Exhibit 10.4


 


GUARANTY
AND SECURITY AGREEMENT


 


THIS GUARANTY AND SECURITY AGREEMENT, dated as of
May 30, 2003, is made by WILLIAMS ETHANOL
SERVICES, INC., a Delaware corporation (the “Borrower”), WILLIAMS BIO-ENERGY, LLC, a Delaware limited liability company
(“Parent” and, together
with any other entity that may become a party hereto or a Guarantor as provided
herein, the “Guarantors”
and, each individually, a “Guarantor,”
and the Guarantors, together with the Borrower, the “Grantors” and, each individually, a “Grantor”), in favor of JPMORGAN CHASE BANK, as the Administrative
Agent (in such capacity, the “Administrative
Agent”) for the ratable benefit of (a) the financial
institutions (the “Lenders”)
now or hereafter parties to the Credit Agreement dated as of May 30, 2003 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower,
the Administrative Agent, the Issuing Bank (as defined in the Credit Agreement)
and the Lenders, (b) the Issuing Bank, and (c) the Secured Affiliates (as
defined in the Credit Agreement) (collectively, the “Secured Parties”).


 


W I T N E S
S E T H:


 


WHEREAS, pursuant to the Credit Agreement, the
Lenders have severally agreed to make extensions of credit to the Borrower and
the Issuing Bank has agreed to issue Letters of Credit for the account of
Borrower and in each case upon the terms and subject to the conditions set
forth therein;


 


WHEREAS, it is a condition precedent to (a) the
obligation of the Lenders to make their respective extensions of credit to the
Borrower under the Credit Agreement, and (b) the issuance of Letters of Credit
by the Issuing Bank, that the Grantors shall have executed and delivered this
Agreement; and


 


WHEREAS, the Grantors will derive substantial direct
and indirect benefit from the making of the extensions of credit under the
Credit Agreement.


 


NOW, THEREFORE, in consideration of the premises and
to induce (a) the Administrative Agent, the Issuing Bank and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, (b) the Issuing
Bank to issue Letters of Credit thereunder, and (c) the Secured Affiliates to
enter into Hedging Agreements and Cash Management Agreements, each Grantor
hereby agrees as follows:


 


ARTICLE 1

DEFINED TERMS


 


Section 1.1 Definitions.


 


(a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement, and the following terms which are defined in the UCC
are used herein as so defined: Accounts, Chattel Paper, Certificated
Securities, Commercial Tort Claims, Commodity Accounts, Commodity Contracts,
Commodity Intermediary, Deposit Accounts, Documents, Electronic Chattel Paper,


 


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Equipment,
Farm Products, Financial Assets, Fixtures, Goods, Health Care Insurance
Receivable, Instruments, Inventory, Investment Property, Letter-of-Credit
Rights, Money, Payment Intangibles, Proceeds, Promissory Notes, Records,
Security, Securities Accounts, Security Certificate, Security Entitlements,
Securities Intermediary, Software, Supporting Obligations, Uncertificated
Securities and Tangible Chattel Paper.


 


(b) The following terms shall have the following
meanings:


 


“Agreement” shall mean this Guaranty and
Security Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.


 


“Collateral”
shall have the meaning provided in Article 3 hereof.


 


“Collateral
Account” shall mean the Blocked Account and any collateral
account established by the Administrative Agent as provided in Sections 5.2
or 6.2 hereof.


 


“Commodity
Account Control Agreement” shall mean a Commodity Account
Control Agreement substantially in the form of Annex II hereto to be
entered into by and among the Administrative Agent, the applicable Grantor and
the applicable Commodity Intermediary with respect to each Commodity Account
held by each Grantor.


 


“Copyright
Licenses” shall mean any and all agreements, whether written or
oral, providing for the grant by or to Grantor of any right under any
Copyright, including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.


 


“Copyright Security
Agreement” means the Copyright Security Agreement executed and
delivered by the Grantors to the Administrative Agent, substantially in the
form of Annex VI hereto, as such agreement may hereafter be amended,
supplemented or otherwise modified from time to time.


 


“Copyrights”
shall mean (i) any and all other copyrights, in the United States or any other
country, whether registered or unregistered, or published or unpublished, all
registrations and recordings thereof and all applications in connection therewith,
and (ii) the right to obtain all renewals of the foregoing.


 


“Deposit
Account Control Agreement” shall mean a Deposit Account Control
Agreement substantially in the form of Annex III hereto to be entered
into by and among the Administrative Agent, the applicable Grantor and the
applicable depository institution with respect to each Deposit Account held by
each Grantor.


 


“General
Intangibles” shall mean all “general intangibles” as such term
is defined in the UCC and, in any event, including, without limitation, with
respect to any Grantor, all contracts, agreements, instruments and indentures
in any form, and portions thereof, to which such Grantor is a party or under
which such Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject (to the extent that a grant of a
security interest in such general intangible is not prohibited by applicable
law or by the terms of any contract, agreement, instrument, indenture or other
document creating, evidencing or relating to


 


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such
general intangibles), as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation (but limited
as aforesaid), (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights of such
Grantor to damages arising thereunder, (iii) all equity that constitutes “general
intangibles” and (iv) all rights of such Grantor to perform and to exercise all
remedies thereunder. The exclusion of any general intangible from this
definition as a result of any restrictions on the grant of a security interest
in such general intangible does not restrict the grant of the security interest
contemplated hereby in any Account, Payment Intangible, Chattel Paper or other
right to payment arising under or pursuant to such general intangible.


 


“Insurance”
shall mean (i) all insurance policies covering any or all of the Collateral
(regardless of whether the Administrative Agent is the loss payee thereof) and
(ii) any key man life insurance policies.


 


“Intellectual
Property” shall mean all rights, priorities and privileges
provided under United States, multinational and foreign law relating to intellectual
property, including without limitation, the Copyrights, the Copyright Licenses,
the Patents, the Patent Licenses, the Trade Secrets, the Trade Secret Licenses,
the Trademarks and the Trademark Licenses, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.


 


“Issuer”
shall mean, with reference to any Security, the issuer of such Security.


 


“Patent License”
shall mean any and all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent to the extent that a grant of
a security interest in such patent license is not prohibited by applicable law
or the applicable patent agreement.


 


“Patent
Security Agreement” means the Patent Security Agreement executed
and delivered by the Grantors to the Administrative Agent, substantially in the
form of Annex VII hereto, as such agreement may hereafter be amended,
supplemented or otherwise modified from time to time.


 


“Patents”
shall mean (i) all letters patent of the United States or any other country and
all reissues and extensions thereof, (ii) all applications for letters patent
of the United States or any other country and all divisions, continuations and
continuations-in-part thereof, and (iii) all rights to obtain any reissues or
extensions of the foregoing.


 


“Pledged
Securities” shall mean the Securities of any Person that may be
issued or granted to, or held by, any Grantor, other than (i) the Equity held
by any Grantor of any Marketing Alliance Partner which is a Marketing Alliance
Partner on the Closing Date to the extent that the granting of such Lien is
prohibited pursuant to the terms of the organizational documents of such
Marketing Alliance Partner on the date hereof, (ii) the Equity in Nebraska Sub
unless and until either (A) Parent or Borrower obtain the consent of the
requisite holders of Equity in Nebraska Sub to the grant of the Security
Interest in such Equity of Nebraska Sub, or (B) Parent and Borrower
collectively hold at least 80% of the Equity of Nebraska Sub, and (iii) the
Equity held by any Grantor in Fluid Technologies PLC. Upon the occurrence of
either event


 


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described
in clause (ii) preceding, the Equity of Nebraska Sub shall immediately and
without any further action on the part of any Grantor become “Pledged
Securities” for purposes of this Agreement and the security interest provided
for herein shall immediately attach to such Equity.


 


“Receivable”
shall mean any right to payment for goods sold or leased 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
Account Control Agreement” shall mean a Securities Account
Control Agreement substantially in the form of Annex IV hereto to be
entered into by and among the Administrative Agent, the applicable Grantor and
the applicable Securities Intermediary with respect to each Securities Account
held by such Grantor.


 


“Securities Act”
shall mean the Securities Act of 1933, as amended.


 


“Trade Secret
Licenses” shall mean any and all agreements, whether written or
oral, providing for the grant by or to any Grantor of any right in or to Trade
Secrets, to the extent that a grant of a security interest in such Trade Secret
License is not prohibited by applicable law or the applicable Trade Secret
License.


 


“Trade Secrets”
shall mean all trade secrets and all other confidential or proprietary
information and know-how whether or not such trade secret has been reduced to a
writing or other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such trade secret, including but not
limited to: (i) the right to sue for past, present and future misappropriation
or other violation of any trade secret, and (ii) all Proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.


 


“Trademark
License” shall mean any and all agreements, whether written or
oral, providing for the grant by or to any Grantor of any right to use any
Trademark, to the extent that a grant of a security interest in such Trademark
License is not prohibited by applicable law or the applicable Trademark
License.


 


“Trademark
Security Agreement” means the Trademark Security Agreement
executed and delivered by the Grantors to the Administrative Agent,
substantially in the form of Annex VIII hereto, as such agreement may
hereafter be amended, supplemented or otherwise modified from time to time.


 


“Trademarks”
shall mean (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether 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, or otherwise, and all common-law rights related
thereto, and (ii) the right to obtain all renewals thereof.


 


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“Vehicles”
shall mean all cars, railcars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and, in any event, shall include, without limitation, the vehicles listed on Schedule
10 hereto and all tires and other appurtenances to any of the foregoing.


 


Section 1.2 Other Definitional Provisions.


 


(a) The words “hereof,” “herein”, “hereto” 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 and Schedule references are to this Agreement unless otherwise
specified.


 


(b) The meanings given to terms defined herein or in
the UCC or in the Credit Agreement shall be equally applicable to both the
singular and plural forms of such terms.


 


(c) Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor’s Collateral or the relevant part thereof.


 


ARTICLE 2

GUARANTY


 


Section 2.1 Guaranty.


 


(a) Each Guarantor hereby unconditionally and irrevocably,
jointly and severally guarantees to the Administrative Agent, for the ratable
benefit of the Lenders and the Secured Parties, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Lender Indebtedness.


 


(b) Anything herein or in any other Financing
Document to the contrary notwithstanding, the maximum liability of any
Guarantor hereunder and under the other Financing Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor without rendering
the obligations of such Guarantor void or voidable as a fraudulent transfer or
fraudulent conveyance under applicable federal and state laws relating to the
insolvency of debtors.


 


(c) Each Guarantor agrees that the Lender
Indebtedness may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guaranty contained
in this Section 2 or affecting the rights and remedies of any Lender
hereunder.


 


(d) The guaranty contained in this Section 2
shall remain in full force and effect until all of the Lender Indebtedness and
the obligations of each Guarantor under the guaranty contained in this Section
2 shall have been satisfied by payment in full, no Letters of Credit remain
outstanding and the Revolving Credit Commitments shall have been terminated,
notwithstanding that from time to time during the term of the Credit Agreement
no Lender Indebtedness may be outstanding.


 


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Section 2.2 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of such Guarantor by
the Administrative Agent or any other Lender, no Guarantor shall be entitled to
be subrogated to any of the rights of the Administrative Agent or any other
Lender against the Borrower, any Guarantor, any other Obligated Party, or any
collateral security or guaranty or right of offset held by the Administrative
Agent or any other Lender for the payment of the Lender Indebtedness, and no
Guarantor shall seek or be entitled to seek any contribution or reimbursement
from the Borrower, any Guarantor or any other Obligated Party in respect of
payments made by any Guarantor hereunder, until all amounts owing to the
Administrative Agent and the other Lenders on account of the Lender
Indebtedness are paid in full, no Letters of Credit remain outstanding and the
Revolving Credit 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
Lender Indebtedness shall not have been paid in full, such amount shall be held
by such Guarantor in trust for the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Lender Indebtedness, whether matured or unmatured, in such
order as the Administrative Agent may determine in its sole discretion.


 


Section 2.3 Amendments, etc.
with respect to the Lender Indebtedness. 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 Lender Indebtedness made by the Administrative Agent,
any Lender, any Secured Affiliate or Cash Management Affiliate may be rescinded
by the Administrative Agent or such Lender and any of the Lender Indebtedness
continued, and the Lender Indebtedness, or the liability of any other Person
upon or for any part thereof, or any collateral security or guaranty 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, any Lender, any
Secured Affiliate or Cash Management Affiliate, and the Credit Agreement and
the other Financing Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent, the Required Lenders or all
Lenders, as the case may be, may deem advisable from time to time, and any
collateral security, guaranty or right of offset at any time held by the
Administrative Agent, any Lender, any Secured Affiliate or Cash Management
Affiliate for the payment of the Lender Indebtedness may be sold, exchanged,
waived, surrendered or released. No Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Lender Indebtedness or for the guaranty contained in this Section 2
or any property subject thereto.


 


Section 2.4 Guaranty Absolute
and Unconditional.
Each Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Lender Indebtedness and notice of or proof of reliance by
the Administrative Agent or any other Lender upon the guaranty contained in
this Section 2 or acceptance of the guaranty contained in this Section
2; the Lender Indebtedness, and any of them, shall conclusively be deemed
to have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guaranty contained in this Section 2; and
all dealings between the Borrower and such Guarantor, on the one hand, and


 


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any
of the Lenders, any Secured Affiliate or Cash Management Affiliate, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guaranty contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment, notice of intent to accelerate,
notice of acceleration and notice of default or nonpayment to or upon the
Borrower or such Guarantor with respect to the Lender Indebtedness. Each
Guarantor understands and agrees that the guaranty contained in this Section
2 shall be construed as a continuing, absolute and unconditional guaranty
of payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Financing Document, any of the Lender Indebtedness or
any other collateral security therefor or guaranty or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Lender, (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 Borrower, any other Guarantor, any other Obligated Party or any
other Person against the Administrative Agent, any Lender, any Secured
Affiliate or Cash Management Affiliate, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower, any other
Guarantor or Obligated Party or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of such Guarantor
under the guaranty contained in this Section 2, in bankruptcy or in any
other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent,
any Lender, any Secured Affiliate or Cash Management Affiliate may, but shall
be under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as it may have against any other Grantor, any other
Guarantor or Obligated Party, or any other Person, or against any collateral
security or guaranty for the Lender Indebtedness or any right of offset with
respect thereto, and any failure by the Administrative Agent, any Lender, any
Secured Affiliate or Cash Management Affiliate to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any Guarantor, any other Obligated Party, or any other Person, or to
realize upon any such collateral security or guaranty or to exercise any such
right of offset, or any release of the Borrower, any Guarantor, any other
Obligated Party, or any other Person, or any such collateral security, guaranty
or right of offset, shall not relieve such Guarantor of any obligation or
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, any Lender, any Secured Affiliate or Cash Management Affiliate against
such Guarantor. For the purposes hereof, “demand” shall include the
commencement and continuance of any legal proceedings.


 


Section 2.5 Reinstatement. The guaranty contained in this Section
2 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 Lender Indebtedness is rescinded or must otherwise be
restored or returned by the Administrative Agent, any Lender, any Secured
Affiliate or Cash Management Affiliate upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Grantor or any other
Obligated Party, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for any Grantor or
any other Obligated Party, or any substantial part of its property, or
otherwise, all as though such payments had not been made.


 


Section 2.6 Acceleration. Without limiting the rights of the
Administrative Agent, the Lenders, any Secured Affiliate or Cash Management
Affiliate and the obligations of each Grantor hereunder, if an Event of Default
occurs under the Credit Agreement which would


 


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permit
acceleration of the Lender Indebtedness but for any limitation on acceleration
imposed on account of any bankruptcy, insolvency or other legal proceedings
relating to any Grantor, then upon written notice from the Administrative Agent
upon the request of the Required Lenders pursuant to Article 8 of the
Credit Agreement on account of such Event of Default, the full amount of the
Lender Indebtedness which would then be payable pursuant to Article 8 of
the Credit Agreement shall be and become due and payable from the Guarantors
whether or not the Lender Indebtedness has been declared to become due and
payable from the Borrower.


 


Section 2.7 Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim and in immediately available funds and in Dollars at the Payment
Office, not later than 12:00 noon, New York, New York time. Without limiting
the above, any and all payments by or on account of any of the Guarantors
hereunder shall be made free and clear of and without deduction for any Taxes
other than Excluded Taxes; provided that if any of the Guarantors shall be
required to deduct any Taxes from such payments, then (1) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.7) the Administrative Agent receives an amount equal to the sum it would
have received had no such deductions been made, (2) the applicable Guarantors
shall make such deductions, and (3) such Guarantors shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.


