Exhibit 10.3


 


CREDIT
AGREEMENT


 


DATED AS OF


 


MAY 30,
2003


 


AMONG


 


WILLIAMS
ETHANOL SERVICES, INC.,


(TO BE
RENAMED “AVENTINE RENEWABLE ENERGY, INC.”)


AS
BORROWER,


 


WILLIAMS
BIO-ENERGY, LLC,


(TO BE
RENAMED “AVENTINE RENEWABLE ENERGY, LLC”)


AS PARENT,


 


JPMORGAN
CHASE BANK,


AS
ADMINISTRATIVE AGENT


 


AND


 


FINANCIAL
INSTITUTIONS


NOW OR
HEREAFTER PARTIES HERETO,


AS LENDERS


 


$60,000,000
REVOLVING CREDIT FACILITY


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 1

  	
   

  
	
   

  	
   

  	
  DEFINITIONS; CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  1.1

  	
  Definitions

  	
  2

  
	
  Section

  	
  1.2

  	
  Accounting Terms and Determinations

  	
  31

  
	
  Section

  	
  1.3

  	
  Other Definitional Terms

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
  AMOUNT AND TERMS OF LOANS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  2.1

  	
  Loans and Commitments

  	
  32

  
	
  Section

  	
  2.2

  	
  Borrowing Requests

  	
  33

  
	
  Section

  	
  2.3

  	
  Letters of Credit

  	
  34

  
	
  Section

  	
  2.4

  	
  Disbursement of Funds

  	
  38

  
	
  Section

  	
  2.5

  	
  Notes and Amortization

  	
  39

  
	
  Section

  	
  2.6

  	
  Interest

  	
  39

  
	
  Section

  	
  2.7

  	
  Interest Periods

  	
  41

  
	
  Section

  	
  2.8

  	
  Records; Weekly Settlement

  	
  41

  
	
  Section

  	
  2.9

  	
  Voluntary Termination or Reduction of Revolving Credit Commitments

  	
  42

  
	
  Section

  	
  2.10

  	
  Repayment at Maturity; Prepayments

  	
  43

  
	
  Section

  	
  2.11

  	
  Continuation and Conversion Options

  	
  44

  
	
  Section

  	
  2.12

  	
  Fees

  	
  45

  
	
  Section

  	
  2.13

  	
  Payments, Credit Availability, etc

  	
  46

  
	
  Section

  	
  2.14

  	
  Interest Rate Not Ascertainable, etc

  	
  47

  
	
  Section

  	
  2.15

  	
  Illegality

  	
  47

  
	
  Section

  	
  2.16

  	
  Increased Costs

  	
  48

  
	
  Section

  	
  2.17

  	
  Change of Lending Office

  	
  49

  
	
  Section

  	
  2.18

  	
  Funding Losses

  	
  50

  
	
  Section

  	
  2.19

  	
  Sharing of Payments, etc

  	
  50

  
	
  Section

  	
  2.20

  	
  Taxes

  	
  51

  
	
  Section

  	
  2.21

  	
  Pro-rata Treatment; Order of Application During Default; Order of
  Application of Payments.

  	
  53

  
	
  Section

  	
  2.22

  	
  Replacement of Lenders

  	
  54

  
	
  Section

  	
  2.23

  	
  Advances of Revolving Credit Loans to Satisfy Lender Indebtedness

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
  CONDITIONS TO BORROWINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  3.1

  	
  Closing

  	
  54

  
	
  Section

  	
  3.2

  	
  Conditions Precedent to All Loans and Letters of Credit

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
  SECURITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  4.1

  	
  Security

  	
  59

  
	
  Section

  	
  4.2

  	
  Establishment of Lockbox

  	
  59

  
	
  Section

  	
  4.3

  	
  Establishment of Blocked Account

  	
  60

  
	
  Section

  	
  4.4

  	
  Application of Proceeds of Blocked Account

  	
  60

  
	
  Section

  	
  4.5

  	
  Exceptions to Security

  	
  60

  



 


i

















 


	
   

  	
   

  	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  5.1

  	
  Corporate Existence

  	
  60

  
	
  Section

  	
  5.2

  	
  Corporate Power and Authorization

  	
  61

  
	
  Section

  	
  5.3

  	
  Binding Obligations

  	
  61

  
	
  Section

  	
  5.4

  	
  No Legal Bar or Resultant Lien

  	
  61

  
	
  Section

  	
  5.5

  	
  No Consent

  	
  61

  
	
  Section

  	
  5.6

  	
  Financial Information

  	
  61

  
	
  Section

  	
  5.7

  	
  Investments and Guaranties

  	
  62

  
	
  Section

  	
  5.8

  	
  Litigation

  	
  62

  
	
  Section

  	
  5.9

  	
  Use of Proceeds

  	
  63

  
	
  Section

  	
  5.10

  	
  Employee Benefits

  	
  63

  
	
  Section

  	
  5.11

  	
  Taxes; Governmental Charges

  	
  64

  
	
  Section

  	
  5.12

  	
  Titles, etc

  	
  64

  
	
  Section

  	
  5.13

  	
  Defaults

  	
  64

  
	
  Section

  	
  5.14

  	
  Casualties; Taking of Properties

  	
  64

  
	
  Section

  	
  5.15

  	
  Compliance with the Law

  	
  64

  
	
  Section

  	
  5.16

  	
  No Material Misstatements

  	
  64

  
	
  Section

  	
  5.17

  	
  Investment Company Act

  	
  65

  
	
  Section

  	
  5.18

  	
  Public Utility Holding Company Act

  	
  65

  
	
  Section

  	
  5.19

  	
  Capital Structure

  	
  65

  
	
  Section

  	
  5.20

  	
  Insurance

  	
  66

  
	
  Section

  	
  5.21

  	
  Environmental Matters

  	
  66

  
	
  Section

  	
  5.22

  	
  Solvency

  	
  67

  
	
  Section

  	
  5.23

  	
  Employee Matters

  	
  67

  
	
  Section

  	
  5.24

  	
  Real Property

  	
  67

  
	
  Section

  	
  5.25

  	
  Perfection Certificates; Schedules to other Financing Documents

  	
  68

  
	
  Section

  	
  5.26

  	
  Existing Indebtedness

  	
  68

  
	
  Section

  	
  5.27

  	
  Material Contracts

  	
  68

  
	
  Section

  	
  5.28

  	
  Terminals/Terminal Contracts

  	
  68

  
	
  Section

  	
  5.29

  	
  Purchase Documents

  	
  69

  
	
  Section

  	
  5.30

  	
  Representations With Respect to Parent and Certain Affiliates

  	
  69

  
	
  Section

  	
  5.31

  	
  Accounts

  	
  69

  
	
  Section

  	
  5.32

  	
  Motor Fuels, Liquor or Other Sales or Excise Taxes

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  6.1

  	
  Maintenance and Compliance, etc

  	
  70

  
	
  Section

  	
  6.2

  	
  Payment of Taxes and Claims, etc

  	
  70

  
	
  Section

  	
  6.3

  	
  Further Assurances

  	
  70

  
	
  Section

  	
  6.4

  	
  Performance of Obligations

  	
  71

  
	
  Section

  	
  6.5

  	
  Maintenance of Insurance

  	
  71

  
	
  Section

  	
  6.6

  	
  Accounts and Records

  	
  71

  
	
  Section

  	
  6.7

  	
  Right of Inspection

  	
  71

  
	
  Section

  	
  6.8

  	
  Operation and Maintenance of Property

  	
  71

  
	
  Section

  	
  6.9

  	
  New Subsidiaries; Additional Liens

  	
  71

  
	
  Section

  	
  6.10

  	
  Reporting Covenants

  	
  72

  



 


ii

















 


	
  Section

  	
  6.11

  	
  Pledge of Equity of Nebraska Sub

  	
  76

  
	
  Section

  	
  6.12

  	
  Risk Management Policy

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  7.1

  	
  Financial Covenants; Minimum Availability

  	
  77

  
	
  Section

  	
  7.2

  	
  Indebtedness

  	
  77

  
	
  Section

  	
  7.3

  	
  Liens

  	
  78

  
	
  Section

  	
  7.4

  	
  Mergers, Sales, etc

  	
  79

  
	
  Section

  	
  7.5

  	
  Restricted Payments

  	
  80

  
	
  Section

  	
  7.6

  	
  Investments, Loans, etc

  	
  82

  
	
  Section

  	
  7.7

  	
  Sales and Leasebacks

  	
  83

  
	
  Section

  	
  7.8

  	
  Nature of Business

  	
  83

  
	
  Section

  	
  7.9

  	
  ERISA Compliance

  	
  83

  
	
  Section

  	
  7.10

  	
  Sale or Discount of Receivables

  	
  84

  
	
  Section

  	
  7.11

  	
  Negative Pledge Agreements

  	
  84

  
	
  Section

  	
  7.12

  	
  Transactions with Affiliates

  	
  84

  
	
  Section

  	
  7.13

  	
  Unconditional Purchase Obligations

  	
  84

  
	
  Section

  	
  7.14

  	
  Equity

  	
  84

  
	
  Section

  	
  7.15

  	
  Capital Expenditures

  	
  85

  
	
  Section

  	
  7.16

  	
  Modifications to Indebtedness Agreements

  	
  85

  
	
  Section

  	
  7.17

  	
  Intercompany Transactions

  	
  85

  
	
  Section

  	
  7.18

  	
  Acquisitions; Creation of Subsidiaries

  	
  85

  
	
  Section

  	
  7.19

  	
  Restricted Accounts

  	
  86

  
	
  Section

  	
  7.20

  	
  Certain Restriction on Activities of Parent

  	
  86

  
	
  Section

  	
  7.21

  	
  Fiscal Year

  	
  86

  
	
  Section

  	
  7.22

  	
  Hedging Agreements

  	
  86

  
	
  Section

  	
  7.23

  	
  Management Fees

  	
  86

  
	
  Section

  	
  7.24

  	
  Acquisition of Equity in Nebraska Sub

  	
  86

  
	
  Section

  	
  7.25

  	
  No Amendment to Nebraska Sub Operating Agreement

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  8.1

  	
  Payments

  	
  87

  
	
  Section

  	
  8.2

  	
  Covenants Without Notice

  	
  87

  
	
  Section

  	
  8.3

  	
  Other Covenants

  	
  87

  
	
  Section

  	
  8.4

  	
  Other Financing Document Obligations

  	
  87

  
	
  Section

  	
  8.5

  	
  Representations

  	
  87

  
	
  Section

  	
  8.6

  	
  Non-Payments of Other Indebtedness and Under Hedging Agreements

  	
  87

  
	
  Section

  	
  8.7

  	
  Defaults Under Hedging and Other Agreements

  	
  87

  
	
  Section

  	
  8.8

  	
  Bankruptcy

  	
  88

  
	
  Section

  	
  8.9

  	
  Money Judgment

  	
  88

  
	
  Section

  	
  8.10

  	
  Discontinuance of Business

  	
  88

  
	
  Section

  	
  8.11

  	
  Financing Documents

  	
  88

  
	
  Section

  	
  8.12

  	
  Change of Control

  	
  89

  
	
  Section

  	
  8.13

  	
  Material Adverse Change

  	
  89

  
	
  Section

  	
  8.14

  	
  Breach or Default Under Purchase Agreement

  	
  89

  



 


iii

















 


	
   

  	
   

  	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
  THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  9.1

  	
  Appointment of Administrative Agent

  	
  89

  
	
  Section

  	
  9.2

  	
  Limitation of Duties of Administrative Agent

  	
  90

  
	
  Section

  	
  9.3

  	
  Lack of Reliance on the Administrative Agent

  	
  90

  
	
  Section

  	
  9.4

  	
  Certain Rights of the Administrative Agent

  	
  90

  
	
  Section

  	
  9.5

  	
  Reliance by Administrative Agent

  	
  91

  
	
  Section

  	
  9.6

  	
  Indemnification of Administrative Agent

  	
  91

  
	
  Section

  	
  9.7

  	
  Administrative Agent in its Individual Capacity

  	
  91

  
	
  Section

  	
  9.8

  	
  May Treat Lender as Owner

  	
  91

  
	
  Section

  	
  9.9

  	
  Successor Administrative Agent

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  10.1

  	
  Notices

  	
  92

  
	
  Section

  	
  10.2

  	
  Amendments and Waivers

  	
  92

  
	
  Section

  	
  10.3

  	
  No Waiver; Remedies Cumulative

  	
  94

  
	
  Section

  	
  10.4

  	
  Payment of Expenses, Indemnities, etc

  	
  94

  
	
  Section

  	
  10.5

  	
  Right of Setoff

  	
  97

  
	
  Section

  	
  10.6

  	
  Benefit of Agreement

  	
  97

  
	
  Section

  	
  10.7

  	
  Successors and Assigns; Participations and Assignments

  	
  97

  
	
  Section

  	
  10.8

  	
  Governing Law; Submission to Jurisdiction; etc

  	
  100

  
	
  Section

  	
  10.9

  	
  Independent Nature of Lenders’ Rights

  	
  101

  
	
  Section

  	
  10.10

  	
  Invalidity

  	
  101

  
	
  Section

  	
  10.11

  	
  Renewal, Extension or Rearrangement

  	
  101

  
	
  Section

  	
  10.12

  	
  Confidentiality

  	
  101

  
	
  Section

  	
  10.13

  	
  Interest

  	
  102

  
	
  Section

  	
  10.14

  	
  Entire Agreement

  	
  103

  
	
  Section

  	
  10.15

  	
  Attachments

  	
  103

  
	
  Section

  	
  10.16

  	
  Counterparts

  	
  103

  
	
  Section

  	
  10.17

  	
  Survival of Indemnities

  	
  103

  
	
  Section

  	
  10.18

  	
  Headings Descriptive

  	
  103

  
	
  Section

  	
  10.19

  	
  Satisfaction Requirement

  	
  103

  
	
  Section

  	
  10.20

  	
  Exculpation Provisions

  	
  103

  
	
  Section

  	
  10.21

  	
  Secured Affiliate

  	
  104

  



 


iv

















 


	
  ANNEXES

  
	
   

  
	
  Annex I

  	
   

  	
  Revolving Credit Commitments

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  
	
  Exhibit A -

  	
   

  	
  Form of Borrowing Base Report

  
	
  Exhibit B-1 -

  	
   

  	
  Form of Borrowing Request

  
	
  Exhibit B-2

  	
   

  	
  Form of Request for Letters of Credit

  
	
  Exhibit C -

  	
   

  	
  Form of Perfection Certificate Update

  
	
  Exhibit D -

  	
   

  	
  Form of Restricted Account Agreement

  
	
  Exhibit E -

  	
   

  	
  Form of Revolving Credit Note

  
	
  Exhibit F -

  	
   

  	
  Form of Opinion of Davis, Polk & Wardwell

  
	
  Exhibit G

  	
   

  	
  Form of Opinion of Morris, Nichols, Arsht & Tunnel

  
	
  Exhibit H -

  	
   

  	
  Form of No Default/Compliance Certificate

  
	
  Exhibit I -

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit J -

  	
   

  	
  Form of Guaranty and Security Agreement

  
	
  Exhibit K -

  	
   

  	
  Form of Collateral Assignment of Purchase Agreement

  
	
  Exhibit L -

  	
   

  	
  Form of Mortgage

  
	
  Exhibit M

  	
   

  	
  Form of Inventory Designation Report

  
	
  Exhibit N

  	
   

  	
  Form of Interim Account Report

  
	
  Exhibit O

  	
   

  	
  Form of PACA Reserve Report

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
  -

  	
  Approved Depository Bank

  
	
  Schedule 5.6(f)

  	
  -

  	
  Projections

  
	
  Schedule 5.7

  	
  -

  	
  Investments and Guaranties

  
	
  Schedule 5.8

  	
  -

  	
  Litigation

  
	
  Schedule 5.15

  	
  -

  	
  Compliance With Laws

  
	
  Schedule 5.19

  	
  -

  	
  Capital Structure

  
	
  Schedule 5.20

  	
  -

  	
  Insurance

  
	
  Schedule 5.21

  	
  -

  	
  Environmental Matters

  
	
  Schedule 5.23

  	
  -

  	
  Employee Matters

  
	
  Schedule 5.24

  	
  -

  	
  Real Property

  
	
  Schedule 5.26

  	
  -

  	
  Existing Indebtedness

  
	
  Schedule 5.27

  	
  -

  	
  Material Contracts

  
	
  Schedule 5.28

  	
  -

  	
  Terminals/Terminal Contracts

  
	
  Schedule 7.3

  	
  -

  	
  Liens

  
	
  Schedule 7.8

  	
  -

  	
  Nature of Business

  
	
  Schedule 7.12

  	
  -

  	
  Affiliate Documents

  
					



 


v

















 


LIST OF DEFINED TERMS


 


	
   

  	
   

  	
  Page No.

  
	
  $ 

  	
   

  	
  9

  
	
  Acquisition

  	
   

  	
  1

  
	
  Administrative Agent

  	
   

  	
  2

  
	
  Advance Notice

  	
   

  	
  2

  
	
  Affiliate

  	
   

  	
  2

  
	
  Affiliate Documents

  	
   

  	
  2

  
	
  Aggregate Revolving Credit Exposure

  	
   

  	
  3

  
	
  Agreement

  	
   

  	
  3

  
	
  Applicable Commitment Fee Percentage

  	
   

  	
  3

  
	
  Applicable Margin

  	
   

  	
  3

  
	
  Application

  	
   

  	
  4

  
	
  Approved Depository Bank

  	
   

  	
  4

  
	
  Assignment and Acceptance

  	
   

  	
  4

  
	
  Availability

  	
   

  	
  4

  
	
  Availability Reserves

  	
   

  	
  4

  
	
  Average Availability

  	
   

  	
  5

  
	
  Bailee

  	
   

  	
  5

  
	
  Bailee’s Letter

  	
   

  	
  5

  
	
  Bankruptcy Code

  	
   

  	
  88

  
	
  Base Rate

  	
   

  	
  39

  
	
  Base Rate Loan

  	
   

  	
  5

  
	
  Blocked Account

  	
   

  	
  5

  
	
  Borrower

  	
   

  	
  1

  
	
  Borrowing

  	
   

  	
  6

  
	
  Borrowing Base

  	
   

  	
  6

  
	
  Borrowing Base Report

  	
   

  	
  7

  
	
  Borrowing Request

  	
   

  	
  7

  
	
  Bring-Down Representations and Warranties

  	
   

  	
  7

  
	
  Business Day

  	
   

  	
  7

  
	
  Capital Expenditures

  	
   

  	
  7

  
	
  Capital Lease Obligations

  	
   

  	
  7

  
	
  Cash Management Agreement

  	
   

  	
  7

  
	
  Cash Management Reserve

  	
   

  	
  7

  
	
  CERCLA

  	
   

  	
  14

  
	
  Change of Control

  	
   

  	
  7

  
	
  Closing Date

  	
   

  	
  8

  
	
  Closing Transactions

  	
   

  	
  8

  
	
  Code

  	
   

  	
  8

  
	
  Collateral

  	
   

  	
  8

  
	
  Collateral Assignment of Purchase Agreement

  	
   

  	
  8

  
	
  control

  	
   

  	
  2

  
	
  controlled by

  	
   

  	
  2

  
	
  Cover

  	
   

  	
  9

  
	
  Covered Terminal

  	
   

  	
  9

  



 


vi

















 


	
  Credit Parties

  	
   

  	
  9

  
	
  Credit Party

  	
   

  	
  9

  
	
  Current Financials

  	
   

  	
  9

  
	
  Default

  	
   

  	
  9

  
	
  determination day

  	
   

  	
  3

  
	
  Dilution

  	
   

  	
  9

  
	
  Dilution Percentage

  	
   

  	
  9

  
	
  Disbursement Account

  	
   

  	
  38

  
	
  disposal

  	
   

  	
  14

  
	
  disposed

  	
   

  	
  14

  
	
  Dollar

  	
   

  	
  9

  
	
  EBITDA

  	
   

  	
  9

  
	
  Eligible Account

  	
   

  	
  10

  
	
  Eligible Account Advance Percentage

  	
   

  	
  12

  
	
  Eligible Finished Goods Inventory

  	
   

  	
  13

  
	
  Eligible In-Transit Inventory

  	
   

  	
  13

  
	
  Eligible Inventory

  	
   

  	
  13

  
	
  Eligible Raw Materials Inventory

  	
   

  	
  14

  
	
  Eligible Unbilled Account

  	
   

  	
  14

  
	
  Eligible Unbilled Account Advance Percentage

  	
   

  	
  14

  
	
  Environmental Laws

  	
   

  	
  14

  
	
  Equity

  	
   

  	
  14

  
	
  ERISA

  	
   

  	
  15

  
	
  ERISA Affiliate

  	
   

  	
  15

  
	
  ERISA Termination Event

  	
   

  	
  15

  
	
  Event of Default

  	
   

  	
  87

  
	
  Exchange Reserve

  	
   

  	
  15

  
	
  Excluded Taxes

  	
   

  	
  15

  
	
  Exempt Management Fees

  	
   

  	
  15

  
	
  Existing Indebtedness

  	
   

  	
  16

  
	
  Federal Funds Effective Rate

  	
   

  	
  16

  
	
  Fee Letter

  	
   

  	
  16

  
	
  Financing Documents

  	
   

  	
  16

  
	
  Financing Parties

  	
   

  	
  102

  
	
  Fiscal Quarter

  	
   

  	
  16

  
	
  Fiscal Year

  	
   

  	
  16

  
	
  Fixed Charge Calculation Period

  	
   

  	
  16

  
	
  Fixed Charge Coverage Ratio

  	
   

  	
  16

  
	
  Fixed Price Contracts

  	
   

  	
  17

  
	
  Foreign Lender

  	
   

  	
  17

  
	
  Free Cash Flow

  	
   

  	
  18

  
	
  Fuels Tax Reserve

  	
   

  	
  18

  
	
  Funding Amount

  	
   

  	
  33

  
	
  Funds Flow from Operations

  	
   

  	
  18

  
	
  GAAP

  	
   

  	
  19

  
	
  Governmental Authority

  	
   

  	
  19

  



 


vii

















 


	
  Governmental Requirement

  	
   

  	
  19

  
	
  Guarantor

  	
   

  	
  19

  
	
  Guarantors

  	
   

  	
  19

  
	
  Guaranty and Security Agreement

  	
   

  	
  19

  
	
  hazardous substance

  	
   

  	
  14

  
	
  Hedging Agreement

  	
   

  	
  19

  
	
  Hedging Reserves

  	
   

  	
  19

  
	
  herein

  	
   

  	
  32

  
	
  hereof

  	
   

  	
  32

  
	
  hereunder

  	
   

  	
  32

  
	
  Highest Lawful Rate

  	
   

  	
  20

  
	
  Historical Financials

  	
   

  	
  20

  
	
  Holdco

  	
   

  	
  1

  
	
  Holdco II

  	
   

  	
  20

  
	
  Indebtedness

  	
   

  	
  20

  
	
  Indemnified Taxes

  	
   

  	
  21

  
	
  Information

  	
   

  	
  102

  
	
  Interest Expense

  	
   

  	
  21

  
	
  Interest Period

  	
   

  	
  21

  
	
  Interim Account Report

  	
   

  	
  21

  
	
  Inventory Designation Report

  	
   

  	
  21

  
	
  ISP98

  	
   

  	
  34

  
	
  Issuing Bank

  	
   

  	
  21

  
	
  JPMorgan Chase

  	
   

  	
  22

  
	
  Landlord Consent

  	
   

  	
  22

  
	
  Lender

  	
   

  	
  1

  
	
  Lender Affiliate

  	
   

  	
  22

  
	
  Lender Indebtedness

  	
   

  	
  22

  
	
  Lenders

  	
   

  	
  1

  
	
  Lending Office

  	
   

  	
  22

  
	
  Letter of Credit Liabilities

  	
   

  	
  22

  
	
  Letters of Credit

  	
   

  	
  34

  
	
  Leverage Ratio

  	
   

  	
  22

  
	
  LIBOR Loan

  	
   

  	
  22

  
	
  LIBOR Rate

  	
   

  	
  23

  
	
  Lien

  	
   

  	
  23

  
	
  Lockbox

  	
   

  	
  23

  
	
  Lockbox Agreement

  	
   

  	
  23

  
	
  Lockbox Institution

  	
   

  	
  23

  
	
  Make-Whole Amount

  	
   

  	
  23

  
	
  Margin Stock

  	
   

  	
  23

  
	
  Marketing Alliance Partner

  	
   

  	
  23

  
	
  Material Adverse Change

  	
   

  	
  24

  
	
  Material Adverse Effect

  	
   

  	
  24

  
	
  Material Contracts

  	
   

  	
  24

  
	
  Material Provision

  	
   

  	
  88

  



 


viii

















 


	
  Maximum Available Amount

  	
   

  	
  24

  
	
  Morgan Stanley Funds

  	
   

  	
  24

  
	
  Mortgage

  	
   

  	
  24

  
	
  Mortgaged Real Property

  	
   

  	
  25

  
	
  Nebraska Sub

  	
   

  	
  25

  
	
  Nebraska Sub Operating Agreement

  	
   

  	
  25

  
	
  Net Recovery Value

  	
   

  	
  25

  
	
  Net Working Capital

  	
   

  	
  25

  
	
  New Subsidiary

  	
   

  	
  71

  
	
  Non-Financed Capital Expenditures

  	
   

  	
  25

  
	
  Non-Mortgaged Real Property

  	
   

  	
  25

  
	
  Non-Repeating Representations and Warranties

  	
   

  	
  25

  
	
  NOx Compliance Project

  	
   

  	
  26

  
	
  NOx Initial Reserve

  	
   

  	
  26

  
	
  Obligated Party

  	
   

  	
  26

  
	
  oil

  	
   

  	
  14

  
	
  OPA

  	
   

  	
  14

  
	
  Other Taxes

  	
   

  	
  26

  
	
  Overadvances

  	
   

  	
  43

  
	
  PACA

  	
   

  	
  26

  
	
  PACA Reserve

  	
   

  	
  26

  
	
  PACA Reserve Report

  	
   

  	
  26

  
	
  Parent

  	
   

  	
  1

  
	
  Participant

  	
   

  	
  99

  
	
  Payment Office

  	
   

  	
  27

  
	
  PBGC

  	
   

  	
  27

  
	
  Perfection Certificate Update

  	
   

  	
  27

  
	
  Perfection Certificates

  	
   

  	
  27

  
	
  Permitted Liens

  	
   

  	
  78

  
	
  Person

  	
   

  	
  27

  
	
  Plan

  	
   

  	
  27

  
	
  Prime Rate

  	
   

  	
  27

  
	
  Projections

  	
   

  	
  27

  
	
  Property

  	
   

  	
  27

  
	
  Purchase Agreement

  	
   

  	
  1

  
	
  Purchase Documents

  	
   

  	
  69

  
	
  Qualified Public Offering

  	
   

  	
  28

  
	
  Quarterly Date

  	
   

  	
  28

  
	
  RCRA

  	
   

  	
  14

  
	
  Real Property

  	
   

  	
  28

  
	
  Recovery Event

  	
   

  	
  28

  
	
  Refinancing Dividend

  	
   

  	
  1

  
	
  Register

  	
   

  	
  99

  
	
  Regulation D

  	
   

  	
  28

  
	
  Regulation U

  	
   

  	
  28

  
	
  Regulation X

  	
   

  	
  28

  



 


ix

















 


	
  Reimbursement Obligations

  	
   

  	
  28

  
	
  release

  	
   

  	
  14

  
	
  Request for Letters of Credit

  	
   

  	
  28

  
	
  Required Lenders

  	
   

  	
  28

  
	
  Responsible Officer

  	
   

  	
  28

  
	
  Restricted Account

  	
   

  	
  29

  
	
  Restricted Account Agreement

  	
   

  	
  29

  
	
  Restricted Payment

  	
   

  	
  29

  
	
  Revolving Credit Commitment

  	
   

  	
  32

  
	
  Revolving Credit Commitments

  	
   

  	
  32

  
	
  Revolving Credit Exposure

  	
   

  	
  29

  
	
  Revolving Credit Loan

  	
   

  	
  32

  
	
  Revolving Credit Maturity Date

  	
   

  	
  29

  
	
  Revolving Credit Note

  	
   

  	
  29

  
	
  Revolving Credit Percentage

  	
   

  	
  29

  
	
  Risk Management Policy

  	
   

  	
  29

  
	
  Rolling Period

  	
   

  	
  29

  
	
  Schedules

  	
   

  	
  29

  
	
  Secured Affiliate

  	
   

  	
  29

  
	
  Security Instruments

  	
   

  	
  30

  
	
  Seller

  	
   

  	
  1

  
	
  Seller Note

  	
   

  	
  1

  
	
  solid waste

  	
   

  	
  14

  
	
  Solvent

  	
   

  	
  30

  
	
  Standby Letter of Credit

  	
   

  	
  30

  
	
  Statutory Reserves

  	
   

  	
  30

  
	
  Storage/Handling Reserves

  	
   

  	
  30

  
	
  Subsidiary

  	
   

  	
  31

  
	
  Taxes

  	
   

  	
  31

  
	
  Temporary Lockbox Account

  	
   

  	
  31

  
	
  Terminal

  	
   

  	
  31

  
	
  Terminal Inventory

  	
   

  	
  31

  
	
  threatened release

  	
   

  	
  14

  
	
  Title Commitments

  	
   

  	
  57

  
	
  Transferee

  	
   

  	
  100

  
	
  Tri-Party Agreement

  	
   

  	
  31

  
	
  Type

  	
   

  	
  31

  
	
  UCC

  	
   

  	
  31

  
	
  under common control with

  	
   

  	
  2

  
	
  Utilization Percentage

  	
   

  	
  31

  
	
  Voting Equity

  	
   

  	
  31

  
	
  Williams

  	
   

  	
  31

  



 


x

















 


CREDIT AGREEMENT


 


THIS CREDIT AGREEMENT (this “Agreement”) is made and entered into as
of May 30, 2003, among WILLIAMS ETHANOL
SERVICES, INC., a Delaware corporation to be renamed “Aventine
Renewable Energy, Inc.” immediately after the execution and delivery of
this Agreement (“Borrower”),
WILLIAMS BIO-ENERGY, LLC, a
Delaware limited liability company to be renamed “Aventine Renewable Energy,
L.L.C.” immediately after the execution and delivery of this Agreement (“Parent”), JPMORGAN CHASE BANK, individually as a Lender (in such
individual capacity, “JPMorgan Chase”),
as the Issuing Bank (in such capacity the “Issuing
Bank”) and as the Administrative Agent (in such capacity, the “Administrative Agent”), and each of the
lenders that is a signatory hereto or which hereafter becomes a party hereto as
provided in Section 10.7 (individually, a “Lender” and, collectively, the “Lenders”).


RECITALS:


 


WHEREAS, Aventine Renewable
Energy Holdings, Inc., a Delaware corporation (“Holdco”), has entered into that certain
Purchase Agreement (the “Purchase
Agreement”) dated as of February 19, 2003, pursuant to
which Holdco has purchased 100% of the outstanding limited liability company
interests of Parent from Williams Energy Services, L.L.C., a Delaware limited
liability company (“Seller”)
(such purchase, the “Acquisition”);
and


 


WHEREAS, Holdco has paid a
portion of the purchase price payable by it pursuant to the Purchase Agreement
by issuing to Seller that certain promissory note (the “Seller Note”) dated May 30, 2003;
and


 


WHEREAS, after giving effect
to the Acquisition, Parent is a Subsidiary (as herein defined) of Holdco and
Borrower is a wholly owned Subsidiary of Parent; and


 


WHEREAS, Borrower has
requested that Lenders provide to Borrower a revolving credit facility the
proceeds of which will be used by Borrower (a) to pay a dividend (the “Refinancing Dividend”) to Parent in the
amount of the Seller Note, the proceeds of which will be distributed by Parent
to Holdco and utilized by Holdco to repay the Seller Note, (b) to finance
Borrower’s working capital requirements, and (c) for the other purposes
permitted herein; and


 


WHEREAS, upon and subject to
the terms and conditions herein, (a) the Lenders have agreed to provide
such revolving credit facility to Borrower, (b) the Issuing Bank has
agreed to act as Issuing Bank hereunder, and (c) Administrative Agent has
agreed to act as the Administrative Agent for the Lenders.


 


AGREEMENT:


 


In consideration of the
mutual covenants and agreements herein contained, Parent, Borrower, the
Administrative Agent, the Issuing Bank and the Lenders agree as follows:


 


1

















 


ARTICLE 1

DEFINITIONS; CONSTRUCTION


 


Section 1.1
Definitions.
As used herein, the following terms shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined). Reference to any party to a Financing Document shall mean that party
and its successors and assigns.


 


“Acquisition” shall have the meaning set
forth in the recitals hereto.


 


“Administrative Agent” shall mean
JPMorgan Chase acting in the manner and to the extent described in Article 9,
and any successor Administrative Agent appointed pursuant to Article 9.


 


“Advance Notice” shall mean written or
telecopy notice (with telephonic confirmation in the case of telecopy notice),
which in each case shall be irrevocable, from Borrower to be received by the
Administrative Agent before noon (New York, New York time), by the number of
Business Days in advance of any Borrowing, conversion, continuation or
prepayment of any Revolving Credit Loan or Revolving Credit Loans pursuant to
this Agreement as respectively indicated below:


 


(a) LIBOR Loans - 3
Business Days; and


 


(b) Base Rate Loans -
same Business Day.


 


For the purpose of determining the respectively
applicable Revolving Credit Loans in the case of the conversion from one Type
of Revolving Credit Loan into another, the Revolving Credit Loans into which
there is to be a conversion shall control. The Administrative Agent, the
Issuing Bank and each Lender are entitled to rely upon and act upon telecopy
notice made or purportedly made by Borrower.


 


“Affiliate” shall mean, with respect to
any Person, (a) any Person controlling, controlled by or under common
control with such Person, (b) any director, officer, manager, shareholder,
partner or member of such Person or of any Person described in clause (a) preceding,
and (c) any member of the immediate family of any Person described in
clauses (a) or (b) preceding. For purposes of this definition, “control” (including “controlled by” and “under common control with”) shall mean
the possession, directly or indirectly, of the power to either (i) vote
10% or more of the securities having ordinary voting power for election of
directors of such Person, or (ii) direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; provided, that, no
Marketing Alliance Partner shall be considered an Affiliate of any of the
Credit Parties solely as a result of a Credit Party’s ownership of voting
securities of such Marketing Alliance Partner unless such ownership constitutes
30% or more of the outstanding Voting Equity of such Marketing Alliance
Partner.


 


“Affiliate Documents” shall mean the
agreements, instruments and other documents set forth in Schedule 7.12
and in effect on the date hereof.


 


2

















 


“Aggregate Revolving Credit Exposure”
shall mean the sum of all of the Lenders’ Revolving Credit Exposures.


 


“Agreement” shall mean this Credit
Agreement, as further amended, modified or supplemented from time to time.


 


“Applicable Commitment Fee Percentage”
shall mean, on any day (a “determination
day”) and with respect to any Revolving Credit Loan, the
applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Utilization Percentage for the most recent
Fiscal Quarter ended prior to such determination day.


 




	
  Utilization Percentage

  	
   

  	
  Applicable Commitment Fee

  Percentage

  	
   

  
	
  Less than 40%

  	
   

  	
  0.500%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to 40% but less than or equal to 75%

  	
   

  	
  0.375%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 75%

  	
   

  	
  0.250%

  	
   

  






 


Each change in the Applicable Commitment Fee
Percentage shall be effective as of the first day of each Fiscal Quarter based
on the Utilization Percentage during the preceding Fiscal Quarter.
Notwithstanding the foregoing, for the period commencing on the Closing Date
and continuing through and including March 31, 2004, the Applicable
Commitment Fee Percentage shall be 0.3750%.


 


“Applicable Margin” shall mean, on any
day (a “determination day”) and with respect to any Revolving Credit Loan, the
applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Leverage Ratio determined on the most
recent Quarterly Date with respect to which Borrower and Parent were required
to deliver the Current Financials as of such determination day (said
calculation of the Leverage Ratio to be made by the Administrative Agent as
soon as practicable after receipt by the Administrative Agent of all required
Current Financials for the applicable period):


 




	
  Leverage Ratio

  	
   

  	
  LIBOR Loan

  Applicable Margin

  Percentage

  	
   

  	
  Base Rate Loan

  Applicable Margin

  Percentage

  	
   

  
	
  Greater than 3.00 to 1.00

  	
   

  	
  3.00%

  	
   

  	
  0.75%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.50 to 1.00 but less than or equal to 3.00 to 1.00

  	
   

  	
  2.75%

  	
   

  	
  0.50%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.00 to 1.00 but less than or equal to 2.50 to 1.00

  	
   

  	
  2.50%

  	
   

  	
  0.25%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less
  than or equal to

  2.00 to 1.00

  	
   

  	
  2.25%

  	
   

  	
  0.00%

  	
   

  






 


3

















 


Each change in the Applicable Margin based on a
change in the Leverage Ratio shall be effective as of the 5th Business Day
following actual receipt by the Administrative Agent of the Current Financials
for the applicable Fiscal Quarter (and based upon Current Financials for the
Rolling Period ended as of the last day of the Rolling Period for which such
Current Financials are provided). Notwithstanding the foregoing, for the period
commencing on the Closing Date and continuing through and including the 5th
Business Day following receipt by the Administrative Agent of the Current
Financials for the Fiscal Quarter ended March 31, 2004, the Applicable
Margin for (a) LIBOR Loans shall be 2.750%, and (b) Base Rate Loans
shall be 0.500%. In the event Current Financials are not provided on any date
required by Section 6.10(a), Section 6.10(b) and Section 6.10(c),
the LIBOR Loan Applicable Margin Percentage shall be 3.000% and the Base Rate
Loan Applicable Margin Percentage shall be 0.75% from the date such Current
Financials are due until the 5th Business Day after the date the Administrative
Agent receives such Current Financials then due pursuant to Section 6.10(a),
Section 6.10(b) and Section 6.10(c).


 


“Application” shall mean an “Application
and Agreement for Letter of Credit,” or similar instrument or agreement,
entered into between Borrower and the Issuing Bank in connection with any
Letter of Credit.


 


“Approved Depository Bank” shall mean
any financial institution described on Schedule 1.1 hereto and any
other financial institution which the Administrative Agent may hereafter
designate as an “Approved Depository Bank” by written notice to Borrower; provided,
that, the Administrative Agent may, in its reasonable discretion, notify
Borrower that a financial institution which was an “Approved Depository Bank”
no longer qualifies as such for purposes of this Agreement, in which event such
financial institution shall not be considered an “Approved Depository Bank” for
purposes of the Financing Documents from and after the date specified in such
notice (which shall not be less than ten (10) Business Days following the
date specified in such notice).


 


“Assignment and Acceptance” shall mean
an Assignment and Acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 10.7),
and accepted by the Administrative Agent, in substantially the form of Exhibit I
hereto or any other form approved by the Administrative Agent.


 


“Availability” shall mean, as of any
date, the remainder of (a) the Maximum Available Amount on such date,
minus (b) the Aggregate Revolving Credit Exposure on such date.


 


“Availability Reserves” shall mean, as
of any date of determination, (a) PACA Reserves, (b) Hedging
Reserves, (c) Storage/Handling Reserves, (d) Exchange Reserves, (e) Cash
Management Reserves, (f) Fuels Tax Reserves and (g) such other
amounts as the Administrative Agent may from time to time establish and
revise in its sole but reasonable discretion reducing the Borrowing Base (i) to
reflect general eligibility criteria, events, conditions, contingencies or
risks which, as determined by the Administrative Agent in its sole but
reasonable discretion, do or could reasonably be expected to (A) adversely
affect either (1)


 


4

















 


the Eligible Accounts or Eligible Inventory or their
value, or (2) the security interests and other rights of the
Administrative Agent in the Collateral (including the enforceability,
perfection and priority thereof), or (B) materially and adversely affect
the assets, business or prospects of the Credit Parties taken as a whole,
including, without limitation, the existence of actual or contingent material
liabilities and other actual or potential material capital requirements which
are unanticipated or otherwise arise outside of the ordinary course of business
and which are not reasonably expected to be satisfied out of cash flow from
operations or other capital resources available to the Credit Parties (for
purposes of this clause (B), “Credit Parties” shall not include Nebraska Sub
prior to the date on which the Credit Parties hold at least eighty percent
(80%) of the outstanding Equity of Nebraska Sub), (ii) to reflect the
Administrative Agent’s belief that any collateral report or financial
information furnished by or on behalf of any Credit Party to the Administrative
Agent or any Lender is or may have been incomplete, inaccurate or
misleading in any material respect, or (iii) in respect of any state of
facts which the Administrative Agent determines in its reasonable discretion
constitutes a Default or Event of Default. Without limiting the foregoing, the
NOx Initial Reserve will be established as an Availability Reserve with respect
to the Borrowing Base from the Closing Date until the completion of the NOx
Compliance Project (subject to the reductions of such NOx Initial Reserve as
provided for in the definition of “NOx Initial Reserve”).


 


“Average Availability” shall mean, for
any Fiscal Quarter, the average Availability for such Fiscal Quarter determined
by dividing (a) the sum of the Availability determined by Administrative
Agent at the end of each Business Day during such Fiscal Quarter (taking into
account all Borrowings and all Letters of Credit issued on such Business Day
and application of all amounts credited to the Lender Indebtedness on such
Business Day), by (b) the total number of Business Days in such Fiscal
Quarter.


 


“Bailee” shall mean any Person who is in
possession of any inventory of Borrower on behalf of Borrower.


