Amended and Restated Credit Agreement, dated as of
December 9, 2014 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC
(the “U.S. Borrower”), Kildair Service Ltd. (“Kildair”), Sprague Resources ULC
(“AcquireCo”), the Lenders from time to time parties thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the other agents parties thereto.
Unless otherwise defined herein or the context otherwise requires, capitalized
terms used herein have the meanings provided in the Credit Agreement.

The attached schedule sets forth the outstanding Letters of Credit issued by
[NAME OF ISSUING LENDER].21

 

[NAME OF ISSUING LENDER] By:  

 

  Name:   Title:

 

21  Issuing Lender shall deliver this Credit Utilization Summary to the
Administrative Agent within five (5) Business Days of the end of each calendar
month.

--------------------------------------------------------------------------------

CREDIT UTILIZATION SUMMARY SCHEDULE

Name of Issuing Lender:                     

As of the last day of the calendar month ended                     :

WORKING CAPITAL FACILITY LETTERS OF CREDIT

 

Applicant

   Beneficiary    Reference    Issuing Bank
Ref. Number    Issuance
Date/Effective
Date    Expiry
Date    Amount
Available to be
Drawn    Drawings, Payment
and Reductions                                          

ACQUISITION FACILITY LETTERS OF CREDIT

 

Applicant

   Beneficiary    Reference    Issuing Bank
Ref. Number    Issuance
Date/Effective
Date    Expiry
Date    Amount
Available to be
Drawn    Drawings, Payment
and Reductions