 


ARTICLE 3 

GRANT OF
SECURITY INTEREST


 


Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following assets and Property, tangible and intangible 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”), as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Lender Indebtedness:


 


(a) all Accounts (including Health Care Insurance
Receivables);


 


(b) all books and Records pertaining to the
Collateral or otherwise;


 


(c) all Chattel Paper (including all Tangible
Chattel Paper and Electronic Chattel Paper);


 


(d) all Commercial Tort Claims described on Schedule
11;


 


(e) all Commodity Accounts;


 


(f) all Commodity Contracts;


 


(g) all Deposit Accounts;


 


(h) all Documents;


 


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(i) all General Intangibles (but subject to the
limitations set forth in the definition of such term);


 


(j) all Goods (including, without limitation, all
Equipment and Inventory);


 


(k) all Instruments (including, without limitation,
all promissory notes);


 


(l) all Insurance;


 


(m) all Intellectual Property;


 


(n) all Investment Property;


 


(o) all Letter of Credit Rights;


 


(p) all Money;


 


(q) all Pledged Securities (but subject to the
limitations set forth in the definition of such term);


 


(r) all Receivables, to the extent not otherwise
described above;


 


(s) all Securities;


 


(t)  all Securities Accounts;


 


(u) all Securities Entitlements;


 


(v) all Supporting Obligations;


 


(w) all Vehicles; and


 


(x) to the extent not otherwise included, all
Proceeds, products, accessions, rents and profits of or in respect of any and
all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.


 


ARTICLE 4

REPRESENTATIONS
AND WARRANTIES


 


To induce the Administrative Agent, the Issuing Bank
and the Lenders to enter into the Credit Agreement and to induce (a) the
Lenders to make their respective extensions of credit to the Borrower, (b) the
Issuing Bank to issue Letters of Credit thereunder, and (c) the Secured
Affiliates to enter into Hedging Agreements and Cash Management Agreements,
each Grantor hereby represents and warrants to the Administrative Agent and
each other Lender that:


 


Section 4.1 Representations in
Credit Agreement.
The representations and warranties set forth in Article 5 of the Credit
Agreement as they relate to such Grantor or to the Financing Documents to which
such Grantor is a party, each of which is hereby incorporated herein by
reference, are true and correct in all material respects, and the
Administrative Agent


 


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and
each other Lender shall be entitled to rely on each of them as if they were
fully set forth herein.


 


Section 4.2 Title; No Other
Liens. Except for
the security interest granted to the Administrative Agent for the ratable
benefit of the Secured Parties pursuant to this Agreement and the Permitted
Liens, such Grantor owns each item of the Collateral free and clear of any and
all Liens or claims of others. No 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 (a) such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties pursuant
to this Agreement, (b) such as are expressly permitted by the Credit Agreement,
and (c) those which will be released simultaneously with the initial Borrowing
under the Credit Agreement.


 


Section 4.3 Perfected First
Priority Liens.
The security interests granted pursuant to this Agreement, the Copyright
Security Agreement, the Patent Security Agreement and the Trademark Security
Agreement (a) upon completion of the filings and other actions specified on Schedule
1 hereto (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent
in completed and duly executed form) will constitute valid perfected security interests
in the Collateral to the extent that a security interest therein may be
perfected by filing pursuant to the UCC in favor of the Administrative Agent,
for the ratable benefit of the Lenders, as collateral security for the Lender
Indebtedness, enforceable in accordance with the terms hereof against all
creditors of such Grantor subject to (1) bankruptcy, insolvency, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors’ rights generally, and (2) general principles of equity (regardless
of whether considered in a proceeding at law or in equity), and (b) are prior
to all other Liens on the Collateral in existence on the date hereof except for
Permitted Liens. Any reference in this Agreement or the other Financing
Documents to Permitted Liens is not intended to and should not be interpreted
as subordinating or postponing, or as any agreement to subordinate or postpone,
any Lien created herein or by any of the other Financing Documents to any
Permitted Lien.


 


Section 4.4 Organization. Such Grantor’s jurisdiction of
incorporation, formation or organization (as applicable), organizational
identification number and federal tax identification number are specified on Schedule
2 hereto (as such Schedule may be updated from time to time in accordance
with Section 5.6).


 


Section 4.5
Inventory and Equipment.


 


(a) The Inventory and Equipment of each Grantor
(other than In-Transit Inventory and mobile Goods) are kept at the locations
listed on Schedule 3 hereto (as such Schedule may be updated from time
to time in accordance with Section 5.6 hereof).


 


(b) No part of the Equipment of any Grantor
constitutes a Fixture or has otherwise become permanently attached to, affixed
to or otherwise incorporated into any real property or improvements of any
Person other than real property and improvements owned in fee by such Grantor
and with respect to which such Grantor has delivered to the Administrative
Agent a Mortgage granting to the Administrative Agent a first and prior
mortgage Lien on such real property and improvements (subject to Permitted
Liens) to secure the Lender Indebtedness.


 


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(c) No Inventory or Equipment of any Grantor is or
at any time evidenced by a negotiable Document.


 


Section 4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.


 


Section 4.7  Securities and Securities
Accounts.


 


(a) All Securities in which a Grantor holds any
beneficial or record interest are accurately listed and described in Schedule
4 hereto (as such Schedule
may be updated from time to time in accordance with Section 5.8 hereof).


 


(b) All Securities Accounts held by each Grantor are
accurately listed and described (including by reference to the Securities
Intermediary and account number) on Schedule 5 hereto (as such schedule
may be updated from time to time in accordance with Section 5.8 hereof).
Each Grantor has executed and delivered, and caused the applicable Securities
Intermediary to execute and deliver a Securities Account Control Agreement with
respect to each such Securities Account. Each Grantor is the sole entitlement
holder of each such Securities Account, and such Grantor has not consented to,
and is not otherwise aware of, any Person (other than the Administrative Agent)
having “control” (within the meanings of Sections 8-106 and 9-106 of the UCC)
over, or any other interest in, any such Securities Account or securities or
other property credited thereto.


 


(c) Each Grantor has taken all actions necessary,
including those specified in Section 4.7(b) hereof, to establish
the Administrative Agent’s “control” (within the meanings of Sections 8-106 and
9-106 of the UCC) over any portion of the Collateral constituting Certificated
Securities, Uncertificated Securities, Securities Accounts or Securities
Entitlements.


 


(d) Except as described in Schedule 4 hereto
(as such Schedule may be updated from time to time in accordance with Section
5.8 hereof), the Pledged Securities represent one hundred percent (100%) of
the issued and outstanding Securities of every class of the applicable Issuer.


 


(e) The applicable Grantor has delivered to the
Administrative Agent an Acknowledgement and Consent to Pledge substantially in
the form of Annex V hereto duly executed by such Issuer of Pledged
Securities.


 


(f) All of the Pledged Securities have been duly and
validly issued and are fully paid and nonassessable.


 


(g) Each Grantor is the record and beneficial owner
of, and has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens, restrictions on transfer, voting
agreements, options or claims of, any other Person, other than Permitted Liens.


 


(h) To the extent any of the Pledged Securities are
Certificated Securities, the applicable Grantor has delivered the Security
Certificates evidencing such Securities, duly


 


11

















 


endorsed
in blank, or accompanied by appropriate transfer powers executed in blank, to
the Administrative Agent.


 


Section 4.8 Commodity Accounts
and Commodity Contracts.


 


(a) Borrower is not a party to any Commodity
Contract other than Commodity Contracts which are carried in Commodity Accounts
described in Schedule 6 hereto (as such Schedule may be updated from
time to time in accordance with Section 5.15 hereof).


 


(b) All Commodity Accounts held by each Grantor are
accurately listed and described (including by reference to the Commodity
Intermediary and account number) on Schedule 6 hereto (as such Schedule
may be updated from time to time in accordance with Section 5.15
hereof). Each Grantor has executed and delivered, and caused the applicable
Commodity Intermediary to execute and deliver a Commodity Account Control
Agreement with respect to each such Commodity Account. Each Grantor is the sole
entitlement holder of each such Commodity Account, and such Grantor has not
consented to, and is not otherwise aware of, any Person (other than the
Administrative Agent) having “control” (within the meanings of Sections 8-106
and 9-106 of the UCC) over, or any other interest in, any such Commodity
Account or securities or other property credited thereto.


 


(c) Each Grantor has taken all actions necessary,
including those specified in Section 4.8(b) hereof, to establish
the Administrative Agent’s “control” (within the meanings of Sections 8-106 and
9-106 of the UCC) over any portion of the Collateral constituting Commodity
Accounts and Commodity Contracts.


 


Section 4.9 Intellectual Property.


 


(a) All Intellectual Property owned or licensed by
each Grantor or in which any Grantor holds an interest are accurately listed
and described in Schedule 7 hereto (as such Schedule may be updated from
time to time in accordance with Section 5.10 hereof).


 


(b) The Copyrights and Copyright applications listed
on Schedule A to the Copyright Security Agreement executed and delivered in
connection with this Agreement constitute all of the Copyrights and Copyright
applications owned and currently in use by the Company. The Patents and Patent
applications listed on Schedule A to the Patent Security Agreement executed and
delivered in connection with this Agreement constitute all of the Patents and
Patent applications owned and currently in use by the Company. The Trademarks
and Trademark applications listed on Schedule A to the Trademark Security
Agreement executed and delivered in connection with this Agreement constitute
all of the Trademarks and Trademark applications owned and currently in use by
the Company.


 


(c) All Intellectual Property of each Grantor is
valid, subsisting, unexpired, enforceable, has not been abandoned, and does not
infringe the Intellectual Property rights of a third party.


 


(d) Except as set forth in Schedule 7 hereto
(as such Schedule may be updated from time to time in accordance with Section
5.10 hereof), none of the Intellectual Property is


 


12

















 


the
subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor.


 


(e) No holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel or question
the validity of, or such Grantor’s rights in, any Intellectual Property.


 


(f) No action or proceeding is pending or, to the
knowledge of such Grantor, threatened on the date hereof seeking to limit,
cancel or question the validity, or such Grantor’s ownership, of any
Intellectual Property.


 


Section 4.10 Deposit Accounts.


 


(a) All Deposit Accounts held by each Grantor are
accurately listed and described (including by reference to the bank at which
such account has been established and account number) on Schedule 8 hereto (as such Schedule may be updated from
time to time in accordance with Section 5.16 hereof). Each Grantor has
executed and delivered, and caused the applicable bank to execute and deliver a
Deposit Account Control Agreement with respect to each such Deposit Account.
Each Grantor is the sole account holder of each such Deposit Account and such
Grantor has not consented to, and is not otherwise aware of, any Person (other
than the Administrative Agent) having either sole dominion and control (within
the meaning of common law) or “control” (within the meaning of Section 9-104 of
the UCC) over, or any other interest in, any such Deposit Account or any money
or other property deposited therein. Each Grantor shall take all actions
necessary to establish the Administrative Agent’s “control” (within the meaning
of Section 9-104 of the UCC) over all Deposit Accounts.


 


(b) Each of the Grantors, the Administrative Agent
and JPMorgan Chase agree that each account held by a Grantor at JPMorgan Chase
is a “Deposit Account” within the meaning of 9-102(a)(29) of the UCC and that
pursuant to the terms of this Agreement and the Credit Agreement, the Deposit
Accounts of the Grantors held by JPMorgan Chase are within the “control” of the
Administrative Agent for purposes of perfecting Administrative Agent’s security
interest in the Deposit Accounts. JPMorgan Chase hereby acknowledges and agrees
(i) that if at any time JPMorgan Chase shall receive any instructions
originated by the Administrative Agent directing the disposition of funds in
any Deposit Account, JPMorgan Chase shall comply with such instructions without
further consent by the applicable Grantor or Grantors or any other person and
(ii) that it has received notice of the security interest of the Administrative
Agent in any and all Deposit Accounts now or hereafter held by JPMorgan Chase
and hereby acknowledges and consents to such lien.


 


Section 4.11 Instruments and
Chattel Paper.


 


(a) All Instruments and Chattel Paper in which a
Grantor holds any beneficial or record interest are accurately listed and
described in Schedule 9 hereto (as such Schedule may be updated from
time to time in accordance with Section 5.3 hereof).


 


(b) The applicable Grantor has delivered to the
Administrative Agent all Instruments and tangible Chattel Paper comprising a
part of the Collateral (except to the extent


 


13

















 


excused
pursuant to Section 7.6(g) of the Credit Agreement), and each such instrument
has been duly endorsed in blank.


 


(c) Each Grantor has taken all actions reasonably
requested by the Administrative Agent to establish control (as defined in the
UCC) by the Administrative Agent of all electronic Chattel Paper included in
the Collateral and all “transferable records” as defined in Section 201 of the
Federal Electronics Signatures in Global and National Commerce Act or in
Section 16 of Uniform Electronic Transactions Act as in effect in all relevant
jurisdictions. Without limiting the foregoing, each Grantor represents and
warrants that all conditions necessary to establish the Administrative Agent’s
control over any electronic chattel paper included in the Collateral under Section
9.105 of the UCC have been satisfied.


 


Section 4.12 Vehicles.


 


(a) All vehicles in which any Grantor holds an
interest are accurately listed and described in Schedule 10 hereto (as
such Schedule may be updated from time to time in accordance with Section
5.14 hereof).


 


(b) To the extent required by Section 4.5(b) of the
Credit Agreement, the applicable Grantor has delivered to the Administrative
Agent the original certificate of title, together with original applications
for new certificates of title, for each Vehicle) and other Property owned by
any Grantor and subject to a certificate of title statute of any applicable
jurisdiction as is necessary to cause the Lien established pursuant to this
Agreement to be noted on such certificate of title.


 


Section 4.13 Aircraft. No Grantor owns or holds any interest in
aircraft.


 


Section 4.14 Accuracy of
Borrowing Base Reports/Eligibility Criteria. All information contained in each Borrowing
Base Report, Inventory Designation Report and collateral certificate delivered
to the Administrative Agent or Lenders pursuant to Section 6.10(g) of the
Credit Agreement was accurate and complete on the date as of which each such
report was prepared. Without limiting the foregoing, all Inventory and Accounts
designated as Eligible Accounts, Eligible Unbilled Accounts, Eligible Finished
Goods Inventory, Eligible InTransit Inventory or Eligible Raw Materials
Inventory in any Borrowing Base Report delivered to the Administrative Agent
and Lenders satisfied all eligibility criteria set forth in the definitions of “Eligible
Account”, “Eligible Unbilled Account”, “Eligible Inventory”, “Eligible Finished
Goods Inventory”, “Eligible In-Transit Inventory” and “Eligible Raw Materials
Inventory” set forth in the Credit Agreement as of the date such Borrowing Base
Report was prepared.


 


Section 4.15 Commercial Tort
Claims. All
Commercial Tort Claims of each Grantor or in which any Grantor holds an
interest are accurately listed and described in Schedule 11 hereto (as
such Schedule may be updated from time to time in accordance with Section
5.11 hereof).


 


14



















ARTICLE 5

COVENANTS


 


Each Grantor covenants and agrees that, from and
after the date of this Agreement until the Lender Indebtedness shall have been
paid in full and the Revolving Credit Commitments shall have terminated such
Grantor shall:


 


Section 5.1 Covenants in Credit
Agreement and other Financing Documents. Take, or refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that each covenant and agreement applicable to such Grantor contained in
the Credit Agreement and the other Financing Documents is completed and no
Default or Event of Default is caused by the failure to take such action or to
refrain from taking such action by such Grantor or any of its Subsidiaries.


 


Section 5.2 Application of Cash
Proceeds. Cause
each invoice issued by such Grantor to provide for payment of such invoice (a)
if by check, by remitting the same to the Lock Box, and (b) by wire transfer,
automated checking transaction or other electronic funds transfer by remitting
the same directly to the Blocked Account, and otherwise take all action
necessary to cause all cash Proceeds of the Collateral, including, without
limitation, all cash Proceeds of Receivables to be remitted to the Blocked
Account. If, notwithstanding the foregoing, any Grantor shall receive any cash
Proceeds of the Collateral, such Grantor shall hold such Proceeds in trust for
the benefit of the Administrative Agent, and not later than the first (1st)
Business Day following the date of receipt, deposit the same directly into the
Blocked Account in the exact form received.


 


Section 5.3 Delivery of
Instruments and Chattel Paper. Immediately upon the creation or acquisition of any Instrument or
Chattel Paper, deliver written notice thereof, to the Administrative Agent
which notice shall include a description in reasonable detail of the
Instruments or Chattel Paper which is the subject of such notice, and, except
to the extent excused pursuant to Section 7.6(g) of the Credit Agreement,
deliver the same duly indorsed in a manner satisfactory to the Administrative
Agent, to be held as Collateral pursuant to this Agreement. At the Administrative
Agent’s option, the Administrative Agent may permit such Grantor to retain
physical possession of any Chattel Paper in the event such Grantor shall cause
the original of any such Instrument or Chattel Paper to be conspicuously marked
in a form and manner acceptable to the Administrative Agent with the following
legend referring to Chattel Paper: “This Chattel Paper is subject to the
security interest of JPMorgan Chase Bank, as the Administrative Agent, and any
sale, transfer, assignment or encumbrance of this Chattel Paper violates the
rights of such secured party.” Upon receipt of the notice required by this Section
5.3 with respect to any Instrument or Chattel Paper hereafter acquired by
any Grantor, Schedule 9 shall be deemed to be updated to include such
Instrument or Chattel Paper (and the Administrative Agent may, but shall not be
required to, physically replace the existing Schedule 9 with a new
Schedule reflecting such additional Instrument or Chattel Paper).