 


“Bailee’s Letter” shall mean a letter in
form and substance reasonably acceptable to the Administrative Agent
executed by any Bailee pursuant to which, among other things, such Person (a) acknowledges
the Administrative Agent’s Lien with respect thereto, (b) acknowledges
that such Person holds such inventory or other Property for the Administrative
Agent’s benefit, and (c) provides access to such inventory or other
Property to the Administrative Agent.


 


“Bankruptcy Code” shall have the meaning
provided in Section 8.8.


 


“Base Rate” shall have the meaning
provided in Section 2.6(a).


 


“Base Rate Loan” shall mean a Revolving
Credit Loan bearing interest at the rate provided in Section 2.6(a).


 


“Blocked Account” shall mean Account No. 801
804 701 established by Borrower with the Administrative Agent and any other account
hereafter established by Borrower or any Guarantor with Administrative Agent
which Borrower or such Guarantor and Administrative Agent jointly designate as
the “Blocked Account,” (b) into which all cash receipts of Borrower or any
Guarantor from whatever source (including, without limitation, all currency,
checks and


 


5

















 


drafts and further including any of the foregoing
received in the Lockbox) shall be deposited pursuant to Section 4.3
hereof and pursuant to the Security Instruments, and (c) which are subject
to the provisions of Section 4.3 and Section 4.4
hereof.


 


“Borrower” shall mean Williams Ethanol
Services, Inc., a Delaware corporation, to be renamed “Aventine Renewable
Energy, Inc.” immediately after the execution and delivery of this
Agreement.


 


“Borrowing” shall mean a borrowing
pursuant to a Borrowing Request or a continuation or a conversion pursuant to Section 2.11
consisting, in each case, of the same Type of Revolving Credit Loans having, in
the case of LIBOR Loans, the same Interest Period (except as otherwise provided
in Section 2.14 and Section 2.15) and made previously
or being made concurrently by all of the Lenders.


 


“Borrowing Base” shall mean:


 


(a)          the Eligible Account Advance Percentage of Eligible Accounts, plus



 


(b)         the Eligible Unbilled Account Advance Percentage of Eligible Unbilled
Accounts, plus  


 


(c)          the lesser of


 


(i) 85% of the Net Recovery Value of Eligible Inventory, and


 


(ii) the sum of the following valued at the lower of cost
(determined on  a weighted
average cost basis) or market value as determined in accordance with GAAP
consistently applied: (A) 72% of Eligible Finished Goods Inventory, (B) 65%
of Eligible In-Transit Inventory, and (C) 58% of the Eligible Raw Materials
Inventory, minus


 


(d)         any Availability Reserves then in effect.  


 


The Borrowing Base in effect under this Agreement at
any time shall be the Borrowing Base reflected on the most recent Borrowing
Base Report delivered to the Lenders pursuant to Section 3.1(h) or
Section 6.10(g) subject to (i) adjustments on a weekly
basis to reflect increases or decreases in the components of the Borrowing Base
reflected in each of the Inventory Designation Report, the Interim Account
Report and the PACA Reserve Report required pursuant to Section 6.10(g),
(ii) the right of the Administrative Agent or the Required Lenders to
redetermine any component of the Borrowing Base or the calculation thereof if
and to the extent the Borrower, Administrative Agent or the Required Lenders
believe, in good faith, such component or calculation to be incorrect (any such
redetermination made in good faith and absent manifest error shall be
conclusive and binding on Borrower), and (iii) immediate adjustment as a
result of (A) the establishment or release of Availability Reserves, (B) reduction
in advance rates provided for herein, (C) changes in eligibility criteria
or standards imposed by the Administrative Agent, and (D) the sale,
assignment, lease, license, transfer, exchange or other disposition by any
Credit Party of all or substantially all of its right, title and interest in
any Property.


 


6

















 


“Borrowing Base Report” shall mean the
report of Borrower setting forth a calculation of the Borrowing Base to be
delivered pursuant to Section 6.10(g), substantially in the form attached
as Exhibit A (or during the period from the Closing Date until the
first such report delivered following the Closing Date, the report delivered
pursuant to Section 3.1(h)).


 


“Borrowing Request” shall mean a request
for a Borrowing pursuant to Section 2.2, substantially in the form attached
as Exhibit B-1.


 


“Bring-Down Representations and Warranties “
shall mean all representations and warranties set forth in the Agreement and
the other Financing Documents, other than the Non-Repeating Representations and
Warranties.


 


“Business Day” shall mean any day
excluding Saturday, Sunday and any other day on which banks are required or
authorized to close in New York, New York and, if the applicable Business Day
relates to LIBOR Loans, on which trading is carried on by and between banks in
Dollar deposits in the London interbank market.


 


“Capital Expenditures” shall mean, as to
any Person for any period, all expenditures (whether paid in cash or accrued as
a liability, including the portion of Capital Lease Obligations originally
incurred during such period that are required under GAAP to be capitalized on a
balance sheet of such Person) during such period, that, in conformity with
GAAP, are included in “capital expenditures,” “additions to property, plant or
equipment” or comparable items in the financial statements of such Person.


 


“Capital Lease Obligations” shall mean,
as to any Person, the obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to use) real and/or
personal property which obligations are required to be classified and accounted
for as a liability on a balance sheet of such Person in conformity with GAAP and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof.


 


“Cash Management Agreement” shall mean
any document, instrument, agreement, arrangement or transaction with respect to
cash management services and includes, without limitation, any of the foregoing
related to deposit accounts, overdraft protection or automated clearing house
transactions.


 


“Cash Management Reserve” shall mean, an
amount (reflected in Dollars) calculated as of the last day of each month equal
to the amount reasonably determined by Administrative Agent equal to the
maximum projected liability of the Credit Parties to the Lenders or Secured
Affiliates with respect to Cash Management Agreements between a Lender or
Secured Affiliates on the one hand and any Credit Party or Credit Parties on
the other hand.


 


“Change of Control” shall mean the
occurrence of any event which results in any of the following statements being
incorrect: (i) before a Qualified Public Offering is consummated, (a) Parent
holds legal and beneficial title to 100% of the outstanding Equity of Borrower
of every class, (b) Parent holds legal and beneficial title to not less
than 78.42% of the outstanding Equity of Nebraska Sub of every class (subject
to dilution that may result in a reduction to Parent’s interest in the
Equity of Nebraska Sub to not less than 75% as a result of the issuance of
Equity to management of Nebraska Sub pursuant to a properly authorized
management equity plan),


 


7

















 


(c) Holdco holds legal and beneficial title to
not less than 85% of the outstanding Equity of Parent of every class, (d) Holdco
II holds legal and beneficial title to not less than 85% of the outstanding
Equity of Holdco of every class, (e) the Morgan Stanley Funds hold legal
and beneficial title to not less than 85% of the outstanding Equity of Holdco
II of every class, (f) Holdco does not have any outstanding Indebtedness
other than (1) Indebtedness that is held by Holdco II or the Morgan Stanley
Funds, (2) purchase price adjustments (if any) pursuant to the Purchase
Agreement and (3) other Indebtedness in an aggregate outstanding principal
amount not to exceed $5,000,000 at any time, and (g) Holdco II does not
have any outstanding Indebtedness other than (1) Indebtedness that is held
by the Morgan Stanley Funds, and (2) other Indebtedness in an aggregate
outstanding principal amount not to exceed $5,000,000 at any time or (ii) after
a Qualified Public Offering is consummated, (a) any person or group
(within the meaning of the Securities and Exchange Act of 1934 and the rules of
the SEC thereunder as in effect on the date hereof) other than Morgan Stanley
Funds, holds, directly or indirectly, beneficially or of record, Equity
Interests representing more than 30% of either the aggregate Voting Equity or
the aggregate equity value represented by the issued and outstanding Equity
Interests in Holdco, (b) Parent holds legal and beneficial title to 100%
of the outstanding Equity of Borrower of every class, (c) Parent holds
legal and beneficial title to not less than 78.42% of the outstanding Equity of
Nebraska Sub of every class (subject to dilution that may result in a
reduction to Parent’s interest in the Equity of Nebraska Sub to not less than
75% as a result of the issuance of Equity to management of Nebraska Sub
pursuant to a properly authorized management equity plan), (d) Holdco
holds legal and beneficial title to not less than 85% of the outstanding Equity
of Parent of every class, and (e) Holdco does not have any outstanding
Indebtedness other than (1) Indebtedness that is held by Holdco II or the
Morgan Stanley Funds, (2) purchase price adjustments (if any) pursuant to
the Purchase Agreement, and (3) other Indebtedness in an aggregate amount not
to exceed $5,000,000 at any time. The consummation of a Qualified Public
Offering shall not constitute a Change of Control.


 


“Closing Date” shall mean May 30,
2003.


 


“Closing Transactions” shall mean the
transactions occurring on the Closing Date pursuant to the Purchase Agreement
and this Agreement, including, without limitation (a) the consummation of
the Acquisition, (b) the borrowing of Revolving Credit Loans to occur on
the Closing Date, (c) the declaration and payment of the Refinancing
Dividend, and (d) the contribution by Holdco II and other stockholders of
Holdco of not less than $43,000,000 of cash to the common equity capital of
Holdco.


 


“Code” shall mean the Internal Revenue
Code of 1986, as amended, and any successor statute.


 


“Collateral” shall mean each Obligated
Party’s Properties described in and subject to the Liens, privileges,
priorities and security interests purported to be created by any Security
Instrument.


 


“Collateral Assignment of Purchase Agreement”
shall mean a Collateral Assignment of Purchase Agreement and Consent
substantially in the form of Exhibit K to be executed by
Holdco, pursuant to which Holdco shall collaterally assign to the
Administrative Agent to secure the Lender Indebtedness Holdco’s rights under
the Purchase Agreement.


 


8

















 


“Cover” when required by this Agreement
for Letter of Credit Liabilities, shall be effected by paying to the
Administrative Agent in immediately available funds, to be held by the
Administrative Agent in a collateral account maintained by the Administrative
Agent at its Payment Office (which may be the Blocked Account), an amount
equal to 105% of the maximum amount of each applicable Letter of Credit
available for drawing at any time. Such amount shall be retained by the
Administrative Agent in such collateral account until such time as the same is
no longer required under this Agreement or the applicable Letter of Credit
shall have expired and the Reimbursement Obligations, if any, with respect thereto
shall have been fully satisfied, whichever occurs first.


 


“Covered Terminal” shall mean a Terminal
the owner of which has executed and delivered to the Administrative Agent a
Bailee Letter which is in full force and effect.


 


“Credit Parties” shall mean Parent and
each of its Subsidiaries, including, without limitation, Borrower and Nebraska
Sub, collectively, and “Credit Party”
shall mean any such Person individually.


 


“Current Financials” shall mean, as of
any day, the financial statements and other related information for any
applicable period most recently required to be delivered to the Lenders
pursuant to Section 6.10(a), Section 6.10(b) and Section 6.10(c).


 


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


 


“Dilution” shall mean a reduction as
reasonably determined by the Administrative Agent in the value of accounts of
Borrower caused by returns, allowances, discounts, credits, and/or any other offsets
having the effect of reducing the collections of accounts.


 


“Dilution Percentage” shall mean, with
respect to Borrower, the ratio of Dilution to the total sales of Borrower for
the relevant calculation period.


 


“Disbursement Account” shall have the meaning
provided in Section 2.4(a).


 


“Dollar” and the sign “$” shall mean lawful money of the
United States of America.


 


“EBITDA” shall mean, as to Parent and
its consolidated Subsidiaries on a consolidated basis and for any period, the
amount equal to:


 


(a) net income
determined in accordance with GAAP, plus


 


(b) to the extent
deducted from revenues in the calculation of net income (without duplication),


 


(i) Interest Expense,


 


(ii) depreciation, amortization, other non-cash expenses
(including (A) reserves for restructuring charges, until such time as such
restructuring charges are incurred and become payable in cash (at which time
they will be deducted in


 


9

















 


the
calculation of EBITDA), (B) non-cash asset impairment charges pursuant to
FASB No. 144, and (C) unrealized losses on derivative instruments as
defined in FASB No. 133, but excluding minority interest expense),


 


(iii) income and franchise tax expense,


 


(iv) extraordinary losses for such period,


 


(v) all losses on the disposition of assets (other than the sale
of inventory in the ordinary course of business),


 


(vi) rent expenses for leases of the type described in clause (i) of
the definition of “Indebtedness,” plus


 


(vii) any expenditures for the NOx Compliance Project, plus


 


(c) all payments received in cash from Seller pursuant to the
indemnity provisions of the Purchase Agreement which are contributed in cash to
Parent and from Parent to Borrower, excluding indemnity payments reimbursing or
compensating Borrower for Capital Expenditures made or to be made by Borrower
(or otherwise compensating Borrower for losses, deficiencies or defects
pertaining to property, plant or equipment), minus


 


(d) to the extent included in revenues in the calculation of consolidated
net income (without duplication),


 


(i) extraordinary gains for such period,


 


(ii) all gains on the disposition of assets (other than the sale
of inventory in the ordinary course of business), and


 


(iii) unrealized gains on derivative instruments as defined in
FASB No. 133.


 


“Eligible Account” shall mean, at any
time, the invoice amount owing on each account (which shall mean any “account”
as such term is defined in Section 9-102 of the UCC) of Borrower (net of
any trade discounts, unbilled amounts, retention or finance charges, and sales
or fuels taxes) which meet such standards of eligibility as the Administrative
Agent shall establish from time to time in its sole but reasonable discretion; provided
that, no account shall be deemed an Eligible Account unless each of the
following statements is accurate (and Borrower, by including such account in
any computation of the Borrowing Base, shall be deemed to represent and warrant
to the Administrative Agent, the Issuing Bank and each Lender the accuracy of
such statements):


 


(1) said account is a
binding and valid obligation of the obligor thereon in full force and effect;


 


10

















 


(2) said account is
evidenced by an invoice which has been issued to the obligor (either by (A) electronic
transmission, (B) deposit of the same in the United States mail, properly
addressed and with postage paid, or (C) deposit with a commercial courier
service for delivery not later than the 2nd Business Day);


 


(3) said account is genuine
as appearing on its face and as represented in the books and records of
Borrower;


 


(4) said account is
free from claims regarding rescission, cancellation or avoidance, whether by
operation of law or otherwise;


 


(5) said account has
not been outstanding for more than ninety (90) days past the original invoice
date thereof;


 


(6) said account is net
of concessions, offsets, deductions, contras, chargebacks or understandings
with the obligor thereon that in any way could reasonably be expected to adversely
affect the payment of said account;


 


(7) the Administrative
Agent, on behalf of the Lenders, has a first-priority perfected Lien covering
said account and said account is, and at all times will be, free and clear of
all other Liens other than rights of vendors arising under PACA but only to the
extent no amounts owed such vendors is past due;


 


(8) the amount of said
account represented as being an Eligible Account is net of all accounts payable
and other amounts owed by Borrower to the obligor on said account and its
Affiliates;


 


(9) the obligor on said
account is not (a) an Affiliate of any of the Credit Parties (other than
commodities trading subsidiaries of Morgan Stanley), or (b) an employee of
any of the Credit Parties;


 


(10) said account arose
out of the sale of goods in the ordinary course of business of Borrower;


 


(11) said account is not
payable by a delinquent obligor; a Person is a “delinquent obligor” for
purposes of this clause (11), if more than fifty percent (50%) of the aggregate
amount of the accounts owed by such obligor and its Affiliates to Borrower have
been outstanding for more than ninety (90) days past the original invoice date
thereof;


 


(12) all consents, licenses,
approvals or authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given in connection
with the execution, delivery and performance of said account by each party
obligated thereunder have been duly obtained, effected or given and are in full
force and effect;


 


(13) the obligor on said
account is not the subject of any bankruptcy or insolvency proceeding, has not
had a trustee or receiver appointed for all or a substantial part of its
property, has not made an assignment for the benefit of creditors, admitted its
inability to pay


 


11

















 


its debts as they mature or suspended its business,
or said account is secured by letters of credit assigned to the Administrative
Agent and otherwise satisfactory to the Administrative Agent;


 


(14) the obligor of said
account is a corporation, partnership, limited liability company or other
entity incorporated or organized under the laws of a State of the United States
of America, the District of Columbia, or Canada or, if the obligor is not such
an entity, said account is secured by letters of credit assigned to the
Administrative Agent and otherwise satisfactory to the Administrative Agent or
export/import credit insurance assigned to the Administrative Agent and naming
Administrative Agent as loss payee and otherwise satisfactory to the
Administrative Agent;


 


(15) the obligor of said
account is not a state, commonwealth, federal, foreign, territorial, or other
court or governmental department, commission, board, bureau, agency or
instrumentality;


 


(16) the goods sold which
resulted in the creation of said account have been shipped or delivered to the
obligor on said account on a true sale basis on open account, and not on
consignment, on approval, on a “sale or return” basis, or on a “bill and hold”
or “pre-sale” basis or subject to any other repurchase or return agreement; no
material part of such goods has been returned, rejected, lost or damaged,
and said account is not evidenced by chattel paper or an instrument of any
kind;


 


(17) each of the
representations and warranties set forth in the Security Instruments with
respect to said account is true and correct;


 


(18) said account is payable
only in cash and is not an “exchange account;” and


 


(19) the Administrative
Agent has not notified Borrower that the Administrative Agent in its sole but
reasonable judgment is otherwise dissatisfied with the credit worthiness of the
obligor on said account;


 


provided that, if any Eligible Account, when added to all
other accounts that are obligations of the same obligor and its Affiliates,
results in a total sum that exceeds, in the case of any obligor that is rated
A- or better by Standard & Poor’s Ratings Group or A3 or better by
Moody’s Investors Services, Inc., 50%, and in the case of any other
obligor, 20%, of the total balance then due on all Eligible Accounts (without
giving effect to any reduction in Eligible Accounts pursuant to this proviso),
the amount of said account in excess of such percentage of such total balance
then due shall be excluded from Eligible Accounts. Administrative Agent and
each Lender acknowledge and agree that no deduction in the gross amount of any
account shall be required to be duplicated pursuant to any clause (including
the preamble) of this definition notwithstanding that the facts or
circumstances given rise to such deduction require deduction under more than
one clause.


 


“Eligible Account Advance Percentage”
shall mean 85% of Eligible Accounts, provided, that, the
Administrative Agent may, in its sole discretion, lower such percentage to such
lesser percentage as it deems appropriate in its sole discretion if the
Dilution Percentage exceeds five percent (5%) (with Dilution being calculated
for the most recently completed six (6) month period).


 


12

















 


“Eligible Finished Goods Inventory”
shall mean Eligible Inventory that consists of finished goods and that is not
Eligible In-Transit Inventory.


 


“Eligible Inventory” shall mean, at any
time, all “inventory” (as such term is defined in Section 9-102 of the
UCC) of Borrower used or consumed in the ordinary course of business of
Borrower or held for resale in the ordinary course of business of Borrower
which meets such standards of eligibility as the Administrative Agent shall
establish from time to time in its sole but reasonable discretion; provided
that no inventory shall be considered Eligible Inventory unless each of the
following statements is accurate (and Borrower, by including such inventory in
any computation of the Borrowing Base, shall be deemed to represent and warrant
to the Administrative Agent, the Issuing Bank and each Lender the accuracy of
such statements):


 


(a) said inventory
consists only of raw materials and finished goods and does not include goods
that are classified as work-in-progress;


 


(b) said inventory is
in good condition, meets all requirements imposed by any Governmental Authority
having regulatory authority over it or its use and/or sale and is currently
salable in the normal course of business of Borrower;


 


(c) said inventory is
either (i) Eligible In-Transit Inventory, (ii) Terminal Inventory, (iii) in
possession of Borrower, and if in the possession of Borrower, is located on
Real Property owned or leased by Borrower and described in Schedule 5.24
hereto and, to the extent said inventory is on leased property, the landlord of
such property shall have executed a Landlord Consent;


 


(d) each of the
representations and warranties set forth in the Security Instruments with
respect to said inventory is true and correct;


 


(e) the Administrative
Agent, on behalf of the Lenders, has a first-priority perfected Lien covering
said inventory, and said inventory is, free and clear of all Liens except for
Permitted Liens;


 


(f) said inventory does
not include goods that are not owned by Borrower or that are held by Borrower
pursuant to a consignment agreement or arrangement; and


 


(g) said inventory does
not include supplies, storeroom materials, parts, fuel (other than ethanol
held for resale) or similar items (denaturant is not excluded pursuant to this
clause (g)); and


 


(h) said inventory is
not evidenced by a negotiable document (as defined in the UCC).


 


“Eligible In-Transit Inventory” shall
mean Eligible Inventory consisting of finished goods owned by Borrower (a) which
is in the possession of a common carrier pending delivery to either (i) a
customer of Borrower, (ii) a Covered Terminal to be stored for the account
of Borrower, or (iii) Borrower at Real Property owned or leased by
Borrower and described in Schedule 5.24 hereto (and to the extent
such Real Property is leased, the landlord of such property has executed a
Landlord Consent), and (b) which is insured against risk of loss pursuant


 


13

















 


to an insurance policy in form and substance
and issued by an insurance company acceptable to the Administrative Agent, with
respect to which the Administrative Agent has been named loss payee and which
otherwise satisfies the requirements of Section 6.5 hereof.


 


“Eligible Raw Materials Inventory” shall
mean Eligible Inventory that consists of raw materials and is not Eligible
In-Transit Inventory.


 


“Eligible Unbilled Account” shall mean,
at any time, any account that would be an Eligible Account but for the
requirement of clause (2) of the definition of Eligible Account; provided,
that, (a) such account constitutes a non-contingent right to
receive payment of the full amount of such account from the applicable obligor,
(b) no such account will remain an Eligible Unbilled Account for more than
seven (7) days after its creation, and (c) the aggregate amount of
all Eligible Unbilled Accounts shall not exceed at any time the greater of (i) $3,000,000
or (ii) 10% of Borrower’s aggregate accounts at such time, but in no event
in excess of $5,000,000.


 


“Eligible Unbilled Account Advance Percentage”
shall mean 75% of Eligible Unbilled Accounts; provided, that, the
Administrative Agent may, in its sole discretion, lower such percentage to such
lesser percentage as it deems appropriate in its sole discretion if the
Dilution Percentage exceeds five percent (5%) (with Dilution being calculated
for the most recently completed six (6) month period).


 


“Environmental Laws” shall mean any and
all laws, statutes, ordinances, rules, regulations, orders, or determinations
of any Governmental Authority pertaining to health or the environment in effect
in any and all jurisdictions in which any Credit Party is conducting or at any
time has conducted business, or where any Property of any Credit Party is
located, or where any hazardous substances generated by or disposed of by any
of the Credit Parties are located, including, but not limited to, the Oil
Pollution Act of 1990 (“OPA”),
as amended, the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking
Water Act, as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, and other
environmental conservation or protection laws. The term “oil” shall have the meaning specified
in OPA; the terms “hazardous substance”
and “release” shall have
the meanings specified in CERCLA and “threatened
release” shall be used herein as it is used in CERCLA; and the
terms “solid waste” and “disposal” (or “disposed”) shall have the meanings
specified in RCRA; provided, however, in the event either CERCLA
or RCRA is amended so as to change the meaning of any term defined thereby,
such changed meaning shall apply on and subsequent to the effective date of
such amendment, and provided, further, that, to the extent
the laws of the relevant state in which any Property of any Credit Party is
located establish a meaning for “oil,” “hazardous substance,” “release,” “solid
waste” or “disposal” which is broader than that specified in either OPA, CERCLA
or RCRA, such broader meaning shall apply.


 


“Equity” shall mean shares of capital
stock, all partnership, profits, capital or member interest, all stock
appreciation rights, all phantom stock or similar rights, and all options,
warrants or any other right to substitute for or otherwise acquire the capital
stock, partnership,


 


14

















 


profits, capital or member interest, stock
appreciation rights, phantom stock or similar rights of any Person.


 


“ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended, and any successor statute.


 


“ERISA Affiliate” shall mean each trade
or business (whether or not incorporated) which together with any Credit Party
would be deemed to be a “single employer” within the meaning of Section 4001(b)(1) of
ERISA or Subsections 414(b), (c), (m) or (o) of the Code.


 


“ERISA Termination Event” shall mean (a) a
“Reportable Event” described in Section 4043 of ERISA and the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived), (b) the withdrawal of any Credit Party or
any ERISA Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination, each, under Section 4041(c) of ERISA, (d) the
receipt by a Credit Party or any ERISA Affiliate of any notice relating to the
institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which could reasonably be expected to constitute
grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.


 


“Event of Default” shall have the
meaning provided in Article 8.


 


“Exchange Reserve” shall mean an
Availability Reserve which, on any date, shall be the value (determined at the
lower of weighted average cost or market value as determined in accordance with
GAAP consistently applied) of inventory Borrower is obligated to deliver on
such date to or on account of any Person in exchange for inventory which has
been delivered to or for the account of Borrower by such Person on or prior to
such date.


 


“Excluded Taxes” shall mean, with
respect to the Administrative Agent, any Lender and the Issuing Bank (each, a “Payee”),
(a) income or franchise Taxes imposed on (or measured by) such Payee’s net
income by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office
is located, (b) any branch profits Taxes imposed by the United States of
America or any similar Tax imposed by any other jurisdiction in which any
Credit Party is located, (c) any Taxes imposed by reason of any present or
former connection between such Payee and the jurisdiction imposing such Tax,
other than Taxes that would not have been imposed but for this Agreement or any
Financing Document, and (d) in the case of a Foreign Lender, any
withholding Tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new Lending Office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.20(f), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new Lending Office (or assignment), to receive additional amounts from Borrower
with respect to such withholding Tax pursuant to Section 2.20(a).


 


“Exempt Management Fees” shall mean
salary, benefits, fees and expenses payable to employees, consultants and
advisors engaged by Borrower, Parent, Holdco, Holdco II or the


 


15

















 


Morgan Stanley Funds (but not employed directly by
the Morgan Stanley Funds or the general partner of the Morgan Stanley Funds, or
any “management company” or other Affiliate of the Morgan Stanley Funds
providing general management or advisory services to the Morgan Stanley Funds)
solely for services rendered with respect to the management and operations of
the business of the Credit Parties. Exempt Management Fees shall include amounts
paid to the Morgan Stanley Funds or Affiliates thereof to fund or reimburse the
Morgan Stanley Funds or such Affiliates for amounts paid by them and described
in the preceding sentence.


 


“Existing Indebtedness” shall mean all
Indebtedness of the Credit Parties outstanding on the Closing Date immediately
prior to the effectiveness of the Closing Transactions.


 


“Federal Funds Effective Rate” shall
mean, for any day, the per annum rate equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.


 


“Fee Letter” shall mean, collectively, (a) the
letter agreement dated February 19, 2003, regarding fees, executed by
JPMorgan Chase and accepted and agreed to by MSDW Capital Partners IV, LLC and
Holdco as of February 19, 2003, and (b) any other agreement now or at
any time hereafter entered into between any Credit Party and JPMorgan Chase
providing for the payment of fees to JPMorgan Chase in connection with this
Agreement or any transactions contemplated hereby or related hereto.


 


“Financing Documents” shall mean this
Agreement, the Revolving Credit Notes, the Security Instruments, the
Applications, the Borrowing Requests, the Borrowing Base Reports, and the Fee
Letter, together with any other written document, instrument or agreement
(other than participation, agency or similar agreements among the Lenders or
between any Lender and any other bank or creditor with respect to any
indebtedness or obligations of any Obligated Party hereunder or thereunder) now
or hereafter entered into in connection with the Revolving Credit Loans, the Lender
Indebtedness or the Collateral, as such written documents, instruments or
agreements may be amended, modified or supplemented from time to time.


 


“Fiscal Quarter” shall mean the fiscal
quarter of Parent, ending on the last day of each March, June, September and
December of each Fiscal Year.


 


“Fiscal Year” shall mean the fiscal year
of Parent and Borrower ending on December 31 of each year.


 


“Fixed Charge Calculation Period” shall
mean (a) the period of three (3) months ending September 30,
2003, (b) the period of six (6) months ending December 31, 2003,
(c) the period of nine (9) months ending March 31, 2004, and (d) each
Rolling Period ending on or after June 30, 2004.


 


“Fixed Charge Coverage Ratio” shall mean
for Parent and its consolidated Subsidiaries on a consolidated basis, for any
Fixed Charge Calculation Period, the ratio of:


 


16

















 


(a)                                  (i) EBITDA for such period, minus


 


(ii) Non-Financed Capital Expenditures made during such period
(excluding Non-Financed Capital Expenditures related to the NOx Compliance
Project to the extent such Non-Financed Capital Expenditures do not exceed in
the aggregate, the NOx Initial Reserve), minus


 


(iii) cash Taxes paid or due for such period to,


 


(b) the
sum of:


 


(i) scheduled principal payments on Indebtedness during such
period, plus


 


(ii) Interest Expense for such period, plus


 


(iii) to the extent not already deducted in the calculation of
EBITDA and without duplication, the amount of Restricted Payments for such
period pursuant to Section 7.5(b) and management, advisory,
monitoring, servicing and other fees and payments described in Section 7.23
for such period, plus


 


(iv) to the extent not included in Interest Expense or scheduled
principal payments pursuant to clauses (b)(i) and (ii) above, rent
expense for leases of the type described in clause (i) of the definition
of “Indebtedness.”


 


Notwithstanding the above, until Parent and Borrower
either (i) obtain the consent of the requisite holders of Equity in
Nebraska Sub pursuant to Section 6.11 and comply with all other
requirements of Section 6.11 with respect thereto, or (ii) hold
80% of the Equity of Nebraska Sub and comply with all requirements of Section 6.9
with respect thereto, the results of operations of Nebraska Sub shall be
excluded from the calculation of the Fixed Charge Coverage Ratio except that
cash dividends actually paid by Nebraska Sub to Parent shall be included in the
calculation of consolidated EBITDA. For each Fixed Charge Calculation Period
ending on or prior to March 31, 2004, the Fixed Charge Coverage Ratio
shall be determined by annualizing each component of such calculation set forth
in this definition above (i.e. multiplying the actual results of operations as
reflected in each such component by a fraction, the numerator of which is 12
and the denominator is the actual number of months in such period); provided,
that the annualized Non-Financed Capital Expenditures will be deemed
limited to the maximum amount of Capital Expenditures permitted pursuant to Section 7.15
for the Fiscal Year in which the last day of the applicable Fixed Charge
Calculation Period falls.


 


“Fixed Price Contracts” shall mean
contracts for the sale of ethanol entered into by Borrower pursuant to which
Borrower is obligated to sell such ethanol at a fixed price.


 


“Foreign Lender” shall mean any Lender
that is organized under the laws of a jurisdiction other than that in which
Borrower is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.


 


17

















 


“Free Cash Flow” shall mean, for Parent
and its wholly-owned Subsidiaries for any period,


 


(a) Funds Flow from
Operations for such period, plus


 


(b) Equity
distributions received in cash from any Person which is not a wholly-owned
Subsidiary of Parent, plus


 


(c) cash proceeds on
the disposition of assets (other than the sale of inventory in the ordinary
course of business), plus


 


(d) net decreases (or minus
net increases) in Net Working Capital, plus


 


(e) to the extent not
deducted from revenues in the calculation of consolidated net income and
without duplication, the amount of Restricted Payments made pursuant to Section 7.5(b) and
management, advisory, monitoring, servicing and other fees and payments
described in Section 7.23, minus


 


(f) the sum of each of
the following, to the extent actually paid in cash during such period: (1) Non-Financed
Capital Expenditures, and (2) principal payments on Indebtedness (other
than payments on the Revolving Credit Loans).


 


“Fuels Tax Reserve” shall mean an
Availability Reserve which shall be established in respect of Borrower’s
obligations to collect, remit and/or pay motor fuels, liquor or other sales or
excise taxes in respect of ethanol or other inventory sold by Borrower. Such
Availability Reserve shall be determined and reported in the Borrowing Base
Report on a monthly basis and shall equal the highest actual liability at any
point during the preceding month in respect of motor fuels, liquor or other
sales or excise taxes to the extent such liability is (or if remains unpaid
will become) secured by a Lien or is otherwise subject to a trust (statutory,
constructive or otherwise) for the benefit of the relevant taxing authority
which the Administrative Agent determines will have priority equal to or senior
to the Liens granted to the Administrative Agent pursuant to the Security
Instruments.


 


“Funded Indebtedness” shall mean, as to
any Person, without duplication, indebtedness of the type described in clauses
(a), (c), (d), (f), (i) and (h) in the definition of “Indebtedness,” plus
non-contingent reimbursement and indemnity obligations with respect to Letters
of Credit.


 


“Funding Amount” shall have the meaning
set forth in Section 2.2(c).


 


“Funds Flow from Operations” shall mean,
for Parent and its wholly-owned Subsidiaries for any period, without
duplication,


 


(a) the amount equal to
the consolidated net income of Parent and its wholly-owned Subsidiaries in
accordance with GAAP, plus


 


(b) to the extent
deducted from net income, depreciation, amortization, non-cash Interest
Expense, deferred taxes and any other non-cash expenses (including (A) reserves
for restructuring charges, until such time as such restructuring charges are
incurred and become


 


18

















 


payable in cash (at which time they will be deducted
in the calculation of Funds Flow from Operations), (B) non-cash asset
impairment charges pursuant to FASB No. 144, and (C) non-cash charges
pursuant to FASB No. 133), plus


 


(c) to
the extent deducted from consolidated net income, all after-tax losses on the
disposition of assets (other than the sale of inventory in the ordinary course
of business), plus


 


(d) all
payments received in cash from Seller pursuant to the indemnity provisions of
the Purchase Agreement which are contributed in cash to Parent and from Parent
to Borrower, excluding indemnity payments reimbursing or compensating Borrower
for Capital Expenditures made or to be made by Borrower (or otherwise
compensating Borrower for losses, deficiencies or defects pertaining to
property, plant or equipment), minus


 


(e) to
the extent deducted from consolidated net income, all after-tax gains on the
disposition of assets (other than the sale of inventory in the ordinary course
of business).


 


“GAAP” shall mean generally accepted
accounting principles as applied in accordance with Section 1.2.


 


“Governmental Authority” shall mean any
(domestic or foreign) federal, state, province, county, city, municipal or
other political subdivision or government, department, commission, board,
bureau, court, agency or any other instrumentality of any of them, which
exercises jurisdiction over any Obligated Party or any Property (including, but
not limited to, the use and/or sale thereof) of any Obligated Party or any
Plan.


 


“Governmental Requirement” shall mean
any law, statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
direction or requirement (including, but not limited to, any of the foregoing
which relate to Environmental Laws, energy regulations and occupational, safety
and health standards or controls) of any Governmental Authority.


 


“Guarantors” shall mean Parent and each
current or future Subsidiary of Parent, other than Borrower, collectively, and 


 


“Guarantor” shall mean each such Person
individually; provided, that, Nebraska Sub shall not be a
Guarantor hereunder unless and until Parent becomes the direct or indirect
beneficial owner of 100% of the Equity of Nebraska Sub.


 


“Guaranty and Security Agreement” shall
mean a Guaranty and Security Agreement executed by Borrower and each Guarantor
substantially in the form of Exhibit J, as amended, modified,
renewed, supplemented or restated from time to time.


 


“Hedging Agreement” shall mean any swap,
cap, floor, collar, forward agreement, futures or other protection agreement or
option with respect to any such transaction, designed to hedge against
fluctuations in interest rates, commodity prices, currency exchange rates or
financial market conditions, other than any agreement or other arrangement
requiring physical delivery.


 


“Hedging Reserves” shall mean an
Availability Reserve in an amount (reflected in Dollars), calculated as of any
date, equal to Borrower’s net liability under Hedging Agreements


 


19

















 


to which Borrower is a party with respect to which
the counterparty is a Lender or Secured Affiliate, calculated in accordance
with GAAP, with such calculation subject to review and approval by the
Administrative Agent.


 


“Highest Lawful Rate” shall mean, with
respect to each Lender, the maximum non-usurious interest rate, if any, that at
any time or from time to time may be contracted for, taken, reserved,
charged or received on the Revolving Credit Notes or on other Lender
Indebtedness, as the case may be, owed to it under the law of any
jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding other provisions of this Agreement, or under the law of the
United States of America applicable to such Lender and the Closing
Transactions, which would permit such Lender to contract for, charge, take, reserve
or receive a greater amount of interest than under such jurisdiction’s law.


 


“Historical Financials” shall mean (a) the
audited consolidated balance sheet of Parent prepared as of December 31,
2002, (b) the unaudited consolidated and consolidating statement of income
(loss) for Parent and its consolidated Subsidiaries for the Fiscal Year ended December 31,
2002, (c) the unaudited consolidated balance sheet of Parent prepared as
of the last day of the calendar month most recently ended as of the 25th day
prior to the Closing Date, and (d) the unaudited consolidated and
consolidating statements of income (loss) of Parent and its consolidated
Subsidiaries for the portion of Parent’s Fiscal Year ended as of the last day
of the calendar month most recently ended as of the 25th day prior to the
Closing Date.


 


“Holdco” shall have the meaning set
forth in the recitals hereto.


 


“Holdco II” shall mean Aventine
Renewable Energy Holdings, LLC, a Delaware limited liability company.


 


“Indebtedness” of any Person shall mean:


 


(a) all
obligations of such Person for borrowed money and obligations evidenced by
bonds, debentures, notes, bankers’ acceptances or other similar instruments;


 


(b) all
obligations of such Person (whether contingent or otherwise) in respect of letters
of credit, surety or other bonds and similar instruments;


 


(c) all
obligations of such Person to pay the deferred purchase price of Property or
services, other than trade payables from time to time incurred in the ordinary
course of business which do not remain unpaid more than 60 days past the due
date specified in the invoice or specified in any contract pursuant to which
such payable arises (other than such trade payables as are being disputed in
good faith by the applicable Credit Party and with respect to which reserves
have been established satisfactory to Administrative Agent in its sole but
reasonable discretion);


 


(d) all
Capital Lease Obligations in respect of which such Person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss;


 


20














 


(e) all
guaranties (direct or indirect), and other contingent obligations of such
Person in respect of, or obligations to purchase or otherwise acquire or to
assure payment of, Indebtedness of other Persons;


 


(f) all
obligations and indebtedness of other Persons secured by any Lien upon Property
owned by such Person, whether or not assumed;


 


(g) all
obligations or undertakings of such Person to maintain or cause to be
maintained the financial position or financial covenants of other Persons
(excluding, in the case of the Credit Parties, commitments of any Credit Party
to invest in Marketing Alliance Partners but only to the extent that the
fulfillment of such commitments will not result in a violation of Section 7.6(i));


 


(h) all
obligations of such Person to deliver goods or services in consideration of
advance payments but excluding payments for the purchase of inventory made not
more than seven (7) days in advance of the physical delivery of such
inventory to the applicable purchaser, but only to the extent such advance
payments are required by Borrower in the ordinary course of business to address
credit concerns pertaining to such purchaser; and


 


(i) any
“synthetic lease,” “tax retained operating lease” or similar lease financing
arrangements under which the tenant is treated as the owner of property for tax
purposes but such lease is treated as an operating lease in accordance with
GAAP.


 


“Indemnified Taxes” shall mean Taxes
arising from any payment made or action taken hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
Financing Document other than Excluded Taxes.


 


“Interest Expense” shall mean, as to
Parent and its consolidated Subsidiaries on a consolidated basis and for any
period, without duplication, total interest expenses, whether paid or accrued
as liabilities (including the interest component of Capital Lease Obligations),
with respect to all outstanding Indebtedness, including, without limitation,
all commissions, discounts and other fees and charges owed with respect to any
financing or letters of credit and net costs (or plus net gains) under any
interest rate Hedging Agreement to the extent that such costs are included
within interest expense under GAAP.


 


“Interest Period” shall mean, with
respect to each Borrowing of LIBOR Loans, an interest period complying with the
terms and provisions of Section 2.7.


 


“Interim Account Report” shall mean the
Interim Account Report to be delivered pursuant to Section 6.10(g),
a form of which is attached hereto as Exhibit N.


 


“Inventory Designation Report” shall
mean the Inventory Designation Report to be delivered pursuant to Section 6.10(g),
a form of which is attached hereto as Exhibit M.


 


“ISP98” shall have the meaning provided
in Section 2.3(b)(1).


 


“Issuing Bank” shall mean, for each
Letter of Credit, JPMorgan Chase as the issuing bank for such Letter of Credit.


 


21

















 


“JPMorgan Chase” shall mean JPMorgan
Chase Bank in its individual capacity as a Lender or as the Issuing Bank, as
the case may be, and not as the Administrative Agent.


 


“Landlord Consent” shall mean an
agreement executed and delivered by each landlord of Mortgaged Real Property
leased by Borrower or any Guarantor pursuant to which such landlord (a) consents
to the execution and delivery of a Mortgage by such Borrower or Guarantor in
favor of the Administrative Agent with respect to such leased Real Property (to
the extent the Administrative Agent is being granted a leasehold Mortgage with
respect to such leased Real Property), and (b) subordinates or waives all
of its Liens to the Liens of the Administrative Agent in the Property of such
Borrower or Guarantor located on such leased Real Property.


 


“Lender” shall have the meaning set forth
in the initial paragraph hereof.


 


“Lender Affiliate” shall mean (a) with
respect to any Lender (i) an Affiliate of such Lender, or (ii) any
entity (whether a corporation, partnership, limited liability company, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender, and (b) with respect to any Lender that is a fund which
invests in bank loans and similar extensions of credit, any other fund that
invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.


 


“Lender Indebtedness” shall mean any and
all amounts owing or to be owing by any Obligated Party to the Administrative
Agent, the Issuing Bank, the Lenders or any Secured Affiliate with respect to
or in connection with the Revolving Credit Loans, any Overadvance, any Letter
of Credit Liabilities, the Revolving Credit Notes, any Hedging Agreement, any
Cash Management Agreement, this Agreement, or any other Financing Document.


 


“Lending Office” shall mean, for each
Lender, the office specified opposite such Lender’s name on the signature pages hereof,
or in the Assignment and Acceptance pursuant to which it became a Lender, with
respect to each Type of Revolving Credit Loan, or such other office as such
Lender may designate in writing from time to time to Borrower and the
Administrative Agent with respect to such Type of Revolving Credit Loan.


 


“Letter of Credit Liabilities” shall
mean, at any time and in respect of any Letter of Credit, the sum of (a) the
amount available for drawings under such Letter of Credit as of the date of
determination plus (b) the aggregate unpaid amount of all
Reimbursement Obligations due and payable as of the date of determination in
respect of previous drawings made under such Letter of Credit less (c) the
amount of Cover as of the date of determination.


 


“Letters of Credit” shall have the
meaning provided in Section 2.3(a).


 


“Leverage Ratio shall mean, the ratio,
determined for Parent and its consolidated Subsidiaries on each Quarterly Date,
of (a) Funded Indebtedness determined as of such Quarterly Date, to (b) EBITDA
for the Rolling Period ending on such Quarterly Date.


 


“LIBOR Loan” shall mean a Revolving
Credit Loan bearing interest at the rate provided in Section 2.6(b).


 


22

















 


“LIBOR Rate” shall mean, with respect to
any Borrowing of LIBOR Loans for any Interest Period, the product of (a) (1) the
interest rate per annum shown on page 3750 of the Dow Jones &
Company Telerate screen or any successor page as the composite offered
rate for London interbank deposits with a period comparable to the Interest
Period for such LIBOR Loan, as shown under the heading “USD” at 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
or (2) if the rate in clause (1) of this definition is not shown for
any particular day, the average interest rate per annum (rounded upwards, if
necessary, to the next 1/16th of 1%) offered to the Administrative Agent in the
London interbank market for Dollar deposits of amounts in funds comparable to
the principal amount of the LIBOR Loan to which such LIBOR Rate is to be
applicable with maturities comparable to the Interest Period for which such
LIBOR Rate will apply as of approximately 10:00 a.m. (New York, New York
time) two Business Days prior to the commencement of such Interest Period, times
(b) Statutory Reserves.


 


“Lien” shall mean any interest in
Property securing an obligation owed to, or a claim by, a Person other than the
owner of the Property, whether such interest is based on contract,
constitutional, common, or statutory law, and including, but not limited to,
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights of way, liens and other statutory,
constitutional, or common law rights of landlords, leases and other title
exceptions and encumbrances affecting Property. For the purposes of this
Agreement, any Credit Party shall be deemed to be the owner of any Property
which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property
has been retained by or vested in some other Person for security purposes.


 


“Lockbox” shall mean the lockbox to be
established and operated pursuant to Section 4.2  hereof and the Lockbox Agreement.


 


“Lockbox Agreement” shall mean one or
more lockbox agreements to be entered into between Borrower and each Guarantor
and the Lockbox Institution on such Lockbox Institution’s standard form (with
such modifications thereto as the Administrative Agent or the Required Lenders
shall reasonably require), setting forth certain terms applicable to the
establishment and operation of the Lockbox.


 


“Lockbox Institution” shall mean the
Administrative Agent, and prior to August 31, 2003, “Lockbox Institution” shall include Bank
One, NA.


 


“Make-Whole Amount” shall have the
meaning set forth in Section 2.20(c).


 


”Margin Stock” shall have the meaning
provided in Regulations U and X.


 


“Marketing Alliance Partner” shall mean
a Person with whom Borrower has entered into a contract pursuant to which
Borrower purchases and resells all or a material portion of such Person’s
ethanol production for the stated term of such contract (including any of the
foregoing entered into after the Closing Date).


 


23

















 


“Material Adverse Change” shall mean the
occurrence or existence of any event, condition or circumstance that has had,
or could reasonably be expected to have, a Material Adverse Effect.


 


“Material Adverse Effect” shall mean any
material and adverse effect on (a) the ability of Borrower or any
Guarantor to pay and perform its obligations under and comply with the
terms and conditions of the Revolving Credit Notes, this Agreement and the
other Financing Documents in accordance with their respective terms, (b) the
rights and remedies of the Administrative Agent, the Lenders and the Secured
Affiliates under any of the Financing Documents, (c) the validity or
enforceability of any of the Financing Documents, or (d) the perfection or
priority of any of the Liens purported to be granted to the Administrative
Agent pursuant to any of the Security Instruments.


 


“Material Contracts” shall mean all
contracts, commitments, offers and agreements to which any Credit Party is a
party or by which any Credit Party or any of its assets are bound which is material
to its assets, liabilities, financial condition, revenues, expenses,
operations, properties or prospects, and which include, without limitation, any
contract, commitment, offer or agreement (a) which is not cancelable on
notice of 30 days or less without the payment of any penalty, premium,
cancellation fee or similar payment (other than nominal amounts), (b) pursuant
to which a Credit Party purchases any product or service which cannot be
readily replaced from other qualified vendors on comparable terms, (c) which
is entered into outside of the ordinary course of business, (d) which
provides for the payment by any Credit Party of an amount in excess of $100,000
in any period of 12 months, or (e) which provides for the payment to any
Credit Party of an amount in excess of $100,000 in any period of 12 months
except (x) confidentiality agreements, (y) short-term corn purchase contracts
and (z) co-product sales agreements of Nebraska Sub.


 


“Material Provision” shall have the
meaning provided in Section 8.11.


 


“Maximum Available Amount” shall mean,
at any date, an amount equal to the lesser of (a) the aggregate Revolving
Credit Commitments as of such date, and (b) the Borrowing Base as of such
date.


 


“Morgan Stanley Funds” shall mean Morgan
Stanley Dean Witter Capital Partners IV, L.P., Morgan Stanley Dean Witter
Capital Investors IV, L.P., and MSCP IV 892 Investors, L.P., collectively.


 


“Mortgage” shall mean a Mortgage, Deed
of Trust, Security Agreement, Assignment of Rents and Financing Statement to be
executed by Borrower or a Guarantor pursuant to which Borrower or such
Guarantor grants to the Administrative Agent to secure the Lender Indebtedness
first priority Liens in and to Real Property owned or leased by Borrower or
such Guarantor. Each Mortgage shall be substantially in the form of Exhibit L
hereto (subject to such modifications as the Administrative Agent shall
reasonably require to conform such Mortgage to the Governmental
Requirements and practice of the jurisdiction in which the relevant Mortgaged
Real Property is located).


 


24

















 


“Mortgaged Real Property” shall mean all
Real Property of Borrower and Guarantors designated as such on Schedule 5.24
hereto, and all other Real Property which may hereafter be mortgaged to
the Administrative Agent pursuant to a Mortgage.


 


“Nebraska Sub” shall mean Nebraska
Energy, L.L.C., a Kansas limited liability company.


 


“Nebraska Sub Operating Agreement” shall
mean the Amended and Restated Operating Agreement of Nebraska Energy, L.L.C.
dated September 1, 1994, as amended by Amendment I to the Amended and
Restated Operating Agreement dated October 27, 1997, and by Amendment to
the Amended and Restated Operating Agreement dated February 9, 2001.


 


“Net Recovery Value” shall mean, at any
date of determination, the net cash value (as determined by an independent
appraisal firm acceptable to the Administrative Agent including in connection
with the most recent inventory appraisal conducted pursuant to Section 6.10(o))
derived from the sale and/or other disposition of Borrower’s Eligible Inventory
after deducting all commissions, broker’s fees, legal and other professional
fees and expenses and other usual and customary transaction costs associated
with such sale or disposition (other than fees, expenses and other costs for
which an Availability Reserve is in effect as of the date of calculation of Net
Recovery Value).


 


“Net Working Capital” shall mean, on any
date of calculation, the remainder of (a) the aggregate amount of Eligible
Accounts and Eligible Inventory (valued at the lower of cost (determined on a
weighted average cost basis) or market value as determined in accordance with
GAAP consistently applied on such date), minus (b) the consolidated
current liabilities of Parent and its consolidated Subsidiaries determined on
such date in accordance with GAAP.


 


“New Subsidiary” shall have the meaning
provided in Section 6.9.


 


“Non-Financed Capital Expenditures”
shall mean Capital Expenditures made by any Credit Party which are not financed
pursuant to (a) the incurrence of Indebtedness (other than Indebtedness
incurred pursuant to this Agreement and trade payables incurred in the ordinary
course of business), or (b) an equity contribution made after the Closing
Date; provided, that, the first $5,000,000 of Capital
Expenditures made after the Closing Date which are not financed as provided in
clauses (a) or (b) shall not be considered “Non-Financed Capital
Expenditures” for purposes of this Agreement; provided, further, that,
Non-Financed Capital Expenditures for any period shall be reduced to the extent
of payments received in cash during such period from Seller pursuant to the
indemnity provisions of the Purchase Agreement which are contributed in cash to
Parent and from Parent to Borrower, reimbursing or compensating Borrower for
Capital Expenditures made or to be made by Borrower (or otherwise compensating
Borrower for losses, deficiencies or defects pertaining to property, plant or
equipment).


 


“Non-Mortgaged Real Property” shall mean
all Real Property owned or leased by Borrower or any Guarantor which is not
Mortgaged Real Property.


 


“Non-Repeating Representations and Warranties”
shall mean the representations and warranties set forth in Section 5.6(f),
Section 5.7, the first sentence of Section 5.19, the
last sentence of Section 5.23, the first two sentences of Section 5.24,
Section 5.25, Section 5.26, the


 


25

















 


first sentence of Section 5.27, the
first three sentences of Section 5.28, the last sentence of Section 5.29,
and Section 5.32.


 


“NOx Compliance Project” shall mean
Borrower’s effort to bring its Pekin, Illinois facility into compliance with
the United States Environmental Protection Agency NOx SIP Call, as implemented
by the Illinois Environmental Protection Agency, which caps the amount of
emissions of nitrogen oxide (NOx), an ozone precursor, allowed from large
boilers, turbines and combustion engines.


 


“NOx Initial Reserve” shall mean an
Availability Reserve in the amount of $1,000,000 established with respect to
the Borrowing Base and which shall be reduced as Capital Expenditures and other
expenditures are made in connection with the NOx Compliance Project subject to
delivery of evidence satisfactory to Administrative Agent that such Capital
Expenditures or other expenditures have been made; provided, that,
the NOx Initial Reserve shall not be reduced below $100,000 until the
Administrative Agent has received satisfactory evidence satisfactory to it that
the NOx Compliance Project has been completed at which time it shall be reduced
to zero ($0.00) (for this purpose the NOx Compliance Project shall be deemed
completed when new coal burners have been installed and tested to demonstrate
that NOx emissions are reduced to 0.4lbs/MMBTU).


 


“Obligated Party” shall mean each Credit
Party, Holdco and each other Person which is now, or hereafter becomes, a party
to any Financing Document pursuant to which such Person (a) becomes
obligated to repay all or any part of the Lender Indebtedness (whether as
primary obligor, guarantor, endorser, surety or otherwise), (b) subjects
any Property of such Person to a Lien securing all or any Lender Indebtedness,
or (c) otherwise provides credit support for all or any part of the
Lender Indebtedness or assures any Lender, the Administrative Agent or any
Secured Affiliate against loss in respect of the Lender Indebtedness.


 


“Other Taxes” shall mean any and all
present or future stamp or documentary Taxes or any other excise or property
Taxes, charges or similar levies arising from any payment made or action taken
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any Financing Document.


 


“Overadvance” shall have the meaning
provided in Section 2.10(b).


 


“PACA” shall mean the Perishable
Agricultural Commodities Act, 7 U.S.C §§499a-499t, as it may be amended
from time to time.


 


“PACA Reserve” shall mean an
Availability Reserve which shall be determined and reported in the PACA Reserve
Report on a weekly basis and which shall equal the highest actual liability of
Borrower at any point during the preceding week to vendors of agricultural
commodities to Borrower to the extent the claims of such vendors are subject to
PACA.


 


“PACA Reserve Report” shall mean the
PACA Reserve Report to be delivered pursuant to Section 6.10(g), a form of
which is attached hereto as Exhibit O.


 


26

















 


“Parent” shall mean Williams Bio-Energy,
L.L.C., a Delaware limited liability company, to be renamed “Aventine Renewable
Energy, LLC” immediately after the execution and delivery of this Agreement.


 


“Payment Office” shall mean the
Administrative Agent’s office located at 395 North Service, 3rd Floor,
Melville, New York 11749 (or such other office or individual as the
Administrative Agent may hereafter designate in writing to the other
parties hereto).


 


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


 


“Perfection Certificate Update” shall
mean a Certificate in the form of Exhibit C  hereto from a Responsible Officer of each
Obligated Party that has previously delivered a Perfection Certificate to be
delivered to the Administrative Agent pursuant to Section 6.10(g) hereof
and setting forth all changes that would be required to be made to such Credit
Party’s Perfection Certificate (as updated pursuant to any prior Perfection
Certificate Updates) to cause such Perfection Certificate to be accurate and
complete if reissued as of the last day of the month immediately preceding the
month in which such Perfection Certificate Update is required to be delivered
pursuant to Section 6.10(g) hereof.


 


“Perfection Certificates” shall mean
those certain Perfection Certificates dated as of the Closing Date, executed by
each Obligated Party and addressed to the Administrative Agent.


 


”Permitted Liens” shall have the meaning
provided in Section 7.3.


 


“Person” shall mean any individual,
partnership, firm, corporation, association, joint venture, trust or other
entity (including, but not limited to, the Obligated Parties), or any
government or political subdivision or agency, department or instrumentality
thereof.


 


“Plan” shall mean any employee pension
benefit plan subject to the provisions of Title IV of ERISA, which (a) is
currently or hereafter sponsored, maintained or contributed to by any Credit
Party or an ERISA Affiliate, or (b) was at any time during the five
preceding Fiscal Years sponsored, maintained or contributed to by any Credit
Party or an ERISA Affiliate.


 


“Prime Rate” shall mean the rate which
the Administrative Agent announces from time to time as its prime rate,
effective as of the date announced as the effective date of any change in such
prime rate. Without notice to Borrower or any other Person, the Prime Rate
shall change automatically from time to time as and in the amount by which such
prime rate shall fluctuate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
The Administrative Agent may make commercial loans or other loans at rates
of interest at, above or below the Prime Rate.


 


“Projections” shall mean the projections
of Parent’s and its consolidated Subsidiaries’ financial condition and results
of operation for the twelve (12) month period ending December 31, 2003,
copies of which are attached hereto as Schedule 5.6(f).


 


“Property” shall mean any interest in
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible.


 


27

















 


“Purchase Agreement” shall have the
meaning set forth in the recitals hereto.


 


“Purchase Documents” shall have the
meaning provided in Section 5.29.


 


“Quarterly Date” shall mean the last day
of each March, June, September and December in each year.


 


“Qualified Public Offering” shall mean
the first underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933 covering the offering and sale of
Equity of Holdco on a firm commitment basis in which the aggregate net proceeds
received by Holdco at the public offering price is at least $20,000,000.


 


“Real Property” shall mean any right,
title or interest in and to real property, including any fee interest,
leasehold interest, easement, or license and any other right to use or occupy
real property, including any right arising by contract.


 


“Recovery Event” shall mean any
settlement of or payment in respect of any Property or casualty insurance claim
or any condemnation proceeding relating to any asset of any Credit Party.


 


“Refinancing Dividend” shall have the
meaning set forth in the recitals hereto.


 


“Register” shall have the meaning provided in Section 10.7(c).


 


“Regulation D,” “Regulation U” and “Regulation X” shall mean, respectively,
Regulation D under the Securities Act of 1933, as amended or modified from time
to time, and Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System, as such regulations are from time to time in effect and
any successor regulations thereto.


 


“Reimbursement Obligations” shall mean,
at any date, the obligations of Borrower then outstanding in respect of the
Letters of Credit, to reimburse the Administrative Agent for the account of the
Issuing Bank for the amount paid by the Issuing Bank in respect of any drawings
under the Letters of Credit.


 


“Request for Letters of Credit” shall
mean a request for Letters of Credit pursuant to Section 2.3(b)(1),
substantially in the form attached as Exhibit B-2.


 


“Required Lenders” shall mean Lenders
with an aggregate Revolving Credit Percentage of 66.67% or more.


 


“Responsible Officer” shall mean, with
respect to any corporation, the chairman of the board, the president, any vice
president, the chief executive officer, the chief operating officer, or the
chief financial officer, or any equivalent officer (regardless of his or her
title), and, in respect of financial or accounting matters, the chief financial
officer, the vice president of finance, the treasurer, the controller, or any
equivalent officer (regardless of his or her title).


 


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“Restricted Account” shall mean a
deposit account established by Borrower or a Guarantor with an Approved
Depository Bank which has entered into a Restricted Account Agreement with the
Administrative Agent regarding such Account.


 


“Restricted Account Agreement” shall
mean a letter agreement substantially in the form of Exhibit D
hereto to be entered into between the Administrative Agent and each Approved
Depository Bank with respect to the Restricted Accounts of Borrower and
Guarantors maintained at such Approved Depository Bank.


 


“Restricted Payment” shall mean for any
Credit Party (a) the declaration or payment of any dividend on the Equity
of such Credit Party, (b) any payment to purchase, redeem, retire or
otherwise acquire any Equity of a Credit Party by such Credit Party or any
other Credit Party, (c) the return of any capital to or any distribution
of assets to any holder of Equity to such Credit Party, or (d) the
payment, prepayment, redemption, repurchase, retirement or defeasance of any
Indebtedness of such Credit Party which is prohibited pursuant to the terms of
the subordination, intercreditor or similar agreement or provision pertaining
to such Indebtedness.


 


“Revolving Credit Commitment” shall have
the meaning provided in Section 2.1(c).


 


“Revolving Credit Exposure” shall mean,
at any date and as to each Lender, the sum of (a) the aggregate principal
amount of the Revolving Credit Loans made by such Lender outstanding as of such
date plus (b) such Lender’s Revolving Credit Percentage of the
aggregate amount of all Letter of Credit Liabilities as of such date.


 


“Revolving Credit Loan” shall have the
meaning provided in Section 2.1(a). The Revolving Credit Loans
shall not include any Letter of Credit Liabilities.


 


“Revolving Credit Maturity Date” shall
mean May 30, 2006.


 


“Revolving Credit Note” shall mean a
promissory note of Borrower described in Section 2.5(a) payable
to any Lender and being substantially in the form of Exhibit E
hereto, evidencing the Indebtedness of Borrower to such Lender resulting from
Revolving Credit Loans made by such Lender.


 


“Revolving Credit Percentage” shall
mean, as to any Lender, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment (or, if the
Revolving Credit Commitments have terminated or expired, the percentage which
such Lender’s Revolving Credit Exposure at such time constitutes of the
Aggregate Revolving Credit Exposure at such time).


 


“Risk Management Policy” shall have the
meaning set forth in Section 6.12.


 


“Rolling Period” shall mean any period
of four consecutive Fiscal Quarters.


 


“Schedules” shall mean the Schedules to
this Agreement.


 


“Secured Affiliate” shall mean any
Affiliate of any Lender at the time that such Affiliate has entered into a
Hedging Agreement or Cash Management Agreement with any of the Credit


 


29

















 


Parties with the obligations of such Credit Parties
thereunder being secured by one or more Security Instruments.


 


“Security Instruments” shall mean the
Guaranty and Security Agreement, the Collateral Assignment of Purchase
Agreement, each Mortgage and any and all other agreements or instruments now or
hereafter executed and delivered by any Obligated Party or any other Person as
security for the payment or performance of the Lender Indebtedness, as any of
the foregoing may be amended, modified, renewed, supplemented or restated
from time to time.


 


“Seller” shall have the meaning set
forth in the recitals hereto.


 


“Seller Note” shall have the meaning set
forth in the recitals hereto.


 


“Solvent” shall mean with respect to any
Person on a particular date, the condition that, on such date, (a) the
fair value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liabilities
of such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small amount of capital.


 


“Standby Letter of Credit” shall mean a
letter of credit that (a) is used in lieu or in support of performance
guarantees or performance, surety or other similar bonds (but expressly
excluding stay and appeal bonds) arising in the ordinary course of business, (b) is
used in lieu or in support of stay or appeal bonds, (c) supports the
payment of insurance premiums for casualty insurance carried by Borrower, or (d) supports
payment or performance for identified purchases or exchanges of products or
services in the ordinary course of business.


 


“Statutory Reserves” shall mean a
fraction (expressed as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
applicable reserve percentages, including any marginal, special, emergency or
supplemental reserves (expressed as a decimal) established by the Board of
Governors of the Federal Reserve System and any other banking authority to
which the Lenders are subject for Eurocurrency Liabilities (as defined in Regulation
D) or any other category of deposits or liabilities by reference to which the
LIBOR Rate is determined. Such reserve percentages shall include those imposed
pursuant to Regulation D. LIBOR Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.


 


“Storage/Handling Reserves” shall mean
an amount, calculated as of the last day of each month, equal to the aggregate
of all amounts for storage, handling and other services charged by each Bailee
to Borrower for the two month period then ended; provided, however,
such amounts charged by Bailees who are no longer Bailees at the end of the
period for which


 


30

















 


Storage/Handling Reserves are being calculated shall
be excluded in calculating Storage/Handling Reserves for such period; provided,
further, if a Bailee at the end of any period for which Storage/Handling
Reserves are being calculated has not been a Bailee for all of such period, all
such amounts paid to such Bailee shall be included in the Storage/Handling
Reserves on a pro forma basis as if such Bailee had been a Bailee since the
beginning of such period.


 


“Subsidiary” of any Person shall mean a
corporation, limited liability company, partnership or other entity of which a
majority of the outstanding Voting Equity is owned by such Person, by one or
more Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries.


 


“Taxes” shall mean any and all present
or future taxes, levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.


 


“Temporary Lockbox Account” shall mean a
bank account maintained by Borrower with Bank One, NA pursuant to a Lockbox
Agreement until August 31, 2003, the administration of which shall be
governed by the Tri-Party Agreement referenced in Section 3.1(d)(5) hereof.


 


“Terminal” shall mean a warehouse or
terminal in which Borrower stores inventory (which may include a customer
location but only to the extent that inventory is held pending use by customer
and is not held pursuant to a consignment arrangement).


 


“Terminal Inventory” shall mean
inventory which is located in a Covered Terminal.


 


“Title Commitments” shall have the
meaning provided in Section 3.1(j).


 


“Tri-Party Agreement” shall mean that
certain Tri-Party Agreement Regarding Lockbox Accounts among Borrower, JP
Morgan Chase and Bank One, NA.


 


“Type” of Revolving Credit Loan shall
mean a Base Rate Loan or a LIBOR Loan.


 


“UCC” shall mean 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.


 


“Utilization Percentage” shall mean, for
any day, a percentage equal to the Aggregate Revolving Credit Exposure on such
day divided by the aggregate Revolving Credit Commitment on such day.


 


“Voting Equity” of any Person shall mean
Equity of such Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such Person, whether at
all times or only so long as no senior class of securities has such voting
power by reason of any contingency.


 


“Williams” shall mean The Williams
Companies, Inc., a Delaware corporation.


 


Section 1.2
Accounting Terms and Determinations. Unless otherwise defined or specified
herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be


 


31

















 


prepared, in accordance with GAAP as in effect from
time to time; provided, that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment of Section 7.1
hereof or the definitions related thereto to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof (or if
the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment of Section 7.1 hereof or the definitions
related thereto for such purpose), regardless of whether such notice is given
before or after such change in GAAP or in the application thereof, then such
provision shall be applied on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.


 


Section 1.3
Other Definitional Terms. The words “hereof,”
“herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and article, section, schedule, exhibit and
like references are to this Agreement unless otherwise specified.


 


ARTICLE 2

AMOUNT AND TERMS OF LOANS


 


Section 2.1
Loans and Commitments.


 


(a) Revolving Credit Loans. Subject to the
terms and conditions and relying on the representations and warranties
contained herein, each Lender severally agrees to make, on the Closing Date and
on any Business Day from and after the Closing Date, but prior to the Revolving
Credit Maturity Date, revolving credit loans (each a “Revolving Credit Loan”) to Borrower.


 


(b) Types of Loans. The Revolving Credit
Loans made pursuant hereto by each Lender shall, at the option of Borrower, be
either Base Rate Loans or LIBOR Loans and may be continued or converted
pursuant to Section 2.11; provided that, except as otherwise
specifically provided herein, all Revolving Credit Loans made pursuant to the
same Borrowing shall be of the same Type.


 


(c) Revolving Credit Commitments. Each
Lender’s Revolving Credit Exposure shall not exceed at any one time the amount
set forth opposite such Lender’s name on Annex I under the caption “Revolving
Credit Commitment” (as the same may be reduced pursuant to Section 2.9
or Section 2.10 or otherwise from time to time modified pursuant to
Section 10.7, its “Revolving
Credit Commitment,” and collectively for all Lenders, the “Revolving Credit Commitments”); provided,
however, that, subject to the last sentence of Section 2.10(b),
the Aggregate Revolving Credit Exposure at any one time outstanding shall not
exceed the Maximum Available Amount in effect at such time; and provided,
further, that, subject to the last sentence of Section 2.10(b),
Borrower shall not be permitted to obtain Borrowings of Revolving Credit Loans
hereunder at anytime in excess of the Availability at such time (calculated
immediately prior to giving effect to such Borrowings). There may be more
than one Borrowing with respect to Revolving Credit Loans on any day. Within
the foregoing limits and subject to the conditions set out in Article 3,
Borrower may obtain Borrowings of


 


32

















 


Revolving Credit Loans, repay or prepay such
Revolving Credit Loans, and reborrow such Revolving Credit Loans.


 


(d) Amounts of Borrowings, etc. With the
exception of Borrowings made pursuant to Section 2.2(c), the
aggregate principal amount of each Borrowing (1) of LIBOR Loans shall be (A) in
an amount sufficient to cause each Borrowing thereof to be not less than
$1,000,000 and (B) in an integral multiple of $100,000 and (2) of
Base Rate Loans may be in any amount. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that Borrower
shall not be entitled to request any Borrowing that, if made, would result in
an aggregate of more than five separate Borrowings of LIBOR Loans being
outstanding at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.


 


Section 2.2
Borrowing Requests.


 


(a) Borrowing Requests. Whenever Borrower
desires to make a Borrowing hereunder, it shall give Advance Notice in the form of
a Borrowing Request, specifying, subject to the provisions hereof, (1) the
aggregate principal amount of the Revolving Credit Loans to be made pursuant to
such Borrowing, (2) the date of such Borrowing (which shall be a Business
Day), (3) whether the Revolving Credit Loans being made pursuant to such
Borrowing are to be Base Rate Loans or LIBOR Loans, and (4) in the case of
LIBOR Loans, the Interest Period to be applicable thereto.


 


(b) Notice by Administrative Agent. The
Administrative Agent shall promptly (and, if any Borrowing Request is received
prior to 12:00 noon, New York, New York time, on the same Business Day
received) give each Lender telecopy or telephonic notice (and, in the case of
telephonic notices, confirmed by telecopy or otherwise in writing) of the
proposed Borrowing, of such Lender’s Revolving Credit Percentage thereof and of
the other matters covered by the Advance Notice. Borrower hereby waives the
right to dispute the Administrative Agent’s record of the terms of such
telephonic notice, absent manifest error. Notwithstanding the foregoing, to the
extent the Administrative Agent elects to utilize weekly settlement as provided
in Section 2.8(d) hereof, the Administrative Agent shall not
be required to give the Lenders notice of each Borrowing and instead shall note
each Borrowing on the weekly settlement statements delivered to each Lender.


 


(c) Automatic Funding to Disbursement Accounts.
Notwithstanding Section 2.2(a) and Section 2.2(b),
on each Business Day, Borrower will be deemed to have requested pursuant to a
Borrowing Request a Borrowing to be made on such day in an amount (the “Funding Amount”) equal to the amount of
all checks, drafts and other items submitted for payment from the Disbursement
Account on such Business Day. Such Borrowing shall be a Borrowing of Revolving
Credit Loans which shall be a Base Rate Loan. Subject to the satisfaction of
the conditions precedent set forth in Article 3, the Funding Amount
shall be deposited into the Disbursement Account.


 


33

















 


Section 2.3
Letters of Credit.


 


(a) Issuance of Letters of Credit. Subject
to the terms and conditions hereof, Borrower shall have the right, in addition
to Revolving Credit Loans provided for in Section 2.1, to utilize
the Revolving Credit Commitments from time to time prior to the Revolving
Credit Maturity Date by obtaining the issuance of Standby Letters of Credit for
the account of Borrower by the Issuing Bank if Borrower shall so request in the
notice referred to in Section 2.3(b)(1) (such letters of
credit being collectively referred to as the “Letters of Credit”); provided, however, that
Borrower shall not be permitted to obtain the issuance of Letters of Credit
hereunder at anytime in excess of the Availability at such time (calculated immediately
prior to giving effect to the issuance of such Letters of Credit) and the
aggregate of all Letter of Credit Liabilities at any one time outstanding shall
not exceed $10,000,000. The Letters of Credit shall be denominated in Dollars
and may be issued to support obligations of Borrower permitted pursuant to
this Agreement. Upon the date of the issuance of a Letter of Credit, the
Issuing Bank shall be deemed, without further action by any party hereto, to
have sold to each Lender, and each Lender shall be deemed, without further
action by any party hereto, to have purchased from such Issuing Bank, a
participation, to the extent of such Lender’s Revolving Credit Percentage, in
the Letter of Credit and the related Letter of Credit Liabilities. No Letter of
Credit issued pursuant to this Agreement shall have an expiry date beyond the
earlier of one year after the date of issuance or thirty (30) days prior to the
Revolving Credit Maturity Date.


 


(b) Additional Letter of Credit Provisions.
The following additional provisions shall apply to each Letter of Credit:


 


(1) Borrower shall give the Administrative Agent and the Issuing
Bank at least three Business Days’ prior notice (effective upon receipt) in the
form of a Request for Letters of Credit, or in each case, such shorter
period as may be agreed to by the Administrative Agent and the Issuing
Bank, specifying the date such Letter of Credit is to be issued (which shall be
a Business Day) and describing: (A) the face amount of the Letter of
Credit, (B) the expiration date of the Letter of Credit, (C) the name
and address of the beneficiary, (D) such information concerning the
transaction proposed to be supported by such Letter of Credit as the
Administrative Agent or the Issuing Bank may reasonably request, (E) such
other information and documents relating to the Letter of Credit as the
Administrative Agent or the Issuing Bank may reasonably request, and (F) a
precise description of documents and the verbatim text of any certificate to be
presented by the beneficiary, which, if presented prior to the expiry date of
the Letter of Credit, would require the Issuing Bank to make payment under the
Letter of Credit; provided, that, the Issuing Bank, in its
reasonable judgment, may require changes in such documents and
certificates. Each such notice shall be accompanied by the Issuing Bank’s
Application and by a certificate executed by a Responsible Officer setting
forth calculations evidencing availability for such Letter of Credit pursuant
to Section 2.3(b)(2) and stating that all conditions precedent
to such issuance have been satisfied. Each Letter of Credit shall, to the
extent not inconsistent with the express terms hereof or the applicable
Application, be subject to the International Standby Practices, 1998, International
Chamber of Commerce Publication No. 590 (the “ISP98”) and shall, as to matters not
governed by the ISP98, be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.


 


34

















 


(2) Subject to the last sentence of Section 2.10(b),
no Letter of Credit may be issued if, after giving effect thereto, the
Aggregate Revolving Credit Exposure would exceed the Maximum Available Amount.
On each day during the period commencing with the issuance of any Letter of
Credit and until such Letter of Credit shall have expired or shall have been
terminated, the Revolving Credit Commitment of each Lender shall be deemed to
be utilized for all purposes hereof in an amount equal to such Lender’s
Revolving Credit Percentage of the amount of the Letter of Credit Liabilities
related to such Letter of Credit.


 


(3) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment thereunder, the Issuing Bank shall promptly notify
Borrower and the Administrative Agent of such demand (provided, that,
the failure of the Issuing Bank to give such notice shall not affect the
Reimbursement Obligations of Borrower hereunder) and Borrower shall
immediately, and in any event no later than 10:00 a.m. (New York, New York
time) on the date of such drawing, reimburse the Administrative Agent for the
account of the Issuing Bank for any amount paid by the Issuing Bank upon any
drawing under any Letter of Credit, without presentment, demand, protest or
other formalities of any kind in an amount, in same day funds, equal to the
amount of such drawing. Unless prior to 10:00 a.m. (New York, New York
time) on the date of such drawing, Borrower shall have either notified the
Issuing Bank and the Administrative Agent that Borrower intends to reimburse
the Administrative Agent for the account of the Issuing Bank for the amount of
such drawing with funds other than the proceeds of Revolving Credit Loans or
delivered to the Administrative Agent a Borrowing Request for Revolving Credit
Loans in an amount equal to such drawing, Borrower will be deemed to have given
a Borrowing Request to the Administrative Agent requesting that the Lenders
make Revolving Credit Loans which shall be Base Rate Loans on the date on which
such drawing is honored in an amount equal to the amount of such drawing; provided,
that, such Revolving Credit Loans shall be subject to (A) the
satisfaction of the conditions in Article 3 and (B) the
existence of Revolving Credit Loan availability pursuant to Section 2.1(c) hereof
(after giving effect to repayment of the applicable Reimbursement Obligations
with the proceeds of the proposed Revolving Credit Loans). Subject to the
preceding sentence, if so requested by the Administrative Agent, each of the
Lenders shall, on the date of such drawing, make such Revolving Credit Loans in
an amount equal to such Lender’s Revolving Credit Percentage of such drawing or
the full amount of the unused Revolving Credit Loan available pursuant to Section 2.1(c),
as applicable, the proceeds of which shall be applied directly by the
Administrative Agent to reimburse the Issuing Bank to the extent of such
proceeds.


 


(4) If Borrower fails to reimburse the Issuing Bank as provided in
clause (3) above for any reason, including, but not limited to, failure to
satisfy the conditions in Article 3 or insufficient unused
Revolving Credit Loan availability pursuant to Section 2.1(c), the
Issuing Bank shall promptly notify the Administrative Agent and the
Administrative Agent shall notify each Lender of the unreimbursed amount of
such drawing and of such Lender’s respective participation therein based on
such Lender’s Revolving Credit Percentage. Each Lender will pay to the
Administrative Agent for the account of the Issuing Bank on the date of such
notice an amount equal to such Lender’s Revolving Credit Percentage of such
unreimbursed drawing (or, if such notice is made


 


35

















 


after
1:00 p.m. (New York, New York time) on such date, on the next succeeding
Business Day). Notwithstanding the foregoing, to the extent the Administrative
Agent elects to utilize weekly settlement as provided in Section 2.8(d) hereof,
the Administrative Agent shall not be required to give the Lenders notice of
each unreimbursed drawing against Letters of Credit and instead shall note each
unreimbursed drawing on the weekly settlement statements delivered to each
Lender. If any Lender fails to make available to the Issuing Bank the amount of
such Lender’s participation in such Letter of Credit as provided in this clause
(4), the Issuing Bank shall be entitled to recover such amount on demand from
such Lender together with interest at the Federal Funds Effective Rate for one
Business Day and thereafter at the Base Rate. Nothing in this clause (4) shall
be deemed to prejudice the right of any Lender to recover from the Issuing Bank
any amounts made available by such Lender to the Issuing Bank pursuant to this
clause (4) if it is determined by a court of competent jurisdiction that
the payment with respect to a Letter of Credit by the Issuing Bank was wrongful
and such wrongful payment was the result of gross negligence or willful
misconduct on the part of the Issuing Bank. The Issuing Bank shall pay to
the Administrative Agent, and the Administrative Agent to each Lender, such
Lender’s Revolving Credit Percentage of all amounts received from Borrower for
payment, in whole or in part, of the Reimbursement Obligations in respect of
any Letter of Credit, but only to the extent such Lender has made payment to
the Issuing Bank in respect of such Letter of Credit pursuant to this clause
(4).


 


(5) The issuance by the
Issuing Bank of each Letter of Credit shall, in addition to the conditions
precedent set forth in Article 3, be subject to the conditions
precedent that such Letter of Credit shall be in the form and contain such
terms as shall be reasonably satisfactory to the Issuing Bank, and that
Borrower shall have executed and delivered such other instruments and agreements
relating to the Letter of Credit as the Issuing Bank shall have reasonably
requested and that are not inconsistent with the terms of this Agreement,
including the Issuing Bank’s Application therefor. In the event of a conflict
between the terms of this Agreement and the terms of any Application, the terms
of this Agreement shall control.


 


(6) AS
BETWEEN BORROWER AND THE ISSUING BANK, BORROWER ASSUMES ALL RISKS OF THE ACTS
AND OMISSIONS OF OR MISUSE OF THE LETTERS OF CREDIT ISSUED BY THE ISSUING BANK BY
THE RESPECTIVE BENEFICIARIES OF SUCH LETTERS OF CREDIT. IN FURTHERANCE AND NOT
IN LIMITATION OF THE FOREGOING, THE ISSUING BANK SHALL NOT BE RESPONSIBLE: (A) FOR
THE FORM, VALIDITY, SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY
DOCUMENT SUBMITTED BY ANY PERSON IN CONNECTION WITH THE APPLICATION FOR OR
ISSUANCE OF SUCH LETTERS OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO BE IN
ANY OR ALL RESPECTS INVALID, INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED; (B) FOR
THE VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR
PURPORTING TO TRANSFER OR ASSIGN ANY SUCH LETTER OF CREDIT OR THE RIGHTS OR
BENEFITS THEREUNDER OR PROCEEDS THEREOF, IN WHOLE OR IN


 


36

















 


PART, WHICH MAY PROVE TO BE INVALID OR INEFFECTIVE FOR
ANY REASON; (C) FOR ERRORS, OMISSIONS, INTERRUPTIONS OR DELAYS IN
TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE, TELEGRAPH, TELEX OR
OTHERWISE, WHETHER OR NOT THEY ARE IN CIPHER; (D) FOR ERRORS IN
INTERPRETATION OF TECHNICAL TERMS; (E) FOR ANY LOSS OR DELAY IN THE
TRANSMISSION OR OTHERWISE OF ANY DOCUMENT REQUIRED IN ORDER TO MAKE A DRAWING
UNDER ANY SUCH LETTER OF CREDIT OR OF THE PROCEEDS THEREOF; (F) FOR THE
MISAPPLICATION BY THE BENEFICIARY OF ANY SUCH LETTER OF CREDIT OF THE PROCEEDS
OF ANY DRAWING UNDER SUCH LETTER OF CREDIT; AND (G) FOR ANY CONSEQUENCES
ARISING FROM CAUSES BEYOND THE CONTROL OF THE ISSUING BANK, INCLUDING, WITHOUT
LIMITATION, THE ACTIONS OF ANY GOVERNMENTAL AUTHORITY. NONE OF THE ABOVE SHALL
AFFECT, IMPAIR, OR PREVENT THE VESTING OF ANY OF THE ISSUING BANK’S RIGHTS OR
POWERS HEREUNDER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN CLAUSE (G) ABOVE,
BORROWER SHALL NOT ASSUME ANY RISK AND SHALL HAVE NO OBLIGATION TO INDEMNIFY
THE ISSUING BANK IN RESPECT OF, AND THE ISSUING BANK WILL NOT BE EXCULPATED
FROM (BUT SUBJECT TO SECTION 10.8), ANY LIABILITY INCURRED BY THE
ISSUING BANK ARISING PRIMARILY OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE ISSUING BANK, AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION.


 


(7) The Issuing Bank
will send to Borrower and the Administrative Agent immediately upon issuance of
any Letter of Credit, or an amendment thereto, a true and complete copy of such
Letter of Credit, or such amendment thereto. Upon issuance of any Letter of
Credit or an amendment thereto, the Administrative Agent shall promptly notify
each Lender of the terms of such Letter of Credit or amendment thereto, and of
such Lender’s Revolving Credit Percentage of the amount of such Letter of
Credit or amendment thereto, and the Administrative Agent shall provide to each
Lender a copy of such Letter of Credit or such amendment thereto. Upon
cancellation or termination of any Letter of Credit, the Issuing Bank shall
promptly notify the Administrative Agent and Borrower, and the Administrative
Agent will then promptly notify each Lender, of such cancellation or
termination.


 


The
obligation of Borrower to reimburse the Issuing Bank for Reimbursement
Obligations with regard to the Letters of Credit issued by it, and the
obligations of the Lenders under clause (4), shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement and under all circumstances including, without limitation, the
following circumstances:


 


(A) any lack of validity or enforceability of any Letter of
Credit;


 


(B) the existence of any claim, set-off, defense or other right
that any Credit Party may have at any time against a beneficiary or any
transferee of


 


37

















 


any
Letter of Credit (or any Persons for whom any such transferee may be
acting), any Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction (including
any underlying transaction between any Credit Party and the beneficiary for
which the Letter of Credit was procured) other than a defense based on the
gross negligence (as opposed to ordinary negligence) or willful misconduct of
the Issuing Bank, as determined by a court of competent jurisdiction;


 


(C) any draft, demand, certificate or any other document presented
under any Letter of Credit is proved to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein is untrue or inaccurate in
any respect;


 


(D) any adverse change in the condition (financial or otherwise)
of any of the Credit Parties;


 


(E) any breach of this Agreement or any other Financing Document
by any Credit Party, the Administrative Agent or any Lender (other than the
Issuing Bank);


 


(F) any other circumstance or happening whatsoever which is
similar to any of the foregoing; provided, that, such other
occurrence or happening is not the result of the gross negligence (as opposed
to ordinary negligence) or willful misconduct of the Issuing Bank, as
determined by a court of competent jurisdiction; or


 


(G) the fact that a Default shall have occurred and be continuing.