 


In the event that such Grantor shall at any time
hold or acquire an interest in any electronic chattel paper or any “transferable
record” (as such term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction), such
Grantor shall


 


15

















 


promptly
notify the Administrative Agent thereof in writing, and such Grantor shall
take, or cause to be taken, such actions as the Administrative Agent may
request to give the Administrative Agent control of such Electronic Chattel
Paper under Section 9-314 of the UCC and control of such transferable record
under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction.


 


Section 5.4 Insurance. Cause the Collateral to at all times be
insured in such amounts, against such claims and losses and pursuant to such
policies as are required pursuant to the Credit Agreement.


 


Section 5.5 Maintenance of
Perfected Security Interest; Further Documentation.


 


(a) Maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 4.3 hereof and shall defend such security interest
against the claims and demands of all Persons whomsoever; provided that the
Administrative Agent shall release liens and security interests in any
Collateral which is sold or otherwise disposed of in accordance with the terms
of the Credit Agreement and the other Financing Documents.


 


(b) Furnish to the Administrative Agent and the
other Secured Parties from time to time, at such Grantor’s sole cost and expense,
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Administrative
Agent may request, all in such detail as the Administrative Agent may request.


 


(c) 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 (as required by applicable
law), deliver and/or have recorded with appropriate agencies such further
instruments and documents and take such further actions as the Administrative
Agent may request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the UCC (or other similar laws) in effect in any jurisdiction with
respect to the security interests created hereby.


 


(d) This Section 5.5 and the obligations
imposed on each Grantor by this Section 5.5 shall be interpreted as
broadly as possible in favor of the Administrative Agent and the Secured
Parties in order to effectuate the purpose and intent of this Agreement.


 


Section 5.6 Changes in
Locations, Name, etc. Not, except upon five (5) Business Days’ prior written notice to the
Administrative Agent and delivery to the Administrative Agent of all additional
financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein (which shall expressly include the
delivery of Bailee Letters, with respect to any Terminal which is not the
subject of a Bailee Letter to the extent required by Section 4.1 of the Credit
Agreement):


 


16

















 


(a) permit any of the Equipment or Inventory owned
by such Grantor to be kept at a location other than those listed on Schedule
3 hereof, except for
In-Transit Inventory;


 


(b) change its jurisdiction of incorporation,
formation, or organization, as applicable; or


 


(c) change its name, identity or organizational
structure.


 


Each notice delivered pursuant to this Section
5.6 shall specify in reasonable detail any new Inventory or Equipment
location or change in the jurisdiction of incorporation, organization,
formation, name, identity or corporate structure as applicable. Upon receipt of
such notice, Schedule 2 or 3, as applicable, shall be deemed to be
updated to include such new or modified information (and the Administrative
Agent may, but shall not be required to, physically replace the existing Schedule
2 or 3, as applicable, with a new Schedule reflecting such additional or
modified information).


 


Section 5.7 Notices. Advise the Administrative Agent promptly,
in reasonable detail, of any Lien (other than Permitted Liens) on any of the
Collateral.


 


Section 5.8 Pledged Securities;
Securities Accounts.


 


(a) Notify the Administrative Agent promptly in
writing upon the acquisition by any Grantor of any Pledged Securities, which
notice shall (i) set forth all information with respect to such Pledged
Securities as is set forth on Schedule 4 hereto with respect to the Pledged
Securities owned by the Grantors on the date hereof, and (ii) be accompanied by
an Acknowledgment and Consent to Pledge duly executed by the Issuer of such
Securities (unless such Issuer is also a Grantor). Upon receipt of such notice,
Schedule 4 shall be deemed to be updated to include such Pledged
Securities (and the Administrative Agent may, but shall not be required to,
replace the existing Schedule 4 with a new Schedule reflecting such
Pledged Securities). Nothing contained in this Section 5.8 shall permit
any Grantor to invest in or hold any Security to the extent such investment is
prohibited pursuant to the Credit Agreement.


 


(b) Not open or maintain any Securities Account
(other than those owned by the Grantors on the date hereof and described on Schedule
5 hereto) unless the
applicable Grantor shall have (i) delivered written notice thereof to Administrative
Agent not less than five (5) Business Days prior to opening such account, which
notice shall set forth all information with respect to such Securities Account
as is set forth on Schedule 5 hereto with respect to Securities Accounts
held by the Grantors on the date hereof and (ii) Grantor and the applicable
Securities Intermediary shall have executed and delivered a Securities Account
Control Agreement. Upon receipt of such notice, Schedule 5 shall be
deemed to be updated to include such Securities Account (and the Administrative
Agent may, but shall not be required to, replace the existing Schedule 5
with a new Schedule reflecting such Securities Account).


 


(c) If any Grantor shall become entitled to receive
or shall receive any Security Certificate (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 in respect of
the Securities of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in


 


17

















 


exchange
for, any Pledged Securities, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Administrative Agent and the other Lenders,
hold the same in trust for the Administrative Agent and the other Lenders and
deliver the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor in blank or accompanied by an undated
stock power covering such certificate duly executed in blank by such Grantor
and with, if the Administrative Agent so requests, signature guaranteed, to be
held by the Administrative Agent, subject to the terms hereof, as additional
Pledged Securities.


 


(d) Any sums paid upon or in respect of the Pledged
Securities including any dividend or distribution or any amount paid upon the
liquidation or dissolution of any Issuer shall be paid deposited directly into
the Blocked Account in accordance with Section 5.2 hereof. In case any
distribution of property upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, such non-cash Proceeds so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent for the ratable benefit of the Secured
Parties, be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Lender Indebtedness.


 


(e) Without the prior written consent of the
Administrative Agent, such Grantor will not (i) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (ii) 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 Securities or Proceeds thereof, or any interest therein,
except for Permitted Liens, or (iii) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
dispose of any of the Pledged Securities or Proceeds thereof (except for
restrictions that exist on the date hereof which are expressly set forth in the
organizational documents of Marketing Alliance Partners in which any Grantor
owns Equity as of the Closing Date).


 


(f) If such Grantor is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) hereof with respect
to the Pledged Securities issued by it, and (iii) the terms of Section 6.1
hereof shall apply to it, mutatis mutandis,
with respect to all actions that may be required of it pursuant to Section
6.1 hereof with respect to the Pledged Securities issued by it.


 


Section 5.9 Receivables.


 


(a) Other than in the ordinary course of business
with respect to Receivables which are not included in Eligible Accounts in the
most recent Borrowing Base Report provided to Administrative Agent, not (i)
grant any extension of the time of payment of any Receivable, (ii) compromise
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, (iv)
allow any credit or discount whatsoever on any Receivable or (v) amend,
supplement or modify any Receivable in any manner that could adversely affect
in any material respect the value thereof.


 


18

















 


(b) If at any time the aggregate amount owing to
such Grantor on all Accounts as to which a Governmental Authority is an obligor
exceeds 5% of the aggregate amount owing to the Grantor on all Accounts, such
Grantor shall so notify the Administrative Agent and, if requested by the
Administrative Agent, at such Grantor’s sole cost and expense, from and after
the date on which such aggregate amount first exceeds such percentage, deliver
to the Administrative Agent such assignments, notices of assignment and other
documents or information as shall be necessary or otherwise requested by the
Administrative Agent to permit the assignment hereunder of all Accounts as to
which a Governmental Authority is an obligor pursuant to all applicable
Governmental Requirements (including, without limitation, the Assignment of
Claims Act of 1940, as amended). Nothing contained in this Section 5.9
shall permit the inclusion of any such Account in Eligible Accounts.


 


(c) The Administrative Agent shall have the right to
make test verifications of the Receivables in any manner and through any medium
that it considers advisable, and each Grantor shall furnish all such assistance
and information as the Administrative Agent may reasonably require in
connection with such test verifications. At any time while an Event of Default
shall have occurred and be continuing, upon the Administrative Agent’s request
and at the expense of the Grantors, the Grantors 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.


 


(d) Upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of an Event of
Default, each Grantor shall notify obligors on the Receivables that the
Receivables have been assigned to the Administrative Agent for the ratable
benefit of the Secured Parties and that payments in respect thereof shall be
made directly to the Administrative Agent.


 


(e) Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of its Receivables to observe and
perform all of the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving rise
thereto. No Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Administrative Agent or any other
Secured Party of any payment relating thereto, nor shall the Administrative
Agent or any other Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto) 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 thereunder, 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.


 


Section 5.10 Intellectual Property.


 


(a) Notify the Administrative Agent promptly, in
writing upon the acquisition by Grantor of any Intellectual Property which
notice shall set forth (i) all information with respect to such Intellectual
Property as is set forth on Schedule 7 hereto with respect to
Intellectual Property owned by the Grantors on the date hereof, and (ii) shall
be accompanied by


 


19

















 


a
Copyright Security Agreement, Patent Security Agreement and/or Trademark
Security Agreement, as applicable, duly executed and completed by the
applicable Grantor. Upon receipt of such notice, Schedule 7 shall be
deemed to be updated to include such Intellectual Property (and the
Administrative Agent may, but shall not be required to, replace the existing Schedule
7 with a new Schedule reflecting such Intellectual Property).


 


(b) Grantor (either itself or through licensees)
will, with respect to each Trademark which is material to the operation of its
business, (i) continue to use such Trademark on each and every trademark class
of goods applicable to its current line as reflected in its then-current
catalogs, brochures and price lists in order to maintain such Trademark in full
force free from any claim of abandonment for non-use, (ii) maintain the quality
of products and services offered under such Trademark, (iii) use such Trademark
with all notices and legends required by applicable law or regulations, and
(iv) 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 invalidated or
impaired in any way.


 


(c) No Grantor will, and no Grantor will permit any
licensee to do any act, whereby any Patent which is material to the operation
of its business may become forfeited, abandoned or dedicated to the public.


 


(d) No Grantor will, and no Grantor will permit any
licensee to do any act or omit to do any act whereby any portion of any
Copyright which is material to the operation of its business may become
invalidated or otherwise impaired. Such Grantor will not (either itself or
through licensees) do any act whereby any of the Copyrights may fall into the
public domain.


 


(e) No Grantor will, and no Grantor will permit any
licensee to do any act that results in any Intellectual Property held by such
Grantor infringing on the Intellectual Property rights of a third party.


 


(f) Such Grantor will promptly notify the
Administrative Agent immediately if it knows, or has reason to know, that any
application or registration relating to any Patent, Copyright or Trademark may
become abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal
in any country) regarding Grantor’s ownership of, or the validity of, any
Intellectual Property or such Grantor’s right to register the same or to own and
maintain the same.


 


(g) To the extent any Grantor, either by itself or
through an authorized agent, employee, licensee or designee, shall file an
application for any Patent or Trademark with the United States Patent and
Trademark Office or any Copyright in the U.S. Copyright Office or any similar
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, a Copyright Security Agreement, a Patent
Security Agreement, a Trademark Security Agreement and any and all other
agreements, instruments, documents, and papers as the Administrative Agent may
request to evidence the


 


20

















 


Administrative
Agent’s security interest in any Copyright, Patent or Trademark and the
goodwill and General Intangibles of such Grantor relating thereto or
represented thereby.


 


(h) Grantor will take all commercially reasonable
and necessary steps, including, without limitation, in any proceeding before
the United States Patent and Trademark Office, the U.S. Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain each registration of Patents, Trademarks and Copyrights
held by, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability, to the extent such
Patents, Trademarks or Copyrights are material to the operation of its
business.


 


(i) In the event that any Intellectual Property of
any Grantor which is material to the operation of its business is infringed,
misappropriated or diluted by a third party, such Grantor shall take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances, or as otherwise requested by the Administrative Agent, to
protect such Intellectual Property.


 


(j) Take all steps reasonably necessary to protect
the secrecy of all Trade Secrets, including, without limitation, entering into
confidentiality agreements with employees with access to such Trade Secrets and
labeling and restricting access to secret information and documents.


 


Section 5.11 Commercial Tort
Claims. Notify
the Administrative Agent promptly, in writing in the event that any Grantor
shall at any time after the date hereof hold any Commercial Tort Claims which
notice shall set forth (i) all information with respect to such Commercial Tort
Claims as is set forth on Schedule 11 hereto with respect to Commercial Tort Claims held by the Grantors on
the date hereof, and (ii) shall include the express grant by such Grantor to
the Administrative Agent of a security interest in such Commercial Tort Claim
(and the proceeds thereof). Upon receipt of such notice, Schedule 11
shall be deemed to be updated to include such Commercial Tort Claims (and the
Administrative Agent may, but shall not be required to, replace the existing Schedule
11 with a new Schedule reflecting such Commercial Tort Claims). In the
event that such notice does not include such grant of a security interest, the
sending thereof by such Grantor to the Administrative Agent shall be deemed to
constitute such grant to the Administrative Agent. Upon the sending of such
notice, any Commercial Tort Claim described therein shall constitute part of
the Collateral and shall be deemed included therein. Without limiting the
authorization of the Administrative Agent provided in the Credit Agreement or
otherwise arising by such Grantor’s execution of this Agreement or any of the
other Financing Documents, the Administrative Agent is hereby irrevocably
authorized from time to time and at any time to file such financing statements
naming the Administrative Agent or its designee as secured party and such
Grantor as debtor, or any amendments to any financing statements, covering any
such Commercial Tort Claim as Collateral. In addition, such Grantor shall
promptly upon the Administrative Agent’s request, execute and deliver, or cause
to be executed and delivered, to the Administrative Agent such other
agreements, documents and instruments as the Administrative Agent may require
in connection with such Commercial Tort Claim.


 


Section 5.12  Negotiable Documents. No Grantor shall permit any Inventory or
other Property of such Grantor to be evidenced by a negotiable Document. If,
notwithstanding the


 


21

















 


foregoing,
any such Inventory or other Property is or becomes evidenced by a negotiable
Document, the Grantor shall cause such negotiable Document to be duly
negotiated to the Administrative Agent.


 


Section 5.13 Inventory and Equipment.


 


(a) Keep the Equipment, Inventory (except for
In-Transit Inventory) and any Documents evidencing any Equipment and Inventory
in the locations specified on Schedule 3 (as such Schedule may be
amended or supplemented from time to time in accordance with Section 5.6
hereof) and take all actions necessary or advisable to maintain the continuous
validity, perfection and the same or better priority of the Administrative
Agent’s security interest in such Inventory and Equipment intended to be
granted and agreed to hereby, or to enable the Administrative Agent to exercise
and enforce its rights and remedies hereunder, with respect to such Equipment
and Inventory.


 


(b) Keep materially correct and accurate records of
the Inventory, itemizing and describing the kind, type and quantity of Inventory,
such Grantor’s cost therefor and (where applicable) the current list prices for
the Inventory, in each case, in reasonable detail.


 


(c) Not deliver any Document evidencing any
Equipment and Inventory to any Person other than to the issuer of such Document
to claim the Goods evidenced therefor or to the Administrative Agent.


 


(d) Take commercially reasonable measures to
maintain, keep and preserve the Inventory in good and merchantable condition,
maintain and preserve each item of Equipment in good operating condition,
ordinary wear and tear and immaterial impairments of value and damage by the
elements excepted, and provide all maintenance, service and repairs necessary
for such purpose


 


(e) Prevent any Equipment from becoming attached to
real estate in such a manner that the same may become a Fixture or otherwise
becomes permanently attached to, affixed to or otherwise incorporated into any
real property or improvements of any Person other than real property and
improvements owned in fee by such Grantor and with respect to which such
Grantor has delivered to the Administrative Agent a Mortgage granting to the
Administrative Agent a first and prior mortgage Lien on such real property and
improvements (subject to Permitted Liens) to secure the Lender Indebtedness.


 


Section 5.14 Vehicles.


 


(a) Notify the Administrative Agent promptly, in
writing upon the acquisition by Grantor of any Vehicle which notice shall set
forth (i) all information with respect to any such Vehicle as is set forth on Schedule
10 hereto with respect to Vehicles owned by the Grantors on the date
hereof, and (ii) shall be accompanied by the original certificate of title,
together with original applications for new certificates of title, for each such
Vehicle except to the extent excused pursuant to Section 4.5 of the Credit
Agreement. Upon receipt of such notice, Schedule 10 shall be deemed to
be updated to include such Vehicle (and the Administrative Agent may, but shall
not be required to, replace the existing Schedule 10 with a new Schedule
reflecting such Vehicle).


 


22

















 


(b) 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. No Vehicle shall be removed from the state
which has issued the certificate of title or ownership therefor for a period in
excess of sixty (60) days.


 


Section 5.15 Commodity Accounts
and Commodity Contracts.


 


(a) Not open or maintain any Commodity Account
(other than those owned by the Grantors on the date hereof and described on Schedule
6 hereto) unless the
applicable Grantor shall have (i) delivered written notice thereof to the
Administrative Agent not less than five (5) Business Days prior to opening such
account, which notice shall set forth all information with respect to such
Commodity Account as is set forth on Schedule 6 hereto with respect to
Commodity Accounts held by the Grantors on the date hereof and (ii) Grantor and
the applicable Commodity Intermediary shall have executed and delivered a
Commodity Account Control Agreement. Upon receipt of such notice, Schedule 6
shall be deemed to be updated to include such Commodity Account (and the
Administrative Agent may, but shall not be required to, replace the existing Schedule
6 with a new Schedule reflecting such Commodity Account).


 


(b) Not hold or be a party to any Commodity Contract
other than those held in Commodity Accounts with respect to which the requests
of Section 5.15(a) have been satisfied.


 


Section 5.16 Deposit Accounts. Not open or maintain any Deposit Account
(other than those owned by the Grantors on the date hereof and described on Schedule
8 hereto) unless the applicable Grantor shall have (i) delivered written
notice thereof to the Administrative Agent not less than five (5) Business Days
prior to opening such account, which notice shall set forth all information
with respect to such Deposit Account as is set forth on Schedule 8
hereto with respect to Deposit Accounts held by the Grantors on the date hereof
and (ii) Grantor and the applicable depository institution shall have executed
and delivered a Deposit Account Control Agreement. Upon receipt of such notice,
Schedule 8 shall be
deemed to be updated to include such Deposit Account (and the Administrative
Agent may, but shall not be required to, replace the existing Schedule 8
with a new Schedule reflecting such Deposit Account). Nothing contained in this
Section 5.16 shall permit Borrower to establish or maintain any Deposit
Account which is prohibited pursuant to the Credit Agreement.


 


ARTICLE 6

REMEDIAL
PROVISIONS


 


Section 6.1 Pledged Securities.


 


(a) Unless an Event of Default shall have occurred
and be continuing, each Grantor shall be permitted to exercise all voting and
corporate rights with respect to the Pledged Securities; provided, however,
that no vote shall be cast or corporate right exercised or other action taken
which, in the Administrative Agent’s reasonable judgment, would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Financing Document.


 


23

















 


(b) If an Event of Default shall occur and be
continuing and upon the written request of the Administrative Agent, any or all
of the Pledged Securities shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders or members of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the applicable Grantor or the Administrative
Agent of any right, privilege or option pertaining to such Pledged Securities,
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account
for property actually received by it, but the Administrative Agent and the
other Secured Parties shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.


 


(c) Each Grantor hereby authorizes and instructs
each Issuer of Pledged Securities pledged by such Grantor hereunder to (i)
comply with any instruction received by such Issuer from the Administrative
Agent in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and such Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii) pay
any dividends or other payments with respect to the Pledged Securities directly
to the Administrative Agent.


 


Section 6.2 Application of
Proceeds. At any
time after the occurrence and during the continuance of an Event of Default, at
the Administrative Agent’s election, the Administrative Agent may apply all or
any part of Proceeds, including, without limitation, any such Proceeds held in
any Collateral Account in payment of the Lender Indebtedness in the manner
required by Section 2.21 of the Credit Agreement. Any balance of such Proceeds
remaining after the Lender Indebtedness shall have been paid in full, no
Letters of Credit shall be outstanding and the Revolving Credit Commitments
shall have terminated shall be paid over to the Grantors or to whomsoever may
be lawfully entitled to receive the same.


 


Section 6.3 UCC and Other
Remedies. 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 them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Lender Indebtedness, all
rights and remedies of a secured party under the UCC or any other applicable
law. 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, including, without limitation, notice of
intent to accelerate or notice of acceleration, (except any notice required by
law as referred to below) to or upon the Grantor or any other Person (all and
each of which demands, defenses, advertisements and notices are hereby waived),
may in such circumstances forthwith 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


 


24

















 


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 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. The
Administrative Agent 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 Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
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, whether at such
Grantor’s premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.3, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith 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 hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Lender Indebtedness and to any other Person legally entitled thereto in
accordance with Section 2.21 of the Credit Agreement. 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 them of any 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 ten days before such
sale or other disposition.


 


Section 6.4 Registration Rights.


 


(a) If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Securities pursuant to Section
6.3 hereof, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Securities, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will cause any Issuer
thereof to: (i) execute and deliver, and cause the directors, members, managers
and officers of such Issuer 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
Pledged Securities, or that portion thereof to be sold, under the provisions of
the Securities Act, (ii) 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 Pledged Securities, or that portion thereof
to be sold, and (iii) 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 Grantor agrees to cause any Issuer 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 Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged
Securities, by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise, and may be


 


25

















 


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 Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable 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 Securities for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.


 


(c) Each Grantor agrees to use its best efforts to
do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Securities pursuant to this Section
6.4 valid and binding and in compliance with any and all other applicable
Governmental Requirements. Each Grantor further agrees that a breach of any of
the covenants contained in this Section 6.4 will cause irreparable
injury to the Administrative Agent and the other Secured Parties, that the
Administrative Agent and the other 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 6.4 shall be specifically enforceable against
such Grantor, and such Grantor 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 under the Credit Agreement.


 


Section 6.5 Waiver; Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay the Lender Indebtedness and the reasonable fees and
disbursements of any attorneys employed by the Administrative Agent or any
other Secured Party to collect such deficiency.


 


ARTICLE 7

THE ADMINISTRATIVE AGENT


 


Section 7.1 The Administrative
Agent’s Appointment as Attorney-in-Fact etc.


 


(a) 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 such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this 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 Agreement, and, without limiting the
generality of the foregoing, such Grantor hereby gives the Administrative Agent
the power and right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:


 


(1)
in the name of such Grantor or its own name, or otherwise, take possession of
and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of


 


26

















 


law or equity or otherwise
deemed appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or with respect to any other
Collateral whenever payable;


 


(2)
in the case of any Copyright, Patent or Trademark, execute, deliver and have
recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s
security interest in such Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby;


 


(3)
pay or discharge Taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;


 


(4)
execute, in connection with any sale provided for in Section 6.3 or 6.4
hereof, any endorsements, assignments or other instruments or documents of
conveyance or transfer with respect to the Collateral; and


 


(5)
(A) 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) ask or
demand for, collect, and 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) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents (including,
without limitation, any negotiable Documents) in connection with any of the
Collateral; (D) 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) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (F) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate; (G)
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or 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, 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 were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and such Grantor’s 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 security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.


 


27

















 


Anything
in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.


 


(b) The Administrative Agent may (but without any
obligation to do so) (i) perform or satisfy any of the Grantor’s and any other
Obligated Party’s obligations under or pursuant to this Agreement and the other
Financing Documents which remain unsatisfied (after providing any notice and
opportunity to cure to which such Grantor or other Obligated Party is entitled
under any other provision of any Financing Document, if any), and (ii) take all
other actions and pay such amounts and claims as Administrative Agent
determines in its sole but reasonable discretion, is necessary or appropriate
to protect the rights and interests of the Administrative Agent and the other
Secured Parties under this Agreement and the other Financing Documents and
otherwise with respect to the Lender Indebtedness or to preserve and protect
the Collateral or any part thereof from loss.


 


(c) The expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section
7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable under the Credit Agreement on past due Loans that are Base Rate
Loans, from the date of payment by the Administrative Agent to the date
reimbursed by any Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.


 


(d) Each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the powers granted
in this Section 7.1. All powers, authorizations and agencies contained
in this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.


 


Section 7.2 Duty of the
Administrative Agent.
The Administrative Agent’s sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under 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, any other Secured Party, nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any 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 hereunder are solely to protect the
Administrative Agent’s interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any other Secured Party to exercise any
such powers. The Administrative Agent shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be
responsible to any Grantor or any other Credit Party for any act or failure to
act hereunder, except for their own gross negligence or willful misconduct.


 


Section 7.3 Financing Statements. Pursuant to the UCC and any other
applicable laws, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral in such form


 


28

















 


and
in such offices as the Administrative Agent reasonably determines appropriate
to perfect the security interests of the Administrative Agent under this
Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.


 


Section 7.4 Authority of the
Administrative Agent.
Each Grantor acknowledges that the rights and responsibilities of the
Administrative Agent under this 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 Agreement shall, as
between the Administrative Agent and the other 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 such Grantor, the Administrative Agent shall be conclusively presumed to be
acting as Administrative Agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and such Grantor shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.


 


ARTICLE 8

MISCELLANEOUS


 


Section 8.1 Amendments in
Writing. None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 10.2 of the Credit
Agreement.


 


Section 8.2 Notices. All notices, requests and demands to or
upon the Administrative Agent, any other Secured Party, or any Grantor
hereunder shall be effected in the manner provided for in Section 10.1 of the
Credit Agreement.


 


Section 8.3 No Waiver; Remedies
Cumulative. No
failure or delay on the part of any Grantor or the Administrative Agent in
exercising any right or remedy under this Agreement or any other Financing
Document and no course of dealing between such Grantor and the Administrative
Agent or any Secured Party shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy under this Agreement or any
other Financing Document preclude any other or further exercise thereof or the
exercise of any other right or remedy under this Agreement or any other
Financing Document. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any Grantor, the
Administrative Agent or any Secured Party would otherwise have. No notice to or
demand on any Grantor not required under this Agreement or any other Financing
Document in any case shall entitle such Grantor or any other Grantor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Secured
Parties to any other or further action in any circumstances without notice or
demand.


 


Section 8.4 Enforcement
Expenses; Indemnification.


 


(a) Each Grantor agrees to pay or reimburse the Administrative
Agent for all of its costs and expenses incurred in collecting against such
Grantor under the guaranty


 


29

















 


contained
in Section 2 hereof or otherwise enforcing or preserving any rights
under this Agreement and the other Financing Documents to which such Grantor is
a party, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent.


 


(b) Each Grantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.


 


(c) Each Grantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, to the same extent each Grantor would be required to do so pursuant
to Section 10.4 of the Credit Agreement.


 


(d) The agreements in this Section 8.4 shall
survive repayment of the Lender Indebtedness and all other amounts payable
under the Credit Agreement and the other Financing Documents.


 


Section 8.5 Successors and
Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of any Issuing Bank that issues any Letter of Credit),
except that no Grantor may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by such Grantor without such consent shall be
null and void).


 


Section 8.6 Set-Off. In addition to and not in limitation of all
rights of offset that the Administrative Agent, any Lender or any Issuing Bank
may have under applicable law, each Lender shall, upon the occurrence of any
Event of Default and at any time during the continuance thereof and whether or
not such Lender or such Issuing Bank has made any demand or the Lender
Indebtedness are matured, have the right at any time and from time to time,
without notice to any Grantor (any such notice being expressly waived by each
Grantor) to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by any Lender or any Issuing Bank to or for the credit or the
account of any Grantor against any and all of the Lender Indebtedness owing to
such Lender or such Issuing Bank then outstanding, subject to the provisions of
Section 2.19 of the Credit Agreement.


 


Section 8.7 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.


 


30

















 


Section 8.8 Severability. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held invalid,
illegal or unenforceable in any respect, (a) each Grantor agrees that such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement and (b) each Grantor and the Administrative Agent (acting on
behalf and at the direction of the Lenders) will negotiate in good faith to
amend such provision so as to be legal, valid, and enforceable.


 


Section 8.9 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
ADMINISTRATIVE AGENT, THE OTHER LENDERS, THE GRANTORS AND THE OTHER RESPECTIVE
PARTIES HERETO AND THERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.


 


Section 8.10 Governing Law;
Submission to Jurisdiction; etc.


 


(a) GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE
UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY STATE IN
WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY GOVERNS THE VALIDITY,
PERFECTION, PRIORITY AND ENFORCEABILITY, AND THE EXERCISE OF ANY REMEDIES WITH
RESPECT TO ANY LIEN OR SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED
HEREBY ON COLLATERAL LOCATED IN SUCH STATE.


 


(b) SUBMISSION
TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT, THE NOTES OR THE OTHER FINANCING DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, BUT NOT LIMITED TO, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.


 


(c) WAIVER OF
JURY TRIAL & CONSEQUENTIAL DAMAGES. TO THE MAXIMUM EXTENT
ALLOWED BY APPLICABLE LAW, EACH OF THE GRANTORS, THE ADMINISTRATIVE AGENT, THE
ISSUING BANK, AND THE OTHER LENDERS: (1) IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR


 


31

















 


ANY
FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2) IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (3) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER; AND (IV) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.


 


(d) Service of
Process. Each Credit Party which is a party hereto irrevocably
consents to service of process by notice delivered in accordance with Section
8.2 hereof. Nothing herein or in any other Financing Document shall affect
the right of the Administrative Agent or any other Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Grantor in any other jurisdiction.


 


Section 8.11 Acknowledgments. Each Grantor hereby acknowledges that:


 


(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Financing
Documents;


 


(b) neither the Administrative Agent nor any other
Lender has any fiduciary relationship with or duty to such Grantor arising out
of or in connection with this Agreement or any of the other Financing
Documents, and the relationship between the Administrative Agent and the other
Lenders, on one hand, and such Grantor, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor;


 


(c) no joint venture is created hereby or by the
other Financing Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantor and the Lenders; and


 


(d) nothing herein shall obligate any Secured
Affiliates to enter into any Hedging Agreement or any Cash Management
Agreement, provided, that, if any Secured Affiliates enters into the Hedging
Agreements or any Cash Management Agreement, it shall be deemed to be entering
into such agreement in reliance of this Agreement and the terms and conditions
contained herein.


 


Section 8.12 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.


 


Section 8.13 Additional Grantors. Each Subsidiary of Parent that is required
to become a party to this Agreement pursuant to Section 6.9 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex I hereto.


 


32

















 


Section 8.14 Releases.


 


(a) At such time as the Revolving Credit Loans, the
Reimbursement Obligations and the other Lender Indebtedness shall have been
paid in full, the Revolving Credit Commitments have been terminated, and no
Letters of Credit shall be outstanding, the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the applicable Grantor. At the request and joint and
several expense of the Grantors following any such termination, the
Administrative Agent shall promptly deliver to the appropriate Grantor any
Collateral held by the Administrative Agent hereunder, and promptly execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.


 


(b) If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Grantor in a transaction permitted
by Section 7.4 of the Credit Agreement, then the Administrative Agent, at the
request and sole expense of such Grantor, shall promptly execute and deliver to
such Grantor all releases or other documents reasonably necessary or desirable
for the release of the Liens created hereby on such Collateral. Additional
releases of Collateral shall be provided as set forth in Section 10.2(c) of the
Credit Agreement.


 


Section 8.15 Reinstatement. The provisions of this Agreement shall
remain in full force and effect and continue to be effective should any
petition be filed by or against any Grantor for liquidation or reorganization,
should such Grantor become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any part of
such Grantor’s assets or should any other financial impairment occur, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment or performance of the Lender Indebtedness, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned to any obligee of the Lender Indebtedness, whether as a
“voidable preference”, “fraudulent conveyance”, or otherwise, all as though
such payment or performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored, or returned, the Lender
Indebtedness shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.


 


[signature page to follow]


 


33

















 


IN WITNESS WHEREOF, the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.



 


	
  BORROWER:

  	
  WILLIAMS ETHANOL SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
					



 


	
  GUARANTOR: 

  	
  WILLIAMS BIO-ENERGY, LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
					



 


	
  ADMINISTRATIVE AGENT:  

  	
  JPMORGAN CHASE BANK, as Administrative

  Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
					



 


	
  Acknowledged
  and Agreed for the sole

  	
   

  
	
  purpose
  of Section 4.10(b) of this Agreement:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, individually

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


Signature Page


 














 


ANNEX I

TO GUARANTY AND SECURITY AGREEMENT


 


ASSUMPTION AGREEMENT


 


THIS ASSUMPTION AGREEMENT, dated as of                         ,
200  , by                                                       ,
a                                                                
(the “Additional Grantor”), in favor of JPMORGAN CHASE BANK, as the Administrative Agent (in such
capacity, the “Administrative Agent”) for the banks and other financial
institutions (the “Lenders”)
parties to the Credit Agreement referred to below. All capitalized terms not
defined herein shall have the meaning ascribed to them in such Credit
Agreement.