 


Section 2.4
Disbursement of Funds.


 


(a) Availability. Subject to Section 2.8(d),
no later than 12:00 noon (or, in the case of Base Rate Loans, 1:00 p.m.)
(New York, New York time) on the date of each Borrowing, each Lender will make
available to the Administrative Agent such Lender’s Revolving Credit Percentage
of the principal amount of the Borrowing requested to be made on such date
reduced by the principal amount of Revolving Credit Loans (if any) of such
Lender maturing on such date, in Dollars and in immediately available funds at
the Payment Office. The Administrative Agent will make available to Borrower at
the Payment Office the aggregate of the amounts (if any) so made available by
the Lenders by depositing such amounts, in immediately available funds, to the
accounts of Borrower, maintained with the Administrative Agent, designated by
Borrower for such purpose (collectively, the “Disbursement Account”) (on the date hereof, such accounts
being account numbers 601 867 419 (styled “Accounts Payable Controlled
Disbursement Account”) and 323 366 619 (styled “Operating Account”)), not later
than 3:00 p.m. (New York, New York time) on the date of each Borrowing. To
the extent that any Lender Indebtedness is due and owing on the date of a
requested Borrowing of Revolving Credit Loans, the Lenders shall apply the
proceeds of the Revolving Credit Loans then being made, to the extent thereof,
to the repayment of such Lender Indebtedness, such


 


38

















 


Revolving Credit Loans or Reimbursement Obligations
and repayments intended to be a contemporaneous exchange.


 


(b) Funds to the Administrative Agent.
Unless the Administrative Agent shall have been notified by any Lender prior to
the date of a Borrowing that such Lender does not intend to make available to
the Administrative Agent such Lender’s Revolving Credit Percentage of the
Borrowing to be made on such date, and subject to Section 2.8(d),
the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date, and the Administrative
Agent may make available to or for the account of Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of a Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at the Federal Funds Effective
Rate for a period of three (3) Business Days after the date due and at the
rate applicable to Base Rate Loans pursuant to Section 2.6(a) thereafter.
If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent shall promptly
notify Borrower and Borrower shall immediately pay such corresponding amount to
the Administrative Agent together with interest at the rate specified for the
Borrowing which includes such amount paid. Nothing in this Section 2.4(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Revolving
Credit Commitments hereunder or to prejudice any rights which Borrower may have
against any Lender as a result of any default by such Lender hereunder.


 


(c) Lenders’ Responsibilities. No Lender
shall be responsible for any default by any other Lender in its obligation to
make Revolving Credit Loans hereunder, and each Lender shall be obligated to
make only such Revolving Credit Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its Revolving Credit
Commitment hereunder.


 


Section 2.5
Notes and Amortization.


 


(a) Revolving Credit Notes. Borrower’s
obligation to pay the principal of, and interest on, the Revolving Credit Loans
made by each Lender shall be further evidenced by Borrower’s issuance,
execution and delivery of a Revolving Credit Note payable to the order of each
such Lender in the amount of such Lender’s Revolving Credit Commitment and
shall be dated as of the date of issuance of such Revolving Credit Note. The
principal amount of each Revolving Credit Note shall be payable on or before
the Revolving Credit Maturity Date.


 


Section 2.6
Interest. In
all cases subject to Section 10.13:


 


(a) Base Rate Loans. Subject to Section 2.6(c),
Borrower agrees to pay interest in respect of the unpaid principal amount of
each Base Rate Loan from the date thereof until payment in full thereof at a
rate per annum which shall be, for any day, equal to the sum of the relevant
Applicable Margin plus the Base Rate in effect on such day, but in no event to
exceed the Highest Lawful Rate. The term “Base
Rate” shall mean, for any day, the highest of (1) the Prime
Rate in effect on such day, and (2) one-half of one percent (1⁄2%) plus the
Federal Funds Effective Rate in effect for such day (rounded upwards, if
necessary, to the nearest 1/16th


 


39

















 


of 1%), but in no event to exceed the Highest Lawful
Rate. For purposes of this Agreement, any change in the Base Rate due to a
change in the Federal Funds Effective Rate or the Prime Rate shall be effective
as of the opening of business on the effective date of such change in the
Federal Funds Effective Rate or the Prime Rate, as the case may be. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive and binding, absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including, but not
limited to, the inability of the Administrative Agent to obtain sufficient bids
or publications in accordance with the terms hereof, the Base Rate shall be the
Prime Rate until the circumstances giving rise to such inability no longer
exist.


 


(b) LIBOR Loans. Subject to Section 2.6(c),
Borrower agrees to pay interest in respect of the unpaid principal amount of
each LIBOR Loan from the date thereof until payment in full thereof at a rate
per annum which shall be equal to the sum of the relevant Applicable Margin
plus the LIBOR Rate, but in no event to exceed the Highest Lawful Rate.


 


(c) Default Interest. During the
continuance of any Event of Default, interest shall accrue on the outstanding
Lender Indebtedness, to the maximum extent permitted by law, at a rate per
annum equal to (1) in the case of any LIBOR Loan, the rate that would be
applicable under Section 2.6(b) to such LIBOR Loan, plus 2%
per annum, and (2) in the case of any other amount comprising a part of
the Lender Indebtedness, the rate that would be applicable under Section 2.6(a) to
a Base Rate Loan, plus 2% per annum, but in no event to exceed the Highest
Lawful Rate; provided, that, the Administrative Agent shall give
written notice of the accrual of default interest but the failure of the
Administrative Agent to give such notice shall not affect the validity or
timing of the accrual of such default interest.


 


(d) Interest Payment Dates. Interest on
each Revolving Credit Loan shall accrue from and including the date of such
Revolving Credit Loan to but excluding the date of payment in full thereof.
Interest on each LIBOR Loan shall be payable on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each day which occurs at three month intervals of the initial
date of such Interest Period, and on any prepayment (on the amount prepaid), at
maturity (whether by acceleration or otherwise) and, after maturity, on demand.
Interest on each Base Rate Loan shall be payable on the first Business Day of
each calendar month, commencing on the first of such days to occur after such
Base Rate Loan is made and at maturity (whether by acceleration or otherwise).
Interest which accrues pursuant to Section 2.6(c) shall be
payable on demand.


 


(e) Notice by the Administrative Agent. The
Administrative Agent, upon determining the LIBOR Rate for any Interest Period,
shall promptly notify, by telecopy, telephone (in the case of telephonic
notices, confirmed by telecopy or otherwise in writing) or in writing, Borrower
and the Lenders of such LIBOR Rate.


 


(f) Collection Charge. Solely for purposes
of determining the amount of interest which accrues and is payable in respect
of Revolving Credit Loans, payments of principal will be deemed to be applied
to the outstanding principal balance of the Revolving Credit Loans on the first
Business Day following receipt by the Administrative Agent of collected funds.


 


40

















 


Section 2.7
Interest Periods.
In connection with each Borrowing of LIBOR Loans, Borrower shall elect an
Interest Period to be applicable to such Borrowing, which Interest Period shall
begin on and include, as the case may be, the date selected by Borrower
pursuant to Section 2.2(a), the conversion date or the date of
expiration of the then current Interest Period applicable thereto, and end on
but exclude the date which is either one, two, three or six months thereafter,
as selected by Borrower; provided, that:


 


(a) Business Days. If any Interest Period
would otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided, further,
that, if any Interest Period (other than in respect of a Borrowing of
LIBOR Loans the Interest Period of which is expiring pursuant to Section 2.15(b) hereof)
would otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;


 


(b) Month End. Any Interest Period which
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to Section 2.7(c) below,
end on the last Business Day of a calendar month; and


 


(c) Maturity Dates. No Interest Period
shall extend beyond the Revolving Credit Maturity Date.


 


 Section 2.8
Records; Weekly Settlement.


 


(a) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing indebtedness of Borrower to such Lender resulting from each
Revolving Credit Loan of such Lender from time to time, including, without
limitation, the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.


 


(b) The
Administrative Agent shall maintain the Register pursuant to Section 10.7(c),
and a subaccount therein for each Lender, in which shall be recorded (1) the
amount of each Revolving Credit Loan made hereunder, the Type thereof and each
Interest Period, if any, applicable thereto, (2) the amount of any
principal or interest due and payable or to become due and payable from
Borrower to each Lender hereunder and (3) both the amount of any sum
received by the Administrative Agent hereunder from Borrower and each Lender’s
Revolving Credit Percentage thereof.


 


(c) The
entries made in the Register and the accounts of each Lender maintained
pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of Borrower therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of Borrower to repay (with applicable interest) the Revolving Credit
Loans made to Borrower by such Lender in accordance with the terms of this
Agreement.


 


41

















 


(d) The
arrangements between the Administrative Agent and the Lenders with respect to
making and advancing the Revolving Credit Loans and making payments under
Letters of Credit, at the option of the Administrative Agent (which, if
exercised, may be terminated by the Administrative Agent at any time),
shall be handled on the following basis: no less than once a week, the
Administrative Agent will provide each Lender with a statement showing, for the
period of time since the date of the most recent of such statements previously
provided, the aggregate principal amount of new Revolving Credit Loans made to
Borrower, the aggregate amount of new Reimbursement Obligations which have not
been reimbursed, the aggregate face amount of new Letters of Credit issued for
the accounts of Borrower, the amount of remittances and payments actually
collected and applied by the Administrative Agent to reduce the outstanding
principal balance of the Revolving Credit Loans and to reimburse Reimbursement
Obligations during such period, and the outstanding principal balances of the
Revolving Credit Loans and the aggregate Letter of Credit Liabilities
outstanding at the end of such period. If a Lender’s pro-rata share (based on
such Lender’s Revolving Credit Percentage) of the Revolving Credit Loans and
the unreimbursed Reimbursement Obligations made during such period exceeds such
Lender’s pro-rata share of remittances and payments applied to reduce the
Revolving Credit Loans and reimburse Reimbursement Obligations during such
period, the difference will be paid and made available in same day funds by
such Lender to the Administrative Agent, and if such Lender’s pro rata share
(based on such Lender’s Revolving Credit Percentage) of remittances and
payments applied to reduce the Revolving Credit Loans and reimburse
Reimbursement Obligations during such period exceeds such Lender’s pro rata
share (based on such Lender’s Revolving Credit Percentage) of the Revolving
Credit Loans and the Reimbursement Obligations made during such period, the
difference will be paid and made available in same day funds by the
Administrative Agent to such Lender. If any amount required to be paid by a
Lender to the Administrative Agent or by the Administrative Agent to a Lender
hereunder is not in fact made available to the Administrative Agent or such
Lender as applicable on the date due, the Lender or the Administrative Agent to
which such amount is due shall be entitled to recover such corresponding amount
on demand from such Lender together with interest at the Federal Funds
Effective Rate for a period of three (3) Business Days after the date due
and at the rate applicable to Base Rate Loans pursuant to Section 2.6(a) thereafter.
Nothing in this Section 2.8(d) shall be deemed to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitments
hereunder or to prejudice any rights which Borrower may have against any
Lender as a result of any default by such Lender hereunde.r


 


(e) The
Administrative Agent shall render to Borrower each month a statement of
Borrower’s account of all transactions of the type described in Section 2.8(d) hereof,
which shall be deemed to be correct and accepted by and be binding upon
Borrower unless the Administrative Agent receives a written statement of
Borrower’s exceptions to such account statement within ten (10) days after
such statement was rendered to Borrower.


 


Section 2.9
Voluntary Termination or Reduction of Revolving Credit  Commitments. Borrower may, upon at least five Business
Days’ written notice to the Administrative Agent, terminate entirely at any
time, or partially reduce from time to time by an aggregate amount of
$1,000,000 or any larger multiple of $100,000, the unused portions of the
Revolving Credit Commitments; provided, that (1) any such
reduction shall apply proportionately to the Revolving Credit Commitment of
each Lender, and (2) if the Revolving Credit Commitments are reduced or
terminated pursuant to this Section 2.9 on or before the first


 


42

















 


anniversary of the Closing Date, simultaneously with
such reduction or termination, Borrower shall pay to the Administrative Agent
for the ratable benefit of the Lenders the cancellation fee required pursuant
to Section 2.12(c) hereof. Borrower shall not be permitted to
reduce the Revolving Credit Commitments to an aggregate amount less than
$25,000,000 unless Borrower terminates the Revolving Credit Commitments in their
entirety.


 


Section 2.10
Repayment at Maturity; Prepayments.


 


(a) Repayment and Maturity. Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender, the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Revolving Credit Maturity Date (or such earlier date on
which the Revolving Credit Loans become due and payable pursuant to Article 8).


 


(b) Mandatory Prepayments.


 


(1) Subject to the last sentence of this Section 2.10(b)(1),
if at any time the Aggregate Revolving Credit Exposure is in excess of the
Maximum Available Amount, Borrower shall immediately pay to the Administrative
Agent, for the account of the Lenders, the amount of such excess to be applied (A) as
a prepayment of the Revolving Credit Loans and Reimbursement Obligations
outstanding and (B) after payment in full of the Revolving Credit Loans
and Reimbursement Obligations outstanding, as Cover for the Letter of Credit
Liabilities in an amount of such remaining excess. Any prepayment or Cover
required as a result of any reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.9 shall be payable or provided in
full on the date on which the reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.9 becomes effective. Each Lender
acknowledges and agrees that notwithstanding anything to the contrary set forth
in this Agreement, the Administrative Agent, in its sole discretion, may, for
the account and credit risk of the Lenders, make or permit to remain
outstanding, and/or cause each Lender to make, or permit to remain outstanding,
Revolving Credit Loans, or issue, or permit to remain outstanding, Letters of
Credit, which in any case results in the Aggregate Revolving Credit Exposure
exceeding the Maximum Available Amount (collectively, “Overadvances”); provided, however,
(i) no Overadvance may cause the Aggregate Revolving Credit Exposure
to exceed the total Revolving Credit Commitments of all Lenders, (ii) the
aggregate amount of all Overadvances outstanding at any time shall not exceed
the lesser of (A) $5,000,000 or (B) 10% of the Borrowing Base then in
effect, (iii) no Overadvance shall be outstanding for more than thirty
(30) consecutive days, and (iv) there can be only one Overadvance during
any 180-day period.


 


(2) Subject to the provisions of Section 2.8(d) hereof,
on or before 12:00 noon (New York, New York time) on each Business Day, the
Administrative Agent shall disburse to each Lender, for application to the principal
amount of the outstanding Revolving Credit Loans of each Lender, such Lender’s
Revolving Credit Percentage of all amounts then on deposit in the Blocked
Account, not to exceed such Lender’s Revolving Credit Exposure, which the
Administrative Agent shall have determined constitute “collected funds” in
accordance with the policies of the


 


43

















 


Administrative
Agent then in effect and reasonably consistent with industry custom and
practice.


 


(c) Voluntary Prepayments. Borrower may, at
its option, at any time and from time to time, prepay the Revolving Credit
Loans and the Reimbursement Obligations, in whole or in part, upon giving, in
the case of any LIBOR Loan, three Business Days’ prior written notice to the
Administrative Agent, and, in the case of any Base Rate Loan, prior written
notice on the same Business Day to the Administrative Agent. Such notice shall
specify (1) in the case of any prepayment of Revolving Credit Loans, the
date and amount of prepayment and whether the prepayment is of LIBOR Loans,
Base Rate Loans or a combination thereof, and, in each case if a combination
thereof, the principal amount allocable to each; and (2) in the case of
any prepayment of Reimbursement Obligations, the date and amount of prepayment,
the identity of the applicable Letter of Credit or Letters of Credit and the
amount allocable to each of such Reimbursement Obligations. Upon receipt of
such notice, the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender’s Revolving Credit Percentage of such prepayment. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (if a LIBOR Loan is
prepaid other than at the end of the Interest Period applicable thereto) any
amounts payable pursuant to Section 2.18. Prepayments of the
Revolving Credit Loans and the Reimbursement Obligations pursuant to this Section 2.10(c) shall
be applied, first, to payment of the Revolving Credit Loans then
outstanding, and second, to payment of any Reimbursement Obligations
then outstanding, third, to Cover any outstanding Letter of Credit
Liability. Each prepayment of Base Rate Loans shall be in the minimum principal
amount of $100,000 and in integral multiples of $100,000 and each prepayment of
LIBOR Loans shall be in the minimum principal amount of $1,000,000 and in
integral multiples of $100,000 or, in the case of either Base Rate Loans or
LIBOR Loans, the aggregate principal balance outstanding on the Revolving
Credit Loans and the Reimbursement Obligations, as applicable. No prepayment of
a LIBOR Loan shall be made which would result in the remaining outstanding
balance of such LIBOR Loan being an amount less than $1,000,000, and any
payment of LIBOR Loans made on any day other than the last day of the
applicable Interest Period shall be subject to the payment of the amounts
specified in Section 2.18.


 


(d) Notice by Administrative Agent. Upon
receipt of a notice of prepayment pursuant to this Section 2.10,
the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender’s ratable share of such prepayment.


 


Section 2.11
Continuation and Conversion Options.


 


(a) Continuation. Borrower may elect to
continue all or any part of any Borrowing of LIBOR Loans beyond the
expiration of the then current Interest Period relating thereto by giving
Advance Notice (which shall be irrevocable) to the Administrative Agent of such
election, specifying the LIBOR Loans or portion thereof to be continued and the
Interest Period therefor. In the absence of such a timely and proper election
with regard to LIBOR Loans, Borrower shall be deemed to have elected to convert
such LIBOR Loans to Base Rate Loans pursuant to Section 2.11(d).


 


44

















 


(b) Amount of Continuations. All or part of
any LIBOR Loans may be continued as provided herein, provided, that, any
continuation of such LIBOR Loans shall not be (as to each Borrowing of such
LIBOR Loans as continued for an applicable Interest Period) less than
$1,000,000 and shall be in an integral multiple of $100,000.


 


(c) Continuation or Conversion Upon Default.
If no Default shall have occurred and be continuing, each LIBOR Loan may be
continued or converted as provided in this Section 2.11. If a Default
shall have occurred and be continuing, Borrower shall not have the option to
elect to continue any such LIBOR Loan pursuant to Section 2.11(a) or
to convert Base Rate Loans to LIBOR Loans pursuant to Section 2.11(e).


 


(d) Conversion to Base Rate. Borrower may elect
to convert any LIBOR Loan on the last day of the then current Interest Period
relating thereto to a Base Rate Loan by giving Advance Notice to the
Administrative Agent of such election.


 


(e) Conversion to LIBOR Rate. Borrower may elect
to convert any Base Rate Loan at any time or from time to time to a LIBOR Loan
by giving Advance Notice (which shall be irrevocable) to the Administrative
Agent of such election, specifying each Interest Period therefor.


 


(f) Amounts of Conversions. All or any part of
the outstanding Revolving Credit Loans may be converted as provided
herein, provided that any conversion of such Revolving Credit Loans shall not
result in a Borrowing of LIBOR Loans in an amount less than $1,000,000 and in
integral multiples of $100,000.


 


Section 2.12
Fees.


 


(a) Revolving Credit Commitments. Borrower
shall pay to the Administrative Agent, for the account of and distribution to
each Lender in accordance with its Revolving Credit Percentage, a commitment
fee for the period commencing on the Closing Date, to and including the
Revolving Credit Maturity Date (or such earlier date as the Revolving Credit
Commitments shall have been terminated entirely), computed at a rate per annum
equal to the Applicable Commitment Fee Percentage on the amount by which the
Revolving Credit Commitments exceeds the daily Aggregate Revolving Credit
Exposure. The commitment fees payable pursuant to this Section 2.12(a) shall
be payable quarterly in arrears on the first Business Day of each calendar
quarter, commencing on September 2, 2003.


 


(b) Letters of Credit.


 


(1) As consideration for acting as the Issuing Bank with respect
to any Letter of Credit, Borrower will pay to the Issuing Bank, at the time of
issuance, renewal or material amendment of any Letter of Credit, a
non-refundable fee equal to 0.25% of the face amount of such Letter of Credit.
Borrower shall also pay to the Issuing Bank, with respect to any issuance,
amendment, transfer, or cancellation prior to expiration of any Letter of
Credit and for each drawing made thereunder, documentary and processing charges
in accordance with the Issuing Bank’s standard schedule for such charges
in effect at the time of, and payable at the time of, such issuance, amendment,
transfer,


 


45

















 


cancellation
or drawing, as the case may be. All fees payable pursuant to this clause
shall be retained by the Issuing Bank for its own account.


 


(2) Borrower will pay to the Administrative Agent, for the account
of and pro rata distribution to each Lender, a fee on the daily average amount
available for drawings under each Letter of Credit, in each case for the period
from and including the date of issuance of such Letter of Credit to and
excluding the date of expiration or termination thereof, computed at a per
annum rate for each day equal to the Applicable Margin for Revolving Credit
Loans that are LIBOR Loans in effect on such day. Such fees shall be payable
monthly in arrears on the first Business Day of each calendar month.


 


(c) Commitment Cancellation Fees. If
Borrower shall voluntarily reduce or terminate the Revolving Credit Commitments
prior to the first anniversary of the Closing Date, Borrower shall pay to the
Administrative Agent, for the account of and pro-rata distribution of each
Lender, a fee equal to one percent (1%) of the amount by which such Revolving
Credit Commitments are reduced, or one percent (1%) of the entire amount of the
Revolving Credit Commitments in the event of a termination.


 


(d) Fee Letter. Borrower shall pay to
JPMorgan Chase such fees as are set forth in the Fee Letter, as the same has
been or may be hereafter amended or supplemented, on the dates and in the
manner specified therein.


 


Section 2.13
Payments, Credit Availability, etc.


 


(a) Without Setoff, etc. Except as
otherwise specifically provided herein, all payments under this Agreement shall
be made to the Administrative Agent for the account of the Lenders without
defense, set-off or counterclaim to the Administrative Agent not later than
12:00 noon (New York, New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office. Subject to Section 2.8(d),
the Administrative Agent will promptly thereafter distribute funds in the form received
relating to the payment of principal or interest or commitment fees ratably to
the Lenders for the account of their respective Lending Offices, and funds in
the form received relating to the payment of any other amount payable to
any Lender to such Lender for the account of its applicable Lending Office.


 


(b) Non-Business Days. Whenever any payment
to be made hereunder or under any Revolving Credit Note shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (except as otherwise provided in Section 2.7
hereof) and, with respect to payments of principal, interest thereon shall be
payable at the applicable rate during such extension.


 


(c) Computations. All computations of
interest shall be made on the basis of a year of 360 days (unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be)
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall, except for manifest error, be final, conclusive and binding for


 


46

















 


all purposes, provided, that, such
determination shall be made in good faith in a manner generally consistent with
the Administrative Agent’s standard practice. If the Administrative Agent and
Borrower determine that manifest error exists, said parties shall correct such
error by way of an adjustment to the next payment due hereunder.


 


Section 2.14
Interest Rate Not Ascertainable, etc. In the event that the Administrative Agent
shall have determined (which determination shall be reasonably exercised and
shall, absent manifest error, be final, conclusive and binding upon all
parties) that on any date for determining the LIBOR Rate for any Interest
Period, by reason of any changes arising after the date of this Agreement
affecting the London interbank market, or any Lender’s position in such market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of LIBOR Rate, then, and in
any such event, the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrower and to the Lenders of such
determination. Until the Administrative Agent notifies Borrower that the
circumstances giving rise to the suspension described herein no longer exist, (a) the
obligations of the Lenders to make LIBOR Loans shall be immediately suspended, (b) any
Borrowing of LIBOR Loans that is requested (by continuation, conversion or
otherwise) shall instead be made as a Borrowing of Base Rate Loans, and (c) any
outstanding LIBOR Loan shall be converted, on the last day of the then current
Interest Period applicable thereto, to a Base Rate Loan.


 


Section 2.15
Illegality.


 


(a) Determinations of Illegality. In the
event that any Lender shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance of any
LIBOR Loan has become unlawful as a result of compliance by such Lender in good
faith with any applicable law, governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful), then, in any such event, such Lender shall give
prompt notice (by telephone confirmed in writing) to Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to the other Lenders).


 


(b) LIBOR Loans Suspended. Upon the giving
of the notice to Borrower referred to in Section 2.15(a) above,
(1) Borrower’s right to request (by continuation, conversion or
otherwise), and such Lender’s obligation to make, LIBOR Loans shall be
immediately suspended, and, thereafter, any requested Borrowing of LIBOR Loans
shall, as to such Lender only, be deemed to be a request for a Base Rate Loan,
and (2) if the affected LIBOR Loan or LIBOR Loans are then outstanding,
Borrower shall immediately, or if permitted by applicable law, no later than
the date permitted thereby, upon at least one Business Day’s written notice to
the Administrative Agent and the affected Lender, convert each such LIBOR Loan
into a Base Rate Loan, provided that if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to
this Section 2.15(b).


 


47

















 


Section 2.16
Increased Costs.


 


(a) LIBOR Regulations, etc. If, by reason
of (x) the introduction of or any change after the date hereof (including, but
not limited to, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or (y) the
compliance with any guideline or request issued after the date hereof by any
central bank or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally (whether or
not having the force of law):


 


(1) any Lender (or its applicable Lending Office) shall be subject
to any Tax, duty or other charge with respect to its LIBOR Loans or its
obligation to make LIBOR Loans, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on its LIBOR Loans or
its obligation to make LIBOR Loans (except for changes in the rate of Tax on
the overall net income or gross receipts of such Lender or its applicable
Lending Office imposed by the jurisdiction in which such Lender’s principal
executive office or applicable Lending Office is located); or


 


(2) any reserve (including, but not limited to, any imposed by the
Board of Governors of the Federal Reserve System, but excluding any such
reserve requirement that is reflected in the LIBOR Rate), special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or its applicable Lending Office shall be
imposed or deemed applicable or any other condition affecting its LIBOR Loans
or its obligations to make LIBOR Loans shall be imposed on any Lender or its
applicable Lending Office or the London interbank market or the secondary
certificate of deposit market;


 


and as a result thereof there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or
maintaining LIBOR Loans (except to the extent already included in the
determination of the applicable LIBOR Rate or taken into account under Section 2.20)
or there shall be a reduction in the amount received or receivable by such
Lender or its applicable Lending Office (except to the extent taken into
account under Section 2.20), then Borrower shall from time to time,
upon written notice from and demand by such Lender (with a copy of such notice
and demand to the Administrative Agent), pay to such Lender on demand
additional amounts determined by such Lender in a reasonable manner to be
sufficient to indemnify such Lender against such increased cost; provided,
that, Borrower shall not be required to compensate a Lender pursuant to
this Section 2.16(a) for any amounts incurred more than six
months prior to the date that such Lender notifies Borrower of such Lender’s
intention to claim compensation therefor; and provided, further that,
(A) if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect, and (B) the limitation set forth in this proviso
shall not apply to amounts already included in the determination of the applicable
LIBOR Rate. A certificate as to the amount of such increased cost and the
calculation thereof, submitted to Borrower and the Administrative Agent by such
Lender, shall, except for manifest error, be final, conclusive and binding for
all purposes.


 


(b) Costs. If any Lender shall advise the
Administrative Agent that at any time, because of the circumstances described
in clauses (x) or (y) in Section 2.16(a) or any other


 


48

















 


circumstances affecting such Lender or the London
interbank market or such Lender’s position in such market, the LIBOR Rate, as
determined in good faith by the Administrative Agent, will not adequately and
fairly reflect the cost to such Lender of funding its LIBOR Loans, then, and in
any such event:


 


(1) the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrower and to the other Lenders of such
advice; and


 


(2) Borrower’s right to request a Borrowing of LIBOR Loans from
such Lender and such Lender’s obligation to make LIBOR Loans shall be
immediately suspended, any such Borrowing of LIBOR Loans that is requested (by
continuation, conversion or otherwise) shall, as to such Lender only, be deemed
to be a request for a Base Rate Loan, and any such outstanding LIBOR Loan from
such Lender shall be converted, on the last day of the then current Interest
Period applicable thereto, to a Base Rate Loan.


 


(c) Capital Adequacy. If, by reason of (1) the
introduction of or any change after the date hereof (including, but not limited
to, any change by way of imposition or increase of reserve requirements) in or
in the interpretation of any law or regulation, or (2) the compliance with
any guideline or request issued after the date hereof by any central bank or
other governmental authority or quasi-governmental authority exercising control
over banks or financial institutions generally (whether or not having the force
of law), affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling such Lender, and the
amount of such capital is increased by or based upon the existence of such
Lender’s Revolving Credit Loans or such Lender’s commitment to lend hereunder
and other commitments of this type or of the Letters of Credit (or similar
contingent obligations), then, upon written request therefor by such Lender
(with a copy of such request to the Administrative Agent), Borrower shall pay
to such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for the increased cost of such additional
capital in light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender’s Revolving Credit Loans or such Lender’s commitment to lend
hereunder or to the issuance or maintenance of the Letters of Credit and such
Lender is generally charging such costs to other similarly situated borrowers
under similar credit facilities; provided, that, Borrower shall
not be required to compensate a Lender pursuant to this Section 2.16(c) for
any amounts incurred more than six months prior to the date that such Lender
notifies Borrower of such Lender’s intention to claim compensation therefor;
and provided, further that, if the circumstances giving rise to
such claim have a retroactive effect, then such six-month period shall be
extended to include the period of such retroactive effect. A certificate as to
such amounts and the calculation thereof, submitted to Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.


 


(d) Issuing Bank. The rights and benefits
of the Lenders under this Section 2.16 shall also apply to the
Issuing Bank in its capacity as such.


 


Section 2.17
Change of Lending Office. Each Lender agrees that it will use reasonable efforts to designate
an alternate Lending Office with respect to any of its LIBOR


 


49

















 


Loans affected by the matters or circumstances
described in Section 2.14, Section 2.15 or Section 2.16
to reduce the liability of Borrower or avoid the results provided thereunder,
so long as such designation is not disadvantageous to such Lender as determined
by such Lender in its sole discretion; provided, that, the mere
existence of fees, charges, costs or expenses that such Borrower has offered
and agreed to pay on behalf of such Lender shall not be deemed to be materially
disadvantageous to the Lender; and provided, further, that,
such Lender shall have no obligation to so designate an alternate Lending
Office located in the United States.


 


Section 2.18
Funding Losses.
Borrower shall compensate each Lender, upon its written request (which request
shall set forth the basis for requesting such amounts and shall, absent
manifest error, be final, conclusive and binding upon all of the parties
hereto), for all losses, expenses and liabilities (including, but not limited
to, any interest paid by such Lender to lenders of funds borrowed by it to make
or carry its LIBOR Loans to the extent not recovered by such Lender in
connection with the re-employment of such funds), which such Lender may sustain:
(1) if for any reason (other than a default by such Lender) a Borrowing of
LIBOR Loans does not occur on the date specified therefor in a Borrowing
Request (whether or not withdrawn), including, but not limited to, a failure by
the Credit Parties to fulfill on the date of any Borrowing of LIBOR Loans the
conditions set forth in Article 3, or to convert or continue any
LIBOR Loan hereunder after irrevocable notice of such conversion or
continuation has been given pursuant to Section 2.11; (2) if
any payment, prepayment or conversion of any of its LIBOR Loans required or
permitted by any other provision of this Agreement or otherwise, or any
assignment of a LIBOR Loan pursuant to Section 2.22, in each case
is made or deemed made on a date which is not the last day of the Interest
Period applicable thereto; or (3) if, for any reason, Borrower defaults in
its obligation to repay its LIBOR Loans or interest accrued thereon as and when
due and payable (at the due date thereof, whether at scheduled maturity, by
acceleration, irrevocable notice of prepayment or otherwise).


 


Section 2.19
Sharing of Payments, etc. If any Lender shall obtain any payment or reduction (including, but
not limited to, any amounts received as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code) of any obligation of any
Obligated Party hereunder or under any of the other Financing Documents
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share of payments or reductions on
account of such obligations obtained by all the Lenders, such Lender shall
forthwith (1) notify each of the other Lenders and the Administrative
Agent of such receipt, and (2) purchase from the other Lenders such
participations in the affected obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them, provided, that,
if all or any portion of such excess payment or reduction is thereafter
recovered from such purchasing Lender or additional costs are incurred, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery or such additional costs, but without interest. Each Obligated
Party, by entering into a Financing Document, further agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.19
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Credit Parties in the amount of
such participation.


 


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Section 2.20
Taxes.


 


(a) Payments Free and Clear. Any and all
payments by or on account of any obligation of a Credit Party hereunder or any
other Financing Document shall be made free and clear of, and without deduction
for, any Indemnified Taxes or Other Taxes; provided, that, if any
Credit Party shall be required to deduct any Indemnified Taxes or Other 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 2.20) each
Payee receives an amount equal to the sum it would have received had no such
deductions been made, (2) the Credit Parties shall make such deductions,
and (3) the Credit Parties shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.


 


(b) Other Taxes. In addition, the Credit
Parties shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.


 


(c) Indemnification. Borrower shall
indemnify each Payee, upon written demand therefor, on an after-tax basis for
the full amount of any Indemnified Taxes or Other Taxes paid by such Payee on
or with respect to any payment by or on account of any obligation of the Credit
Parties hereunder and under the other Financing Documents and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority, such that, after
making all such payments, such Payee receives and retains such amounts
(hereinafter, the “Make-Whole Amount”)
as it would have received and retained had no such Indemnified Taxes, Other
Taxes or liabilities arising therefrom, been imposed on, and actually paid by,
such Payee. A certificate as to the amount of such payment or liability
delivered to Borrower by any Payee shall be accompanied by evidence of actual
payments made by such Payee on account of any liabilities arising from
Indemnified Taxes or Other Taxes, and it shall be conclusive absent manifest
error; provided, that, Borrower shall not be obligated to make
payment to any Payee pursuant to this Section 2.20(c) in
respect of penalties, interest or other additions attributable to any
Indemnified Taxes or Other Taxes if (i) written demand therefore has not
been made by such Payee within thirty (30) days from the date on which such
Payee knew of the imposition of Indemnified Taxes or Other Taxes by the
relevant Governmental Authority (but only to the extent that such penalties,
interest or other additions arise from such Payee having made its demand more
than thirty (30) days after the date on which such Payee knew of the imposition
of Indemnified Taxes or Other Taxes by the relevant Governmental Authority), or
(ii) such penalties, interest or other additions have accrued more than
ten (10) days after Borrower has indemnified or paid the full amount of
the Indemnified Taxes or Other Taxes to which such penalties, interest or other
additions relate. After a Payee learns of the imposition of Indemnified Taxes
or Other Taxes, such Payee will act in good faith to promptly notify Borrower
of its obligations hereunder.


 


(d) Receipts. As soon as practicable after
any payment of Indemnified Taxes or Other Taxes by any Credit Party to a
Governmental Authority, Borrower shall cause such Credit Party to deliver to
the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting


 


51

















 


such payment, or other evidence of such payment
reasonably satisfactory to the Administrative Agent.


 


(e) Survival. Without prejudice to the
survival of any other agreement contained herein, the agreements and
obligations contained in this Section 2.20 shall survive the
payment in full of principal and interest hereunder.


 


(f) Lender Representations and Agreements.
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which Borrower is located,
or any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by Borrower as will permit such payments to be made
without withholding or at a reduced rate.


 


(g) Change of Lending Office. If the
Borrower is required to pay additional amounts to or for the account of any
Lender pursuant to this Section 2.20 as a result of a change of law
occurring after the date hereof, then such Lender, at the request of the
Borrower, will change the jurisdiction of its Lending Office if such change (i) will
eliminate or reduce any such additional payment which may thereafter
accrue and (ii) is not otherwise materially disadvantageous to such
Lender, provided, that, the mere existence of fees, charges,
costs or expenses that such Borrower has offered and agreed to pay on behalf of
such Lender shall not be deemed to be materially disadvantageous to the Lender.


 


(h) Refunds.


 


(1) If Payee shall become aware that it is entitled to receive a
refund or credit from a Governmental Authority in respect of Indemnified Taxes,
Other Taxes or any additional amounts for which such Payee has been indemnified
by Borrower pursuant to this Section, or with respect to which any Credit Party
has paid additional amounts pursuant to this Section, it shall promptly notify
Borrower of the availability of such refund or credit; provided, that,
no Payee shall be under any duty to inquire into or investigate the
availability of any such refund or credit. Borrower may request that such
Payee seek a refund of, or credit in respect of, such amounts, provided that
Payee shall not be obligated to seek any such refund or credit until Borrower
shall have (A) advanced to Payee such amounts as Payee shall reasonably
determine to be sufficient to cover its costs and expenses in seeking such
refund or claiming the benefit of such credit, and (B) undertaken, in such
form as Payee shall reasonably determine to be appropriate to protect its
interests, to fund any costs and expenses of Payee in excess of those covered
by the advance described in (A). Within 30 days after receipt of a request by
the Borrower and satisfaction of the foregoing conditions precedent, Payee
shall make a claim to the appropriate Governmental Authority for such refund or
credit.


 


(2) If as a result of the claim for refund or credit described in (1) above
or otherwise, Payee receives a refund or secures the application of a credit in
respect of any Indemnified Taxes, Other Taxes or any other amounts as to which
it has been indemnified by Borrower pursuant to this Section, or with respect
to which any Credit


 


52

















 


Party
has paid additional amounts pursuant to this Section, such Payee shall promptly
notify Borrower of such refund or credit and shall, within thirty (30) days from
the date of receipt of such refund or the application of such credit, pay over
to Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower or any Credit Party under this Section with
respect to the Indemnified Taxes, Other Taxes or any other amounts giving rise
to such refund or credit) the excess, if any, of (A) the amount of such
refund or credit (including any interest paid by the Governmental Authority
with respect to such refund or credit), over (B) the sum of (i) all
out-of-pocket expenses of such Payee in excess of any advances theretofore made
by Borrower, plus (ii) any Taxes levied on or attributable to the receipt
by Payee of such refund or credit, such that, after making any payment to
Borrower required by this Section 2.20(h), Payee shall have
received and retained an amount equal to the Make-Whole Amount; provided,
that, Borrower, upon the request of such Payee agrees to repay any
amount paid over to Borrower (plus penalties, interest or other charges due to
the Governmental Authority in connection therewith) to such Payee in the event
such Payee is required to repay such refund to such Governmental Authority or
is disallowed the benefit of the claimed credit.


 


Section 2.21
Pro rata Treatment; Order of Application During Default; Order of  Application
of Payments.


 


(a) Subject to Section 2.4(b),
each Borrowing of Revolving Credit Loans shall be made, each payment on account
of any commitment fee in respect of the Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction of the
Revolving Credit Commitments of the Lenders shall be allocated by the
Administrative Agent, pro rata according to the relevant Revolving Credit
Percentages of the Lenders. Subject to Section 2.4(b), each payment
(including each prepayment) on account of principal of and interest on any
Revolving Credit Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such Revolving
Credit Loans then held by the Lenders.


 


(b) During the
existence of any Event of Default, any payments in respect of the Lender
Indebtedness or in respect of any of the proceeds of Collateral shall be
applied to the Lender Indebtedness (1) first, to the payment in full of
all costs, expenses and other charges (but not fees) of Administrative Agent
incurred in connection with the collection and enforcement of the Lender
Indebtedness and for the protection, preservation or sale, disposition or other
realization upon the Collateral or the Lenders interests under the Loan
Documents, including all expenses, liabilities and advances incurred or made by
or on behalf of Administrative Agent, including attorneys’ fees and legal
expenses, and (2) then to payment in full of the remaining Lender
Indebtedness (including to establish L/C Cover for all outstanding Letters of
Credit) in such order as Administrative Agent shall determine in its sole
discretion; provided, that, any Lender Indebtedness consisting of
amounts owed by any Obligated Party in respect of any Hedging Agreements or
Cash Management Agreements, shall only be paid after payment in full of all
other Lender Indebtedness to be paid pursuant to clause (2) above
(subordinated amounts owing under any Cash Management Agreements shall not
include amounts owing in respect of any checks or other items deposited in the
relevant cash management accounts which are returned unpaid for any reason).
For purposes of this Section 2.21(b), “payment in full” with
respect to fees, expenses, costs and interest shall include any fees, costs and
expenses incurred


 


53

















 


during any bankruptcy or insolvency proceeding, and
any interest which accrued or would have accrued after the commencement of any
bankruptcy or insolvency proceeding, irrespective of whether a claim for such
fees, expenses, costs and interest is allowable in such bankruptcy or
insolvency proceeding.


 


Section 2.22
Replacement of Lenders. If any Lender (a) does not make a LIBOR Loan pursuant to Section 2.15,
(b) is subject to increased costs pursuant to Section 2.16, (c) fails
to designate an alternate Lending Office pursuant to Section 2.17
or Section 2.20, or (d) is owed or reasonably anticipates being owed
additional amounts pursuant to Section 2.20, Borrower shall have
the right, if no Default then exists, to replace such Lender with another bank
or financial institution with the consent of the Administrative Agent, which
consent shall not be unreasonably withheld; provided, that, (1) the
obligations of the Credit Parties owing to the Lender being replaced (including
such increased costs) that are not being assigned to the replacement lender
shall be paid in full to the Lender being replaced concurrently with such replacement
lender, (2) the replacement lender shall execute an Assignment and
Acceptance pursuant to which it shall become a party hereto as provided in Section 10.7,
and (3) upon compliance with the provisions for assignment provided in Section 10.7
and the payment of amounts referred to in clause (1), the replacement lender
shall constitute a “Lender” hereunder and the Lender being so replaced shall no
longer constitute a “Lender” hereunder.


 


Section 2.23
Advances of Revolving Credit Loans to Satisfy Lender Indebtedness. Borrower and each Lender hereby agree with
the Administrative Agent and each other Lender that, on each date on which any
payment of interest, fees, principal or other amounts are due and owing
hereunder or under any of the other Financing Documents, the Administrative
Agent may, in its sole discretion, but without any obligation to do so and
subject to all other terms of this Agreement (other than any request for
delivery of a Borrowing Request hereunder) cause a Borrowing of Revolving Credit
Loans (which shall be Base Rate Loans) to be made on such date in an amount
sufficient to satisfy in full all such payments of interest, fees or other
amounts which are then due hereunder, and, subject to Section 2.8(d),
the Administrative Agent shall disburse the proceeds of such Borrowing to each
Lender to satisfy all such obligations and liabilities which are then due and
the Administrative Agent shall give Borrower prompt notice of any such
advances.


 


ARTICLE 3

CONDITIONS TO BORROWINGS


 


Section 3.1
Closing. The
obligation of each Lender to make its initial Revolving Credit Loan and the
Issuing Bank to issue its initial Letter of Credit hereunder, is subject to (x)
receipt by the Administrative Agent of the following items which are to be
delivered, in form and substance satisfactory to each Lender, with a copy
(except for the Revolving Credit Notes and this Agreement) for each Lender and
(y) the satisfaction of the following conditions:


 


(a) Revolving Credit Notes. A duly
completed and executed Revolving Credit Note for each Lender and in each case
dated as of the Closing Date, and payable to the order of such Lender.


 


54

















 


(b) Resolutions and Incumbency Certificates.


 


(1) certified copies of
the resolutions of the Board of Directors (or comparable authority) of each
Obligated Party dated as of the Closing Date and approving, as appropriate, the
Revolving Credit Loans, the Revolving Credit Notes, this Agreement, the other
Financing Documents, and all other documents, if any, in each case being
executed and delivered as of the Closing Date, in connection with this
Agreement to which such Obligated Party is a party and evidencing corporate (or
other organizational) authorization with respect to such documents; and


 


(2) a certificate of the Secretary or an Assistant Secretary of
each Obligated Party dated as of the Closing Date and certifying (A) the
name, title and true signature of each officer of such Person authorized to
execute the Revolving Credit Notes, this Agreement, Applications and the other
Financing Documents to which such Obligated Party is a party, (B) the
name, title and true signature of each officer of such Person authorized to
provide the certifications required pursuant to this Agreement including, but
not limited to, certifications required pursuant to Section 6.10,
Borrowing Requests, and Borrowing Base Reports, and (C) that attached
thereto is a true and complete copy of (i) the certificate or articles of
incorporation, certificate or articles of organization, certificate of limited
partnership, or comparable charter documents, certified by the appropriate
Governmental Authority of the jurisdiction of incorporation or organization of
such Obligated Party, (ii) the bylaws, regulations, partnership agreement,
or comparable charter documents of such Obligated Party, each as amended to
date, (iii) recent good standing certificates and certificates of
existence for such Obligated Party, and (iv) certificates of foreign
qualification for such Obligated Party in such jurisdictions as the
Administrative Agent shall require.


 


(c) Opinions of Counsel.


 


(1) opinion of Davis, Polk & Wardwell, counsel to each
Obligated Party, dated as of the Closing Date and substantially in the form of
Exhibit F hereto, addressed to the Administrative Agent, the
Issuing Bank and the Lenders and covering such matters as the Administrative
Agent, the Issuing Bank or the Lenders may reasonably request.


 


(2) opinion of special counsel for the Administrative Agent in
each of the states where Mortgaged Real Property is located, each dated the
Closing Date, favorably opining as to the enforceability of each Mortgage and
otherwise in form and substance satisfactory to the Administrative Agent
and the Lenders.


 


(3) opinion of Morris, Nichols, Arsht & Tunnell, counsel
to each Credit Party, dated as of the Closing Date and substantially in the form of
Exhibit G hereto, addressed to the Administrative Agent, the
Issuing Bank and the Lenders and covering such matters as the Administrative
Agent, the Issuing Bank or the Lenders may reasonably request, including,
but not limited to, perfection of the security interests granted herein
pursuant to Delaware law.


 


55

















 


(d) The Security Instruments; Perfection of Liens in the
Collateral.


 


(1) a Guaranty and Security Agreement, dated as of the Closing
Date and duly executed by Borrower and each Guarantor;


 


(2) duly executed Mortgages with respect to all Mortgaged Real
Property duly executed and delivered by the Credit Party owning such Mortgaged
Real Property;


 


(3) Restricted Account Agreements duly executed by Parent,
Borrower and each Approved Depository Bank with respect to each Restricted
Account;


 


(4) the Lockbox Agreement duly executed by Borrower and the
Lockbox Institution establishing the Lockbox;


 


(5) a Tri-Party Agreement duly executed and delivered by Borrower
and Bank One, NA;


 


(6) the Collateral Assignment of Purchase Agreement duly executed
and delivered by Holdco;


 


(7) original stock certificates evidencing (A) 100% of the
issued and outstanding Equity of Borrower, and (B) all other Equity owned
by Borrower or any Guarantor to the extent such Equity is evidenced by a
certificate, in each case accompanied by duly executed corresponding stock powers
(except for the Equity of Marketing Alliance Partners and Fluid Technologies
PLC which is not required to be pledged to the Administrative Agent pursuant to
Section 4.5 hereof);


 


(8) all Property in which the Administrative Agent shall, at such
time, be entitled to have a Lien pursuant to this Agreement or any other
Financing Document shall have been physically delivered to the possession of
the Administrative Agent to the extent that such possession is necessary for
the purpose of perfecting the Administrative Agent’s Lien in such Collateral;


 


(9) a Securities Account Control Agreement (as defined in the
Guaranty and Security Agreement) with respect to each securities account
maintained by Borrower or any Guarantor duly executed by Borrower or such Guarantor
and the brokerage firm at which such accounts are maintained;


 


(10) a Commodity Account Control Agreement (as defined in the
Guaranty and Security Agreement) with respect to each commodity account
maintained by Borrower or any Guarantor duly executed by Borrower or such
Guarantor and the brokerage firm at which such accounts are maintained;


 


(11) Borrower shall use reasonable efforts to obtain all Bailee’s
Letters with respect to each Terminal at which Borrower or any Guarantor holds
inventory as of the Closing Date and shall deliver a sufficient number of
Bailee’s Letters to ensure compliance with Section 3.1(h);


 


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(12) UCC-1 Financing Statements naming Borrower and each Guarantor as
Debtor and the Administrative Agent as Secured Party describing the Collateral,
each of which shall have been duly filed in each jurisdiction as the
Administrative Agent shall require; and


 


(13) such other documents, instruments and agreements and other actions
as the Administrative Agent shall require in its sole discretion to fully
create, evidence, register and perfect the Administrative Agent’s Liens in the
Collateral securing the Lender Indebtedness.


 


(e) Insurance. Copies of all insurance
binders, together with a certificate of insurance coverage, dated as of the
Closing Date, evidencing that the Credit Parties are carrying insurance in
accordance with Section 6.5 hereof.


 


(f) Certificate of Responsible Officer.
Certificate of a Responsible Officer of Borrower acceptable to the Lenders
dated as of the Closing Date certifying that (1) each Credit Party is
Solvent both before and after giving effect to the Closing Transactions, (2) no
Default or Event of Default exists or will exist after giving effect to the
Closing Transactions, (3) each representation and warranty contained
herein and in the other Financing Documents is true and correct both before and
after giving effect to the Closing Transactions, and (4) each condition
precedent contained in this Section 3.1 and Section 3.2
has been satisfied (subject only to the funding and application of the initial
Borrowing to be made hereunder).


 


(g) Lien Searches. Lien searches reflecting
no prior Liens on the Collateral other than Liens set forth on Schedule 7.3.


 


(h) Borrowing Base Report. A Borrowing Base
Report prepared as of May 21, 2003 setting forth the Borrowing Base to be
in effect under this Agreement on the Closing Date, and reflecting that, after
giving effect to the Closing Transactions, Availability shall not be less than
$8,500,000; provided, that, in calculating Availability for
purposes of this condition, the NOx Initial Reserve shall be disregarded. It is
understood that this condition contemplates that all existing Indebtedness of
the Credit Parties not permitted to remain outstanding under Section 7.2
has been prepaid and all accounts payable, debts and other obligations are
current.


 


(i) Surveys. Surveys in form and
substance acceptable to the Administrative Agent with respect to all Mortgaged
Real Property.


 


(j)
Title Commitment. A
Commitment for a Mortgagee’s Policy of Title Insurance (“Title Commitments”), in form and
substance satisfactory to the Administrative Agent with respect to the
Mortgaged Real Property, together with evidence satisfactory to the Administrative
Agent that the Mortgagee’s Policies of Title Insurance to be issued pursuant to
such Title Commitments will be issued pursuant to each such Title Commitment
and all premiums therefore have been paid.


 


(k)
[Intentionally Deleted.]


 


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(l)
Cash Management Arrangements.
The Administrative Agent shall be satisfied in its sole discretion with all
aspects of Borrower’s and each Guarantor’s cash management arrangements.


 


(m)
Fees and Expenses. Payment
and/or reimbursement of (1) the Administrative Agent’s counsel’s fees and
expenses rendered through the Closing Date, to the extent invoiced, and (2) any
fees or expenses required to be paid pursuant to the Fee Letter.


 


(n)
Closing Transactions. Such
evidence as the Administrative Agent shall require that, subject only to the
disbursement and application of the initial Borrowing hereunder, each of the
Closing Transactions shall have occurred.


 


(o)
Representations and Warranties.
Each representation and warranty of each Obligated Party contained herein and
in each of the other Financing Documents shall be true and correct.


 


(p)
Documentation. The
Administrative Agent shall have received such other documents as the
Administrative Agent (or any Lender acting through the Administrative Agent) may reasonably
request, all in form and substance reasonably satisfactory to the
Administrative Agent.


 


Section 3.2
Conditions Precedent to All Loans and Letters of Credit. The obligation of each Lender to make each
Revolving Credit Loan hereunder (including the initial Revolving Credit Loan)
and the obligation of the Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with the making
of each such Revolving Credit Loan or the issuance of each such Letter of
Credit:


 


(a) Representations and Warranties. All
Bring-Down Representations and Warranties contained herein and in the other
Financing Documents executed and delivered on or after the Closing Date shall
be true and correct in all material respects with the same effect as though
such Bring-Down Representations and Warranties had been made on and as of the
date of such Revolving Credit Loan (unless such representation and warranty is
expressly limited to an earlier date). The fact that any representation and
warranty is a Non-Repeating Representation and Warranty and is therefore not
remade other than on the date hereof, the Closing Date and at the time of the
initial Borrowing hereunder (and thus not made for purposes of this Section 3.2(a) and
Section 6.10(c)) will not prevent the existence of any Event of
Default or the exercise by the Administrative Agent or any Lender of any right
or remedy resulting from any breach of such representation and warrant when
made on the date hereof, the Closing Date and at the time of the initial
Borrowing hereunder.


 


(b) No Default. There shall not exist a
Default or Event of Default hereunder.


 


(c) No Material Adverse Change. No Material
Adverse Change shall have occurred.


 


(d) Availability. Availability shall exist
in the amount of such requested Revolving Credit Loan or the amount of such
Letter of Credit.


 


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ARTICLE 4

SECURITY


 


Section 4.1
Security. The
Lender Indebtedness shall be secured by perfected, first priority Liens on (a) all
Property of Borrower and each Guarantor, whether now owned or hereafter
acquired and wherever located (but subject to Section 4.5), and (b) all
rights of Holdco arising under and pursuant to the Purchase Agreement. In
furtherance of the foregoing, Borrower and Parent hereby agree to execute and
deliver (and to (x) cause any other appropriate Obligated Party to execute and
deliver, and (y) cause any other appropriate Person to execute and deliver) to
the Administrative Agent for the benefit of the Lenders, promptly upon request
by the Administrative Agent, such Security Instruments and other documents,
instruments, agreements and certificates, as the Administrative Agent shall
deem necessary or appropriate in its sole discretion to create, evidence and
perfect the Liens contemplated by this Section 4.1. Borrower and
Parent hereby consent and authorize (and shall cause any other appropriate Obligated
Parties to consent and authorize) the Administrative Agent and its agents,
successors and assigns to file any and all necessary financing statements under
the UCC, amendments, “in lieu” filings or assignments or continuation
statements as necessary from time to time (in the Administrative Agent’s
discretion) to perfect or continue perfection of the Liens granted (or
purported to be granted) pursuant to the Financing Documents. Notwithstanding
the foregoing, Borrower shall not be in Default of this Section 4.1
as a result of its failure to obtain and deliver Bailee’s Letters for Terminals
or Landlord Consents with respect to Real Property leased by Borrower to the
extent Borrower exercises reasonable efforts to obtain such Bailee’s Letters
and Landlord Consents, provided, that, no inventory that is
located at such Terminal(s) or leased Real Property shall be included in
Eligible Inventory.


 


Section 4.2
Establishment of Lockbox. Borrower and each Guarantor have entered into or shall enter into the
Lockbox Agreement with the Lockbox Institution pursuant to which Borrower and
each Guarantor will establish the Lockbox to be operated by the Lockbox
Institution. Borrower and each Guarantor shall direct all account debtors with
respect to each of Borrower’s and each Guarantor’s accounts and all other
Persons obligated to make payments of any type to Borrower or any Guarantor in
respect of the Collateral to direct such payments to the Lockbox at the address
established by the Lockbox Institution in accordance with the Lockbox
Agreement. All invoices issued by Borrower or any Guarantor shall contain a
notation requiring the accounts evidenced by such invoice to be paid to the
Lockbox. The Lockbox Institution shall have sole and exclusive access to the
Lockbox. All monies, checks and other drafts received in the Lockbox shall be
endorsed in accordance with the Lockbox Agreement and deposited by the Lockbox
Institution each Business Day in the Blocked Account. Until August 31,
2003, Bank One, NA may remain a Lockbox Institution, and Borrower shall be
permitted to maintain and utilize the Lockbox established with Bank One, NA and
the Temporary Lockbox Account; provided, that, all amounts
deposited into the Temporary Lockbox Account shall be transferred by wire
transfer to the Blocked Account on the first (1st) Business Day following the
date of deposit into the Temporary Lockbox Account. The Lockbox established
with Bank One, NA and the Temporary Lockbox Account shall be closed no later
than August 31, 2003 (at which time Bank One, NA shall no longer be a
Lockbox Institution).


 


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Section 4.3
Establishment of Blocked Account. From and after the Closing Date, so long as
this Agreement is in effect or any Lender Indebtedness shall be outstanding,
Borrower and Parent agree that all funds received by Borrower or any Guarantor
from any source, including any of the foregoing which constitutes any part of
the Collateral, shall be deposited (and Borrower and Parent shall cause each
other Guarantor to deposit all funds received by such Person) in the Blocked
Account not later than one Business Day following the date of receipt. Such
deposit shall be made in the exact form received subject only to any
necessary endorsements. Borrower and Parent hereby acknowledge and agree (a) that
they have no power of withdrawal over the funds in the Blocked Account, (b) that
they have granted a Lien on, and pledged to the Administrative Agent as
additional collateral security for the Lender Indebtedness, all funds in the
Blocked Account, (c) that they may not unilaterally terminate the
Blocked Account, and (d) that the Blocked Account and all funds on deposit
therein shall be subject to the absolute dominion and control of the
Administrative Agent.


 


Section 4.4
Application of Proceeds of Blocked Account. All funds received by the Administrative
Agent in the Blocked Account shall be applied to the Lender Indebtedness in the
manner set forth in Section 2.10 hereof.


 


Section 4.5
Exceptions to Security. Notwithstanding anything contained in this Article 4, (a) no
Lien shall be required hereunder or under any Financing Document with respect
to (i) the Equity held by any Credit Party 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 Parent and Borrower either
(A) obtain the consent of the requisite holders of Equity in Nebraska Sub
pursuant to Section 6.11 and comply with all other requirements of Section 6.11
with respect thereto, or (B) acquire 80% of the Equity of Nebraska Sub,
and (iii) the Equity held by any Credit Party in Fluid Technologies PLC
and (b) Administrative Agent shall not be entitled to require the delivery
of certificates of title, (or original applications for new certificates of
title and other related documents), with respect to vehicles and other Property
owned by Borrower or any Guarantor and subject to a certificate of title
statute of any applicable jurisdiction unless and until (i) the aggregate
net book value of such vehicles and other Property (as described in this clause
(b)) exceeds $500,000, or (ii) an Event of Default has occurred and is
continuing.


 


ARTICLE 5

REPRESENTATIONS AND WARRANTIES


 


In order to induce the
Lenders to enter into this Agreement, each of Borrower and Parent jointly and
severally represents and warrants to the Administrative Agent and each Lenders
as follows (such representations and warranties (a) will survive the
delivery of the Revolving Credit Notes, (b) are made by Borrower and
Parent as of the date hereof, as of the Closing Date and as of the date of each
Borrowing and the issuance of each Letter of Credit, and (c) when made as
of the date hereof and as of the Closing Date, shall be deemed made both before
and after giving effect to the Closing Transactions (unless specifically
provided otherwise herein):


 


Section 5.1
Corporate Existence. Each Obligated Party is a corporation, partnership or limited
liability company duly organized, legally existing and in good standing under
the laws


 


60

















 


of the jurisdictions in which it is incorporated or
organized and is duly qualified as foreign corporation, partnership or limited
liability company in all jurisdictions wherein the Property owned or the
business transacted by it makes such qualification necessary, except where the
failure to be so qualified would not have a Material Adverse Effect.


 


Section 5.2
Corporate Power and Authorization. Borrower is authorized and empowered to
create and issue the Revolving Credit Notes; each Obligated Party is duly
authorized and empowered to execute, deliver and perform the Financing
Documents, including this Agreement, to which it is a party; and all corporate,
partnership, limited liability company or other action on any Obligated Party’s
part requisite for the due creation and issuance of the Revolving Credit
Notes and for the due execution, delivery and performance of the Financing
Documents, including this Agreement, to which such Obligated Party is a party
has been duly and effectively taken.


 


Section 5.3
Binding Obligations. This Agreement does, and the Revolving Credit Notes and other
Financing Documents to which any Obligated Party is a party upon their
creation, issuance, execution and delivery will, when issued and delivered
under this Agreement, constitute legal, valid and binding obligations of each
Obligated Party that is a party thereto, and will be enforceable in accordance
with their respective terms (except that enforcement may be subject to any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors’ rights and subject to the availability of equitable
remedies).


 


Section 5.4
No Legal Bar or Resultant Lien. The execution, delivery and performance of the Revolving Credit Notes
and the other Financing Documents, including this Agreement, to which an
Obligated Party is a party do not and will not violate or create a default
under any provisions of the articles or certificate of incorporation,
certificate of limited partnership, articles or certificate of organization,
bylaws, partnership agreement, regulations or other organizational documents of
such Obligated Party, or any contract, agreement, instrument or Governmental
Requirement to which such Obligated Party is subject, or result in the creation
or imposition of any Lien upon any Properties of such Obligated Party.


 


Section 5.5
No Consent.
Each Obligated Party’s execution, delivery and performance of the Revolving
Credit Notes and the other Financing Documents, including this Agreement, to
which such Obligated Party is a party, do not require notice to or filing or
registration with, or the authorization, consent or approval of or other action
by any other Person, including, but not limited to, any Governmental Authority,
except those obtained or made.


 


Section 5.6
Financial Information.


 


(a) Current Financials. The Current
Financials were prepared in accordance with GAAP as in effect on the date such
Current Financials are delivered (subject, in the case of interim financial
statements, to the absence of footnotes and year-end audit adjustments which
will not, individually or in the aggregate, be material) and fairly present the
consolidated and consolidating financial condition and results of operations of
Parent and its consolidated Subsidiaries as of the dates and for the periods
reflected therein.


 


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(b) Unaudited Historical Financials. The
Historical Financials other than the audited consolidated balance sheet of
Parent and its consolidated Subsidiaries prepared as of December 31, 2002,
fairly present the consolidated and consolidating financial condition and
results of operations of Parent and its consolidated Subsidiaries as of the
dates and for the periods reflected therein.


 


(c) Audited Consolidated Balance Sheet. The
audited consolidated balance sheet of Parent and its consolidated Subsidiaries
prepared as of December 31, 2002 (i) was prepared in accordance with
GAAP as in effect on December 31, 2002, and fairly presents the
consolidated financial condition of Parent and its consolidated Subsidiaries as
of the dates reflected thereon and (ii) is presented on the historic cost
basis of Williams reflecting certain group allocations of Williams. This
balance sheet does not include any fair value purchase price adjustments.


 


(d) Absence of Contingent Liabilities. No
Credit Party has any outstanding Indebtedness or other liability (including,
without limitation, contingent liabilities) or unusual, forward or long-term
commitments other than (1) those disclosed in the most recent financial
statements referred to in Sections 5.6(a), (b) or (c) above, as applicable,
or the notes thereto, (2) those expressly described in this Agreement
(including in the Schedules hereto), and (3) those entered into or
incurred in compliance with the terms of this Agreement.


 


(e) Pro Forma Consolidated Balance Sheets.
The pro forma consolidated balance sheet of Parent dated as of December 31,
2002 provided to the Lenders prior to the Closing Date, fairly presents, in
conformity with GAAP, the consolidated financial position of Parent as of such
date, but adjusted to give effect to the Closing Transactions.


 


(f) Projections. The Projections set forth
Parent’s reasonable best estimate as of the date hereof of Parent’s
consolidated financial condition and results of operations as of the dates and
for the periods covered thereby. The Projections were prepared in good faith in
accordance with sound financial planning practices on the basis of the
assumptions stated therein, which assumptions were believed by Parent and
Borrower to be reasonable at the time made and which Parent and Borrower
continue to believe are reasonable on the date hereof.


 


(g) No Material Adverse Change. No Material
Adverse Change has occurred subsequent to December 31, 2002.


 


Section 5.7
Investments and Guaranties. As of the Closing Date, no Credit Party has made investments in or
advances to any Person or guaranties of the obligations of any Person except (a) those
permitted in Section 7.2 or Section 7.6, and (b) those
reflected in Schedule 5.7 and Schedule 7.2.


 


Section 5.8
Litigation.
Except as set forth on Schedule 5.8, there is no action, suit or
proceeding, or any governmental investigation or any arbitration, in each case
pending or, to the knowledge of Borrower or Parent, threatened against any
Credit Party or any Property of any Credit Party before any court or arbitrator
or any Governmental Authority (a) which challenges the validity of this
Agreement, any Revolving Credit Note, any Security Instrument or any of the


 


62

















 


other Financing Documents, or (b) as to which
there is a reasonable possibility of an adverse determination that could
reasonably be expected to have a Material Adverse Effect.


 


Section 5.9
Use of Proceeds.
Borrower will use the proceeds of the Revolving Credit Loans only to (a) pay
the Refinancing Dividend, (b) pay transaction costs and fees related to
the Closing Transactions, (c) finance ongoing working capital requirements
of Borrower, (d) finance capital expenditures expressly permitted under
this Agreement and (e) for general corporate purposes. The Letters of
Credit will be used only for the purposes specified in the definition of “Standby
Letter of Credit”. No Credit Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock
(within the meaning of Regulations U or X) and no part of the proceeds of
any Revolving Credit Loan hereunder will be used to buy or carry any Margin
Stock in violation of Regulation U or X. No Credit Party nor any Person acting
on behalf of any Credit Party has taken or will take any action which could
reasonably be expected to cause the Revolving Credit Notes or any of the
Financing Documents, including this Agreement, to violate Regulations U or X or
any other regulation of the Board of Governors of the Federal Reserve System,
in each case as now in effect or as the same may hereinafter be in effect.


 


Section 5.10
Employee Benefits.


 


(a) Each
Credit Party and each ERISA Affiliate have complied in all material respects
with all applicable laws regarding each Plan. Each Plan is, and has been,
maintained and administered in substantial compliance with its terms,
applicable collective bargaining agreements, and all applicable laws.


 


(b) There
exists no outstanding material liability of any Credit Party or any ERISA
Affiliate with respect to any Plan that has been terminated. No material
liability to the PBGC (other than for the payment of current premiums which are
not past due) by any Credit Party or any ERISA Affiliate has been or is
expected by any Credit Party or any ERISA Affiliate to be incurred with respect
to any Plan. No ERISA Termination Event with respect to any Plan has occurred
or is reasonably expected to occur which could reasonably be expected to have a
Material Adverse Effect.


 


(c) The
actuarial present value of the benefit liabilities (computed on an accumulated
benefit obligation basis based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) under all Plans in the
aggregate that are subject to Title IV of ERISA does not, as of the end of the
most recently ended fiscal year of such Plans, exceed the current value of the
assets of all Plans in the aggregate that are allocable to such benefit
liabilities. The term “actuarial present value of the benefit liabilities”
shall have the meaning specified in Section 4041 of ERISA.


 


(d) Neither
any Credit Party nor any ERISA Affiliate sponsors, maintains or contributes to,
or has at any time in the preceding five-year period sponsored, maintained or
contributed to, any “multiemployer plan” (as defined in Section 3(37) or
4001(a)(3) of ERISA).


 


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Section 5.11
Taxes; Governmental Charges. Each Credit Party has filed all material tax returns and reports
required to be filed and has paid all material Taxes, assessments, fees and
other governmental charges levied upon any of them or upon any of their
respective Properties or income which are due and payable, including interest
and penalties, except to the extent such Taxes, assessments, fees, other
governmental charges, interest and penalties as are being contested in good
faith by appropriate actions or proceedings disclosed to the Lenders and for
which reserves acceptable to the Administrative Agent have been established.


 


Section 5.12
Titles, etc.
Each Credit Party has good and valid title to its respective material
Properties included in the Current Financials, and with respect to material leased
Properties, good and valid title to the leasehold estate with respect thereto,
pursuant to valid and enforceable leases, free and clear of all Liens other
than Permitted Liens.


 


Section 5.13
Defaults. No
Credit Party is in default nor has any event or circumstance occurred which,
but for the passage of time or the giving of notice, or both, would constitute
a default under (a) any loan or credit agreement, indenture, mortgage,
deed of trust, security agreement or other instrument or agreement evidencing
or pertaining to any Indebtedness of any Credit Party in an amount exceeding
$1,000,000 (individually or in the aggregate), or (b) any other agreement
or instrument to which any of the Credit Parties is a party or by which any
Credit Party is bound to the extent any such default under any such other
agreement or instrument could reasonably be expected to have a Material Adverse
Effect. No Default has occurred which is continuing.


 


Section 5.14
Casualties; Taking of Properties. Neither the business nor the Properties of
any Credit Party has been affected in a manner that has had or could have a
Material Adverse Effect as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy.


 


Section 5.15
Compliance with the Law. Except as set forth on Schedule 5.15 hereto, no Credit
Party:


 


(a) is
in violation of any Governmental Requirement; or


 


(b) has
failed to obtain any license, permit, right-of-way, franchise or other right or
governmental authorization necessary to the ownership of any of their
respective Properties or the conduct of their respective businesses;


 


which violation or failure could reasonably be
expected to, individually or in the aggregate, have (in the event that such a
violation or failure were asserted by any Person through appropriate action) a
Material Adverse Effect.


 


Section 5.16
No Material Misstatements. No material written information, exhibit, schedule or report
(for this purpose, all schedules and exhibits to the Financing Documents shall
be construed to be material) prepared by or on behalf of any Credit Party and
furnished to the Administrative Agent or the Lenders by or at the direction of
any Credit Party in connection with this Agreement or any of the transactions
contemplated hereby (other than the Projections,


 


64

















 


budgets, analysis or other forward-looking
statements which were prepared or made in good faith in accordance with sound
financial planning practices on the basis of reasonable assumptions at the time
made) contained any material misstatement of fact or, omitted to state a
material fact or any fact necessary to make the statement contained therein not
misleading on the date as of which such information is dated; provided, that,
to the extent information provided to the Administrative Agent or the Lenders
or at the direction of any Credit Party prior to the Closing Date was
superceded by other information provided to the Administrative Agent or the
Lenders or at the direction of any Credit Party prior to the Closing Date, this
Section 5.16 shall apply to the most recent (and not superceded)
information; provided, further, that, with respect to any
statement or information prepared by any Person that is not a Credit Party
(other than the Morgan Stanley Funds and its Affiliates), the representation
and warranty set forth in this Section 5.16 is limited to such
Credit Party’s best knowledge; provided, further, that,
any limitations or qualifications of the representations and warranties
contained in this Section 5.16 shall not otherwise limit or qualify
any other representation or warranty contained elsewhere in this Agreement or
in any other Financing Document.


 


Section 5.17
Investment Company Act. No Credit Party is an “investment company” or a company “controlled”
by an “investment company” that is incorporated in or organized under the laws
of the United States or any “State,” as those terms are defined in the
Investment Company Act of 1940, as amended. The execution and delivery by the
Obligated Parties of this Agreement and the other Financing Documents to which
they respectively are parties and their respective performance of the
obligations provided for therein, will not result in a violation of the
Investment Company Act of 1940, as amended.


 


Section 5.18
Public Utility Holding Company Act. No Credit Party is a “holding company,” or
a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” or a “public
utility” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.


 


Section 5.19
Capital Structure.
Schedule 5.19 hereto accurately reflects, as of the Closing Date
and after giving effect to the Closing Transactions, (a) the jurisdiction
of incorporation or organization of each Credit Party, and each direct and
indirect holder of Equity of each Credit Party to the level of the Morgan
Stanley Funds, (b) each jurisdiction in which each Credit Party is
qualified to transact business as a foreign corporation, foreign partnership or
foreign limited liability company, and (c) the authorized, issued and
outstanding Equity of each Credit Party, and each direct and indirect holder of
more than 25% (or 20% in the case of Nebraska Sub) of the Equity of each Credit
Party to the level of the Morgan Stanley Funds, including the names of (and
number of shares or other Equity securities held by) the record and beneficial
owners of securities in excess of such threshold. Except as set forth in Schedule 5.19
hereto, there are no outstanding shareholders agreements, voting agreements
or other agreements of any nature which in any way restrict or effect the
transfer, pledge or voting of any of the Equity securities of any Credit Party
and each direct and indirect holder of Equity of each Credit Party to the level
of the Morgan Stanley Funds, or subject any of such securities to any put,
call, redemption obligation or similar right or obligation of any nature. No
Change of Control has occurred.


 


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Section 5.20
Insurance. All
policies of fire, liability, workmen’s compensation, casualty, flood, business
interruption and other forms of insurance owned or held by each Credit Party (a) satisfy
all requirements of Section 6.5, (b) are valid, outstanding
and enforceable policies, and (c) will not in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such policies are in full force and effect, all premiums with
respect thereto have been paid in accordance with their respective terms, and
no notice of cancellation or termination has been received with respect to any
such policy. Except as set forth on Schedule 5.20 hereto, no Credit
Party maintains any formalized self-insurance program with respect to its
assets or operations or risks with respect thereto. The certificate of
insurance delivered to the Administrative Agent pursuant to Section 3.1(e) contains
an accurate and complete description of all policies of insurance owned or held
by each Credit Party on the Closing Date.


 


Section 5.21
Environmental Matters.


 


(a) Environmental Laws, etc. Except as set
forth on Schedule 5.21 hereto, neither any real Property of any
Credit Party nor the operations conducted thereon by any Credit Party violate
any applicable order of any court or Governmental Authority or Environmental
Laws, which violation could reasonably be expected to have a Material Adverse
Effect or which could reasonably be expected to result in remedial obligations
having a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and circumstances, if
any, pertaining to the relevant Property.


 


(b) No Litigation. Without limitation of Section 5.21(a) above,
and except as set forth on Schedule 5.21 hereto, no Property of any
Credit Party nor the operations currently conducted thereon or by any prior
owner or operator of such real Property or operation, are in violation of or
subject to any pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws, which violation, action, suit,
investigation, inquiry or proceeding could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.


 


(c) Notices, Permits, etc. Except as set
forth on Schedule 5.21 hereto, all notices, permits, licenses or
similar authorizations, if any, required to be obtained or filed by any Credit
Party in connection with their operation or use of any and all real Property of
the Credit Parties, including, but not limited to, past or present treatment,
storage, disposal or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed except to the extent the failure
to obtain or file such notices, permits, licenses or similar authorizations
could not reasonably be expected to have a Material Adverse Effect or which
could not reasonably be expected to result in remedial obligations having a
Material Adverse Effect assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to the relevant Property.


 


(d) Hazardous Substances Carriers. All
hazardous waste or solid waste generated at any and all real Property of any
Credit Party have in the past been transported,


 


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treated and disposed of while under the ownership,
direction or control of any Credit Party only by carriers maintaining valid
permits under RCRA and any other Environmental Law, except to the extent the
failure to have such substances or waste transported, treated or disposed by
such carriers could not reasonably be expected to have a Material Adverse Effect,
and only at treatment, storage and disposal facilities maintaining valid
permits under RCRA and any other Environmental Law, which carriers and
facilities have been and are operating in compliance with such permits, except
to the extent the failure to have such substances or waste treated, stored or
disposed at such facilities, or the failure of such carriers or facilities to
so operate, could not reasonably be expected to have a Material Adverse Effect
or which could not reasonably be expected to result in remedial obligations
having a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and circumstances, if
any, pertaining to the relevant Property.


 


(e) Hazardous Substances Disposal. Each
Credit Party has taken all reasonable steps necessary to determine and has
determined that, except as set forth on Schedule 5.21 hereto, no
hazardous substances or solid waste has been disposed of or otherwise released
and there has been no release of any hazardous substances on or to any real
Property of any Credit Party except in compliance with Environmental Laws,
except to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect or which could not reasonably be expected to
result in remedial obligations having a Material Adverse Effect assuming
disclosure to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant real Property.


 


(f) No Contingent Liability. Except as set
forth on Schedule 5.21 hereto, the Credit Parties have no
contingent liability in connection with any release or threatened release of
any hazardous substance or solid waste into the environment other than such
contingent liabilities at any one time and from time to time which could not
reasonably be expected to exceed $200,000 in excess of applicable insurance
coverage and for which adequate reserves for the payment thereof as required by
GAAP have been provided, or which could not reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such release or threatened release.


 


Section 5.22
Solvency. The
Credit Parties taken as a whole are, and each Credit Party individually is,
Solvent.


 


Section 5.23
Employee Matters.
Except as specified on Schedule 5.23 hereto, no Credit Party, nor
any of their respective employees, is subject to any collective bargaining
agreement. There are no strikes, slowdowns, work stoppages or
controversies pending or threatened against any Credit Party, or their
respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. As of the Closing
Date, except as set forth in Schedule 5.23, no employees were
subject to an employment contract with Borrower or its Subsidiaries.


 


Section 5.24
Real Property.
Schedule 5.24 hereto accurately reflects, as of the Closing Date,
all Real Property in which any Credit Party holds any right, title or interest
as of the date hereof, including any leasehold interest. Schedule 5.24
further accurately reflects as of the date


 


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hereof, in respect of each parcel of Real Property
described thereon, the name of the Credit Party which is the owner and holder
of record title thereto, the nature of the interest of the Credit Parties
therein (fee, leasehold or other), and, in the case of any leasehold interest
described therein, the name of the landlord under such lease and a description
of such lease, including all amendments thereto. No Credit Party is in monetary
default or in default of any other material obligation under any lease of Real
Property, and, to the knowledge of each Credit Party, no landlord under any
such lease is in default of any material obligation of such landlord thereunder
which, in any of the foregoing cases, could reasonably be expected to have a
Material Adverse Effect. No Credit Party has received any notice alleging any
default or any notice of actual or threatened termination or cancellation of
any such lease except to the extent such default, termination or cancellation
would not have a Material Adverse Effect.


 


Section 5.25
Perfection Certificates; Schedules to other Financing Documents. As of the Closing Date, all information in
the Perfection Certificates and all information set forth in all disclosure
schedules to each of the other Financing Documents is true, correct and
complete in all material respects.


 


Section 5.26
Existing Indebtedness. Schedule 5.26 hereto contains an accurate and complete
list of all Existing Indebtedness of the Credit Parties on the Closing Date
after giving effect to repayment of Indebtedness to be repaid on or prior to
the Closing Date, and including, with respect to each such item of Existing
Indebtedness: (a) the current lender or holder of such Indebtedness, (b) the
principal amount of such Indebtedness on the Closing Date, (c) an accurate
list of the material loan agreements, promissory notes and other documents
evidencing, governing or otherwise pertaining to such Indebtedness, and (d) an
accurate list of all Property which stands as security for such Indebtedness.


 


Section 5.27
Material Contracts. Schedule 5.27 contains an accurate list of all Material
Contracts to which any Credit Party is a party or by which any Credit Party or
the assets of any Credit Party is bound as of the Closing Date (provided,
that it is not required that Schedule 5.27 include any
Material Contract which is required to be, and is, disclosed on any other Schedule to
this Agreement or any Material Contract described in clauses (b) and (c) of
the definition of “Material Contracts” that were entered into after 8:00 a.m.,
New York City time on the tenth (10th) Business Day prior to the Closing Date
in the ordinary course of business consistent with past practices). Except as
disclosed on Schedule 5.27 (or such other Schedule to this
Agreement), no material rights or obligations of any party to any Material
Contract has been waived and no Credit Party is, and to Parent’s and Borrower’s
knowledge, no other party to any Material Contract is, in default of its
obligations or in breach of any representations or warranties made thereunder
to the extent that such default or breach could reasonably be expected to have
a Material Adverse Effect. Each of the Material Contracts is a valid, binding
and enforceable obligation of each party thereto in accordance with its terms
and is in full force and effect, except to the extent any such Material
Contract (a) terminates on its scheduled termination or expiration date in
accordance with its terms and (b) the termination or non-validity of such
Material Contract could not reasonably be expected to have a Material Adverse
Effect.


 


Section 5.28
Terminals/Terminal Contracts. Schedule 5.28 contains an accurate list of all Terminals
at which Borrower stores or has an existing right to store inventory as of the
Closing Date. Schedule 5.28 contains an accurate list of the
contracts governing the Borrower’s


 


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right to store inventory at such Terminals as of the
Closing Date. Except as disclosed on Schedule 5.28, no material
rights or obligations of any party to any such contract or agreement has been
waived by any Credit Party as of the Closing Date. No Credit Party is, and to
Parent’s and Borrower’s knowledge, no other party to any such contract or
agreement is, in default of its obligations or in breach of any representations
or warranties made under any Terminal contract or agreement to the extent that
such default or breach could reasonably be expected to have a Material Adverse
Effect. Each of the Terminal contracts and agreements is a valid, binding and
enforceable obligation of each party thereto in accordance with its terms and
is in full force and effect, except to the extent any such contract and
agreement (a) terminates on its scheduled termination or expiration date
in accordance with its terms and (b) the termination or non-validity of
such contracts and agreements could not reasonably be expected to have a
Material Adverse Effect.


 


Section 5.29
Purchase Documents. Borrower has provided to the Administrative Agent a true and correct
copy of the Purchase Agreement and all other material documents, instruments
and agreements entered into by and between or among Holdco, its Affiliates,
Seller, Williams and their Affiliates related to the Acquisition, including all
amendments and modifications thereto (whether characterized as an amendment,
modification, waiver, consent or similar document) (collectively, the “Purchase Documents”). No material
rights or obligations of any party to any of the Purchase Documents have been
waived. Holdco is not, and to Parent’s and Borrower’s knowledge, neither Seller
nor Williams is in default of its obligations or in breach of any
representations or warranties made thereunder. Each of the Purchase Documents
is a valid, binding and enforceable obligation of each party thereto in
accordance with its terms and is in full force and effect. Each representation
and warranty made by Holdco and, to Parent’s and Borrower’s knowledge, Seller
and Williams, in the Purchase Documents is true and correct in all material
respects on the date hereof and will be true and correct in all material
respects on the Closing Date.


 


Section 5.30
Representations With Respect to Parent and Certain Affiliates. None of Holdco II, Holdco or Parent (a) conducts
any business or operations, (b) owns, leases, licenses or otherwise has
the right to use any Property other than, in the case of Holdco II, the Equity
of Holdco, in the case of Holdco, the equity of Parent, and in the case of
Parent, the Equity of Borrower and Nebraska Sub, (c) has any liabilities
or obligations to any Person other than (i) its direct or indirect parent
or the Morgan Stanley Funds, (ii) purchase price adjustments (if any)
pursuant to the Purchase Agreement, and (iii) other liabilities or
obligations not otherwise permitted by this Agreement and not exceeding
$5,000,000 at any time outstanding, or (d) has any employees, except, in
the case of clauses (a) and (d), as are directly related to and required
in connection with the ownership of the respective Equity Interests.


 


Section 5.31
Accounts.
Other than (a) the Blocked Account, (b) the Disbursement Account, (c) Payroll
Account No. 601 868 060 established by Borrower with Administrative Agent,
and (d) until August 31, 2003, the Temporary Lockbox Account, neither
Borrower nor any Guarantor maintains any account with any bank or other
depository institution into which any cash or cash equivalents are deposited or
cash or cash equivalents are maintained.


 


Section 5.32
Motor Fuels, Liquor or Other Sales or Excise Taxes. As of the Closing Date, Borrower has no
liability to collect, remit or pay motor fuels, liquor or other sales or excise


 


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taxes in respect of ethanol or other inventory sold by
Borrower to any Governmental Authority other than (a) motor fuels taxes
which must be collected and remitted by Borrower to the Wisconsin Department of
Revenue in respect of ethanol inventory sold by Borrower in or destined for the
State of Wisconsin pursuant to Wisconsin Statutes Chapter 78.005, et seq.,
(b) motor fuels taxes which must be collected and remitted by Borrower to
the Iowa Department of Revenue in respect of ethanol inventory sold by Borrower
in or destined for the State of Iowa pursuant to Iowa Code Title X, Subtitle 4,
Section 452A, and (c) feed excise taxes which must be collected and
remitted in respect of feed byproducts sold by Borrower, under which
liabilities, in the aggregate, the monthly payable is less than $50,000.