 


W I T N E S S E T H:


 


WHEREAS, the Borrower, the Guarantor, the Lenders,
the Administrative Agent and the Issuing Bank, have entered into a Credit
Agreement, dated as of                       ,
2003, (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”);


 


WHEREAS, the Additional Grantor has executed an
Addendum to the Credit Agreement pursuant to which it has become a Guarantor
under the Credit Agreement;


 


WHEREAS, in connection with the Credit Agreement,
the Borrower and the other Grantors (other than the Additional Grantor) have
entered into the Guaranty and Security Agreement, dated as of                        ,
2003 (as amended, supplemented or otherwise modified from time to time, the “Guaranty and Security Agreement”) in
favor of the Administrative Agent for the ratable benefit of the Lenders;


 


WHEREAS, Section 6.9 of the Credit Agreement
requires the Additional Grantor to become a party to the Guaranty and Security
Agreement; and


 


WHEREAS, the Additional Grantor has agreed to
execute and deliver this Assumption Agreement in order to become a party to the
Guaranty and Security Agreement.


 


NOW,
THEREFORE, IT IS AGREED:


 


1. Guaranty and
Security Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.13 of the Guaranty
and Security Agreement, hereby becomes a party to the Guaranty and Security
Agreement as a Grantor thereunder with the same force and effect as if
originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder and hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a security interest in the Collateral now owned or
hereafter acquired by the Additional Grantor. The information set forth in
Annex I-A hereto is hereby added to the information set forth in Schedules                    *
to the Guaranty and Security Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guaranty and Security Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.


 


1

















 


2. GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE
UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY STATE IN
WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY GOVERNS THE VALIDITY,
PERFECTION, PRIORITY AND ENFORCEABILITY, AND THE EXERCISE OF ANY REMEDIES WITH
RESPECT TO ANY LIEN OR SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED HEREBY
ON COLLATERAL LOCATED IN SUCH STATE.


 






*
Refer to each Schedule which needs to be supplemented.


 


IN WITNESS WHEREOF, the undersigned has caused this
Assumption Agreement to be duly executed and delivered as of the date first
above written. 


 


	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


ACKNOWLEDGMENT
BY [GRANTOR]:


 


By execution of this Assumption Agreement in the
space provided below, [INSERT RELEVANT
GRANTOR] hereby acknowledges and agrees that the Securities
described on Annex I-A hereto has been issued by the Additional Grantor
identified herein and is held by [RELEVANT
GRANTOR] and constitutes “Pledged Securities” comprising part
of the Pledged Securities under the Guaranty and Security Agreement.


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  [RELEVANT GRANTOR]  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							



 


2

















 


ANNEX II TO

GUARANTY AND SECURITY AGREEMENT


 


COMMODITY
ACCOUNT CONTROL AGREEMENT


 


THIS COMMODITY ACCOUNT CONTROL AGREEMENT dated as of
[              ]
(this “Agreement”) among [NAME OF GRANTOR] (the “Debtor”), JPMORGAN CHASE BANK, as the Administrative Agent for the
Lenders (the “Administrative Agent”)
and [                   ],
in its capacity as a “commodity intermediary” as defined in Section 9-102 of
the UCC (in such capacity, the “Commodity
Intermediary”). Capitalized terms used but not defined herein
shall have the meaning assigned thereto in the Guaranty and Security Agreement,
dated [as of the date hereof], among the Debtor, the other Grantors party
thereto and the Administrative Agent (as amended, restated, supplemented or
otherwise modified from time to time, the “Security Agreement”).
All references herein to the “UCC”
shall mean the Uniform Commercial Code as in effect in the State of New York.


 


1.01 Establishment
of Commodity Account.


 


The Commodity Intermediary hereby confirms and
agrees that:


 


(a) The Commodity Intermediary has established
account number [IDENTIFY ACCOUNT NUMBER]
in the name “[IDENTIFY EXACT TITLE OF
ACCOUNT]” (such
account and any successor account, the “Commodity
Account”) and the Commodity Intermediary shall not change the
name or account number of the Commodity Account without the prior written
consent of the Administrative Agent;


 


(b) All commodity contracts and financial assets
credited to the Commodity Account shall be registered in the name of the
Commodity Intermediary, indorsed to the Commodity Intermediary or in blank or
credited to another commodity account maintained in the name of the Commodity
Intermediary and in no case will any commodity contract or financial asset
credited to the Commodity Account be registered in the name of the Debtor,
payable to the order of the Debtor or specially indorsed to the Debtor except
to the extent the foregoing have been specially indorsed to the Commodity
Intermediary or in blank;


 


(c) All property delivered to the Commodity
Intermediary pursuant to the Security Agreement will be promptly credited to
the Commodity Account; and


 


(d) The Commodity Account is a “commodity account”
within the meaning of Section 9-102 of the UCC.


 


2.01 “Commodity
Contract” and “Financial Assets” Election.


 


The Commodity Intermediary hereby agrees that (a)
each commodity futures contract, each option on a commodity futures contract,
each commodity option or other contract or option, if the contact or option is
(i) traded or subject to the rules of a board of trade that has been designated
as a contract market for such a contract pursuant to federal commodities law,
or (ii) traded on a foreign commodity board of trade, exchange, or market and
is carried on the books of a commodity intermediary for a commodity customer,
credited to the Commodity Account shall


 


Annex II-1

















 


be
treated as a “commodity contract” within the meaning of Section 9-102(a)(15) of
the UCC and (b) each other item of property (including, without limitation, any
investment property, financial asset, security, instrument, general intangible
or cash) credited to the Commodity Account shall be treated as a “financial
asset” within the meaning of Section 8-102(a)(9) of the UCC.


 


3.01
Control of the Commodity Account.


 


If at any time the Commodity Intermediary shall
receive any entitlement order or instructions from the Administrative Agent
directing transfer or redemption of any commodity contract or financial asset
carried in the Commodity Account or the application of value distributed on
account of any commodity contract carried in the Commodity Account, the
Commodity Intermediary shall comply with such entitlement order or instructions
without further consent by the Debtor or any other person. If the Debtor is
otherwise entitled to issue entitlement orders or instructions and such
entitlement orders or orders conflict with any entitlement order or
instructions issued by the Administrative Agent, the Commodity Intermediary
shall follow the orders and instructions issued by the Administrative Agent.


 


4.01 Subordination
of Lien; Waiver of Set-Off.


 


In the event that the Commodity Intermediary has or
subsequently obtains by agreement, by operation of law or otherwise a security
interest in the Commodity Account, commodity contract or financial asset or
security entitlement credited thereto, the Commodity Intermediary hereby agrees
that such security interest shall be subordinate to the security interest of
the Administrative Agent. The commodity contracts, financial assets and other
items deposited to the Commodity Account will not be subject to deduction,
set-off, or any other right in favor of any person other than the
Administrative Agent (except that the Commodity Intermediary may set off all
amounts due to the Commodity Intermediary in respect of customary fees and
expenses for the routine maintenance and operation of the Commodity Account.


 


5.01
Choice of Law.


 


This Agreement and the Commodity Account shall each
be governed by the laws of the State of New York. Regardless of any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Commodity Intermediary’s jurisdiction and the Commodity Account (as well as
any securities entitlements related thereto) shall be governed by the laws of
the State of New York.


 


6.01
Conflict with Other Agreements.


 


(a) In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into between the parties hereto with respect to the subject
matter hereof, the terms of this Agreement shall prevail;


 


(b) No amendment or modification of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by all of the parties hereto;


 


(c) The Commodity Intermediary hereby confirms and
agrees that:


 


Annex II-2

















 


(i)
There are no other agreements entered into between the Commodity Intermediary
and the Debtor with respect to the Commodity Account;


 


(ii) It has not entered into, and until the
termination of this Agreement, will not enter into, any agreement with any other
person relating to the Commodity Account and/or any commodity contracts or
financial assets credited thereto pursuant to which it has agreed to comply
with entitlement orders and instructions of such other person; and


 


(iii) It has not entered into, and until the
termination of this Agreement, will not enter into, any agreement with the
Debtor or the Administrative Agent purporting to limit or condition the
obligation of the Commodity Intermediary to comply with entitlement orders and
instructions as set forth in Section 3.01 hereof.


 


7.01
Adverse Claims.


 


Except for the claims and interest of the
Administrative Agent and of the Debtor in the Commodity Account, the Commodity
Intermediary does not know of any claim to, or interest in, the Commodity
Account, any commodity contract, or in any financial asset credited thereto. If
any person asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Commodity Account, in any commodity contract or in any financial
asset carried therein, the Commodity Intermediary will promptly notify the
Administrative Agent and the Debtor thereof.


 


8.01
Maintenance of Commodity Account.


 


In addition to, and not in lieu of, the obligation
of the Commodity Intermediary to honor entitlement orders and instructions as
agreed in Section 3.01 hereof, the Commodity Intermediary agrees to maintain
the Commodity Account as follows:


 


(a) Notice of Sole Control. If at any time
the Administrative Agent delivers to the Commodity Intermediary a Notice of
Sole Control in substantially the form set forth in Exhibit A hereto, the
Commodity Intermediary agrees that after receipt of such notice, it will take
all instruction with respect to the Commodity Account solely from the
Administrative Agent.


 


(b) Voting Rights. Until such time as the
Commodity Intermediary receives a Notice of Sole Control pursuant to subsection
(a) of this Section 8.01, the Debtor shall direct the Commodity Intermediary
with respect to the voting of any financial assets credited to the Commodity
Account.


 


(c) Permitted Commodity Contract Investments.
Until such time as the Commodity Intermediary receives a Notice of Sole Control
signed by the Administrative Agent, the Debtor shall direct the Commodity
Intermediary with respect to the selection of investments in commodity
contracts to be carried in the Commodity Account and the application of value
distributed or allocated on account thereto.


 


(d) Statements and Confirmations. The Commodity
Intermediary will promptly send copies of all statements, confirmations and
other correspondence concerning the Commodity Account, commodity contract
and/or any financial assets credited thereto simultaneously to each


 


Annex II-3

















 


of
the Debtor and the Administrative Agent at the address for each set forth in
Section 12.01 of this Agreement.


 


(e) Tax Reporting. All items of income, gain,
expense and loss recognized in the Commodity Account shall be reported to the
Internal Revenue Service and all state and local taxing authorities under the
name and taxpayer identification number of the Debtor.


 


9.01
Representations, Warranties and Covenants
of the Commodity Intermediary.


 


The Commodity Intermediary hereby makes the
following representations, warranties and covenants:


 


(a) The Commodity Account has been established as
set forth in Section 1.01 above and such Commodity Account will be maintained
in the manner set forth herein until termination of this Agreement; and


 


(b) This Agreement is the valid and legally binding
obligation of the Commodity Intermediary.


 


10.01 Indemnification
of Commodity Intermediary.


 


The Debtor and the Administrative Agent hereby agree
that (a) the Commodity Intermediary is released from any and all liabilities to
the Debtor and the Administrative Agent arising from the terms of this
Agreement and the compliance of the Commodity Intermediary with the terms
hereof, except to the extent that such liabilities arise from the Commodity Intermediary’s
gross negligence or willful misconduct and (b) the Debtor, its successors and
assigns shall at all times indemnify and save harmless the Commodity
Intermediary from and against any and all claims, actions and suits of others
arising out of the terms of this Agreement or the compliance of the Commodity
Intermediary with the terms hereof, except to the extent that such arises from
the Commodity Intermediary’s gross negligence or willful misconduct, and from
and against any and all liabilities, losses, damages, costs, charges, counsel
fees and other expenses of every nature and character arising by reason of the
same, until the termination of this Agreement.


 


11.01
Successors; Assignment.


 


The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
corporate successors or heirs and personal representatives who obtain such
rights solely by operation of law.


 


12.01
Notices.


 


Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.


 


Annex II-4

















 


	
  Debtor:

  	
  [NAME OF GRANTOR]

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  
	
   

  	
   

  
	
  Administrative
  Agent:

  	
  JPMorgan
  Chase Bank

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  
	
   

  	
   

  
	
  Commodity
  Intermediary:

  	
  [NAME OF COMMODITY INTERMEDIARY]

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  



 


Any
party may change its address for notices in the manner set forth above.


 


13.01
Termination.


 


The obligations of the Commodity Intermediary to the
Administrative Agent pursuant to this Agreement shall continue in effect until
the security interest of the Administrative Agent in the Commodity Account has
been terminated pursuant to the terms of the Security Agreement and the
Administrative Agent has notified the Commodity Intermediary of such
termination in writing. The Administrative Agent agrees to provide Notice of
Termination in substantially the form of Exhibit B hereto to the Commodity
Intermediary upon the request of the Debtor on or after the termination of the
Administrative Agent’s security interest in the Commodity Account pursuant to
the terms of the Security Agreement. The termination of this Agreement shall
not terminate the Commodity Account or alter the obligations of the Commodity
Intermediary to the Debtor pursuant to any other agreement with respect to the
Commodity Account.


 


14.01
Counterparts.


 


This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts. Facsimiles shall be effective as originals.


 


IN WITNESS WHEREOF, the parties hereto have caused
this Commodity Account Control Agreement to be executed as of the date first
above written by their respective officers thereunto duly authorized. 


 


	
   

  	
  [NAME OF GRANTOR]  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex II-5

















 


	
   

  	
  JPMORGAN CHASE BANK, 

  
	
   

  	
  as
  Administrative Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


	
   

  	
   

  
	
   

  	
  [NAME OF COMMODITY INTERMEDIARY],  

  
	
   

  	
  as
  Commodity Intermediary  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex II-6

















 


EXHIBIT A

TO COMMODITY ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the
Administrative Agent]


 


[Date]


 


[Name and Address of Commodity Intermediary]


 


Attention:


 


Re: Notice of Sole Control


 


Ladies
and Gentlemen:


 


As referenced in the Commodity Account Control
Agreement dated as of [             ]
among [NAME OF DEBTOR],
you and the undersigned (a copy of which is attached), we hereby give you
notice of our sole control over commodity account number [               ]
(the “Commodity
Account”) and all
commodity contracts and financial assets credited thereto. You are hereby
instructed not to accept any direction, instructions or entitlement orders with
respect to the Commodity Account or the financial assets credited thereto from
any person other than the undersigned, unless otherwise ordered by a court of
competent jurisdiction.


 


You are instructed to deliver a copy of this notice
by facsimile transmission to [NAME OF DEBTOR].


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  cc:
  [NAME OF GRANTOR]

  	
   

  	
   

  	
   

  
					



 


Annex II-7

















 


EXHIBIT B

TO COMMODITY ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the
Administrative Agent]


 


[Date]


 


[Name and Address of Commodity Intermediary]


 


Attention:


 


Re: Termination of Commodity Account Control
Agreement


 


You are hereby notified that the Commodity Account
Control Agreement dated as of [           ]
among you, [NAME OF DEBTOR] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
account number(s)                   
from [NAME OF DEBTOR]. This
notice terminates any obligations you may have to the undersigned with respect
to such account, however nothing contained in this notice shall alter any
obligations which you may otherwise owe to [NAME
OF DEBTOR] pursuant to any other agreement.


 


You
are instructed to deliver a copy of this notice by facsimile transmission to [NAME OF DEBTOR]. 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex II-8

















 


ANNEX III
TO

GUARANTY AND SECURITY AGREEMENT


 


DEPOSIT
ACCOUNT CONTROL AGREEMENT


 


THIS DEPOSIT ACCOUNT CONTROL AGREEMENT dated as of               ,
200   (this “Agreement”)
among [NAME OF DEBTOR] (the Debtor”),
JPMORGAN CHASE BANK, as the
Administrative Agent for the Lenders (the “Administrative
Agent”) and                  ,
in its capacity as a “bank” as defined in Section 9-102 of the UCC (in such
capacity, the “Financial
Institution”).
Capitalized terms used but not defined herein shall have the meaning assigned
thereto in the Guaranty and Security Agreement, dated [as of the date hereof], between the
Debtor, the other Grantors party thereto and the Administrative Agent (as
amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”). All references
herein to the “UCC” shall
mean the Uniform Commercial Code as in effect in the State of New York.


 


1.01
Establishment of Deposit Account.


 


The Financial Institution hereby confirms and agrees
that:


 


(a) The Financial Institution has established
account number [IDENTIFY ACCOUNT NUMBER]
in the name “[IDENTIFY EXACT TITLE OF
ACCOUNT]” (such account and any successor account, the “Deposit Account”) and the Financial
Institution shall not change the name or account number of the Deposit Account
without the prior written consent of the Administrative Agent; and


 


(b) The Deposit Account is a “deposit account”
within the meaning of Section 9-102(a)(29) of the UCC.


 


2.01 Control of
the Deposit Account.


 


If at any time the Financial Institution shall
receive any instructions originated by the Administrative Agent directing the
disposition of funds in the Deposit Account, the Financial Institution shall
comply with such instructions without further consent by the Debtor or any
other person. The Financial Institution hereby acknowledges that it has
received notice of the security interest of the Administrative Agent in the
Deposit Account and hereby acknowledges and consents to such lien.