 


ARTICLE 6

AFFIRMATIVE COVENANTS


 


So long as any Lender has
any Revolving Credit Commitment hereunder or any Revolving Credit Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, Borrower and
Parent shall, and to the extent applicable shall cause each other Credit Party
to, comply with the following covenants:


 


Section 6.1
Maintenance and Compliance, etc. Borrower and Parent will, and will cause each other Credit Party to, (a) preserve
and maintain its corporate, partnership or limited liability company existence,
and (b) except where failure to do so could not reasonably be expected to
have a Material Adverse Effect, observe and comply with all Governmental
Requirements.


 


Section 6.2
Payment of Taxes and Claims, etc. Borrower and Parent will pay, and will
cause each other Credit Party to pay, (a) all material Taxes, assessments
and governmental charges imposed upon it or upon its Property, and (b) all
material claims (including, but not limited to, claims for labor, materials,
supplies or services) which could reasonably be expected, if unpaid, to become
a Lien upon its Property, unless, in each case, the validity or amount thereof
is being contested in good faith by appropriate action or proceedings disclosed
to the Lenders, and Borrower and Parent have established reserves required by
the Administrative Agent in its sole but reasonable discretion with respect
thereto.


 


Section 6.3
Further Assurances. Borrower and Parent will cure, and will cause each other Obligated
Party to cure, promptly any defects in the creation and issuance of the
Revolving Credit Notes, and the execution and delivery of the Financing
Documents, including this Agreement. Borrower and Parent at their expense will,
and will cause each other Obligated Party that is a party to any Financing
Document to, as promptly as practical, execute and deliver to the
Administrative Agent or the Issuing Bank upon request all such other and
further documents, agreements and instruments in compliance with or performance
of the covenants and agreements of the Obligated Parties in the Financing
Documents, including this Agreement, or to further evidence and more fully
describe the Collateral, or to correct any omissions in the Financing
Documents, or more fully to state the security obligations set out herein or in
any of the Financing Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Financing Documents, or to make any recordings,
to file any notices, or obtain any consents, all as may be necessary or
appropriate in connection herewith or therewith.


 


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Section 6.4
Performance of Obligations. Borrower will pay the Revolving Credit Notes according to the
reading, tenor and effect thereof; and Borrower and Parent will do and perform,
and cause each other Obligated Party to do and perform, every act and discharge
all of the obligations provided to be performed and discharged by such parties
under the Financing Documents, including this Agreement, at the time or times
and in the manner specified, and cause each other Obligated Party to take such
action with respect to their obligations to be performed and discharged under
the Financing Documents to which they respectively are parties.


 


Section 6.5
Maintenance of Insurance. Borrower and Parent will, and will cause each of the other Credit
Parties to, maintain insurance with financially sound and reputable insurance
companies or associations in such amounts covering such risks as in effect on
the Closing Date with such changes as Administrative Agent shall reasonably
require to reflect changes after the Closing Date in the business, operations
or assets of, or risks faced by, the Credit Parties. Administrative Agent shall
be named “Loss Payee” and/or “Additional Insured,” as appropriate, on all
property, general liability and business interruption policies.


 


Section 6.6
Accounts and Records. Borrower and Parent will keep, and will cause each of the other
Credit Parties to keep, proper books of record and account in accordance with
GAAP.


 


Section 6.7
Right of Inspection. Borrower and Parent will permit, and will cause each of the other
Credit Parties to permit, any officer, employee or agent of the Administrative
Agent or any Lender to visit and inspect any of the Properties of the Credit
Parties, examine any Credit Party’s books of record and accounts, take copies
and extracts therefrom, and discuss the affairs, finances and accounts of the
Credit Parties with any Credit Party’s officers, accountants and auditors, as
often and all at such reasonable times during normal business hours as may be
reasonably requested by the Administrative Agent or the Required Lenders.


 


Section 6.8
Operation and Maintenance of Property. Each of Borrower and Parent will, and will
cause each other Credit Party to, operate its Properties or cause its
Properties to be operated and maintained (a) in accordance with prudent
industry practice in all material respects and in compliance (except where the
non-compliance therewith could not reasonably be expected to have a Material
Adverse Effect) with the terms and provisions of all applicable leases,
contracts and agreements, and (b) except where the non-compliance
therewith could not reasonably be expected to cause or result in a Material
Adverse Effect, in compliance with all Governmental Requirements of the
jurisdiction in which such Properties may be situated, and all other
Governmental Requirements relating to the ownership and operation of such
Properties.


 


Section 6.9
New Subsidiaries; Additional Liens.


 


(a) If
at any time after the Closing Date, Borrower or any Guarantor creates or
acquires (subject to Section 7.6 and Section 7.18) any
one or more Subsidiaries (a “New
Subsidiary”), Borrower and Parent shall cause such New Subsidiary to
execute and deliver to the Administrative Agent for the benefit of the Lenders
and the Issuing Bank, at the time of such New Subsidiary’s creation or
acquisition, (1) a Guaranty and Security Agreement, and (2) other
appropriate Security Instruments covering such New Subsidiary’s Property as
security for the Lender Indebtedness, in form and substance acceptable to
the Administrative Agent.


 


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(b) If
at any time after the Closing Date, Parent becomes the direct or indirect
beneficial owner of 80% of the Equity of Nebraska Sub (other than Equity held
by management of Nebraska Sub issued pursuant to a properly authorized
management equity plan), Borrower and Parent shall cause Nebraska Sub to
execute and deliver to the Administrative Agent for the benefit of the Lenders
and the Issuing Bank, at the time Parent becomes the direct or indirect
beneficial owner of 80% of the Equity of Nebraska Sub, (1) a Guaranty and
Security Agreement, and (2) other appropriate Security Instruments covering
Nebraska Sub’s Property as security for the Lender Indebtedness, in form and
substance acceptable to the Administrative Agent.


 


(c) In
connection with the execution and delivery of any Security Instrument pursuant
to this Section 6.9, Borrower and Parent shall, or shall cause the
relevant New Subsidiary or Nebraska Sub (as applicable) to, deliver to the
Administrative Agent for the benefit of the Lenders, resolutions, member or
partner consents, certificates, legal opinions and such other related documents
as shall be reasonably requested by the Required Lenders and consistent with
the relevant forms and types thereof delivered on the Closing Date or as shall
be otherwise reasonably acceptable to the Required Lenders. Each Guaranty and
Security Agreement and the like delivered pursuant to this Section 6.9
shall be deemed to be a Security Instrument from and after the date of
execution thereof.


 


Section 6.10
Reporting Covenants. Borrower and Parent will furnish, and will cause all other Credit
Parties to furnish (as applicable to comply with this Section 6.10),
the following to each of the Lenders:


 


(a) Annual Financial Statements. As soon as
available and in any event within 90 days after the end of each Fiscal Year
commencing with the Fiscal Year ending on December 31, 2003, a
consolidated and consolidating balance sheet of Parent and its consolidated
Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income, retained earnings and cash flows of Parent
and its consolidated Subsidiaries for such Fiscal Year, setting forth in each
case, in comparative form the figures for the previous Fiscal Year
(commencing with the financial statements for the Fiscal Year ending December 31,
2004), all in reasonable detail and, in the case of such consolidated
statements, accompanied by a report thereon (without qualification) of
independent public accountants of recognized national standing, which report
shall state that such consolidated financial statements present fairly the
consolidated financial condition as at the end of such Fiscal Year, and the
consolidated results of operations and cash flows for such Fiscal Year, of
Parent and its consolidated Subsidiaries in accordance with GAAP, applied on a
consistent basis.


 


(b) Monthly Financial Statements. As soon
as available and in any event within 25 days after the end of each calendar
month (provided, that, beginning with the information to be
delivered under this Section 6.10(b) for January 2004,
such period shall be reduced to 20 days after the end of each calendar month),
a consolidated and consolidating balance sheet of each of Parent and its
consolidated Subsidiaries as at the end of such month and the related
consolidated and consolidating statements of income (loss), retained earnings
and cash flows of Parent and its consolidated Subsidiaries for such calendar
month and for the portion of Parent’s Fiscal Year ended at the end of such
month, setting forth in each case, in comparative form the figures for the
corresponding month and the corresponding portion of the previous Fiscal Year (provided,
that, (i) consolidating balance sheets and statements of cash flow


 


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shall not be required prior to the date the systems
of Parent and Borrower permit the preparation of such statements (the “systems
conversion date”) which shall, in all events, be no later than the date
required for delivery of the financial statements as of and for the period
ending December 31, 2003 (until such systems conversion date, Parent and
Borrower will provide a separate balance sheet for Nebraska Sub), and (ii) comparative
consolidating balance sheets and comparative statements of cash flow shall not
be required prior to the first anniversary of the systems conversion date), all
in reasonable detail and certified by a Responsible Officer that such financial
statements are complete and correct and fairly present the consolidated and
consolidating (as applicable) financial condition as at the end of such calendar
month, and the consolidated and consolidating (as applicable) results of
operations and cash flows for such calendar month and such portion of the
Fiscal Year of Parent and its consolidated Subsidiaries in accordance with GAAP
(subject to year-end adjustments which shall not, individually or in the
aggregate, be material and adverse). Together with the delivery of the
financial statements required by this Section 6.10(b), Parent and
Borrower shall deliver to each Lender, in form, substance and detail acceptable
to the Administrative Agent, (1) an accounts receivable aging and
reconciliation, (2) an accounts payable aging, (3) copies of all bank
statements received with respect to each deposit account (including each
lockbox account) maintained by Borrower and received subsequent to the delivery
of monthly financial statements during the preceding calendar month, (4) a
summary of all Hedging Agreements to which any Credit Party is subject as of
the last Business Day of the preceding calendar month, and (5) a summary
of all Fixed Price Contracts and contracts providing for the purchase by
Borrower of inventory (including corn) at fixed prices as of the last Business
Day of the preceding calendar month.


 


(c) No Default/Compliance Certificate.
Together with the financial statements required pursuant to Section 6.10(a) or
Section 6.10(b) above, a certificate of each of Borrower and
Parent, which shall be in substantially the form of Exhibit H
hereto, signed by a Responsible Officer (1) stating that a review of such
financial statements during the period covered thereby and of the activities of
each of Parent and its consolidated Subsidiaries has been made under such
Responsible Officer’s supervision with a view to determining whether the Credit
Parties have fulfilled all of their obligations (as applicable) under this
Agreement, the other Financing Documents, and the Revolving Credit Notes; (2) stating
that each Obligated Party has fulfilled its obligations under such instruments
and that all Bring-Down Representations and Warranties (subject to Section 3.2(a))
made in this Agreement continue to be true and correct (or specifying the
nature of any change), or if there shall be a Default or Event of Default,
specifying the nature and status thereof and the Credit Parties’ proposed
response thereto; (3) demonstrating in reasonable detail compliance
(including, but not limited to, showing all material calculations) as at the
end of such month and the end of such Fiscal Year with Section 7.1,
Section 7.2(c), Section 7.2(f), Section 7.5,
Section 7.6(g), and Section 7.15 (such report shall
include a calculation of Parent’s Fixed Charge Coverage Ratio whether or not
Parent is then required to comply with Section 7.1); (4) containing
or accompanied by such financial or other details, information and material as
the Administrative Agent may reasonably request to evidence such
compliance; (5) an accurate list of each Material Contract entered into by
any Credit Party since the date of the preceding compliance certificate delivered
pursuant to the terms of this Section 6.10(c); and (6) stating
that each accounts receivable aging and reconciliation and accounts payable
aging are accurate and complete.


 


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(d) Management Letters. Promptly following
review by the Board of Directors of such Credit Party, or any committee
thereof, but in all events no later than thirty (30) days following the receipt
by the relevant Credit Party, copies of each management letter issued to any
Credit Party by such accountants (together with any response thereto prepared
by such Credit Party).


 


(e) Title Information. Promptly upon
request by the Administrative Agent, additional title information in form and
substance reasonably acceptable to the Administrative Agent to allow the
Administrative Agent to verify the Obligated Parties’ title to, and the
perfection and priority of the Administrative Agent’s Liens in and to, the
Collateral.


 


(f) Events or Circumstances with respect to Collateral.
Promptly after the occurrence of any event or circumstance concerning or
changing any of the Collateral that could reasonably be expected to have a
Material Adverse Effect, written notice of such event or circumstance in
reasonable detail.


 


(g) Borrowing Base Reports; Perfection Certificate Updates.
As soon as available, and in any event on or before the 20th day of each
calendar month (or the next succeeding Business Day if such day is not a
Business Day), (1) a Borrowing Base Report (including a “terminal
reconciliation report”) reflecting the Borrowing Base and Maximum Available
Amount which shall be dated and prepared as of the last Business Day of the
preceding calendar month and (2) to the extent there has been a change in
the information represented in a previously delivered Perfection Certificate or
Perfection Certificate Update or any previously delivered Perfection
Certificate or Perfection Certificate Update is no longer accurate and
complete, a Perfection Certificate Update. In addition to the foregoing, as soon
as available, and in any event on or before the 3rd Business Day of each
calendar week, (x) the Inventory Designation Report in the form of Exhibit M
hereto which shall include a “growers payable report” (reflecting the amount of
inventory then subject to claims of vendors of agricultural commodities under
PACA and other Governmental Requirements), Eligible Inventory, Eligible
Finished Goods Inventory, Eligible In-Transit Inventory and Eligible Raw
Materials, (y) the Interim Account Report (sales and collections) in the form of
Exhibit N hereto, and (z) the PACA Reserve Report in the form of
Exhibit O hereto, all such reports shall be prepared as of the last
Business Day of the preceding calendar week.


 


(h) Notice of Certain Events. Promptly
after either Borrower or Parent learns of the receipt or occurrence of any of
the following, a certificate of the Credit Party learning of such event, signed
by a Responsible Officer, specifying (1) any official notice of any
violation, possible violation, non-compliance or possible non-compliance, or
claim made by any Governmental Authority pertaining to all or any part of
the Properties of any Credit Party which could reasonably be expected to have a
Material Adverse Effect; (2) any event which constitutes a Default or
Event of Default, together with a detailed statement specifying the nature
thereof and the steps being taken to cure such Default or Event of Default; (3) the
receipt of any notice from, or the taking of any other action by, the holder of
any Indebtedness in excess of $200,000 of any Credit Party with respect to a
claimed default, together with a detailed statement specifying the notice given
or other action taken by such holder and the nature of the claimed default and
what action the Credit Parties are taking or propose to take with respect
thereto; (4) any notice of proceedings or actions which could reasonably
be expected to adversely affect any


 


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of the Financing Documents; (5) the creation,
dissolution, merger or acquisition of any Credit Party; (6) any event or
condition not previously disclosed to the Administrative Agent which violates
any Environmental Law and which could reasonably be expected to have a Material
Adverse Effect; (7) any material amendment to, termination of, or default
under, any Material Contract or any execution of, or material amendment to,
termination of, or material default under, any material collective bargaining
agreement; or (8) any other event or condition which could reasonably be
expected to have a Material Adverse Effect.


 


(i) Shareholder Communications, Filings.
Promptly upon the mailing, filing, or making thereof, copies of all
registration statements, periodic reports and other documents (excluding the
related exhibits except to the extent expressly requested by the Administrative
Agent) filed by any Credit Party with the Securities and Exchange Commission
(or any successor thereto) or any national securities exchange.


 


(j)
Litigation. Promptly after
the occurrence thereof, notice of the institution of, or any material adverse
development in, any action, suit or proceeding or any governmental
investigation or any arbitration, before any court or arbitrator or any
governmental or administrative body, agency or official, against any Credit
Party or any material Property of any Credit Party, in which the amount
involved is material and is not covered by insurance or which there is a
reasonable probability of an adverse determination that could reasonably be
expected to have a Material Adverse Effect.


 


(k)
ERISA. Promptly after (1) any
Credit Party obtaining knowledge of the occurrence thereof, notice that an
ERISA Termination Event with respect to any Plan has occurred, which such
notice shall specify the nature thereof, the Credit Parties’ proposed response
thereto (and, if applicable, the proposed response thereto of any Subsidiary of
the Credit Parties and of any ERISA Affiliate) and, where known, any action
taken or proposed by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto, and (2) any Credit Party’s obtaining
knowledge thereof, copies of any notice of the PBGC’s intention to terminate or
to have a trustee appointed to administer any Plan.


 


(l)
Field Examination.
Quarterly, as of such dates designated by the Administrative Agent, the
Administrative Agent may require a field examination and audit of the
components of the Borrowing Base which may be conducted by the
Administrative Agent or a third party designated by the Administrative Agent
and in each case at Borrower’s expense. The Administrative Agent shall be
permitted to conduct or commission such additional field examinations and
audits as the Administrative Agent or the Required Lenders shall reasonably
require which shall be at the Lenders’ expense; provided, however,
that, (1) during any period that an Event of Default has occurred
which is continuing, or (2) if the Administrative Agent or the Required
Lenders shall in good faith believe that any Borrowing Base Report or inventory
report provided to the Lenders hereunder is inaccurate or misleading in any
material respect, the Administrative Agent or the Required Lender shall have
the option to conduct or commission additional field examinations and audits at
Borrower’s expense.


 


(m)
Insurance Coverage. Upon
request, a summary of the insurance coverages of the Credit Parties in form and
substance reasonably satisfactory to the Administrative Agent; upon renewal or
replacement of any such insurance policy, a copy of an


 


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insurance certificate summarizing the terms of such
policy; and upon request of the Administrative Agent, copies of the applicable
policies.


 


(n)
Annual Budget. As soon as
available and in any event not later than commencement of each Fiscal Year, an
annual budget prepared by Parent for Parent and each of its consolidated
Subsidiaries in a form substantially the same as the Projections, setting
forth, in reasonable detail, the projected monthly revenues, expenses and
balance sheet conditions of the Credit Parties for the following Fiscal Year.


 


(o)
Inventory Appraisals. Once
during any Fiscal Year, the Administrative Agent may require, at the cost
of Borrower, an appraisal of Borrower’s inventory in scope and detail and
prepared by an independent appraisal firm acceptable to the Administrative
Agent; provided, that, after the occurrence and during the
continuance of a Default, the Administrative Agent shall have the option to
receive at the cost of Borrower such additional inventory appraisals as the
Administrative Agent or the Required Lenders shall reasonably request. If an
Event of Default exists, the Administrative Agent shall require an inventory
appraisal if the most recently conducted inventory appraisal is more than one
year old.


 


(p)
Motor Fuels, Liquor or Other Sales or
Excise Taxes. Promptly notify Administrative Agent upon the
introduction of or change in (including, but not limited to, a change in the
interpretation or application by any Governmental Authority of) any
Governmental Requirement in any jurisdiction, any change in the manner or
method in which Borrower sells inventory, or any change in the types or mixture
of types of inventory sold by Borrower which imposes upon Borrower any
requirement (or increases or makes more burdensome any existing requirement) to
collect, remit and/or pay motor fuels, liquor or other sales or excise taxes
with respect to the sale by Borrower of ethanol or other inventory.


 


(q)
Other Information. With
reasonable promptness, such other information about the business and affairs
and financial condition of any Credit Party as the Administrative Agent may reasonably
request from time to time, including, without limitation, weekly accounts
receivable aging and reconciliation reports, accounts payable aging and
reconciliation, sales reports and inventory designations.


 


Section 6.11
Pledge of Equity of Nebraska Sub. Parent shall use its reasonable efforts to
obtain the consent of the requisite holders of Equity in Nebraska Sub in order
to pledge its 78.42% Equity interest in Nebraska Sub. Upon the earlier of (i) obtaining
the consent of the requisite holders of Equity of Nebraska Sub or (ii) on
such date as Parent holds directly or indirectly not less than 80% of the
Equity interest in Nebraska Sub, Parent shall execute and deliver (or cause any
other appropriate Credit Party to execute and deliver) to the Administrative
Agent such Security Instruments and other supporting documentation (including
legal opinions) as Administrative Agent shall reasonably require to grant and
fully evidence and perfect in favor of the Administrative Agent for the ratable
benefit of the Lenders, first and prior Liens in and to all Equity of Nebraska.
Without limiting the foregoing sentence, to the extent necessary to perfect
such Liens, Parent shall deliver or cause to be delivered to the Administrative
Agent original certificates evidencing such Equity.


 


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Section 6.12
Risk Management Policy. As soon as possible, but in all events on or before the sixtieth
(60th) day following the Closing Date, the Credit Parties shall prepare and
cause their respective boards of directors to approve a risk management policy
(the “Risk  Management Policy”)
setting forth policies and procedures to be followed by the Credit Parties (a) (i) with
respect to the hedging of commodity price risk actually incurred or reasonably
anticipated to be incurred in the operation of the Credit Parties’ businesses,
including price risks associated with contracts for the future delivery by the
Credit Parties of ethanol and other products at fixed prices (it being
acknowledged that the Risk Management Policy will not require the hedging of
all commodity price risk incurred or reasonably anticipated to be incurred in
the operation of the Credit Parties’ business), and (ii) prevent
speculative hedging, and (b) which shall be in reasonable detail, and may be
amended from time to time as long as such amendment shall take into account and
reflect the requirements provided for in clauses (a) and (b) of this
sentence. From and after the date of approval of such Risk Management Policy by
the boards of directors of each Credit Party, such Credit Parties shall comply
with such Risk Management Policy. The
Borrower shall provide a copy of the Risk Management Policy (including each
amendment thereof) to the Administrative Agent promptly upon the adoption
thereof.


 


ARTICLE 7

NEGATIVE COVENANTS


 


So long as any Lender has
any Revolving Credit Commitment hereunder or any Revolving Credit Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, Parent and
Borrower will not, and Parent and Borrower will not permit any other Credit
Party to:


 


Section 7.1
Financial Covenants; Minimum Availability.


 


(a) Permit
Parent’s Fixed Charge Coverage Ratio to be less than 1.10 to 1.00 for any
applicable Fixed Charge Calculation Period; provided, that,
Parent’s and Borrower’s obligation to comply with this Section 7.1 shall
be suspended (i) for the Fixed Charge Calculation Period ending September 30,
2003 and the Fixed Charge Calculation Period ending December 31, 2003 to
the extent that Average Availability (for this purpose calculated without
giving effect to the NOx Initial Reserve) during the final Fiscal Quarter of
the applicable Fixed Charge Calculation Period was at least $10,000,000, and (ii) for
any Fixed Charge Calculation Period to the extent Availability (for this
purpose calculated without giving effect to the NOx Initial Reserve) was at
least $10,000,000 at all times during the final three (3) months of such
Fixed Charge Calculation Period (such $10,000,000 Availability requirement
contained in this clause (ii) shall be excused to the extent that, on two
occasions, not to exceed an aggregate (for both occasions) of ten (10) Business
Days, Availability may be less than $10,000,000, but not less than
$5,000,000, without triggering compliance with this Section 7.1 for the
applicable Fixed Charge Calculation Period).


 


(b) Permit
Availability to be less than $5,000,000 at any time during the Fiscal Year
ending December 31, 2003.


 


Section 7.2
Indebtedness.
Create, incur, assume or suffer to exist, any Indebtedness, other than:


 


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(a) the
Lender Indebtedness;


 


(b) Indebtedness
outstanding on the date hereof which is set forth on Schedule 5.26
and any refinancings, refundings, renewals or extensions thereof (without any (1) increase
in the principal amount thereof (other than to finance accrued interest, fees
and other amounts outstanding in respect thereof and fees and expenses incurred
in connection with such refinancing, refunding, renewal or extension), or (2) acceleration
of the date of, or increase in the amount of, any payment of principal
thereon);


 


(c) Indebtedness
in respect of Capital Lease Obligations and purchase money Indebtedness in an
aggregate amount not in excess of $2,000,000 outstanding at any time;


 


(d) Indebtedness
owed by the Credit Parties or any of them to any party under any Cash
Management Agreement;


 


(e) Indebtedness
loaned from (i) Parent to Borrower, so long as any instruments evidencing
such Indebtedness are delivered to Administrative Agent to the extent required
in accordance with the Guaranty and Security Agreement, (ii) any Affiliate
of any Credit Party to Borrower or Parent, so long as such Indebtedness is
subordinate to the Lender Indebtedness as evidenced by a subordination
agreement in form and substance satisfactory to the Administrative Agent
in its sole discretion (such subordination agreement will permit the payment of
such subordinated Indebtedness to the extent allowed pursuant to Section 7.5(a) hereof),
and (iii) Parent or Borrower to Nebraska Sub, so long as such Indebtedness
is permitted pursuant to Section 7.6(j); and


 


(f) other
unsecured Indebtedness; provided, that, the aggregate amount of
such other unsecured Indebtedness shall not exceed $500,000 outstanding at any
time.


 


Section 7.3
Liens. Create,
incur, assume or suffer to exist, any Lien on any of its Property now owned or
hereafter acquired to secure any Indebtedness of any Credit Party or any other
Person, other than the following (collectively, the “Permitted Liens”):


 


(a) Liens
existing on the date hereof and set forth on Schedule 7.3;


 


(b) Liens
securing the Lender Indebtedness;


 


(c) Liens
for taxes, assessments or other governmental charges or levies not yet due or
which are being contested in good faith by appropriate action or proceedings
which have been disclosed to the Lenders and with respect to which reserves
acceptable to the Administrative Agent have been established, but only so long
as any execution on or foreclosure of such Liens is stayed;


 


(d) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen,
repairmen, workmen, and other Liens imposed by law created in the ordinary
course of business for amounts which are not past due for more than thirty (30)
days or which are being contested in good faith by appropriate action or
proceedings and with respect to which adequate reserves in accordance with GAAP
are being maintained; provided, that all such Liens in favor of a
Landlord or Bailee attaching to any inventory, equipment or other goods or


 


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equipment of Borrower shall have been subordinated
or waived pursuant to a Landlord Consent or Bailee’s Letter;


 


(e) Liens
incurred or deposits or pledges made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security, old age or other similar obligations, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);


 


(f) irregularities
in title, easements, rights-of-way, restrictions, servitudes, permits,
reservations, exceptions, conditions, covenants, encroachments, protrusions and
other similar charges or encumbrances not materially interfering with the
occupation, use and enjoyment by any Credit Party of any of their respective
Properties in the normal course of business or materially impairing the value
thereof;


 


(g) any
obligations or duties affecting any of the Property of any Credit Party to any
municipality or public authority with respect to any franchise, grant, license
or permit which do not materially impair the use of such Property for the
purposes for which it is held;


 


(h) Liens
securing Indebtedness permitted by Section 7.2(c); provided,
that, (1) such Liens attach only to the Property being leased or
acquired, (2) the creation of or incurrence of such Liens does not violate
this Agreement or any other Financing Documents, and (3) the principal
amount of the Indebtedness secured does not exceed 100% of the total purchase
price of the Property being leased or acquired;


 


(i) judgment
liens in respect of judgments that do not constitute an Event of Default under Section 8.9;


 


(j)
extensions, renewals or replacements of any Lien referred to in Section 7.3(a) and
Section 7.3(h), provided, that the principal amount
of the Indebtedness or obligation secured thereby is not increased and that any
such extension, renewal or replacement is limited to the Property originally
encumbered thereby;


 


(k)
exceptions to title specified in the Mortgagee’s Policies of Title Insurance
issued pursuant to the Title Commitments;


 


(l)
any statutory trust arising pursuant to PACA, to the extent no seller of
agricultural commodities has an enforceable claim with respect to such trust
but only to the extent the amounts owed to all such sellers are less than the
PACA Reserves at such time and are not past due; and


 


(m)
Liens encumbering cash or cash equivalents (or letters of credit or surety
bonds posted in lieu thereof) to satisfy margin calls under Hedging Agreements.


 


Section 7.4
Mergers, Sales, etc. Merge into or with or consolidate with, or permit any other Credit
Party to merge into or with or consolidate with, any other Person, or sell,
lease or otherwise dispose of, or permit any other Credit Party to sell, lease
or otherwise dispose of


 


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(whether in one transaction or in a series of
transactions) all or any part of its Property to any other Person.
Notwithstanding the foregoing limitation (a) the Credit Parties may (1) sell
inventory and other assets (other than accounts, except as permitted by Section 7.10
hereof) in the ordinary course of business, (2) sell, transfer or
otherwise dispose of obsolete or worn-out assets (other than intellectual
property), (3) sell Equity in Marketing Alliance Partners, and (4) sell
other assets not material to the business and operations of the Credit Parties;
provided, that the aggregate consideration received by the Credit
Parties with respect to all transactions referenced in clauses (2) and (4) of
this Section 7.4(a) shall not exceed $2,000,000 in any Fiscal
Year; (b) any Credit Party may merge into or with or consolidate with
or into Borrower so long as Borrower is the surviving Person and no Change of
Control or other Event of Default exists after giving effect thereto; (c) any
Credit Party may sell, redeem or trade among cash equivalent investments
permitted under Section 7.6(b) through Section 7.6(e);
and (d) the following shall not be prohibited by this Section 7.4:
(1) Restricted Payments permitted under Section 7.5, (2) payments
made in compliance with the Financing Documents of other obligations permitted
to exist hereunder, and (3) the grant of Liens permitted hereunder.


 


Section 7.5
Restricted Payments. Declare, pay or make any Restricted Payment; provided, that
the Credit Parties shall be permitted to make the following Restricted
Payments:


 


(a) any
Restricted Payment payable to Borrower;


 


(b) Borrower
shall be permitted to make Restricted Payments to Parent necessary to pay
Parent’s corporate overhead costs (and any amount not so utilized by Parent may be
paid as Restricted Payments by Parent to Holdco to pay Holdco’s corporate
overhead costs); provided, that, such payments may not be
permitted if a Default or Event of Default shall be continuing, unless such
payments are utilized by Parent (or Holdco, as applicable) to pay the Exempt
Management Fees; provided, further, that, the aggregate amount
of Restricted Payments made pursuant to this clause (b) together with the
aggregate amount of all management, monitoring, advisory, service fees and
similar fees paid by the Credit Parties to any Affiliates of the Credit Parties
in any Fiscal Year shall not exceed $500,000 plus such additional amounts as
are necessary to pay travel and other costs reasonably incurred in connection
with board meetings held by Holdco and Holdco II (which are hereby acknowledged
to constitute corporate overhead costs of Parent and Holdco);


 


(c) Nebraska
Sub shall be permitted to make Restricted Payments to its Equity holders on a
pro rata basis;


 


(d) Purchase
of Equity of Borrower by Parent made after the Closing Date;


 


(e) Borrower
shall be permitted to make Restricted Payments to Parent, and Parent shall be
permitted to make related Restricted Payments (i) to Holdco to pay
purchase price adjustments (if any) pursuant to the Purchase Agreement and (ii) to
make investments in Nebraska Sub to the extent permitted pursuant to Section 7.6(j);
and


 


(f) in
addition to Restricted Payments permitted pursuant to clauses (a) through (e) of
this Section 7.5, from and after Lender’s receipt of Parent’s
Current Financials for the Fiscal Year ending December 31, 2003, Borrower
and Parent shall be permitted to make


 


80

















 


Restricted Payments (including in the form of
payments of subordinated Indebtedness payable to Affiliates of the Credit
Parties which subordinated Indebtedness is permitted pursuant to Section 7.2(e) hereof);
provided, that,


 


(i) at the time any such Restricted Payment is made, no Default or
Event of Default shall be continuing,


 


(ii) after giving effect to the making of such Restricted Payment,
including any borrowing made hereunder to finance such Restricted Payment,
Availability shall not be less than $10,000,000,


 


(iii) the amount of any Restricted Payments made pursuant to this
clause (f), when considered together with all other Restricted Payments
previously made pursuant to this clause (f), shall not exceed


 


(A) $5,000,000 plus


 


(B) the aggregate amount of all contributions of cash to the
common Equity capital of Parent made after the Closing Date (other than those
capital contributions to make investments in Marketing Alliance Partners
permitted pursuant to Section 7.6(i)(iii), plus


 


(C) fifty percent (50%) of the cumulative Free Cash Flow for the
period from and including June 1, 2003, to the last day of the calendar
month most recently ended for which Current Financials are available as of the
time such Restricted Payment is made, minus


 


(D) all loans, advances and investments made subsequent to the
Closing Date pursuant to Section 7.6(j)(ii) (provided, that,
at such time as Nebraska Sub becomes a Guarantor, this clause (D) shall no
longer be applicable to any calculation of Restricted Payments permitted
pursuant to this clause (f); and provided, further, that,
substantially contemporaneous Restricted Payments made by Borrower to Parent
and then made by Parent to holders of its Equity (in the case of such
Restricted Payments made by Parent made from, and to the extent of the proceeds
of the substantially contemporaneous Restricted Payment from Borrower) shall be
treated and without duplication as a single Restricted Payment for purposes of
this clause (iii)), and


 


(iv) not less than five (5) Business Days prior to making any
Restricted Payment pursuant to this clause (f), Borrower shall deliver to
Administrative Agent a certificate executed by the chief financial officer of Borrower
setting forth in reasonable detail information and calculations necessary to
verify that such Restricted Payment will be in compliance with the requirements
of this clause (f).


 


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Section 7.6
Investments, Loans, etc. Make or permit to exist any loans to or investments in any Person, or
permit any other Credit Party to make or permit any loans to or investments in
any Person, other than:


 


(a) investments,
loans or advances, the material details of which have been set forth on Schedule 5.7;


 


(b) 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;


 


(c) 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;


 


(d) 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.;


 


(e) investments
in securities that are obligations of the United States government purchased by
any Credit Party 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 any Credit Party;


 


(f) loans
and advances to employees of any Credit Party in the ordinary course of
business (including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount not to exceed $500,000 outstanding
at any time;


 


(g) investments
in the form of promissory notes accepted in settlement of accounts
receivable which are past due; provided that to the extent the aggregate
investment in such promissory notes (based on the principal amount thereof)
exceeds at any time $50,000, all promissory notes representing further
investments in excess of such amount have been endorsed in favor of, and
delivered to, the Administrative Agent as security for the Lender Indebtedness;


 


(h) investments
in common Equity of Borrower so long as no Change of Control results;


 


(i) (i) investments
in Marketing Alliance Partners (1) made prior to the Closing Date and
listed on Schedule 5.7 hereto and (2) made after the Closing
Date in an aggregate amount not to exceed $2,000,000, (ii) in addition to
investments made pursuant to clause (i) of this Section 7.6(i),
investments in Heartland Grain Fuels, L.P. that are mandatory pursuant to the
organizational documents of Heartland Grain Fuels, L.P. as in effect on the
date hereof; provided, that, in the case of, and after giving
effect to each investment under clause (ii),


 


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(1) Availability shall not be less than
$10,000,000, (2) no Default or Event of Default shall exist and be
continuing, and (3) the aggregate maximum investments permitted pursuant
to this clause (ii) shall not exceed $3,000,000, and (iii) investments
in Marketing Alliance Partners made with proceeds of substantially
contemporaneous contributions to the common Equity capital of Parent (and by
Parent in Borrower), whether or not a Default or Event of Default shall exist
and be continuing; provided, that, for purposes of this Section 7.6(i),
any payable owed by Adkins Energy LLC to Borrower resulting from minimum price
payments made by Borrower pursuant to the Ethanol Marketing Agreement dated August 31,
2001, by and between the Borrower and Adkins Energy LLC and as in effect on the
date hereof, shall not be deemed to be loans or investments by Borrower in
Adkins Energy LLC;
and


 


(j)
investments by Parent in Equity of Nebraska Sub (i) if, at the time of
such investment or immediately after giving effect thereto, Nebraska Sub is or
becomes a Guarantor, or (ii) other investments (in the form of Equity
or Indebtedness) in Nebraska Sub; provided, that, in the case any
such other investment is made, Parent would be permitted to make a Restricted
Payment in the same amount pursuant to Section 7.5(f).


 


Notwithstanding the foregoing, Parent and Borrower
shall be prohibited from having Investments of the types described in clauses
(b), (c), (d) and (e) of this Section 7.6 at any time
that the principal balance of the Revolving Credit Loans then outstanding
exceeds $2,000,000.


 


Section 7.7
Sales and Leasebacks. Enter into any arrangement, directly or indirectly, with any Person
whereby any Credit Party shall sell or transfer any Property, whether now owned
or hereafter acquired, and whereby any Credit Party shall then or thereafter
rent or lease as lessee such Property or any part thereof or other Property
which a Credit Party intends to use for substantially the same purpose or
purposes as the Property sold or transferred.


 


Section 7.8
Nature of Business. Engage in, or permit any other Credit Party to engage in, any
business materially or substantially different than the businesses in which the
Credit Parties are engaged in as of the Closing Date, which businesses are
described in Schedule 7.8 hereto.


 


Section 7.9
ERISA Compliance.


 


(a) Engage
in, or permit any ERISA Affiliate to engage in, any transaction in connection
with which any Credit Party or any ERISA Affiliate could be subjected to either
a civil penalty assessed pursuant to Sections 502(c), (i) or (l) of ERISA
or a tax imposed by Chapter 43 of Subtitle D of the Code which could reasonably
be expected to have a Material Adverse Effect;


 


(b) Terminate,
or permit any other Credit Party or any ERISA Affiliate to terminate any Plan
under Section 4041(c) of ERISA or otherwise have the termination of
any Plan initiated by the PBGC;


 


(c) Permit
to exist, or allow any other Credit Party or any ERISA Affiliate to permit to
exist, any accumulated funding deficiency within the meaning of Section 302
of ERISA or Section 412 of the Code, whether or not waived, with respect
to any Plan that could reasonably be expected to have a Material Adverse
Effect;


 


83

















 


(d) Amend,
or permit any other Credit Party or any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that any Credit Party or any
ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29)
of the Code; or


 


(e) Incur,
or permit any other Credit Party or any ERISA Affiliate to incur, a liability
to or on account of a Plan under Sections 515, 4062, 4063, 4064, 4201 or 4204
of ERISA that could reasonably be expected, in the aggregate, to result in a
Material Adverse Effect.


 


Section 7.10
Sale or Discount of Receivables. Sell, or allow any other Credit Party to sell, with or without
recourse, for discount or otherwise, any notes or accounts receivable except
for the collection of accounts or notes receivable that are not Eligible
Accounts in the ordinary course of business consistent with past practices.


 


Section 7.11
Negative Pledge Agreements. Create, incur, assume or suffer to exist, or permit any other Credit
Party to create, incur, assume or suffer to exist, any contract, agreement or
understanding, other than (a) this Agreement and the other Financing
Documents, and (b) any agreements governing any purchase money Liens or
Capital Lease Obligations or dispositions of assets otherwise permitted hereby provided
that any such prohibition or limitation is only effective against the
Property financed thereby, which in any way prohibits or restricts the granting,
conveying, creation or imposition of any Lien on any Property of any Credit
Party, or which requires the consent of or notice to other Persons in
connection therewith.


 


Section 7.12
Transactions with Affiliates. Except as set forth on Schedule 7.12, enter into, or
permit any other Credit Party to enter into, any transaction or series of
transactions with Affiliates of any Credit Party which involve an outflow of
money or other Property from any Credit Party to an Affiliate of any Credit
Party other than Borrower, including, but not limited to, repayment of
Indebtedness, management fees, compensation, salaries, asset purchase payments
or any other type of fees or payments similar in nature except for those which
are in the ordinary course of business of the Credit Parties and are on fair
and reasonable terms no less favorable than would be obtained in a comparable
arm’s-length transaction with a Person not an Affiliate. Notwithstanding the
foregoing, the following shall be permitted: (a) the payment of management,
monitoring, advisory, service and similar fees and payments permitted pursuant
to Section 7.23, (b) the provision of investment banking and
advisory services actually rendered by Affiliates of the Morgan Stanley Funds
to any Credit Party in the ordinary course of such Affiliates’ business, (c) Restricted
Payments permitted pursuant to Section 7.5 and (d) transactions
between or among Credit Parties who are Guarantors.


 


Section 7.13
Unconditional Purchase Obligations. Enter into or be a party to, or permit any
other Credit Party to enter into or be a party to, any material contract for
the purchase of materials, supplies or other property or services, if such
contract requires that payment be made by it regardless of whether or not
delivery is ever made of such materials, supplies or other property or
services.


 


Section 7.14
Equity.
Authorize or issue, or permit any other Credit Party to authorize or issue (a) Equity
to any Person to the extent a Change of Control would result, or (b) any
preferred stock or other Equity having a mandatory redemption right existing
with regard thereto.


 


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Section 7.15
Capital Expenditures. Make Capital Expenditures in excess of (a) $12,000,000 in the
aggregate for the Fiscal Year ending December 31, 2003, or (b) $10,000,000
in the aggregate for any Fiscal Year thereafter; provided, that,
no Capital Expenditures shall be made if, before or after giving effect to the
making of such Capital Expenditures, a Default then exists or thereafter would
exist, other than safety and environmental Capital Expenditures (it being
understood that the making of such safety and environmental Capital
Expenditures shall not operate as a waiver of such Default and nothing
contained herein shall obligate Administrative Agent or any Lender to fund a
Borrowing or otherwise advance funds for the purpose of paying the costs of any
safety or environmental Capital Expenditure during the existence of a Default).


 


Section 7.16
Modifications to Indebtedness Agreements.


 


(a) Amend,
modify, or waive any provision of any instrument, document or agreement
governing the Indebtedness of the Credit Parties set forth on Schedule 7.2
hereto if the effect of such amendment, modification or waiver (1) subjects
any Credit Party to any additional material obligation, (2) increases the
principal thereunder, or (3) accelerates the date fixed for any payment of
principal or interest on such Indebtedness;


 


(b) Make
any voluntary prepayment of, or optionally redeem, or make any payment in
defeasance of, any part of the Indebtedness of the Credit Parties set
forth on Schedule 7.2 hereto; and


 


(c) Amend,
modify or waive any provision of any of the Purchase Documents without the
prior written consent of the Required Lenders, if such amendment, modification
or waiver could reasonably be expected to have a Material Adverse Effect.


 


Section 7.17
Intercompany Transactions. Create or otherwise cause or permit to exist or become effective,
except as may be expressly permitted or required by the Financing
Documents, any consensual encumbrance or restriction of any kind on the ability
of any Credit Party to (a) make any Restricted Payment to any Credit
Party, (b) pay any indebtedness owed to any Credit Party, (c) make
any loan or advance to any Credit Party or any investment in any Credit Party,
or (d) sell, lease or transfer any of its Property to any Credit Party
except, in each case, for restrictions (i) contained in the Nebraska Sub
Operating Agreement as in effect on the Closing Date or set forth in
resolutions of the membership committee of Nebraska Sub adopted on June 21,
2001, and March 10, 2003, copies of which were provided to Administrative
Agent prior to the Closing Date, (ii) arising under any Governmental
Requirement, (iii) set forth in a lease or license permitted pursuant to
the terms of the Financing Documents and entered into in the ordinary course of
business that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to such lease or license, or (iv) set
forth in the terms of any document or instrument evidencing any Permitted Liens
(or the Indebtedness secured thereby) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to
such Permitted Lien.


 


Section 7.18
Acquisitions; Creation of Subsidiaries. Create or acquire any Subsidiary or any
operating division of any other Person other than the purchase of inventory in


 


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the ordinary course of business and the purchase of
capital assets expressly permitted hereunder and the making of investments
permitted under Section 7.6.


 


Section 7.19
Restricted Accounts. Have more than $100,000 in cash in the aggregate at any time which is
not on deposit in an account with an Approved Depository Bank which is subject
to a Restricted Account Agreement other than (i) the Temporary Lockbox
Account at Bank One, NA to the extent permitted by Section 4.2
hereof and (ii) a Nebraska Sub payroll account.


 


Section 7.20
Certain Restriction on Activities of Parent. Allow Parent to (a) conduct any
business or operations, (b) own, lease, license or otherwise have the
right to use any Property other than the Equity of Borrower and Nebraska Sub, (c) incur
any liabilities or obligations to any Person other than its direct or indirect
parent or the Morgan Stanley Funds and other Indebtedness in an aggregate
outstanding principal amount not to exceed $5,000,000 at any time, or (d) employ
any employees except, in the case of clauses (a) and (d), as are directly
related to and required in connection with the ownership of the respective
Equity Interests.


 


Section 7.21
Fiscal Year.
Change its Fiscal Year.


 


Section 7.22
Hedging Agreements. Enter into any Hedging Agreement, except Hedging Agreements entered
into for the purpose of hedging against risks actually incurred by the Credit
Parties in the ordinary course of business.


 


Section 7.23
Management Fees.
No Credit Party shall pay any management, monitoring, service or similar fee or
payment by such Credit Party to any Affiliate of such Credit Party in an
aggregate amount exceeding in any Fiscal Year the remainder of (a) $500,000,
less (b) the aggregate amount of Restricted Payments made pursuant
to Section 7.5(b) (excluding Restricted Payments made pursuant
to Section 7.5(b) to pay travel and other costs reasonably
incurred in connection with board meetings held by Holdco and Holdco II); provided,
that, such fees or payments may not be permitted if a Default or
Event of Default shall be continuing, unless such fees or payments constitute
Exempt Management Fees; provided, further, that, the
payment of fees (i) for investment banking and advisory services actually
rendered by Affiliates of the Morgan Stanley Funds to any Credit Party in the
ordinary course of such Affiliates’ business and (ii) permitted for under
the Grain Supply Agreement dated May 6, 1998, by and between Nebraska Sub
and Aurora Cooperative Elevator Company and as in effect on the date hereof,
shall not be restricted pursuant to this Section 7.23.


 


Section 7.24
Acquisition of Equity in Nebraska Sub. Permit any Affiliate of any Credit Party
other than Parent or Borrower to acquire Equity of Nebraska Sub.


 


Section 7.25
No Amendment to Nebraska Sub Operating Agreement. Amend the Nebraska Sub Operating Agreement
without the prior approval of the Administrative Agent (such approval not to be
unreasonably withheld).


 


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ARTICLE 8

EVENTS OF DEFAULT


 


Upon the occurrence and
during the continuance of any of the following specified events (each an “Event of Default”):


 


Section 8.1
Payments.
Borrower shall fail to pay when due (including, but not limited to, any
mandatory prepayment required pursuant to Section 2.10) any
principal of or interest on any Revolving Credit Loan or any Revolving Credit
Note, or any Reimbursement Obligation or any fee or any other amount payable
hereunder or under the Fee Letter or any other Financing Document;


 


Section 8.2
Covenants Without Notice. Any Credit Party shall fail to observe or perform any covenant
or agreement contained in Article 4, Section 6.1, Section 6.5,
Section 6.7, Section 6.10 or Article 7;


 


Section 8.3
Other Covenants.
Any Credit Party shall fail to observe or perform any covenant or
agreement contained in this Agreement, other than those referred to in Section 8.1
or Section 8.2 and, if capable of being remedied, such failure
shall remain unremedied for ten (10) days after the earlier of (a) any
Credit Party’s obtaining knowledge thereof, or (b) written notice thereof
shall have been given to Borrower or any Guarantor by any Lender, the Issuing
Bank or the Administrative Agent;


 


Section 8.4
Other Financing Document Obligations. Default is made in the due observance or
performance by any Obligated Party of any of the covenants or agreements
contained in any Financing Document other than this Agreement, and such default
continues unremedied beyond the expiration of any applicable grace period which
may be expressly allowed under such Financing Document;


 


Section 8.5
Representations.
Any representation, warranty or statement made or deemed to be made by any
Obligated Party or any of any other Obligated Party’s officers herein or in any
other Financing Document, or in any certificate, request or other document
furnished pursuant to or under this Agreement or any other Financing Document,
shall have been incorrect in any material respect as of the date when made or
deemed to be made;


 


Section 8.6
Non-Payments of Other Indebtedness and Under Hedging  Agreements. Any Credit Party shall fail to make any
payment or payments (i) of principal of or interest on any Indebtedness of
such Credit Party (other than the Lender Indebtedness) or under any Hedging
Agreement in excess of $1,000,000 in the aggregate when due (whether at stated
maturity, by acceleration, on demand or otherwise) after giving effect to any
applicable grace period, or (ii) under any Hedging Agreement entered into
in compliance with Section 7.22;


 


Section 8.7
Defaults Under Hedging and Other Agreements. Any Credit Party shall fail to observe or
perform any covenant or agreement contained in any Hedging Agreement or in
agreement(s) or instrument(s) relating to Indebtedness (other than Lender
Indebtedness) of any Credit Party of $1,000,000 or more in the aggregate within
any applicable grace, notice or cure period, or any other event shall occur, if
the effect of such failure or other event is to accelerate, or, with respect to
any Credit Party, to permit the holder of such Indebtedness or any


 


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other Person to accelerate, the maturity of
$1,000,000 or more in the aggregate of such Indebtedness; or $1,000,000 or more
in the aggregate of any such Indebtedness shall be, or if as a result of such
failure or other event may be, required to be prepaid (other than
prepayments resulting from excess cash flow) in whole or in part prior to
its stated maturity;


 


Section 8.8
Bankruptcy.
Any Obligated Party shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in
effect, or any successor thereto (the “Bankruptcy
Code”); or an involuntary case is commenced against any
Obligated Party and the petition is not controverted within ten (10) days,
or is not stayed or dismissed within sixty (60) days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of any
Obligated Party; or any Obligated Party commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to any Obligated Party or there is
commenced against any Obligated Party any such proceeding which remains
unstayed or undismissed for a period of sixty (60) days; or any Obligated Party
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Obligated Party makes
a general assignment for the benefit of creditors; or any Obligated Party shall
fail to pay, or shall state in writing that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or any Obligated Party
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate or other organizational
action is taken by any Obligated Party for the purpose of effecting any of the
foregoing;


 


Section 8.9
Money Judgment.
Final orders for the payment of money involving in the aggregate at any time a
liability (net of any insurance proceeds or indemnity payments actually received
in respect thereof prior to or within sixty (60) days from the entry thereof,
or to be received in respect thereof in the event any appeal thereof shall be
unsuccessful) of more than $1,000,000 or that would otherwise have a Material
Adverse Effect, shall be rendered against any Credit Party and such judgment or
order shall continue unsatisfied in accordance with the terms of such judgment
or order (in the case of a money judgment) and in effect for a period of thirty
(30) days during which execution shall not be effectively stayed or deferred
(whether by action of a court, by agreement or otherwise);


 


Section 8.10
Discontinuance of Business. Except as permitted by Section 7.4, any Credit Party
shall cease to be principally engaged in the businesses and operations in which
such Credit Party was principally engaged on the Closing Date;


 


Section 8.11
Financing Documents. Any Material Provision of any of the Financing Documents after
delivery thereof shall for any reason, except to the extent permitted by the
terms thereof, cease to be in full force and effect and valid, binding and
enforceable (except as enforceability may be limited as stated in Section 5.3)
in accordance with its terms, or, in the case of any of the Security
Instruments, cease to create a valid and perfected Lien of the priority
contemplated thereby on any of the collateral purported to be covered thereby,
or any Obligated Party shall so state in writing. As used in this Section 8.11,
“Material Provision” shall
mean (a) with respect to this Agreement or the Revolving Credit Notes, any
material term, covenant, or agreement set forth therein, and (b) with
respect to any other Financing Document, any provision


 


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if the validity and enforceability thereof is
necessary for such Financing Document to accomplish its stated, or clearly
intended, purpose or otherwise necessary in order for Administrative Agent or
any Lender to enforce any material right or remedy under any Financing
Document;


 


Section 8.12
Change of Control.
The occurrence of a Change of Control;


 


Section 8.13
Material Adverse Change. A Material Adverse Change shall occur; or


 


Section 8.14
Breach or Default Under Purchase Agreement. Either Holdco, Seller or Williams breaches
or defaults in the observance or performance of any material covenant,
agreement, representation or warranty contained in the Purchase Agreement and
such breach or default (a) could reasonably be expected to have a Material
Adverse Effect, and (b) continues unremedied or unwaived for a period of
thirty (30) consecutive days.


 


then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the
Administrative Agent, upon the written or telex request of the Required Lenders,
shall, by written notice to Borrower and Guarantors, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Lender or the holder of any Revolving Credit Note, to enforce its claims
against Borrower and Guarantors: (a) declare the Revolving Credit
Commitment and other lending obligations, if any, terminated, whereupon the
Revolving Credit Commitment and other lending obligations, if any, of each
Lender shall terminate immediately; or (b) declare the entire principal
amount of and all accrued interest on all Lender Indebtedness then outstanding
to be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest, notice of protest or dishonor, notice of
acceleration, notice of intent to accelerate or other notice of any kind, all
of which are hereby expressly waived by Borrower and Guarantors, and thereupon
take such action as it may deem desirable under and pursuant to the
Financing Documents; provided, that, if an Event of Default
specified in Section 8.8 shall occur, the result which would occur
upon the giving of written notice by the Administrative Agent to Borrower and
Guarantors, as specified in clauses (a) and (b) above, shall occur
automatically without the giving of any such notice; or (c) if any Letter
of Credit shall then be outstanding, demand Cover which Borrower shall
immediately pay to the Administrative Agent for deposit in a cash collateral
account maintained by the Administrative Agent.


 


ARTICLE 9

THE ADMINISTRATIVE AGENT


 


Section 9.1
Appointment of Administrative Agent. Each Lender (and each Secured Affiliate by
and through their affiliated Lenders) and the Issuing Bank hereby designates
JPMorgan Chase Bank as Administrative Agent to act as herein specified and as
specified in the other Financing Documents. Each Lender (and each Secured
Affiliate by and through their affiliated Lenders) and the Issuing Bank hereby
irrevocably authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the Revolving Credit Notes, and
the other Financing Documents and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Administrative Agent by the terms hereof and thereof and such other powers
as are reasonably incidental


 


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thereto. The Administrative Agent may perform any
of its duties hereunder by or through its agents or employees.


 


Section 9.2
Limitation of Duties of Administrative Agent. The Administrative Agent shall have no
duties or responsibilities except those expressly set forth with respect to the
Administrative Agent in this Agreement and as specified in the other Financing
Documents. Neither the Administrative Agent nor any of the officers, directors,
employees or agents of the Administrative Agent shall be liable for any action
taken or omitted by it as such hereunder or in connection herewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement, expressed
or implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement except as
expressly set forth herein.


 


Section 9.3
Lack of Reliance on the Administrative Agent.


 


(a) Independent Investigation.
Independently and without reliance upon the Administrative Agent, each Lender,
to the extent it deems appropriate, has made and shall continue to make (1) its
own independent investigation of the financial condition and affairs of the
Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (2) its own appraisal of the creditworthiness of
the Credit Parties, and, except as expressly provided in this Agreement, and
the other Financing Documents, the Administrative Agent shall have no
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the consummation of the transactions
contemplated herein or at any time or times thereafter.


 


(b) Administrative Agent Not Responsible.
The Administrative Agent shall not be responsible to any Lender or the Issuing
Bank for any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement, the
Revolving Credit Notes, the Letters of Credit or the other Financing Documents
or the financial condition of any Credit Party or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Revolving Credit Notes or the
other Financing Documents, or the financial condition of any Credit Party, or
the existence or possible existence of any Default or Event of Default.


 


Section 9.4
Certain Rights of the Administrative Agent. If the Administrative Agent shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement, the Revolving
Credit Notes and the other Financing Documents, the Administrative Agent shall
be entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required
Lenders; and the Administrative Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against the Administrative Agent as a
result of the Administrative


 


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Agent acting or refraining from acting under this
Agreement, the Revolving Credit Notes and the other Financing Documents in
accordance with the instructions of the Required Lenders, or, to the extent
required by Section 10.2, all of the Lenders.


 


Section 9.5
Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other documentary teletransmission or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. The Administrative Agent may consult
with legal counsel (including counsel for any Credit Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.


 


Section 9.6
Indemnification of Administrative Agent. To the extent the Administrative Agent is
not reimbursed and indemnified by the Credit Parties, each Lender will
reimburse and indemnify the Administrative Agent on a pro-rata basis, for and
against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in
performing its duties hereunder, in any way relating to or arising out of this
Agreement and by reason of the ordinary negligence of the Administrative Agent;
provided, that, no Lender shall be liable to the Administrative
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from, as to the Administrative Agent, the Administrative Agent’s
gross negligence or willful misconduct.


 


Section 9.7
Administrative Agent in its Individual Capacity. With respect to its obligations under this
Agreement, the Revolving Credit Loans made by it and the Revolving Credit Notes
issued to it, the Administrative Agent shall have the same rights and powers
hereunder as any other Lender or holder of a Revolving Credit Note and may exercise
the same as though it were not performing the duties, if any, specified herein;
and the terms “Lenders,” “Required Lenders,” “holders of Revolving Credit Notes”
or any similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with any Credit
Party or any Affiliate of any Credit Party as if it were not performing the
duties, if any, specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.


 


Section 9.8
May Treat Lender as Owner. Borrower, Parent, the Administrative Agent and the Issuing Bank may deem
and treat each Lender as the owner of such Lender’s Revolving Credit Note for
all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the owner of a Revolving Credit
Note shall be conclusive and binding on any subsequent owner, transferee or
assignee of such Revolving Credit Note or any promissory note or notes issued
in exchange therefor.


 


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Section 9.9
Successor Administrative Agent.


 


(a) Administrative Agent Resignation. The
Administrative Agent may resign at any time by giving written notice
thereof to the Lenders, the Issuing Bank and Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right, upon five
days’ notice to Borrower, to appoint a successor Administrative Agent (to act
in the same capacity as the resigning or removed Administrative Agent), subject
to the approval of Borrower, such approval not to be unreasonably withheld. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within thirty (30) days
after the retiring Administrative Agent’s giving of notice of resignation or
the Required Lenders’ removal of the retiring Administrative Agent, then, upon
five days’ notice to Borrower, the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent (subject to approval
of Borrower, such approval not to be unreasonably withheld), which shall be a
bank which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or of any State
thereof, or any Affiliate of such bank, having a combined capital and surplus
of at least $250,000,000.


 


(b) Rights, Powers, etc. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article 9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was an Administrative Agent under this Agreement.


 


ARTICLE 10

MISCELLANEOUS


 


Section 10.1
Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including, telecopy or similar teletransmission or writing) and shall
be given to such party at its address or telecopy number set forth on the
signature pages hereof or such other address or telecopy number as such
party may hereafter specify by notice to the Administrative Agent and
Borrower. Each such notice, request or other communication shall be effective (a) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or (b) if given
by any other means (including, but not limited to, by air courier), when delivered
at the address specified in this Section 10.1; provided, that,
notices to the Administrative Agent shall not be effective until actually
received. Any notice to be given to Borrower or to all Credit Parties pursuant
to this Agreement or any of the other Financing Documents may be given to
Borrower or to any other Credit Party, and if given to Borrower or to any
Credit Party in the manner set forth in this Section 10.1, such
notice shall be deemed to be effective notice to all Credit Parties for purposes
of this Agreement.


 


Section 10.2
Amendments and Waivers. Neither this Agreement nor any other Financing Document, nor any
terms hereof or thereof, may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.2. The
Required Lenders


 


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may, or, with the written consent of the Required
Lenders, the Administrative Agent shall, from time to time, (x) enter into with
the Credit Parties, written amendments, supplements or modifications hereto and
to the other Financing Documents to which they are a party for the purpose of
adding any provisions to this Agreement or to the other Financing Documents or
changing in any manner the rights or obligations of the Lenders or the Credit
Parties hereunder or thereunder or (y) waive at a Credit Party’s request, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Financing Documents to which such
Credit Party is a party or any Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification
shall:


 


(a) reduce
the amount or extend the scheduled date of maturity of any Revolving Credit
Loan or any Reimbursement Obligation or of any scheduled installment thereof or
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or modify any provision that provides for
the ratable sharing by the Lenders of any payment or prepayment of Lender
Indebtedness to provide for a non-ratable sharing thereof or extend the
expiration date of any Lender’s Revolving Credit Commitment or amend, modify or
waive any provision of Section 2.19, in each case without the prior
written consent of each Lender directly affected thereby;


 


(b) change
the currency in which any Revolving Credit Loan or Reimbursement Obligation is
payable or amend, modify or waive any provision of this Section 10.2
or reduce the percentage specified in the definition of Required Lenders, or
increase the amount of any Lender’s Revolving Credit Commitment, in each case
without the written consent of all of the Lenders;


 


(c) release
any material part of the Collateral, without the written consent of all of
the Lenders, except as expressly permitted hereby, provided, that,
the Administrative Agent shall release (without consent from the Lenders) any
Collateral sold, transferred or otherwise disposed of as permitted by Section 7.4
as such Section 7.4 may be amended from time to time in
accordance with this Agreement;


 


(d) amend,
modify or waive (1) any Letter of Credit Liability without the written
consent of the Issuing Bank or (2) any Letter of Credit without the
consent of each Lender if such Letter of Credit, after giving effect to such
amendment, modification or waiver, would no longer satisfy the requirements
hereof if such Letter of Credit was being issued ab initio at such time, provided, that, in all
cases other than clauses (1) or (2), only the consent of the Issuing Bank
shall be required to amend, modify or waive any Letter of Credit;


 


(e) waive
any default in the payment of principal or interest hereunder without the
written consent of all of the Lenders;


 


(f) amend
(i) the definitions of Borrowing Base, Eligible Account Advance Percentage
or Eligible Unbilled Account Advance Percentage, in any case, to increase the
percentages provided therein, or (ii) any of the components (including
related definitions) of the Borrowing Base not already identified in clause (i) preceding
which results in an increase to the Borrowing Base, without the written consent
of all of the Lenders; or


 


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(g) amend,
modify or waive any provision of Article 9 without the written
consent of the Administrative Agent.


 


Any waiver and any
amendment, supplement or modification pursuant to this Section 10.2
shall apply to each of the Lenders and shall be binding upon each Credit Party,
the Lenders, the Administrative Agent and all future holders of any Revolving
Credit Note. In the case of any waiver, the Credit Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default, or impair any right consequent thereon.


 


Section 10.3
No Waiver; Remedies Cumulative. No failure or delay on the part of any Credit Party or the
Administrative Agent or any Lender or any holder of any Revolving Credit Note
in exercising any right or remedy under this Agreement or any other Financing
Document to which it is a party and no course of dealing between any Credit
Party and the Administrative Agent or any Lender or any holder of any Revolving
Credit Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy under the Revolving Credit Notes, this
Agreement or any other Financing Document preclude any other or further
exercise thereof or the exercise of any other right or remedy under the
Revolving Credit Notes, 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 Credit Party, the Administrative Agent or
any Lender would otherwise have. No notice to or demand on any Credit Party not
required under the Revolving Credit Notes, this Agreement or any other
Financing Document in any case shall entitle any Credit Party 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 Lenders to any other or
further action in any circumstances without notice or demand.


 


Section 10.4
Payment of Expenses, Indemnities, etc. Borrower and Parent agree to (and shall be
jointly and severally liable for):


 


(a) Expenses. Whether or not the
transactions hereby contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent and the Issuing
Bank in the administration (both before and after the execution hereof and
including advice of counsel for the Administrative Agent as to the rights and
duties of the Administrative Agent and the Lenders with respect thereto) of,
and in connection with the preparation, execution, syndication and delivery of,
recording or filing of, any amendment, waiver or consent under, preservation of
rights under, enforcement of, and, during the continuance of a Default,
renegotiation or restructuring of this Agreement, the Revolving Credit Notes,
and the other Financing Documents (including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative Agent and,
after Default, for any of the Lenders, in the case of Lenders, incurred with
respect to any such preservation of rights under, enforcement of, renegotiation
or restructuring of this Agreement, the Revolving Credit Notes, and the other
Financing Documents) and promptly reimburse the Administrative Agent for all
amounts expended, advanced, or incurred by the Administrative Agent or the
Lenders to satisfy any obligation of any Credit Party under this Agreement or any
other Financing Document;


 


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(b) INDEMNIFICATION. INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND EACH LENDER, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS
AGAINST, AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, ANY AND
ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR
INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF ANY KIND
OR NATURE WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO)
AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (1) ANY ACTUAL OR
PROPOSED USE BY BORROWER OF THE PROCEEDS OF ANY OF THE REVOLVING CREDIT LOANS;
OR (2) ANY OTHER ASPECT OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES, AND
THE FINANCING DOCUMENTS, INCLUDING, BUT NOT LIMITED TO, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL (INCLUDING ALLOCATED COSTS OF INTERNAL COUNSEL) AND
ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM, AND INCLUDING ALL ACTIONS,
SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES),
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF
ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH
LENDER, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF
THIS SECTION 10.4(b) SHALL NOT APPLY TO ANY ACTION, SUITS,
PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS,
COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT, BUT ONLY TO THE
EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY
SEEKING INDEMNIFICATION; AND


 


(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE
ADMINISTRATIVE AGENT, THE ISSUING BANK, EACH LENDER, AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE REVOLVING CREDIT
LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES
(WHICH IN EACH CASE ARISE AS A RESULT OF OR IN CONNECTION WITH THE REVOLVING
CREDIT LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING BY
REASON OF THE


 


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ORDINARY NEGLIGENCE OF THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS, AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS
OF EACH OF THE FOREGOING (1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO ANY
CREDIT PARTY OR ANY OF THEIR RESPECTIVE PROPERTIES, INCLUDING, WITHOUT
LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR
RESPECTIVE PROPERTIES, (2) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY
ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO SUCH CREDIT PARTY, (3) DUE TO PAST OWNERSHIP BY ANY CREDIT
PARTY OR ANY OF ITS SUBSIDIARIES OF ANY OF THEIR RESPECTIVE PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES WHICH, THOUGH LAWFUL AND FULLY
PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (4) ARISING
FROM, DUE TO, OR AS A RESULT OF, THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR
OPERATED BY ANY CREDIT PARTY, OR (5) ARISING FROM, DUE TO, OR AS A RESULT
OF, ANY OTHER ENVIRONMENTAL CONDITION OR ANY ENVIRONMENTAL LAW IN CONNECTION
WITH THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OTHER FINANCING
DOCUMENT; PROVIDED, HOWEVER, NO INDEMNITY OR HOLD HARMLESS SHALL BE AFFORDED
UNDER THIS SECTION 10.4(c) (A) IN RESPECT OF ANY PROPERTY
FOR ANY LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES ARISING PRIMARILY FROM THE ACTS OR
OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR THEIR SUCCESSORS OR
ASSIGNS DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS
SHALL HAVE OBTAINED ACTUAL PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
OTHERWISE) AND (B) FOR ANY LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES RESULTING FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING
INDEMNIFICATION; AND


 


(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING PROVISIONS, EACH OF
BORROWER AND PARENT HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING
AGAINST ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 10.4 ANY
DEMAND, CLAIM, COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER
HAVE OR ACCRUE (WHICH ARISE AS A RESULT OF THE REVOLVING CREDIT LOANS, THE
LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING FROM (1) ANY
ENVIRONMENTAL LAW NOW OR HEREAFTER ENACTED (INCLUDING THOSE APPLICABLE TO ANY
CREDIT PARTY) UNLESS THE ACTS OR OMISSIONS OF ANY SUCH INDEMNIFIED PERSON OR
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE PRIMARY CAUSE OF THE
CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY ACTION OR
LAWSUIT, (2) THE PRESENCE, USE, RELEASE, STORAGE,


 


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TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY
UNLESS THE ACTS OR OMISSIONS OF ANY SUCH INDEMNIFIED PERSON OR THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS ARE THE PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE
TO SUCH DEMAND, CLAIM, COST RECOVERY ACTION OR LAWSUIT, OR (3) THE BREACH
OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY ENVIRONMENTAL LAW OR
ENVIRONMENTAL COVENANT APPLICABLE TO ANY CREDIT PARTY, UNLESS THE ACTS OR
OMISSIONS OF SUCH INDEMNIFIED PERSON OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS
ARE THE PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM,
COST RECOVERY ACTION OR LAWSUIT.


 


If and to the extent that the obligations of
Borrower and Parent under this Section 10.4 are unenforceable for
any reason, Borrower and Parent hereby agree to make the maximum contribution
to the payment and satisfaction of such obligations which is permissible under
applicable law. Borrower’s and Parent’s obligations under this Section 10.4
shall survive any termination of this Agreement and the payment of the
Revolving Credit Notes.


 


Section 10.5
Right of Setoff.
In addition to, and not in limitation of, all rights of offset that any Lender
or the Issuing Bank may have under applicable law, each Lender or other
holder of a Revolving Credit Note, or any other Lender Indebtedness, shall,
upon the occurrence of any Event of Default and at any time during the
continuance thereof and whether or not such Lender, the Issuing Bank or such
holder has made any demand or Borrower’s obligations are matured, have the
right at any time and from time to time, without notice to any Credit Party
(any such notice being expressly waived by each Credit Party a party hereto) 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 the Issuing Bank to or for the credit or the account of any
Credit Party against any and all of the Lender Indebtedness owing to such
Lender or the Issuing Bank then outstanding, subject to the provisions of Section 2.19.


 


Section 10.6
Benefit of Agreement. The Revolving Credit Notes, this Agreement and the other Financing
Documents shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, provided,
that, neither Borrower nor Parent may assign or transfer any of its
interest hereunder or thereunder without the prior written consent of each
Lender.


 


Section 10.7
Successors and Assigns; Participations and Assignments.


 


(a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that no Credit Party a party hereto 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 any such
Credit Party without such consent shall be null and void). Except as otherwise
expressly provided herein, nothing in this Agreement shall be construed to
confer upon


 


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any Person (other than the parties hereto, and their
respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement.


 


(b) Any
Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Revolving Credit Commitments and the Revolving Credit Loans at the time owing
to it); provided, that, (1) except in the case of an
assignment to a Lender or a Lender Affiliate or an assignment by a Lender in
connection with the sale of all or substantially all of the assets of such
Lender, Borrower and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Revolving Credit Commitment or any Lender’s
obligations in respect of its Revolving Credit Exposure, the Issuing Bank which
has outstanding a Letter of Credit) must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld), (2) except
in the case of an assignment to a Lender or a Lender Affiliate or an assignment
of the entire remaining amount of the assigning Lender’s Revolving Credit
Commitment, the amount of the Revolving Credit Commitment of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of Borrower
and the Administrative Agent otherwise consent, (3) each partial
assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement, (4) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee of $3,500, except in the case of an assignment to a Lender Affiliate, in
which case no processing and recordation fee shall be payable, and (5) the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire in a form supplied by the
Administrative Agent; and provided further that any consent of Borrower
otherwise required under this Section 10.7(b) shall not be
required if an Event of Default has occurred and is continuing. Notwithstanding
the foregoing, at no time shall the aggregate amount of the Administrative
Agent’s share, as a Lender, of the Revolving Credit Commitments be less than
any other Lender’s share of the Revolving Credit Commitments. Subject to
acceptance and recording thereof pursuant to Section 10.7(d), from
and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Section 2.17, Section 2.19,
Section 2.21 and Section 10.4). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 10.7(b) shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 10.7(e).


 


(c) The
Administrative Agent, acting for this purpose as an agent of Borrower, shall
maintain at one of its offices in New York, New York a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Credit Commitment of, and principal
amount of the Revolving Credit Loans and Reimbursement Obligations owing to,
each Lender pursuant to the


 


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terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and Borrower, the Administrative Agent, the Issuing Bank
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.


 


(d) Upon
its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire in a form supplied by the Administrative Agent (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in Section 10.7(b) and any written consent to
such assignment required by Section 10.7(b), the Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this Section 10.7(d).


 


(e) Any
Lender may, without the consent of any Credit Party, the Administrative Agent
or the Issuing Bank, sell participations to one or more banks or other entities
(a “Participant”) in all or
a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Revolving Credit Commitment and the
Revolving Credit Loans and Reimbursement Obligations owing to it); provided
that (1) such Lender’s obligations under this Agreement shall remain
unchanged, (2) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (3) each Credit
Party, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided, that, such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in Section 10.2(a) or
Section 10.2(b) that affects such Participant. Subject to this
Section 10.7(e), each Credit Party a party hereto agrees that each
Participant shall be entitled to the benefits of Section 2.16, Section 2.18
and Section 2.20 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.7(b). To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.5 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.19 as though it were
a Lender.


 


(f) A
Participant shall not be entitled to receive any greater payment under Section 2.18
or Section 2.20 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.20 unless
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of Borrower, to comply with Section 2.20(f) as
though it were a Lender.


 


(g) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such
Lender, including


 


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any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section 10.7 shall not apply to any
such pledge or assignment of a security interest; provided, that,
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.


 


(h) Each
Credit Party a party hereto authorizes each Lender to disclose to any
participant or assignee (each, a “Transferee”)
and any prospective Transferee any and all information in such Lender’s
possession concerning such Credit Party and their Affiliates which has been
delivered to such Lender by or on behalf of such Credit Party pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of such
Credit Party in connection with such Lender’s credit evaluation of the Credit
Parties and their Affiliates prior to becoming a party to this Agreement. No
assignment or participation made or purported to be made to any Transferee
shall be effective without the prior written consent of Borrower if it would
require it to make any filing with any Governmental Authority or qualify any
Revolving Credit Loan or Revolving Credit Note under the laws of any jurisdiction,
and Borrower shall be entitled to request and receive such information and
assurances as it may reasonably request from any Lender or any Transferee
to determine whether any such filing or qualification is required or whether
any assignment or participation is otherwise in accordance with applicable law.


 


Section 10.8
Governing Law; Submission to Jurisdiction; etc.


 


(a) Governing Law. This Agreement and the
rights and obligations of the parties hereunder and under the Revolving Credit
Notes 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.


 


(b) Submission to Jurisdiction. Any legal
action or proceeding with respect to this Agreement, the Revolving Credit 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 Credit Party a party
hereto hereby accepts for itself and in respect of its Property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each
Credit Party a party hereto 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. To the maximum
extent allowed by applicable law, each Credit Party a party hereto, the
Administrative Agent, the Issuing Bank and the Lenders (1) irrevocably and
unconditionally waive trial by jury in any legal action or proceeding relating
to any Financing Document and for any counterclaim therein; (2) irrevocably
waive 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) certify 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 waivers; and (4) acknowledge that it has
been induced to enter into this Agreement,


 


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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 10.8.


 


(d) Service of Process. Nothing herein
shall affect the right of the Administrative Agent or any Lender or any holder
of a Revolving Credit Note to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any Credit
Party in any other jurisdiction.


 


Section 10.9
Independent Nature of Lenders’ Rights. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement,
and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.


 


Section 10.10
Invalidity. In
the event that any one or more of the provisions contained in the Revolving
Credit Notes, this Agreement or in any other Financing Document shall, for any
reason, be held invalid, illegal or unenforceable in any respect, (a) each
Credit Party a party hereto agrees that such invalidity, illegality or unenforceability
shall not affect any other provision of the Revolving Credit Notes, this
Agreement or any other Financing Document and (b) each Credit Party a
party hereto 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 10.11
Renewal, Extension or Rearrangement. All provisions of this Agreement and of any
other Financing Documents relating to the Revolving Credit Notes or other
Lender Indebtedness shall apply with equal force and effect to each and all
promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of
the Lender Indebtedness originally represented by the Revolving Credit Notes,
or of any part of such other Lender Indebtedness.


 


Section 10.12
Confidentiality.


 


(a) Each
of the Administrative Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (1) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (2) to the extent
requested by any regulatory authority, (3) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (4) to
any other party to this Agreement, (5) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder, (6) subject to a written
agreement containing provisions substantially the same as those of this Section 10.12,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (7) with
the consent of the Credit Party to which such information applies or (8) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 10.12 or (ii) becomes available to
the Administrative Agent, the Issuing Bank or any


 


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Lender on a non-confidential basis from a source
other than a Credit Party. For the purposes of this Section 10.12, “Information”
shall mean all information received from any Credit Party relating to a Credit
Party or its business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential
basis prior to disclosure by a Credit Party; provided, that, in the case of information
received from any Credit Party after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section 10.12
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information.


 


(b) Notwithstanding
Section 10.12(a) or any other express or implied agreement,
arrangement or understanding to the contrary, each of parties hereto agrees
that, from the commencement of discussions with respect to any transaction
described in any Financing Document, each of the parties (and each of their
respective employees, representatives, or agents) is permitted to disclose to
any and all persons, without limitation of any kind, the U.S. federal income
tax treatment and U.S. federal income tax structure of any transaction
described in any Financing Document and all materials of any kind (including
opinions or other tax analyses) that are provided to any party related to such
U.S. federal income tax treatment and U.S. federal income tax structure.


 


Section 10.13
Interest. It
is the intention of the parties hereto to conform strictly to usury laws
applicable to the Administrative Agent, the Issuing Bank and the Lenders
(collectively, the “Financing Parties”)
and the Closing Transactions. Accordingly, if the Closing Transactions would be
usurious as to any Financing Party under laws applicable to it, then,
notwithstanding anything to the contrary in the Revolving Credit Notes, this
Agreement or in any other Financing Document or agreement entered into in
connection with the Closing Transactions or as security for the Revolving
Credit Notes, it is agreed as follows: (a) the aggregate of all
consideration which constitutes interest under law applicable to any Financing
Party that is contracted for, taken, reserved, charged or received by such
Financing Party under the Revolving Credit Notes, this Agreement or under any
of such other Financing Documents or agreements or otherwise in connection with
the Closing Transactions shall under no circumstances exceed the maximum amount
allowed by such applicable law, (b) in the event that the maturity of the
Revolving Credit Notes is accelerated for any reason, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Financing Party may never include
more than the maximum amount allowed by such applicable law, and (c) excess
interest, if any, provided for in this Agreement or otherwise in connection
with the Closing Transactions shall be canceled automatically by such Financing
Party and, if theretofore paid, shall be credited by such Financing Party on
the principal amount of Borrower’s Indebtedness to such Financing Party (or, to
the extent that the principal amount of Borrower’s Indebtedness to such
Financing Party shall have been or would thereby be paid in full, refunded by
such Financing Party to Borrower). The right to accelerate the maturity of the
Revolving Credit Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Financing Parties do not intend to collect any unearned interest in the event
of acceleration. All sums paid or agreed to be paid to the Financing Parties
for the use, forbearance or detention of sums included in the Lender Indebtedness
shall, to the extent permitted by law applicable to such Financing Party, be


 


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amortized, prorated, allocated and spread throughout
the full term of the Revolving Credit Notes until payment in full so that the
rate or amount of interest on account of the Lender Indebtedness does not
exceed the applicable usury ceiling, if any. As used in this Section 10.13,
the terms “applicable law” or “laws applicable to any Financing Party” shall
mean the law of any jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement, or law of the United States
of America applicable to any Financing Party and the Closing Transactions which
would permit such Financing Party to contract for, charge, take, reserve or
receive a greater amount of interest than under such jurisdiction’s law.


 


Section 10.14
Entire Agreement.
The Revolving Credit Notes, this Agreement and the other Financing Documents
embody the entire agreement and understanding between or among the
Administrative Agent, the Issuing Bank or the Lenders and the other respective
parties hereto and thereto and supersede all prior agreements and
understandings between or among 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 or among the parties.


 


Section 10.15
Attachments.
The exhibits, schedules and annexes attached to this Agreement are incorporated
herein and shall be considered a part of this Agreement for the purposes
stated herein, except that in the event of any conflict between any of the
provisions of such exhibits and the provisions of this Agreement, the provisions
of this Agreement shall prevail.


 


Section 10.16
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.


 


Section 10.17
Survival of Indemnities. The obligations of each Credit Party a party hereto under Section 2.16,
Section 2.18, Section 2.20 and Section 10.4
shall survive the payment in full of the Revolving Credit Loans and the Letter
of Credit Liabilities.


 


Section 10.18
Headings Descriptive. The headings of the several sections and subsections of this
Agreement, and the table of contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.


 


Section 10.19
Satisfaction Requirement. If any agreement, certificate, instrument or other writing, or any
action taken or to be taken, is by the terms of this Agreement required to be
satisfactory to any party, the determination of such satisfaction shall be made
by such party in its sole and exclusive judgment exercised reasonably and in
good faith.


 


Section 10.20
Exculpation Provisions. Each of the parties hereto specifically agrees that it has a duty to
read this Agreement and the other Financing Documents and agrees that it is
charged with notice and knowledge of the terms of this Agreement and the other
Financing Documents; that it has in fact read this Agreement and is fully
informed and has full notice and knowledge of the terms, conditions and effects
of this Agreement; that it has been represented by legal counsel of its choice
throughout the negotiations preceding its execution of this Agreement


 


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and the other Financing Documents; and has received
the advice of its attorneys in entering into this Agreement and the other
Financing Documents; and that it recognizes that certain of the terms of this
Agreement and the other Financing Documents result in one party assuming the
liability inherent in some aspects of the Closing Transactions and relieving
the other party of its responsibility for such liability. Each party hereto
agrees and covenants that it will not contest the validity or enforceability of
any exculpatory provision of this Agreement and the other Financing Documents
on the basis that the party had no notice or knowledge of such provision or
that the provision is not “conspicuous.”


 


Section 10.21
Secured Affiliate. For purposes of this Agreement and all other Financing Documents
(other than applicable Hedging Agreements or Cash Management Agreements), if a
Secured Affiliate of a Lender has entered into one or more Hedging Agreements
or Cash Management Agreements with any Credit Party, then to the extent that
such Secured Affiliate has rights against or is owed obligations by (or if the
affiliated Lender, rather than the Secured Affiliate, were the counter-party to
the applicable Hedging Agreement or Cash Management Agreement, such rights or
obligations that such Lender has) the Credit Parties hereunder or under any
other Financing Document (other than applicable Hedging Agreements or Cash
Management Agreements), such affiliated Lender shall be the agent and attorney-in-fact
for such Secured Affiliate with regard to any such rights and obligations, or
deemed rights and obligations, as if such Lender were the counter-party to the
applicable Hedging Agreement or Cash Management Agreement including, but not
limited to, the following: (a) all distributions or payments in respect of
Collateral owing to such Secured Affiliate shall be distributed or paid to such
Lender, (b) all representations, statements or disclaimers made herein or
in any Financing Document by or to such Lender shall be deemed to have been
made by or to such Secured Affiliate, and (c) all obligations incurred by
such Lender that would have been incurred by the Secured Affiliate if it were a
party hereto (including, but not limited to, obligations under Section 9.6)
shall be the obligations of such Lender, and such Lender, as the agent and
attorney-in-fact of its Secured Affiliate, will make any and all payments owing
to the Administrative Agent with respect to such obligations or deemed
obligations of its Secured Affiliate. Each such Lender represents, warrants and
covenants to and with the Administrative Agent that such Lender has, or at all
applicable times will have, full power and authority to act as agent and
attorney-in-fact for its Secured Affiliate. Under no circumstance shall any
Secured Affiliate have any voting rights hereunder and the voting rights of any
affiliated Lender shall not be increased by virtue of the obligations owing to
any such Secured Affiliate.


 


[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK.]


 


104

















 


IN WITNESS WHEREOF, the
parties hereto have caused this instrument to be duly executed as of the date
first above written.