 


3.01 Subordination
of Lien; Waiver of Set-Off.


 


In the event that the Financial Institution has or
subsequently obtains by agreement, by operation of law or otherwise a security
interest in the Deposit Account or any funds credited thereto, the Financial
Institution hereby agrees that such security interest shall be subordinate to
the security interest of the Administrative Agent. Money and other items
credited to the Deposit Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any person other than the
Administrative Agent (except that the Financial Institution may set off (i) all
amounts due to the Financial Institution in respect of customary fees and
expenses for the routine maintenance and operation of the Deposit Account and
(ii) the face amount of any checks


 


Annex III-1

















 


which
have been credited to such Deposit Account but are subsequently returned unpaid
because of uncollected or insufficient funds).


 


4.01
Choice of Law.


 


This Agreement and the Deposit Account shall each be
governed by the laws of the State of New York. Regardless of any provision in
any other agreement, for purposes of the UCC, New York shall be deemed to be
the Financial Institution’s jurisdiction (within the meaning of Section 9-304
of the UCC) and the Deposit Account shall be governed by the laws of the State
of New York.


 


5.01
Conflict with Other Agreements.


 


(a) In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into between the parties hereto with respect to the subject
matter hereof, the terms of this Agreement shall prevail;


 


(b) No amendment or modification of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by all of the parties hereto; and


 


(c) The Financial Institution hereby confirms and
agrees that:


 


(i) There are no other agreements entered into
between the Financial Institution and the Debtor with respect to the Deposit
Account; and


 


(ii) It has not entered into, and until the
termination of this Agreement, will not enter into, any agreement with any
other person relating the Deposit Account and/or any funds credited thereto
pursuant to which it has agreed to comply with instructions originated by such
persons as contemplated by Section 9-104 of the UCC.


 


6.01
Adverse Claims.


 


The Financial Institution does not know of any
liens, claims or encumbrances relating to the Deposit Account. If any person
asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Deposit Account, the Financial Institution will promptly notify the
Administrative Agent and the Debtor thereof.


 


7.01
Maintenance of Deposit Account.


 


In addition to, and not in lieu of, the obligation
of the Financial Institution to honor instructions as set forth in Section 2.01
hereof, the Financial Institution agrees to maintain the Deposit Account as
follows:


 


(a) Statements and Confirmations. The
Financial Institution will promptly send copies of all statements,
confirmations and other correspondence concerning the Deposit


 


Annex III-2

















 


Account
simultaneously to each of the Debtor and the Administrative Agent at the
address for each set forth in Section 11.01 of this Agreement; and


 


(b) Tax Reporting. All interest, if any,
relating to the Deposit Account, shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.


 


8.01 Representations,
Warranties and Covenants of the Financial Institution.


 


The Financial Institution hereby makes the following
representations, warranties and covenants:


 


(a) The Deposit Account has been established as set
forth in Section 1.01 and such Deposit Account will be maintained in the manner
set forth herein until termination of this Agreement; and


 


(b) This Agreement is the valid and legally binding
obligation of the Financial Institution.


 


9.01 Indemnification
of Financial Institution.


 


The Debtor and the Administrative Agent hereby agree
that (a) the Financial Institution is released from any and all liabilities to
the Debtor and the Administrative Agent arising from the terms of this
Agreement and the compliance of the Financial Institution with the terms
hereof, except to the extent that such liabilities arise from the Financial
Institution’s gross negligence or willful misconduct and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Financial Institution from and against any and all claims, actions and suits of
others arising out of the terms of this Agreement or the compliance of the
Financial Institution with the terms hereof, except to the extent that such
arises from the Financial Institution’s gross negligence or willful misconduct,
and from and against any and all liabilities, losses, damages, costs, charges,
counsel fees and other expenses of every nature and character arising by reason
of the same, until the termination of this Agreement.


 


10.01
Successors; Assignment.


 


The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
corporate successors or heirs and personal representatives who obtain such
rights solely by operation of law.


 


11.01
Notices.


 


Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.


 


Annex III-3

















 


 


	
  Debtor:

  	
  [NAME OF DEBTOR]

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  
	
   

  	
   

  
	
  Administrative
  Agent:

  	
  JPMorgan
  Chase Bank

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  
	
   

  	
   

  
	
  Financial Institution:

  	
  [NAME OF FINANCIAL INSTITUTION]  

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  



 


Any
party may change its address for notices in the manner set forth above.


 


12.01
Termination.


 


The obligations of the Financial Institution to the
Administrative Agent pursuant to this Agreement shall continue in effect until
the security interest of the Administrative Agent in the Deposit Account has
been terminated pursuant to the terms of the Security Agreement and the
Administrative Agent has notified the Financial Institution of such termination
in writing. The Administrative Agent agrees to provide Notice of Termination in
substantially the form of Exhibit A hereto to the Financial Institution upon
the request of the Debtor on or after the termination of the Administrative
Agent’s security interest in the Deposit Account pursuant to the terms of the
Security Agreement. The termination of this Agreement shall not terminate the
Deposit Account or alter the obligations of the Financial Institution to the
Debtor pursuant to any other agreement with respect to the Deposit Account.


 


13.01
Counterparts.


 


This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts. Facsimiles shall be effective as originals.


 


IN WITNESS WHEREOF, the parties hereto have caused
this Deposit Account Control Agreement to be executed as of the date first
above written by their respective officers thereunto duly authorized. 


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex III-4

















 


	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


 


	
   

  	
  [NAME OF FINANCIAL INSTITUTION],

  
	
   

  	
  as
  Financial Institution

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex III-5

















 


EXHIBIT A


 


TO DEPOSIT
ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the
Administrative Agent]


 


[Date]


 


[Name and Address of Financial Institution]


 


Attention:


 


Re: Termination of Deposit Account Control Agreement


 


You are hereby notified that the Deposit Account
Control Agreement dated as of [                ]
among [NAME OF DEBTOR], you and
the undersigned (a copy of which is attached) is terminated and you have no
further obligations to the undersigned pursuant to such Agreement.
Notwithstanding any previous instructions to you, you are hereby instructed to
accept all future directions with respect to account number(s)                
from [NAME OF DEBTOR]. This
notice terminates any obligations you may have to the undersigned with respect
to such account, however nothing contained in this notice shall alter any
obligations which you may otherwise owe to [NAME
OF DEBTOR] pursuant to any other agreement.


 


You are instructed to deliver a copy of this notice
by facsimile transmission to [NAME OF
DEBTOR]. 


 


 


	
   

  	
  Very
  truly yours, 

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex III-6

















 


ANNEX IV TO

GUARANTY AND SECURITY AGREEMENT


 


SECURITIES
ACCOUNT CONTROL AGREEMENT


 


THIS SECURITIES ACCOUNT CONTROL AGREEMENT dated as
of [             ]
(this “Agreement”) among [NAME OF GRANTOR] (the “Debtor”), JPMORGAN CHASE BANK, as the Administrative Agent for the
Lenders (the “Administrative Agent”)
and [               ],
in its capacity as a “securities intermediary” as defined in Section 8-102 of
the UCC (in such capacity, the “Securities
Intermediary”). Capitalized terms used but not defined herein
shall have the meaning assigned thereto in the Guaranty and Security Agreement,
dated [as of the date hereof],
among the Debtor, the other Grantors party thereto and the Administrative Agent
(as amended, restated, supplemented or otherwise modified from time to time,
the “Security Agreement”).
All references herein to the “UCC”
shall mean the Uniform Commercial Code as in effect in the State of New York.


 


1.01
Establishment of Securities Account.


 


The Securities Intermediary hereby confirms and
agrees that:


 


(a) The Securities Intermediary has established
account number [IDENTIFY ACCOUNT NUMBER]
in the name “[IDENTIFY EXACT TITLE OF
ACCOUNT]” (such account and any successor account, the “Securities Account”) and the Securities
Intermediary shall not change the name or account number of the Securities
Account without the prior written consent of the Administrative Agent;


 


(b) All securities or other property underlying any
financial assets credited to the Securities Account shall be registered in the
name of the Securities Intermediary, indorsed to the Securities Intermediary or
in blank or credited to another securities account maintained in the name of
the Securities Intermediary and in no case will any financial asset credited to
the Securities Account be registered in the name of the Debtor, payable to the
order of the Debtor or specially indorsed to the Debtor except to the extent
the foregoing have been specially indorsed to the Securities Intermediary or in
blank;


 


(c) All property delivered to the Securities
Intermediary pursuant to the Security Agreement will be promptly credited to
the Securities Account; and


 


(d) The Securities Account is a “securities account”
within the meaning of Section 8-501 of the UCC.


 


2.01 “Financial
Assets” Election.


 


The Securities Intermediary hereby agrees that each
item of property (including, without limitation, any investment property,
financial asset, security, instrument, general intangible or cash) credited to
the Securities Account shall be treated as a “financial asset” within the
meaning of Section 8-102(a)(9) of the UCC.


 


Annex IV-1

















 


3.01 Control of
the Securities Account.


 


If at any time the Securities Intermediary shall
receive any order from the Administrative Agent directing transfer or
redemption of any financial asset relating to the Securities Account, the
Securities Intermediary shall comply with such entitlement order without
further consent by the Debtor or any other person. If the Debtor is otherwise
entitled to issue entitlement orders and such orders conflict with any
entitlement order issued by the Administrative Agent, the Securities
Intermediary shall follow the orders issued by the Administrative Agent.


 


4.01 Subordination
of Lien; Waiver of Set-Off.


 


In the event that the Securities Intermediary has or
subsequently obtains by agreement, by operation of law or otherwise a security
interest in the Securities Account or any security entitlement credited
thereto, the Securities Intermediary hereby agrees that such security interest
shall be subordinate to the security interest of the Administrative Agent. The
financial assets and other items deposited to the Securities Account will not
be subject to deduction, set-off, banker’s lien, or any other right in favor of
any person other than the Administrative Agent (except that the Securities
Intermediary may set off (i) all amounts due to the Securities Intermediary in
respect of customary fees and expenses for the routine maintenance and
operation of the Securities Account and (ii) the face amount of any checks
which have been credited to such Securities Account but are subsequently
returned unpaid because of uncollected or insufficient funds).


 


5.01
Choice of Law.


 


This Agreement and the Securities Account shall each
be governed by the laws of the State of New York. Regardless of any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Securities Intermediary’s jurisdiction (within the meaning of Section 8-110
of the UCC) and the Securities Account (as well as the securities entitlements
related thereto) shall be governed by the laws of the State of New York.


 


6.01
Conflict with Other Agreements.


 


(a) In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into between the parties hereto with respect to the subject
matter hereof, the terms of this Agreement shall prevail;


 


(b) No amendment or modification of this Agreement
or waiver of any right hereunder shall be binding on any party hereto unless it
is in writing and is signed by all of the parties hereto;


 


(c) The Securities Intermediary hereby confirms and
agrees that:


 


(i) There are no other agreements entered into
between the Securities Intermediary and the Debtor with respect to the
Securities Account;


 


(ii) It has not entered into, and until the
termination of this Agreement, will not enter into, any agreement with any
other person relating to the Securities Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the UCC) of such other person; and


 


Annex IV-2

















(iii) It has not entered into, and until the
termination of this Agreement, will not enter into, any agreement with the
Debtor or the Administrative Agent purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 3.01 hereof.


 


7.01 Adverse
Claims.


 


Except for the claims and interest of the
Administrative Agent and of the Debtor in the Securities Account, the
Securities Intermediary does not know of any claim to, or interest in, the
Securities Account or in any “financial asset” (as defined in Section 8-102(a)
of the UCC) credited thereto. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Securities Account or in any
financial asset carried therein, the Securities Intermediary will promptly
notify the Administrative Agent and the Debtor thereof.


 


8.01
Maintenance of Securities Account.


 


In addition to, and not in lieu of, the obligation
of the Securities Intermediary to honor entitlement orders as agreed in Section
3.01 hereof, the Securities Intermediary agrees to maintain the Securities
Account as follows:


 


(a) Notice of Sole Control. If at any time
the Administrative Agent delivers to the Securities Intermediary a Notice of
Sole Control in substantially the form set forth in Exhibit A hereto, the
Securities Intermediary agrees that after receipt of such notice, it will take
all instruction with respect to the Securities Account solely from the
Administrative Agent.


 


(b) Voting Rights. Until such time as the
Securities Intermediary receives a Notice of Sole Control pursuant to
subsection (a) of this Section 8.01, the Debtor shall direct the Securities
Intermediary with respect to the voting of any financial assets credited to the
Securities Account.


 


(c) Permitted Investments. Until such time as
the Securities Intermediary receives a Notice of Sole Control signed by the
Administrative Agent, the Debtor shall direct the Securities Intermediary with
respect to the selection of investments to be made for the Securities Account;
provided, however, that the Securities Intermediary shall not honor any
instruction to purchase any investments other than investments of a type
described on Exhibit B hereto.


 


(d) Statements and Confirmations. The
Securities Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Securities Account and/or
any financial assets credited thereto simultaneously to each of the Debtor and
the Administrative Agent at the address for each set forth in Section 12.01 of
this Agreement.


 


(e) Tax Reporting. All items of income, gain,
expense and loss recognized in the Securities Account shall be reported to the
Internal Revenue Service and all state and local taxing authorities under the
name and taxpayer identification number of the Debtor.


 


Annex IV-3

















 


9.01 Representations,
Warranties and Covenants of the Securities Intermediary.


 


The Securities Intermediary hereby makes the
following representations, warranties and covenants:


 


(a) The Securities Account has been established as
set forth in Section 1.01 above and such Securities Account will be maintained
in the manner set forth herein until termination of this Agreement; and


 


(b) This Agreement is the valid and legally binding
obligation of the Securities Intermediary.


 


10.01 Indemnification
of Securities Intermediary.


 


The Debtor and the Administrative Agent hereby agree
that (a) the Securities Intermediary is released from any and all liabilities
to the Debtor and the Administrative Agent arising from the terms of this
Agreement and the compliance of the Securities Intermediary with the terms
hereof, except to the extent that such liabilities arise from the Securities
Intermediary’s gross negligence or willful misconduct and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Securities Intermediary from and against any and all claims, actions and suits
of others arising out of the terms of this Agreement or the compliance of the
Securities Intermediary with the terms hereof, except to the extent that such
arises from the Securities Intermediary’s gross negligence or willful
misconduct, and from and against any and all liabilities, losses, damages,
costs, charges, counsel fees and other expenses of every nature and character
arising by reason of the same, until the termination of this Agreement.


 


11.01
Successors; Assignment.


 


The terms of this Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
corporate successors or heirs and personal representatives who obtain such
rights solely by operation of law.


 


12.01
Notices.


 


Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below. 


 


	
  Debtor:

  	
  [NAME OF GRANTOR]

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  
	
   

  	
   

  
	
  Administrative
  Agent:

  	
  JPMorgan
  Chase Bank

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  



 


Annex IV-4

















 


	
  Securities
  Intermediary:

  	
  [NAME OF SECURITIES INTERMEDIARY]

  
	
   

  	
  [INSERT ADDRESS]

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopier:

  	
   

  	
   

  



 


Any
party may change its address for notices in the manner set forth above.


 


13.01
Termination.


 


The obligations of the Securities Intermediary to
the Administrative Agent pursuant to this Agreement shall continue in effect
until the security interest of the Administrative Agent in the Securities
Account has been terminated pursuant to the terms of the Security Agreement and
the Administrative Agent has notified the Securities Intermediary of such
termination in writing. The Administrative Agent agrees to provide Notice of
Termination in substantially the form of Exhibit C hereto to the Securities
Intermediary upon the request of the Debtor on or after the termination of the
Administrative Agent’s security interest in the Securities Account pursuant to
the terms of the Security Agreement. The termination of this Agreement shall
not terminate the Securities Account or alter the obligations of the Securities
Intermediary to the Debtor pursuant to any other agreement with respect to the
Securities Account.


 


14.01
Counterparts.


 


This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts. Facsimiles shall be effective as originals.


 


IN WITNESS WHEREOF, the parties hereto have caused
this Securities Account Control Agreement to be executed as of the date first
above written by their respective officers thereunto duly authorized. 


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex IV-5

















 


	
   

  	
  [NAME OF SECURITIES INTERMEDIARY], 

  
	
   

  	
  as Securities Intermediary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex IV-6

















 


EXHIBIT A


 


TO
SECURITIES ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the
Administrative Agent]


 


[Date]


 


[Name and Address of Securities Intermediary]


 


Attention:


 


Re: Notice of Sole Control


 


Ladies
and Gentlemen:


 


As referenced in the Securities Account Control
Agreement dated as of [             ]
among [NAME OF DEBTOR], you and
the undersigned (a copy of hich is attached), we hereby give you notice of our
sole control over securities account number [                  ]
(the “Securities
Account”) and all
financial assets credited thereto. You are hereby instructed not to accept any
direction, instructions or entitlement orders with respect to the Securities
Account or the financial assets credited thereto from any person other than the
undersigned, unless otherwise ordered by a court of competent jurisdiction.


 


You are instructed to deliver a copy of this notice
by facsimile transmission to [NAME OF
DEBTOR]. 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  cc:
  [NAME OF GRANTOR]

  	
   

  
					



 


Annex IV-7

















 


EXHIBIT B

TO SECURITIES ACCOUNT CONTROL AGREEMENT


 


PERMITTED INVESTMENTS


 


As at any date of determination, (i) investments in
direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof; (ii) investments in certificates of
deposit of maturities less than one year, issued by commercial banks in the
United States having capital and surplus in excess of $20,000,000,000 and
having short-term credit ratings of at least A1 and P1 by Standard & Poor’s
Ratings Group and Moody’s Investors Service, Inc., respectively; (iii)
investments in commercial paper of maturities of not more than 180 days rated
the highest credit rating obtainable from Standard & Poor’s Ratings Group
and Moody’s Investors Service, Inc.; and (iv) investments in securities that
are obligations of the United States government purchased by Debtor under fully
collateralized repurchase agreements pursuant to which arrangements are made
with selling financial institutions (being a financial institution having
unimpaired capital and surplus of not less than $20,000,000,000 and with
short-term credit ratings of at least A1 and P1 by Standard & Poor’s
Ratings Group and Moody’s Investors Service, Inc., respectively) for such financial
institutions to repurchase such securities within thirty (30) days from the
date of purchase by Debtor.


 


Annex IV-8

















 


EXHIBIT C

TO SECURITIES ACCOUNT CONTROL AGREEMENT


 


[Letterhead of the
Administrative Agent]


 


[Date]


 


[Name and Address of Securities Intermediary]


 


Attention:


 


Re: Termination of Securities Account Control
Agreement


 


You are hereby notified that the Securities Account
Control Agreement dated as of [            ]
among you, [NAME OF DEBTOR] and
the undersigned (a copy of which is attached) is terminated and you have no
further obligations to the undersigned pursuant to such Agreement.
Notwithstanding any previous instructions to you, you are hereby instructed to
accept all future directions with respect to account number(s)                 
from [NAME OF DEBTOR]. This
notice terminates any obligations you may have to the undersigned with respect
to such account, however nothing contained in this notice shall alter any
obligations which you may otherwise owe to [NAME
OF DEBTOR] pursuant to any other agreement.


 


You
are instructed to deliver a copy of this notice by facsimile transmission to [NAME OF DEBTOR]. 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,

  
	
   

  	
  as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


Annex IV-9














 


ANNEX V TO

GUARANTY AND SECURITY AGREEMENT


 


ACKNOWLEDGMENT
AND CONSENT TO PLEDGE


 


[date]


 


[NAME OF ISSUER]

[ADDRESS OF ISSUER]


 


Attention:



 


Re:       Pledge of           
[describe the equity interest] (the
“Pledged Securities”) in           ,
a                  
(the “Company”), held by [Grantor’s Name], a       
           (“Grantor”)


 


Ladies
and Gentlemen:


 


Reference is made herein to that certain Guaranty
and Security Agreement dated as of                  
, 2003 (as amended, supplemented or otherwise modified from time to time,
the “Security Agreement”),
by Williams Ethanol Services, Inc., a Delaware corporation (the “Borrower”), Williams Bio-Energy,
LLC, a [Delaware] limited liability company (together with any
other entity that may become a party thereto), in favor of JPMorgan Chase Bank,
as the Administrative Agent (in such capacity, the “Administrative Agent”) for the ratable
benefit of (a) the financial institutions (the “Lenders”) now or hereafter parties to the Credit Agreement dated as of                  
, 2003 (as amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”),
among the Borrower, the Administrative Agent, the Issuing Bank (as defined in
the Credit Agreement) and the Lenders, (b) the Issuing Bank, and (c) the
Secured Affiliates (as defined in the Credit Agreement).


 


Pursuant to the terms of the Security Agreement
and/or the terms of the Credit Agreement, the Lenders [are requiring/have required] that Grantor
grant to the Administrative Agent, for the benefit of the Lenders, a first
priority security interest in the Pledged Securities to secure the Lender
Indebtedness (as defined in the Credit Agreement).


 


By executing this letter (this “Letter Agreement”), the Company [and
each shareholder/member, as may be required under the applicable organization
documents] hereby (a) acknowledges and confirms that the Pledged Securities
represents all of Grantor’s Securities (as defined in the Security Agreement)
in the Company, (b) agrees to enter a notation in the stock transfer register
or other appropriate records of the Company reflecting the pledge of the
Pledged Securities pursuant to the Security Agreement, (c) consents to the
pledge by Grantor of the Pledged Securities to secure the Lender Indebtedness
and consents to the transfer of the Pledged Securities pursuant to the exercise
of the remedies provided for in the Security Agreement (or any transfer in lieu
thereof), (d) waives any breach or violation of the terms or provisions of the
Company’s organizational documents caused by such pledge or transfer, (e)
agrees that it will be bound by the terms of the Security Agreement relating to
the Pledged Securities issued by it and will comply with such terms insofar as
such terms are applicable to it, (f) agrees that it will notify the
Administrative Agent promptly in writing upon the acquisition by Grantor of any


 


Annex V-1

















 


Securities
(as defined in the Uniform Commercial Code as from time to time in effect in
the State of New York or, where applicable as to specific Collateral, any other
relevant state) issued by the Company, which notice shall set forth in
reasonable detail all information with respect to such Securities, (g) agrees
to comply with any instruction received from the Administrative Agent in
writing that states that (1) an Event of Default under and as defined in the
Credit Agreement has occurred and is continuing and (2) such instructions are
otherwise in accordance with the terms of the Credit Agreement and Security
Agreement, without any other or further instructions from Grantor, and (h)
agrees that any sums paid upon or in respect of the Pledged Securities,
including, without limitation any dividend or distribution or any amount paid
upon the liquidation or dissolution of the Company shall be paid deposited
directly into Account No. 801 804 701 established by the Borrower with the
Administrative Agent or such other account hereafter established by the
Borrower or Grantor with the Administrative Agent which the Borrower or Grantor
and the Administrative Agent jointly designate as the “Blocked Account.”


 


This Letter Agreement may be executed in
counterparts, and all parties need not execute the same counterpart. This
Letter Agreement shall be binding on, enforceable against and inure to the
benefit of the Administrative Agent and all Lenders. Facsimiles shall be
effective as originals.


 


Evidence your agreement to each of the terms and
conditions set forth above by executing this Letter Agreement in the space indicated
below. 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


	
   

  	
  Acknowledged
  and Agreed

  
	
   

  	
  As
  of this day of          ,
  20      

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF THE COMPANY]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


Annex V-2

















 


ANNEX VI TO

GUARANTY AND SECURITY AGREEMENT


 


COPYRIGHT SECURITY AGREEMENT


 


THIS COPYRIGHT SECURITY AGREEMENT (this “Agreement”),
dated as of             
   , 2003 is entered into by WILLIAMS ETHANOL SERVICES,
INC., a Delaware corporation (the “Grantor”) and certain of its
affiliates (collectively, the “Grantors”) and JPMORGAN CHASE
BANK, as the Administrative Agent (the “Administrative Agent”)
for the Lenders. Capitalized terms not otherwise defined herein have the
meanings set forth in the Guaranty and Security Agreement dated as of                
   , 2003 among the Grantors and the Administrative Agent
(the “Security Agreement”).


 


WHEREAS, pursuant to the Security Agreement,
Grantors are granting a security interest to the Lenders in certain Copyrights
whether now owned or existing or hereafter acquired or arising and wherever
located, including the Copyrights listed on Schedule A hereto (“Secured
Copyrights”).


 


NOW, THEREFORE, in consideration of the foregoing
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Grantors and the Administrative Agent hereby
agree as follows:


 


1. Grant of Security Interest.


 


(a)
Each Grantor hereby grants to the Administrative Agent, a security interest in
and continuing lien on all of such Grantor’s right, title and interest in, to
and under all the Secured Copyrights, subject to the terms and conditions of
the Security Agreement.


 


(b)
The security interest granted hereby is granted in conjunction with the
security interest granted to the Administrative Agent under the Security
Agreement. In the event of any conflict between the terms of this Agreement and
the terms of the Security Agreement, the terms of the Security Agreement shall
control.


 


2.
Modification of Agreement.


 


This Agreement or any provision hereof may not be
changed, waived, or terminated except in accordance with the amendment
provisions of the Security Agreement pursuant to which the Administrative Agent
may modify this Agreement, after obtaining Grantor’s approval of or signature
to such modification, by amending Schedule A hereto to include reference
to any right, title or interest in any existing Copyrights or any Copyrights
acquired or developed by Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Copyrights in which Grantor no
longer has or claims any right, title or interest.


 


Annex VI-1

















 


3. Governing Law.


 


THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT
CONTROLLING, LAWS OF THE UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT
THE LAWS OF ANY STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY
GOVERNS THE VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY, AND THE EXERCISE
OF ANY REMEDIES WITH RESPECT TO ANY LIEN OR SECURITY INTEREST INTENDED TO BE
CREATED OR GRANTED HEREBY ON COLLATERAL LOCATED IN SUCH STATE.


 


4. Successors and Assigns.


 


This Agreement shall be binding upon and inure to
the benefit of the Administrative Agent and Grantor and their respective
successors and assigns. Grantor shall not, without the prior written consent of
the Administrative Agent given in accordance with the Credit Agreement, assign
any right, duty or obligation hereunder.


 


5.
Counterparts.


 


This Agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed, shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument. Facsimiles shall be
effective as originals.


 


Annex VI-2

















 


IN WITNESS WHEREOF, the Grantor and the
Administrative Agent have caused this Agreement to be duly executed and
delivered as of the date first above written. 


 


	
   

  	
  WILLIAMS ETHANOL SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


	
   

  	
  JPMORGAN CHASE BANK, as the

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


Annex VI-3

















 


SCHEDULE A


 


COPYRIGHT SECURITY AGREEMENT


 


I.
REGISTERED COPYRIGHTS 


 


	
  Copyright

  	
   

  	
  Country

  	
   

  	
  Reg. No.

  (App.

  No.)

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
  Status/

  Comment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Annex VI-4

















 


II.
COPYRIGHT APPLICATIONS


 


	
  STATE
  OF

  	
  )

  	
   

  
	
   

  	
  )ss:

  	
   

  
	
  COUNTY
  OF

  	
  )

  	
   

  



 


 


On [ ], before me, the undersigned, a notary public
in and for said state and county, personally appeared                      
, personally known to me (or proved to me on the basis of satisfactory
evidence), to be the person who executed the within instrument as the                      
, on behalf of [GRANTOR], a [ ] corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.


 


	
  WITNESS
  MY HAND AND/OR OFFICIAL SEAL.

  
	
   

  
	
  (NOTARIAL
  STAMP OR SEAL)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission Expires:

  



 


Annex VI-5

















 


ANNEX VII
TO

GUARANTY AND SECURITY AGREEMENT


 


PATENT SECURITY AGREEMENT


 


THIS PATENT SECURITY AGREEMENT (this “Agreement”),
dated as of dated as of             
   , 2003 is entered into by WILLIAMS ETHANOL SERVICES,
INC., a Delaware corporation (the “Grantor”) and certain of its
affiliates (collectively, the “Grantors”) and JPMORGAN CHASE
BANK, as the Administrative Agent (the “Administrative Agent”)
for the Lenders. Capitalized terms not otherwise defined herein have the
meanings set forth in the Guaranty and Security Agreement dated as of               
   , 2003 among the Grantors and the Administrative Agent
(the “Security Agreement”).


 


WHEREAS, pursuant to the Security Agreement,
Grantors are granting a security interest to the Lenders in certain Patents
whether now owned or existing or hereafter acquired or arising and wherever
located, including the Patents listed on Schedule A hereto (“Secured
Patents”).


 


NOW, THEREFORE, in consideration of the foregoing
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Grantors and the Administrative Agent hereby
agree as follows:


 


1. Grant of Security Interest.


 


(a)
Each Grantor hereby grants to the Administrative Agent, a security interest in
and continuing lien on all of such Grantor’s right, title and interest in, to
and under the Secured Patents, subject to the terms and conditions of the
Security Agreement.


 


(b)
The security interest granted hereby is granted in conjunction with the
security interest granted to the Administrative Agent under the Security
Agreement. In the event of any conflict between the terms of this Agreement and
the terms of the Security Agreement, the terms of the Security Agreement shall
control.


 


2.
Modification of Agreement.


 


This Agreement or any provision hereof may not be
changed, waived, or terminated except in accordance with the amendment
provisions of the Security Agreement pursuant to which the Administrative Agent
may modify this Agreement, after obtaining Grantor’s approval of or signature
to such modification, by amending Schedule A hereto to include reference
to any right, title or interest in any existing Patents or any Patents acquired
or developed by Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Copyrights in which Grantor no longer
has or claims any right, title or interest.


 


3.
Governing Law.


 


THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE


 


Annex VII-1

















 


GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND, TO
THE EXTENT CONTROLLING, LAWS OF THE UNITED STATES OF AMERICA, EXCEPT TO THE
EXTENT THAT THE LAWS OF ANY STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED
NECESSARILY GOVERNS THE VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY, AND
THE EXERCISE OF ANY REMEDIES WITH RESPECT TO ANY LIEN OR SECURITY INTEREST
INTENDED TO BE CREATED OR GRANTED HEREBY ON COLLATERAL LOCATED IN SUCH STATE.


 


4. Successors and Assigns.


 


This Agreement shall be binding upon and inure to
the benefit of the Administrative Agent and Grantor and their respective
successors and assigns. Grantor shall not, without the prior written consent of
the Administrative Agent given in accordance with the Credit Agreement, assign
any right, duty or obligation hereunder.


 


5.
Counterparts.


 


This Agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed, shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.


 


Annex VII-2

















 


IN WITNESS WHEREOF, the Grantor and the
Administrative Agent have caused this Agreement to be duly executed and
delivered as of the date first above written. 


 


	
   

  	
  WILLIAMS ETHANOL SERVICES, INC.  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


	
   

  	
  JPMORGAN CHASE BANK, as the

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


Annex VII-3

















 


SCHEDULE A


 


PATENT SECURITY AGREEMENT


 


I.
REGISTERED PATENTS 


 


	
  Copyright

  	
   

  	
  Country

  	
   

  	
  Reg. No.

  (App. No.)

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
  Status/

  Comment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Annex VII-4

















 


 


II.
PATENT APPLICATIONS


 


	
  STATE
  OF

  	
  )

  	
   

  
	
   

  	
  )ss:

  	
   

  
	
  COUNTY
  OF

  	
  )

  	
   

  



 


On [ ], before me, the undersigned, a notary public
in and for said state and county, personally appeared                  
, personally known to me (or proved to me on the basis of satisfactory
evidence), to be the person who executed the within instrument as the                   
, on behalf of [GRANTOR], a [ ] corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.


 


	
  WITNESS
  MY HAND AND/OR OFFICIAL SEAL.

  
	
   

  
	
  (NOTARIAL
  STAMP OR SEAL)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission Expires:

  



 


Annex VII-5

















 


ANNEX VIII
TO

GUARANTY AND SECURITY AGREEMENT


 


TRADEMARK SECURITY AGREEMENT


 


THIS TRADEMARK SECURITY AGREEMENT (this “Agreement”),
dated as of           
   , 2003 is entered into by WILLIAMS ETHANOL SERVICES,
INC., a Delaware corporation (the “Grantor”) and certain of its
affiliates (collectively, the “Grantors”) and JPMORGAN CHASE
BANK, as the Administrative Agent (the “Administrative Agent”)
for the Lenders. Capitalized terms not otherwise defined herein have the
meanings set forth in the Guaranty and Security Agreement dated as of          
      , 2003 among the Grantor and the
Administrative Agent (the “Security Agreement”).


 


WHEREAS, pursuant to the Security Agreement,
Grantors are granting a security interest to the Lenders in certain Trademarks
whether now owned or existing or hereafter acquired or arising and wherever
located, including the Trademarks listed on Schedule A (“Secured Trademarks”).


 


NOW, THEREFORE, in consideration of the foregoing
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Grantors and the Administrative Agent hereby
agree as follows:


 


1.
Grant of Security Interest.


 


Section 1.1 Each Grantor hereby grants to the
Administrative Agent, a security interest in and continuing lien on all of such
Grantor’s right, title and interest in, to and under all the Secured
Trademarks, subject to the terms and conditions of the Security Agreement.


 


Section 1.2 The security interest granted hereby is
granted in conjunction with the security interest granted to the Administrative
Agent under the Security Agreement. The rights and remedies of the Lenders with
respect to the security interest granted hereby are in addition to those set
forth in the Security Agreement. In the event of any conflict between the terms
of this Agreement and the terms of the Security Agreement, the terms of the
Security Agreement shall control.


 


2.
Modification of Agreement.


 


This Agreement or any provision hereof may not be
changed, waived, or terminated except in accordance with the amendment
provisions of the Security Agreement pursuant to which the Administrative Agent
may modify this Agreement, after obtaining Grantor’s approval of or signature
to such modification, by amending Schedule A to include reference to any
right, title or interest in any existing Trademarks or any Trademarks acquired
or developed by Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Trademarks in which Grantor no longer
has or claims any right, title or interest.


 


Annex VIII-1

















 


3. Governing Law.


 


THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT
CONTROLLING, LAWS OF THE UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT
THE LAWS OF ANY STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY
GOVERNS THE VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY, AND THE EXERCISE
OF ANY REMEDIES WITH RESPECT TO ANY LIEN OR SECURITY INTEREST INTENDED TO BE
CREATED OR GRANTED HEREBY ON COLLATERAL LOCATED IN SUCH STATE.


 


4. Successors and Assigns.


 


This Agreement shall be binding upon and inure to
the benefit of the Administrative Agent and Grantor and their respective
successors and assigns. Grantor shall not, without the prior written consent of
the Administrative Agent given in accordance with the Credit Agreement, assign
any right, duty or obligation hereunder.


 


5.
Counterparts.


 


This Agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed, shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument. Facsimiles shall be
effective as originals.


 


[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]


 


Annex VIII-2

















 


IN WITNESS WHEREOF, the Grantor and the
Administrative Agent have caused this Agreement to be duly executed and
delivered as of the date first above written. 


 


	
   

  	
  WILLIAMS ETHANOL SERVICES, INC.  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


	
   

  	
  JPMORGAN CHASE BANK, as the

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


Annex VIII-3

















 


SCHEDULE A


 


TRADEMARK SECURITY AGREEMENT


 


I.
REGISTERED TRADEMARKS 


 


	
  Copyright

  	
   

  	
  Country

  	
   

  	
  Reg. No.

  (App. No.)

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
  Status/

  Comment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Annex VIII-4

















 


II.
TRADEMARK APPLICATIONS


 


	
  STATE
  OF            

  	
  )

  	
   

  
	
   

  	
  )ss:

  	
   

  
	
  COUNTY
  OF        

  	
  )

  	
   

  



 


On [   ], before me, the undersigned,
a notary public in and for said state and county, personally appeared                   
, personally known to me (or proved to me on the basis of satisfactory
evidence), to be the person who executed the within instrument as the                    
, on behalf of [GRANTOR], a [   ] corporation, the corporation
therein named, and acknowledged to me that the corporation executed the within
instrument pursuant to its bylaws or a resolution of its board of directors.


 


	
  WITNESS
  MY HAND AND/OR OFFICIAL SEAL.

  
	
   

  
	
  (NOTARIAL
  STAMP OR SEAL)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  
	
   

  
	
  My
  Commission Expires:

  



 


Annex VIII-5

















 


SCHEDULE 1


 


PERFECTION
INFORMATION


 


(To be provided)


 


Schedule 1-1

















 


SCHEDULE 2


 


ORGANIZATIONAL
INFORMATION


 


(To be provided)


 


Schedule 2-1

















 


SCHEDULE 3


 


INVENTORY
AND EQUIPMENT LOCATIONS


 


(To be provided)


 


Schedule 3-1

















 


SCHEDULE 4


 


SECURITIES


 


(To be provided)


 


Schedule 4-1

















 


SCHEDULE 5


 


SECURITIES
ACCOUNTS


 


(To be provided)


 


Schedule 5-1

















 


SCHEDULE 6


 


COMMODITY
ACCOUNTS & COMMODITIES CONTRACTS


 


(To be provided)


 


Schedule 6-1

















 


SCHEDULE 7


 


INTELLECTUAL
PROPERTY


 


(To be provided)


 


Schedule 7-1

















 


SCHEDULE 8


 


DEPOSIT
ACCOUNTS


 


(To be provided)


 


Schedule 8-1

















 


SCHEDULE 9


 


INSTRUMENTS
AND CHATTEL PAPER


 


(To be provided)


 


Schedule 9-1

















 


SCHEDULE 10


 


VEHICLES


 


(To be provided)


 


Schedule 10-1

















 


SCHEDULE 11


 


COMMERCIAL
TORT CLIAMS


 


(To be provided)


 


Schedule 11-1

















 


FIRST
AMENDMENT TO GUARANTY AND SECURITY AGREEMENT


 


THIS FIRST AMENDMENT TO GUARANTY AND SECURITY
AGREEMENT (this “Amendment”)
is effective as of the 17th day of December, 2004 and executed by JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank) in its capacity as the
Administrative Agent (as herein defined) and each party designated as a Grantor
on the signature page hereto (the “Grantors”).


 


W I T N E S S E T H:


 


WHEREAS, JPMorgan Chase Bank as the administrative
agent (in such capacity, the “Administrative
Agent”), Aventine Renewable Energy, Inc., Aventine Renewable
Energy, LLC and certain financial institutions parties thereto as Lenders are
parties to that certain Credit Agreement, dated as of May 30, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”); unless otherwise
defined herein, all terms used herein with their initial letter capitalized
shall have the meaning given such terms in the Credit Agreement, including, to
the extent applicable, after giving effect to the Second Amendment (defined
below); and


 


WHEREAS, to secure the Lender Indebtedness, the
Grantors executed and delivered to the Administrative Agent that certain
Guaranty and Security Agreement dated as of May 30, 2003 (the “Guaranty and Security Agreement”); and


 


WHEREAS, Borrower, Parent, the Administrative Agent
and Lenders have entered into that certain Second Amendment to Credit Agreement
dated as December 8, 2004 (the “Second
Amendment”),
pursuant to which among other things, the Credit Agreement will be amended in
certain respects and the Lenders will consent to Notes Offering; and


 


WHEREAS, the Lenders have required, as a condition
precedent to the effectiveness of the amendments and consents contained in the
Second Amendment, that the Guaranty and Security Agreement be amended as
provided for herein.


 


NOW THEREFORE, for and in consideration of the
mutual covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the parties hereto hereby agree as follows:


 


SECTION 1. Amendments.


 


1.1. Additional Definitions. Section 1.1 of
the Guaranty and Security Agreement shall be amended to add thereto in
alphabetical order the following defined terms:


 


“ABL Priority Collateral” shall mean all
Collateral consisting of the following: (a) all Accounts (including Health Care
Insurance Receivables), (b) all Chattel Paper (including Tangible Chattel Paper
and Electronic Chattel Paper), (c) all Commercial Tort Claims, (d) all
Commodity Accounts, (e) all Commodity Contracts, (f) all Deposit Accounts
(except for (i) the Escrow Account into which


 


1

















 


certain funds constituting
proceeds of the issuance of the Senior Secured Notes are initially deposited
but only with respect to and constituting direct proceeds from the issuance of
the Senior Secured Notes and (ii) Deposit Accounts into which any Proceeds of
Pekin Property are initially deposited but only with respect to and
constituting such Proceeds of Pekin Property), (g) all Documents, (h) all
Equipment (including all Vehicles but except for any Equipment that comprises
any of the Pekin Property), (i) all General Intangibles, (j) all Instruments
(including all Promissory Notes), (k) all Intellectual Property, (l) all
Investment Property, (m) all Inventory, (n) all Letter of Credit Rights, (o)
all Pledged Securities (but subject to the limitations set forth in the
definition of such term), (p) all Real Property (except for Real Property
comprising any of the Pekin Property), (q) all Receivables to the extent not
otherwise described above, (r) all Securities, (s) all Securities Accounts, (t)
all Securities Entitlements, (u) all Supporting Obligations, (v) all books and
Records pertaining to the foregoing (except for any books and Records pertaining
to the Pekin Property), and (w) to the extent not otherwise included, all
substitutions, replacements, Proceeds (including, without limitation, insurance
proceeds), Accessions, rents and profits of or in respect of any and all of the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing (except any of the foregoing in respect of any
Pekin Property); provided, however, that any Collateral,
regardless of type, received in connection with a permitted disposition of or
otherwise in exchange for ABL Priority Collateral shall, subject to the
immediately following proviso, be treated as ABL Priority Collateral under this
Agreement and the Intercreditor Agreement; provided, further,
that any Collateral of the type that constitutes ABL Priority Collateral, if
received in connection with a permitted disposition of or otherwise in exchange
for Term Priority Collateral, shall be treated as Term Priority Collateral
under this Agreement and the Intercreditor Agreement.


 


“Pekin Property” shall have the meaning
given to such term in the Intercreditor Agreement.


 


“Term Priority Collateral” shall mean
all Collateral consisting of the following: (a) all Pekin Property, (b) the
Escrow Account into which certain funds constituting proceeds of the issuance
of the Senior Secured Notes are initially deposited but only with respect to
and constituting direct proceeds from the issuance of the Senior Secured Notes,
(c) Deposit Accounts into which any Proceeds of Pekin Property are initially
deposited but only with respect to and constituting such Proceeds of Pekin
Property, (d) all books and Records pertaining to the foregoing, and (e) to the
extent not otherwise included, all substitutions, replacements, Proceeds
(including, without limitation, insurance proceeds), Accessions, rents and
profits of or in respect of any and all of the foregoing, and all collateral
security and guarantees given by any Person with respect to any of the
foregoing; provided, however, that any Collateral, regardless of
type, received in connection with a permitted disposition of or otherwise in
exchange for Term Priority Collateral shall be treated as Term Priority
Collateral under this Agreement and the Intercreditor Agreement; provided,
further, that any


 


2

















 


Collateral of the type that
constitutes Term Priority Collateral, if received in connection with a
permitted disposition of or otherwise in exchange for ABL Priority Collateral
pursuant to the terms of the Credit Agreement, shall be treated as ABL Priority
Collateral under this Agreement and the Intercreditor Agreement.


 


1.2. Amendment to Definition. The definition
of “Pledged Securities”
contained in Section 1.1 of the Guaranty and Security Agreement shall be
amended to read in its entirety as follows:


 


“Pledged Securities” shall mean the
Securities of any Person that may be issued or granted to, or held by, any
Grantor.


 


1.3. Amendment to Article 3. Article 3 of the
Guaranty and Security Agreement shall be amended by replacing the period at the
end thereof with a semicolon, and adding the following proviso at the end
thereof:


 


;
provided that the Collateral shall not include (i) the Equity held by
any Grantor of any Marketing Alliance Partner which is a Marketing Alliance
Partner on the Closing Date to the extent that the granting of such Lien is
prohibited pursuant to the terms of the organizational documents of such
Marketing Alliance Partner on the Closing Date, (ii) the Equity in Nebraska Sub
unless and until either (A) Parent or Borrower obtain the consent of the
requisite holders of Equity in Nebraska Sub to the grant of the Security
Interest in such Equity of Nebraska Sub, or (B) Parent and Borrower
collectively hold at least 80% of the Equity of Nebraska Sub, and (iii) the Equity held by any Grantor in Fluid
Technologies PLC; provided further, that upon the occurrence of either
event described in clause (ii) preceding, the Equity of Nebraska Sub shall
immediately and without any further action on the part of any Grantor become “Collateral”
for purposes of this Agreement and the security interest provided for herein
shall immediately attach to such Equity.


 


1.4. Amendment to Section 4.10. The second
sentence of clause (a) of Section 4.10 of the Guaranty and Security Agreement
is hereby amended and restated in its entirety as follows:


 


Each Grantor has executed and delivered, and caused
the applicable bank to execute and deliver a Deposit Account Control Agreement
with respect to each such Deposit Account other than the Notes Collateral
Account.


 


1.5. Amendment to Section 4.3. Section 4.3 of
the Guaranty and Security Agreement shall be amended by inserting the phrase “except
to the extent explicitly set forth in the Intercreditor Agreement” immediately
before the period at the end thereof.


 


1.6. Amendment to Section 4.5. Clause (a) of
Section 4.5 of the Guaranty and Security Agreement is hereby amended and
restated in its entirety to read in full as follows:


 


(a)
Maintain the security interest created by this Agreement as a perfected
security interest, to the extent, and having at least the priority, described
in Section 4.3 hereof and, subject to the Intercreditor Agreement, shall


 


3

















 


defend such security
interest against the claims and demands of all Persons whomsoever; provided
that the Administrative Agent shall release liens and security interests in any
Collateral which is sold or otherwise disposed of in accordance with the terms
of the Credit Agreement and the other Financing Documents.


 


1.7. Addition to Article 5. Article 5 of the
Guaranty and Security Agreement is hereby amended to add a new Section 5.17
thereto which shall read in full as follows:


 


Section 5.17 Avoidance of Conflict.
Notwithstanding anything in this Article 5 to the contrary, to the extent the
provisions contained herein conflict with the terms of that certain Security
Agreement among Borrower, Parent, the Trustee and certain other grantors
thereunder from time to time (the “Trustee Security Agreement”) dated as of the date hereof, with respect
to Term Priority Collateral, the terms of the Trustee Security Agreement shall
govern except as otherwise provided in the Intercreditor Agreement.


 


1.8. Amendment to Section 6.2. Section 6.2 of
the Guaranty and Security Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


At
any time after the occurrence and during the continuance of an Event of Default
and subject to the Intercreditor Agreement, at the Administrative Agent’s
election, the Administrative Agent may apply all or any part of Proceeds,
including, without limitation, any such Proceeds held in any Collateral Account
in payment of the Lender Indebtedness in the manner required by Section 2.21 of
the Credit Agreement. Any balance of such Proceeds remaining after the Lender
Indebtedness shall have been paid in full, no Letters of Credit shall be
outstanding and the Revolving Credit Commitments shall have terminated shall,
if not required to be paid to the Trustee in accordance with the Intercreditor
Agreement, be paid over to the Grantors or to whomsoever may be lawfully
entitled to receive the same.


 


1.9. Amendment to Section 6.3. Section 6.3 of
the Guaranty and Security Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


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 them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Lender Indebtedness, all
rights and remedies of a secured party under the UCC or any other applicable
law. Without limiting the generality of the foregoing and subject to the
Intercreditor Agreement, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind, including, without limitation, notice of intent to accelerate or
notice of acceleration, (except any notice required by law as referred to
below) to or upon the Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances


 


4

















 


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
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. The Administrative Agent 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
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and 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, whether at such Grantor’s
premises or elsewhere. Subject to the Intercreditor Agreement, the
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.3, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith 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 hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Lender Indebtedness and to any other Person
legally entitled thereto in accordance with Section 2.21 of the Credit
Agreement. 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 them of any 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 ten days before such sale or other disposition.


 


1.10. Amendment to Section 8.14. Clause (a)
of Section 8.14 of the Guaranty and Security Agreement is hereby amended and
restated in its entirety to read in full as follows:


 


(a)
At such time as the Revolving Credit Loans, the Reimbursement Obligations and
the other Lender Indebtedness shall have been paid in full, the Revolving
Credit Commitments have been terminated, and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall revert
to the applicable Grantor. At the request and joint and several expense of the
Grantors following any such termination, the Administrative Agent shall
promptly deliver to the appropriate Grantor any Collateral held by the
Administrative Agent hereunder, if not required to be delivered to Trustee
pursuant to the Intercreditor Agreement, and promptly execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.


 


5

















 


SECTION
2. Miscellaneous.


 


2.1. Reaffirmation of Financing Documents;
Extension of Liens. Any and all of the terms and provisions of the Guaranty
and Security Agreement and the Financing Documents shall, except as amended and
modified hereby, remain in full force and effect. Each party executing this
Amendment hereby extends the Liens granted by it to secure the Lender
Indebtedness until the Lender Indebtedness has been paid in full, and agrees
that the amendments and modifications herein contained shall in no manner
affect or impair the Lender Indebtedness or, subject to the Intercreditor
Agreement, the Liens securing payment and performance thereof.


 


2.2 Headings. The headings, captions and
arrangements used in this Amendment are, unless specified otherwise, for
convenience only and shall not be deemed to limit, amplify or modify the terms
of this Amendment, nor affect the meaning thereof.


 


2.3 Financing Document. This Amendment is a
Financing Document and is subject to all provisions of the Credit Agreement
applicable to Financing Document.


 


[Signature Page Follows]


 


6

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their respective Responsible Officers on
the date and year first above written. 


 


	
  ADMINISTRATIVE AGENT:  

  	
   

  	
  JPMORGAN CHASE BANK, N.A.,  

  
	
   

  	
   

  	
  as
  the Administrative Agent  

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher
  D. Capriotti, Vice President

  
	
   

  	
   

  	
   

  
						



 


	
  GRANTORS:  

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


	
   

  	
  AVENTINE RENEWABLE ENERGY, LLC  

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


7