 


	
  BORROWER:

  	
  WILLIAMS ETHANOL SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1300 South Second Street

  Pekin, Illinois 61554

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopy:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARENT:

  	
  WILLIAMS BIO-ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1300 South Second Street

  Pekin, Illinois 61554

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telecopy:

  	
   

  	
   

  
								



 


[Signature Page]


 

















 


	
  ADMINISTRATIVE AGENT, ISSUING

  	
   

  
	
  BANK AND THE LENDERS:

  	
  JPMORGAN CHASE BANK, individually as a

  
	
   

  	
  Lender, as the Issuing Bank and as Administrative

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  Address:

  	
  2200 Ross Avenue, 4th Floor

  Dallas, Texas 75201

  
	
   

  	
  Attention:

  	
  Christopher Capriotti

  
	
   

  	
  Telephone:

  	
  (214) 965-2035

  
	
   

  	
  Telecopy:

  	
  (214) 965-4731

  
	
   

  	
   

  



 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  Address:

  	
  One U.S. Bank Plaza

  7th & Washington, MC# SL-MO-T12M

  St. Louis, Missouri 63101

  
	
   

  	
  Attention:

  	
  Curtis Schrieber

  
	
   

  	
  Telephone:

  	
  (314) 418-2817

  
	
   

  	
  Telecopy:

  	
  (314) 418-8430

  



 


[Signature Page]


 

















 


	
   

  	
  FOOTHILL CAPITAL CORPORATION, as a

  
	
   

  	
  Lender  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  Address:

  	
  2450 Colorado Avenue

  Suite 3000W
Santa Monica, CA 90404

  
	
   

  	
  Attention:

  	
  Juan Barrera

  
	
   

  	
  Telephone:

  	
  (310) 453-7312

  
	
   

  	
  Telecopy:

  	
  (310) 453-7447

  
	
   

  	
   

  



 


	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,  

  
	
   

  	
  as a Lender  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  Address:

  	
  Two Lincoln Center

  5420 LBJ Freeway, Suite 200

  Dallas, Texas 75240

  
	
   

  	
  Attention:

  	
  Richard Hatley

  
	
   

  	
  Telephone:

  	
  (972) 455-1625

  
	
   

  	
  Telecopy:

  	
  (972) 455-1690

  



 


[Signature Page]


 

















 


ANNEX I


 


	
  Lender

  	
   

  	
  Revolving Credit

  Commitment

  	
   

  	
  Revolving Credit Percentage

  	
   

  
	
  JPMorgan Chase Bank

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  33.333

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  25.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Foothill Capital Corporation

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  25.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The CIT Group/Business Credit, Inc.

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  16.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  100

  	
  %

  



 


A-1














 


FIRST AMENDMENT TO CREDIT AGREEMENT


 


THIS FIRST AMENDMENT TO
CREDIT AGREEMENT (this “First Amendment”)
is executed as of the 19th day of March, 2004, by and among AVENTINE RENEWABLE
ENERGY, INC., a Delaware corporation (“Borrower”), AVENTINE
RENEWABLE ENERGY, LLC, a Delaware limited liability company (“Parent”), JPMorgan Chase Bank,
individually as a Lender, as the Issuing Bank and as the Administrative Agent,
and each of the other Lenders that is a signatory hereto.


 


WITNESSETH:


 


WHEREAS, Borrower, Parent,
the Administrative Agent and the Lenders are parties to that certain Credit
Agreement dated as of May 30, 2003 (as amended from time to time, the “Credit Agreement;” unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the meaning given such terms in the Credit
Agreement, including, to the extent applicable, after giving effect to this
First Amendment), pursuant to which the Lenders provide certain financing to
Borrower in accordance with the terms and conditions set forth therein; and


 


WHEREAS, Borrower and Parent
have requested that the Lenders (a) extend the Revolving Credit Maturity
Date to May 30, 2007, (b) amend the Borrowing Base to include a fixed
asset component, (c) permit a one-time cash dividend of up to $35,000,000
by Parent to its sole member and (d) amend certain provisions of the
Credit Agreement in connection therewith; and


 


WHEREAS, subject to the
terms and conditions set forth herein, the Lenders have agreed to Borrower’s and
Parent’s requests.


 


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. In reliance on the
representations, warranties, covenants and agreements contained in this First
Amendment, but subject to the satisfaction of each condition precedent
contained in Section 3 hereof, the Credit Agreement shall be
amended effective as of the date hereof in the manner provided in this Section 1.


 


1.1 Amended Definitions. The definitions of
“Borrowing Base,” “Borrowing Base Report” and “Revolving Credit Maturity Date”
contained in Section 1.1 of the Credit Agreement shall be amended to read
in full as follows:


 


“Borrowing Base” shall mean:


 


(a)                                  the Eligible Account Advance Percentage of
Eligible Accounts, plus


 


1

















 


(b)                                 the Eligible Unbilled Account Advance
Percentage of Eligible Unbilled Accounts, plus


 


(c)                                  the lesser of


 


(i)                                     85% of the Net Recovery Value of Eligible
Inventory, and  


 


(ii)                                  the sum of the following valued at the lower
of cost (determined on a weighted average cost basis) or market value as
determined in accordance with GAAP consistently applied: (A) 72% of
Eligible Finished Goods Inventory, (B) 65% of Eligible In-Transit
Inventory, and (C) 58% of Eligible Raw Materials Inventory, plus



 


(d)                                 the Fixed Asset Component in effect as of the
date for which the Borrowing Base is being calculated, minus  


 


(e)                                  any Availability Reserves then in effect.



 


The
Borrowing Base in effect under this Agreement at any time shall be the
Borrowing Base reflected on the most recent Borrowing Base Report delivered to
the Lenders pursuant to Section 3.1(h) or Section 6.10(g) subject
to (i) adjustments on a weekly basis to reflect increases or decreases in
the components of the Borrowing Base reflected in each of the Inventory
Designation Report, the Interim Account Report and the PACA Reserve Report
required pursuant to Section 6.10(g), (ii) the right of the
Administrative Agent or the Required Lenders to redetermine any component of
the Borrowing Base or the calculation thereof if and to the extent the Administrative
Agent or the Required Lenders believe, in good faith, such component or
calculation to be incorrect (any such redetermination made in good faith and
absent manifest error shall be conclusive and binding on Borrower), and (iii) immediate
adjustment as a result of (A) the establishment or release of Availability
Reserves, (B) reduction in advance rates provided for herein, (C) changes
in eligibility criteria or standards imposed by the Administrative Agent, (D) the
sale, assignment, lease, license, transfer, exchange or other disposition by
any Credit Party of all or substantially all of its right, title and interest
in any Property, and (E) scheduled reductions in the Fixed Asset
Component.


 


“Borrowing Base Report”
shall mean the report of Borrower setting forth a calculation of the Borrowing
Base to be delivered pursuant to Section 6.10(g), substantially in
the form attached as Exhibit A to the First Amendment.


 


“Revolving Credit Maturity Date”
shall mean May 30, 2007.


 


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


 


“Disposition” shall
mean the sale by Borrower of the Pekin Facility.


 


2

















 


“First Amendment” shall
mean the First Amendment to Credit Agreement dated as of March 19, 2004,
by and among Borrower, Parent, the Administrative Agent and the Lenders.


 


“Fixed Asset Component”
shall mean the lesser of (a) $10,000,000 or (b) 50% of the appraised
value as of April 2004 of the Pekin Facility, as determined by Barnes &
Click, Inc. and subject to review and approval by the Administrative Agent
in its sole discretion (such lesser amount being referred to as the “Original Fixed Asset Component”);
provided that the Fixed Asset Component shall be reduced (a) by an amount
equal to one-twelfth (1/12) of the Original Fixed Asset Component on the last
day of each Fiscal Quarter commencing September 30, 2004 and continuing
throughout the term of this Agreement, and (b) on March 30th of each
calendar year commencing March 30, 2005, by 25% of the Free Cash Flow for
the Fiscal Year most recently ended but not to exceed $2,000,000 for any Fiscal
Year; provided further that, in no event shall the Fixed Asset Component be
less than $0.00; and provided further that, on the date of the Disposition, the
Fixed Asset Component shall reduce to $0.00.


 


“Pekin Facility”
shall mean Borrower’s ethanol production facility, including, without
limitation, the Real Property and equipment, located in Pekin, Illinois and
described on Schedule 5.24 hereto.


 


1.3 Amendments to the Restricted Payment Covenant.
The reference to December 31, 2003 in the first sentence of subsection (f) of
Section 7.5 of the Credit Agreement shall be replaced with a reference to December 31,
2004. The reference to June 1, 2003 in Section 7.5(f)(iii)(C) of
the Credit Agreement shall be replaced with a reference to January 1,
2004.


 


1.4 Amendment to Exhibit A (Form of Borrowing
Base  Renort) to the Credit Aereement. Exhibit A to
the Credit Agreement shall be replaced with Exhibit A attached
hereto which shall be deemed to be incorporated into the Credit Agreement as of
the effective date hereof


 


SECTION 2. Limited Consent In reliance on the
representations, warranties, covenants and agreements contained in this First
Amendment, and subject to the satisfaction of each condition precedent set
forth in Section 3 hereof, the Lenders hereby consent to the one
time use of proceeds of a Revolving Credit Loan to pay a dividend by Parent to
its sole member (the “Special Dividend”)
in an amount up to (a) $30,000,000 plus (b) the lesser of (i) $5,000,000
and (ii) Borrower’s average cash balance in the Blocked Account for the
five (5) Business Days prior to the payment of the Special Dividend (the “Special Dividend Date”); provided,
that, the Special Dividend is a limited one-time event and nothing
contained herein shall obligate the Lenders to grant any additional or future
consent. For purposes of subsection (f) of Section 7.5 of the
Credit Agreement, the Special Dividend shall not be treated as a Restricted
Payment made pursuant to such subsection.


 


SECTION 3. Conditions Precedent. The effectiveness
of the amendments to the Credit Agreement contained in Section 1
hereof and the limited consent contained in Section 2 hereof is
subject to the satisfaction of each of the following conditions precedent:


 


3

















 


3.1 Amendment Fees. Borrower and Parent
shall have paid to the Administrative Agent for the ratable benefit of the
Lenders in accordance with their respective percentages of the Revolving Credit
Commitments a fee in the amount of $150,000. Such fee shall be distributed by
the Administrative Agent to each Lender ratably based on its Revolving Credit
Percentage.


 


3.2 Additional Fees and Expenses. Borrower
and Parent shall have paid all fees and expenses incurred by the Administrative
Agent in connection with the preparation, negotiation and execution of this
First Amendment, including, without limitation, all fees and expenses of Barnes &
Click, Inc. and Vinson & Elkins L.L.P., counsel to the
Administrative Agent.


 


3.3 Officers’ Certificates; Opinion, etc.
Borrower and Parent shall have delivered to the Administrative Agent such
certificates of authorized officers of Borrower and Parent, certificates of
Governmental Authorities, certified copies of the certificates of incorporation
and formation and bylaws and operating agreements, as applicable, of Borrower
and Parent (or certified confirmation that no amendments, modifications or
revisions have been to those previously certifies and delivered to the
Administrative Agent, as applicable), certified copies of resolutions of the
board of directors, managers or members, as applicable, of Borrower and Parent
and such other documents, instruments and agreements as the Administrative
Agent shall require to evidence the valid corporate existence and authority to
conduct business of Borrower and Parent and the due authorization, execution
and delivery of this First Amendment any other documents related to this First
Amendment and any other legal maters relating to Borrower, Parent, any
Subsidiary or the other Financing Documents by Borrower or Parent, all in a form and
substance satisfactory to the Administrative Agent and its counsel, including,
without limitation, an opinion of counsel to Borrower and Parent.


 


3.4 Projections. The Administrative Agent
shall have received updated financial projections of Parent and its
consolidated subsidiaries for the Fiscal Years ending December 31, 2004
and December 31, 2005.


 


3.5 Financial Statements. The
Administrative Agent shall have received the annual financial statements
required by Section 6.10(a) of the Credit Agreement for the Fiscal
Year ended December 31, 2003.


 


3.6 Borrowing Base Report and Minimum Availability.
The Administrative Agent shall have received a Borrowing Base Report prepared
as of the Special Dividend Date setting forth the Borrowing Base to be in
effect on the Special Dividend Date, and reflecting that, after giving effect
to the Special Dividend, Availability shall not be less than $15,000,000.


 


3.7 Appraisal. The Administrative Agent
shall have received an appraisal from Barnes & Click, Inc. of
Borrower’s Pekin Facility in form and substance satisfactory to the
Administrative Agent in its sole and absolute discretion.


 


4

















 


3.8 Documentation. The Administrative Agent
shall have received such other documents, instruments and agreements as it or
any Lender may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders.


 


3.9 No Defaults. No Default or Event of
Default shall exist.


 


SECTION 4. Representations and Warranties. In
order to induce the Administrative Agent and each Lender to enter into this
First Amendment, Borrower and Parent hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:


 


4.1 Accuracy of Representations and Warranties.
Each of the representations and warranties of Borrower and Parent contained in
the Financing Documents is true and correct in all material respects as of the
date hereof (except to the extent that such representations and warranties are
expressly made as of a particular date, in which event such representations and
warranties were true and correct as of such date).


 


4.2 Due Authorization, No Conflicts. The
execution, delivery and performance by Borrower and Parent of this First
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this First Amendment, are within Borrower’s
corporate or Parent’s limited liability company powers, as applicable, have
been duly authorized by all necessary corporate or limited liability company
action, as applicable, require no action by or in respect of, or filing with,
any governmental body, agency or official and do not violate or constitute a
default under any provision of applicable law or any material agreement binding
upon Borrower, Parent or their Subsidiaries, or result in the creation or
imposition of any Lien upon any of the assets of Borrower, Parent or their
Subsidiaries except for Permitted Liens.


 


4.3 Validity and Binding Effect. This First
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this First Amendment each constitute the
valid and binding obligations of Borrower or Parent enforceable in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors’ rights
generally, and the availability of equitable remedies may be limited by
equitable principles of general application.


 


4.4 Absence of Defaults. Neither a Default
nor an Event of Default has occurred which is continuing.


 


4.5 No Defense. Borrower nor Parent has any
defense to payment, counterclaim or rights of set-off with respect to the
Lender Indebtedness on the date hereof.


 


SECTION 5. Miscellaneous.


 


5.1 Reaffirmation of Financing Documents; Extension of
Liens. Any and all of the terms and provisions of the Credit
Agreement and the Financing Documents shall, except as amended and modified
hereby, remain in full force and effect. Borrower and Parent hereby extend each
Lien granted by Borrower and Parent to secure the Lender Indebtedness until the
Lender Indebtedness has been paid in full, and agree that the amendments and
modifications


 


5

















 


herein contained shall in no manner affect or impair
the Lender Indebtedness or the Liens securing payment and performance thereof,
all of which are ratified and confirmed.


 


5.2 Parties in Interest. All of the terms
and provisions of this First Amendment shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.


 


5.3 Counterparts. Effectiveness of First Amendment.
This First Amendment may be executed in counterparts, and all parties need
not execute the same counterpart; however, no party shall be bound by this
First Amendment until this First Amendment has been executed by Borrower,
Parent, the Administrative Agent and all Lenders. Facsimiles shall be effective
as originals.


 


5.4 COMPLETE AGREEMENT. THIS FIRST
AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITFEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


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


 


5.6 No Implied Waivers. No failure or delay
on the part of the Lenders or the Administrative Agent in exercising, and
no course of dealing with respect to, any right, power or privilege under this
First Amendment, the Credit Agreement or any other Financing Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this First Amendment, the Credit Agreement or any
other Financing Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.


 


5.7 Review and Construction of Documents.
Borrower and Parent hereby acknowledge, and represent and warrant to the
Lenders, that (a) Borrower and Parent have had the opportunity to consult
with legal counsel of their own choice and have been afforded an opportunity to
review this First Amendment with their legal counsel, (b) Borrower and
Parent have reviewed this First Amendment and fully understand the effects
thereof and all terms and provisions contained herein, (c) Borrower and
Parent have executed this First Amendment of their own free will and volition,
and (d) this First Amendment shall be construed as if jointly drafted by
Borrower, the Parent and the Lenders. The recitals contained in this First
Amendment shall be construed to be part of the operative terms and
provisions of this First Amendment.


 


5.8 Arms-Length/Good Faith. This First
Amendment has been negotiated at arms-length and in good faith by the parties
hereto.


 


5.9 Interpretation. Wherever the context
hereof shall so require, the singular shall include the plural, the masculine
gender shall include the feminine gender and the neuter and vice versa. The
headings, captions and arrangements used in this First Amendment are for
convenience only and shall not affect the interpretation of this First
Amendment.


 


6

















 


5.10 Severability. In case any one or more
of the provisions contained in this First Amendment shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof,
and this First Amendment shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.


 


5.11 Further Assurances. Borrower and Parent
agree to execute, acknowledge, deliver, file and record such further
certificates, instruments and documents, and to do all other acts and things,
as may be requested by the Lenders or the Administrative Agent as necessary
or advisable to carry out the intents and purposes of this First Amendment.


 


5.12 WAIVER
OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW, EACH OF
BORROWER, PARENT, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS (i) IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY
WAIVE 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; (iii) CERTIFY 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 WAIVERS; AND (iv) ACKNOWLEDGE THAT IT HAS
BEEN INDUCED TO ENTER INTO THIS FIRST AMENDMENT, THE CREDIT 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.


 


[Signature Pages Follow]


 


7

















 


SIGNATURE PAGE

TO

FIRST AMENDMENT TO CREDIT AGREEMENT

DATED MARCH 19, 2004

BY AND AMONG

AVENTINE RENEWABLE ENERGY, INC., AS BORROWER,

AVENTINE RENEWABLE ENERGY, L.L.C., AS PARENT,

JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER, AS THE

ISSUING BANK AND

AS ADMINISTRATIVE AGENT,

AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS


 


IN WITNESS WHEREOF, the
parties hereto have executed this First Amendment as of the day and year first
above written. 


 


 


	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William T. Hurley

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William T. Hurley

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PARENT:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  By: /s/ William T. Hurley

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William T. Hurley

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ADMINISTRATIVE

  	
   

  	
   

  	
   

  	
   

  
	
  AGENT, ISSUING BANK

  	
   

  	
   

  	
   

  	
   

  
	
  AND THE LENDERS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, individually as a

  
	
   

  	
  Lender, as the Issuing Bank and as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher D. Capriotti

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christopher D. Capriotti

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
						



 


 


[Signature Page]


 

















 


SIGNATURE PAGE

TO

FIRST AMENDMENT TO CREDIT AGREEMENT

DATED MARCH 19, 2004

BY AND AMONG

AVENTINE RENEWABLE ENERGY, INC., AS BORROWER,

AVENTINE RENEWABLE ENERGY, L.L.C., AS PARENT,

JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER, AS THE

ISSUING BANK AND

AS ADMINISTRATIVE AGENT,

AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS


 


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew L. Diehl

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew L. Diehl

  
	
   

  	
   

  	
  Title:

  	
  Corporate Banking Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FOOTHILL CAPITAL CORPORATION, as Lender

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis King

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dennis King

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS CREDIT,

  	
   

  
	
   

  	
  INC., as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan R. Schnacke

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alan R. Schnacke

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


 


[Signature Page]


 

















 


EXHIBIT A


 


FORM OF BORROWING BASE REPORT


 


This Borrowing Base Report
is being delivered pursuant to that certain Credit Agreement dated as of May 30,
2003 (as amended, supplemented, restated or otherwise modified prior to the
date hereof, the “Credit Agreement”), by and among Aventine Renewable
Energy, Inc., a Delaware corporation (“Borrower”), Aventine
Renewable Energy, LLC, a Delaware limited liability company to be renamed,
JPMorgan Chase Bank, individually as a Lender, as Issuing Bank and as the
Administrative Agent, and the other financial institutions now or hereafter
parties thereto. The undersigned hereby certifies on behalf of Borrower that
he/she is a Responsible Officer of Borrower and as such is authorized to
execute this Borrowing Base Report on behalf of Borrower. All capitalized terms
not defined herein shall have the meaning ascribed to them in the Credit
Agreement. The undersigned, in his/her capacity as a Responsible Officer of
Borrower and not in his/her individual capacity, further certifies, represents
and warrants on behalf of Borrower that:


 


I. CALCULATION OF BORROWING BASE. The following is an accurate and complete
calculation of the Borrowing Base as of          ,
200    (the “Calculation Date”):


 


	
   

  	
  A. Account Component

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Eligible Accounts:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Beginning accounts as of the previous Calculation Date

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Plus: Sales
  since the previous Calculation Date

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Less:
  Collections since the previous Calculation Date

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Less: Any
  trade discounts, retention or finance charges, and sales or fuel taxes as of
  the Calculation Date

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Net accounts as of the Calculation Date [Total of (a) plus
  (b) minus (c) and (d)]

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Less:
  Ineligible accounts as of the Calculation Date(1)

  	
   

  
							



 






(1) No
deduction in the gross amount of any account shall be required to be duplicated
pursuant to any subsection below notwithstanding that the facts or
circumstances giving rise to such deduction require deduction under more than
one subsection.


 


A-1

















 


	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
   

  	
  Accounts that are not binding and valid obligations of the obligor in
  full force and effect

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
   

  	
  Accounts that are not evidenced by an invoice which has been issued
  to the obligor (either by (A) electronic transmission, (B) deposit
  in the United States mail, properly addressed and with postage paid, or (C) deposit
  with a commercial courier service for delivery not later than the 2nd
  Business Day)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
   

  	
  Accounts that are not genuine as appearing on their face or as
  represented in the books and records of Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
   

  	
  Accounts that are not free from claims regarding rescission,
  cancellation or avoidance, whether by operation of law or otherwise

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (v)

  	
   

  	
  Accounts that have been outstanding for more than ninety (90) days
  past the original invoice date thereof

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vi)

  	
   

  	
  The aggregate amount of all concessions, offsets, deductions,
  contras, chargebacks or understandings with any obligor on any account that
  in any way could reasonably be expected to adversely affect the payment of
  such account

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vii)

  	
   

  	
  Accounts that are not subject to a first- priority perfected Lien in
  favor of the Administrative Agent, on behalf of the Lenders, or are subject
  to any other Lien other than rights of vendors arising under PACA but only to
  the extent no amounts owed such vendors is past due

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (viii)

  	
   

  	
  The aggregate amount of all accounts payable and other amounts owed
  by Borrower to the obligor (and Affiliates of the obligor) on any account

  	
   

  	
  $

  	
   

  



 


A-2

















 


	
   

  	
   

  	
   

  	
   

  	
  (ix)

  	
   

  	
  Accounts that are owed by an obligor that is (A) an Affiliate of
  any of the Credit Parties (other than commodities trading subsidiaries of
  Morgan Stanley), or (B) an employee of any of the Credit Parties

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (x)

  	
   

  	
  Accounts that did not arise out of the sale of goods in the ordinary
  course of business of Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xi)

  	
   

  	
  Accounts that are payable by a delinquent obligor; a Person is a “delinquent
  obligor” if more than fifty percent (50%) of the aggregate amount of the
  accounts owed by such obligor and its Affiliates to Borrower have been
  outstanding for more than ninety (90) days past the original invoice date
  thereof

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xii)

  	
   

  	
  Accounts that lack any or all consents, licenses, approvals or
  authorizations of, or registrations or declarations with, any Governmental
  Authority required to be obtained, effected or given in connection with the
  execution,delivery and performance of said account by each party obligated
  thereunder

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xiii)

  	
   

  	
  Accounts that are owed by an obligor that is the subject of any
  bankruptcy or insolvency proceeding, has had a trustee or receiver appointed
  for all or a substantial part of its property, has made an assignment
  for the benefit of creditors, admitted its inability to pay its debts as they
  mature or suspended its business, to the extent such accounts are not secured
  by letters of credit assigned to the Administrative Agent and otherwise
  satisfactory to the Administrative Agent

  	
   

  	
  $

  	
   

  



 


A-3

















 


	
   

  	
   

  	
   

  	
   

  	
  (xiv)

  	
   

  	
  Accounts that are owed by an obligor that is not a corporation,
  partnership,  limited
  liability company or other
  entity incorporated or organized under the laws of a State of the United States of America,
  the District of Columbia, or Canada to the extent such accounts are not (A) secured by letters of credit assigned to the Administrative Agent
  and otherwise satisfactory to the Administrative Agent or (B) covered by export/import credit insurance assigned tothe
  Administrative Agent and naming AdministrativeAgent as loss payee and otherwise satisfactory to the
  Administrative Agent

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xv)

  	
   

  	
  Accounts that are owed by an obligor that is a state, commonwealth,
  federal, foreign, territorial, or othercourt or governmental department,
  commission,board, bureau, agency orinstrumentality

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xvi)

  	
   

  	
  Accounts for which the goods sold that resulted in the creation of
  the account  have not
  been shipped or delivered to the obligor on a true sale basis on open account, but rather on consignment, on
  approval, on a “sale or return” basis, or on a “bill and hold” or “pre-sale” basis or subject to any other
  repurchase or return agreement

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xvii)

  	
   

  	
  Accounts for which a material part of goods sold which resulted
  in the creation of such account have been returned, rejected, lost or damaged

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xviii)

  	
   

  	
  Accounts that are evidenced by chattel paper or an instrument of any
  kind

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xix)

  	
   

  	
  Accounts with respect to which each of the representations and
  warranties set forth in the Security Instruments is not true and correct

  	
   

  	
  $

  	
   

  



 


A-4

















 


	
   

  	
   

  	
   

  	
   

  	
  (xx)

  	
   

  	
  Accounts that are payable other than in cash or that are “exchange
  accounts”

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xxi)

  	
   

  	
  Accounts owed by obligors that the Administrative Agent has notified
  the Borrower that, in its sole but reasonable judgment, it is dissatisfied
  with the credit worthiness of

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xxii)

  	
   

  	
  If any otherwise Eligible Account, when added to all other accounts
  that are obligations of the same obligor and its Affiliates, results in a
  total sum that exceeds, in the case of any other obligor, 20%, of the total
  balance then due on all Eligible Accounts (without giving effect to any
  reduction in Eligible Accounts pursuant to this proviso), the amount of said
  account in excess of such percentage of such total balance then due

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (xxiii)

  	
   

  	
  Other ineligible accounts pursuant to such standards of eligibility
  as the Administrative Agent shall establish from time to time in its sole but
  reasonable discretion

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Subtotal: Ineligible Accounts [sum  of (f(i) thru (xxiii)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Eligible Accounts [(e) minus (g)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
        % (2) of Eligible Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Eligible Unbilled Accounts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Accounts that would be Eligible  Accounts but for Section A.1.(f)(ii) above that constitute
  a non-contingent right to receive payment of the full amount of such

  	
   

  	
   

  	
   

  



 






(2) Percentage
equal to the Eligible Account Advance Percentage in effect on the Calculation
Date.


 


A-5

















 


 


	
   

  	
   

  	
   

  	
   

  	
  account from the applicable obligor, provided that (x) the aggregate
  outstanding amount of accounts added pursuant to this clause (a) shall
  not exceed the greater of (1) $3,000,000 and (2) 10% of Borrower’s
  aggregate accounts, but in no event in excess of $5,000,000 at any time and
  (y) such account was created within the 7 days immediately preceding the
  Calculation Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
           % (3) of
  Eligible Unbilled  Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Inventory Component

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Eligible finished goods inventory (valued at lower of cost
  (determined on a weighted average cost basis) or market value as determined
  in accordance with GAAP consistently applied)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Finished goods inventory (not raw materials or work-in progress) as
  of the Calculation Date (valued at lower of cost (determined on a weighted
  average cost basis) or market value as determined in accordance with GAAP
  consistently  applied)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Less:
  Ineligible finished goods inventory as of the Calculation Date (valued at
  lower of of cost (determined on a weighted average cost basis) or market
  value as determined in accordance with GAAP consistently applied)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
  Finished goods inventory that is not in good condition, fails to meet
  all requirements imposed by any Governmental Authority having regulatory
  authority over it or its use and/or sale or is currently not salable in the
  normal course of business of Borrower

  	
   

  	
  $

  	
   

  
									



 






(3) Percentage equal to the Eligible Unbilled
Account Advance Percentage in effect on the Calculation Date.


 


A-6

















 


	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
  Finished goods inventory that is not (A) located in a Covered
  Terminal, (B) in possession of Borrower on Real Property owned by
  Borrower and described in Schedule 5.24 to the Credit Agreement, or (C) in
  possession of Borrower on Real Property leased by Borrower and described in Schedule 5.24
  to the Credit Agreement and subject to a Landlord Consent

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
  Finished goods inventory with respect to which each of the
  representations and warranties set forth in the Security Instruments relating
  to said inventory is not true and correct

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
  Finished goods inventory that is not subject to a first-priority
  perfected Lien in favor of the Administrative Agent, on behalf of the
  Lenders, or is subject to any other Lien other than Permitted Liens

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (v)

  	
  Finished goods inventory that includes goods that are not owned by
  Borrower or that are held by Borrower pursuant to a consignment agreement or
  arrangement

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vi)

  	
  Finished goods inventory that includes supplies, storeroom materials,
  parts, fuel (other than ethanol held for resale) or similar items (denaturant
  is not excluded pursuant to this provision)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vii)

  	
  Finished goods inventory that is evidenced by a negotiable document
  (as defined in the UCC)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (viii)

  	
  Other ineligible finished goods inventory pursuant to such standards
  of eligibility as the Administrative Agent shall establish from time to time
  in its sole but reasonable discretion

  	
   

  	
  $

  	
   

  



 


A-7

















 


	
   

  	
   

  	
   

  	
  (c)

  	
  Subtotal:
  Ineligible finished goods inventory [sum of (b)(i) thru (viii)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Eligible Finished Goods Inventory [(a) minus (c)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Eligible in-transit inventory (valued at the lower of cost
  (determined on a weighted average cost basis) or market value as determined
  in accordance with GAAP consistently  applied)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  In-transit inventory as of the Calculation Date (valued at the lower
  of cost (determined on a weighted average cost basis) or market value as
  determined in accordance with GAAP consistently applied)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Less:
  Ineligible in-transit inventory as of the Calculation Date (valued at the
  lower of cost (determined on a weighted average cost basis) or market value
  as determined in accordance with GAAP consistently applied)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
  In-transit inventory owned by the Borrower which is not in the
  possession of a common carrier pending delivery to either (A) a customer
  of Borrower, (B) a Covered Terminal to be stored for the account of
  Borrower, (C) Borrower at Real Property owned by Borrower and described
  in Schedule 5.24 to the Credit Agreement or (D) Borrower at Real
  Property leased by Borrower and described in Schedule 5.24 to the Credit
  Agreement and subject to a Landlord Consent

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
  In-transit inventory that is not insured against risk of loss pursuant
  to an insurance policy in form and substance and issued by an insurance
  company acceptable to the Administrative Agent, with respect to which the
  Administrative Agent has been named loss payee and which otherwise satisfies
  the requirements of Section 6.5 the Credit Agreement

  	
   

  	
  $

  	
   

  	
   

  



 


A-8

















 


	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
  In-transit inventory that does not consist only of finished goods

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
  In-transit inventory that is not in good condition, fails to meet all
  requirements imposed by any Governmental Authority having regulatory
  authority over it or its use and/or sale or is currently not salable in the
  normal course of business of Borrower

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (v)

  	
  In-transit inventory with respect to which each of the
  representations and warranties set forth in the Security Instruments relating
  to said inventory is not true and correct

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vi)

  	
  In-transit inventory that is not subject to a first-priority
  perfected Lien in favor of the Administrative Agent, on behalf of the
  Lenders, or is subject to any other Lien other than Permitted Liens

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vii)

  	
  In-transit inventory that includes goods that are not owned by
  Borrower or that are held by Borrower pursuant to a consignment agreement or
  arrangement

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (viii)

  	
  In-transit inventory that includes supplies, storeroom materials,
  parts, fuel (other than ethanol held for resale) r similar items (denaturant
  is not excluded pursuant to this provision)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ix)

  	
  In-transit inventory that is evidenced by a negotiable document (as
  defined in the UCC)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (x)

  	
  Other ineligible in-transit inventory pursuant to such standards of
  eligibility as the Administrative Agent shall establish from time to  time in its sole but reasonable discretion

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Subtotal:
  Ineligible in-transit inventory [sum of (b)(i) thru (x)]

  	
   

  	
  $

  	
   

  	
   

  



 


A-9

















 


	
   

  	
   

  	
   

  	
  (d)

  	
  Eligible in-transit inventory [(a) minus (c)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Eligible raw materials inventory (valued at the lower of cost
  (determined on a weighted average cost basis) or market value as determined
  in accordance with GAAP consistently applied)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Raw materials inventory (not finished goods or work in progress as of
  the Calculation Date (valued at the lower of cost (determined on  a weighted average cost basis) or market
  value as determined in accordance with GAAP consistently applied)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Less:
  Ineligible raw materials inventory as of the Calculation Date (valued at the
  lower of cost (determined on a weighted average cost basis) or market value
  as determined in accordance with GAAP consistently applied)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
  Raw materials inventory that is not in good condition, fails to meet
  all requirements imposed by any Governmental Authority having regulatory
  authority over it or its use and/or sale or is currently not salable in the
  normal  course of
  business of Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
  Raw materials inventory that is not (A) located in a Covered
  Terminal, (B) in possession of Borrower on Real Property owned by
  Borrower and described in Schedule 5.24 to the Credit Agreement, or (C) in
  possession of Borrower on Real Property leased by Borrower and described in Schedule 5.24
  to the Credit Agreement and subject to a Landlord Consent

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
  Raw materials inventory with respect to which each of the
  representations and warranties set forth in the Security Instruments relating
  to said inventory is not true and correct

  	
   

  	
  $

  	
   

  
											



 


A-10

















 


	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
  Raw materials inventory that is not subject to a first-priority
  perfected Lien in favor of the Administrative Agent, on behalf of the
  Lenders, or is subject to any other Lien other than Permitted Liens

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (v)

  	
  Raw materials inventory that includes goods that are not owned by
  Borrower or that are held by Borrower pursuant to a consignment agreement or
  arrangement

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vi)

  	
  Raw materials inventory that includes supplies, storeroom materials,
  parts, fuel (other than ethanol held for resale) or similar items (denaturant
  is not excluded pursuant to this provision)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (vii)

  	
  Raw materials inventory that is evidenced by a negotiable document
  (as defined in the UCC)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (viii)

  	
  Other ineligible raw materials inventory pursuant to such standards
  of eligibility as the Administrative Agent shall establish from time to time
  in its sole but reasonable discretion

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Subtotal:
  Ineligible raw materials inventory [sum of (b)(i) thru (viii)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Eligible raw materials inventory [(a) minus (c)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Inventory Component Calculation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Net Recovery Value Calculation

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
  85.4% (4) of Eligible Finished Goods Inventory [from line
  B(1)(d)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
  85.4% (4) of Eligible In-Transit Inventory [from line B(2)(d)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
  68.7% (4) of Eligible Raw Materials Inventory [from line
  B(3)(d)]

  	
   

  	
  $

  	
   

  	
   

  



 






(4) Percentage
of Lower of Cost or Market Value equal to Net Recovery Value based on most
recent inventory appraisal.


 


A-11

















 


	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
  Net Recovery Value of Eligible Inventory [sum of (i), (ii) and
  (iii)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (v)

  	
  85% of Net Recovery Value of Eligible Inventory

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Lower of Cost or Market Value Calculation

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i)

  	
  72% of Eligible Finished Goods Inventory [from line B(1)(d)]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii)

  	
  65% of Eligible In-Transit Inventory [from line B(2)(d)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iii)

  	
  58% of Eligible Raw Materials Inventory [from line B(3)(d)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (iv)

  	
  Lower of Cost or market value as determined in accordance with GAAP
  consistently applied [sum of (i), (ii) and (iii)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Inventory Component [lower of B(4)(a)(v) and B(4)(b)(iv)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Fixed Asset Component

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
  Original Fixed Asset Component

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Accumulated  amortization of original Fixed Asset Component

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Accumulated Free Cash Flow reductions

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4

  	
  Fixed Asset Component [1 minus 2 and 3]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Availability Reserves

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
  PACA Reserves as of the Calculation Date

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Hedging Reserves as of the Calculation Date

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Storage/Handling Reserves as of the Calculation
  Date

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4

  	
  Exchange Reserves as of the Calculation Date

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5

  	
  Cash Management Reserve

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6

  	
  Fuels Tax Reserve as of the Calculation Date

  	
   

  	
  $

  	
   

  	
   

  
											



 


A-12

















 


	
   

  	
   

  	
  7

  	
  Other Reserves (as may be required by the
  Administrative Agent pursuant to the Credit Agreement) as of the Calculation
  Date

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8

  	
  Availability Reserves [sum of 1 thru 7]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  The Borrowing Base, as of             ,
  200  , is as follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
  Eligible Account Component [from A(l)(i)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Eligible Unbilled Account Component [from A(2)(b)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Inventory Component [from B(4)(c)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4

  	
  Fixed Asset Component [from C(4)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5

  	
  Availability Reserves [from D(8)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6

  	
  Borrowing Base [(1) plus (2) plus (3) plus
  (4) minus (5)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  F.

  	
  The Maximum Available Amount as of the Calculation Date is as
  follows:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
  Aggregate Revolving Commitments as of the
  Calculation Date

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Borrowing Base as of the Calculation Date [from
  D(6)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Maximum Available Amount [lesser of (1) and
  (2)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  G.

  	
  Availability

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1

  	
  Maximum Available Amount [from F(3)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2

  	
  Principal amount of Revolving Credit Loans
  Outstanding

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3

  	
  Letter of Credit Liabilities Outstanding

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4

  	
  Availability Amount [1 minus 2 and 3]

  	
   

  	
  $

  	
   

  	
   

  



 


II. SUPPORTING
DATA. This Borrowing Base Report is executed and delivered on
the day of_____, 200_ and reflects the Borrowing Base as of the Calculation
Date. This Borrowing Base Report was prepared in part on the basis of the
information contained in the Accounts Receivable Listing and Aging and
Inventory Reports (the “Reports”) attached hereto as Annex I and Annex
II, respectively, each of which were prepared as of the Calculation Date. The
undersigned hereby represents and warrants to the Administrative Agent and each
Lender that all information contained in such Reports was accurate and complete
as of the date such Reports were prepared.


 


A-13

















 


III. ABSENCE OF
DEFAULT. No Default or Event of Default has occurred and is
continuing.


 


IV. REPRESENTATIONS
AND WARRANTIES AFFIRMED. Each Bring-Down Representation and
Warranty of each Credit Party contained in the Credit Agreemcnt and the other
Financing Documents is true and correct in all material respects on the
Calculation Date.


 


A-14

















 


IN WITNESS WHEREOF, the
undersigned has signed this Borrowing Base Report as of the date first written
above.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  [Name of Responsible Officer of
  Borrower]

  



 


[Signature Page]


 

















 


ANNEX I


 


ACCOUNTS
RECEIVABLE LISTING AND AGING


 


A-16

















 


ANNEX II


 


INVENTORY
REPORTS


 


A-17














 


SECOND AMENDMENT TO CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO
CREDIT AGREEMENT (this “Second Amendment”)
is executed as of the 8th day of December, 2004, by and among AVENTINE RENEWABLE ENERGY, INC., a
Delaware corporation (“Borrower”),
AVENTINE RENEWABLE ENERGY, LLC, a
Delaware limited liability company (“Parent”),
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), individually
as a Lender, as the Issuing Bank and as the Administrative Agent, and each of
the other Lenders that is a signatory hereto.


 


W I T N E S S E T H:


 


WHEREAS, Borrower, Parent,
the Administrative Agent and the Lenders are parties to that certain Credit
Agreement dated as of May 30, 2003 (as amended by that certain First
Amendment to Credit Agreement dated as of March 19, 2004, and as further
amended from time to time, the “Credit
Agreement”;
unless otherwise defined herein, all capitalized terms used herein which are
defined in the Credit Agreement shall have the meaning given such terms in the
Credit Agreement, including, to the extent applicable, after giving effect to
this Second Amendment), pursuant to which the Lenders provide certain financing
to Borrower in accordance with the terms and conditions set forth therein; and


 


WHEREAS, Borrower and Parent
have advised the Administrative Agent and the Lenders that Holdco intends to
issue the Senior Secured Notes in an aggregate principal amount of up to
$160,000,000; and


 


WHEREAS, the issuance of the
Senior Secured Notes is prohibited under the terms of the Credit Agreement; and


 


WHEREAS, Borrower and Parent
have requested that the Lenders consent to the Notes Offering; and


 


WHEREAS, Borrower and Parent
have requested that upon the consummation of the Notes Offering the Lenders (a) extend
the Revolving Credit Maturity Date to December 31, 2008, (b) amend Section 7.15
of the Credit Agreement (i) to increase the annual limit on capital
expenditures to $15,000,000, (ii) to allow for certain capital
expenditures up to $9,000,000 by Nebraska Sub to expand the production capacity
at the Nebraska Facility and (iii) to allow for certain capital
expenditures up to $62,500,000 made with the proceeds of the Senior Secured
Notes to expand the production capacity at the Pekin Facility, (c) permit
a one-time cash dividend by Parent to Holdco (in part from the proceeds of
a Revolving Credit Loan), and (d) amend certain other provisions of the
Credit Agreement in connection with the issuance of the Senior Secured Notes;
and


 


WHEREAS, subject to the
terms and conditions set forth herein, the Lenders have agreed to Borrower’s
and Parent’s requests.


 


1

















 


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. In reliance on the
representations, warranties, covenants and agreements contained in this Second
Amendment, and subject to the satisfaction of each condition precedent
contained in Section 3 hereof, the Credit Agreement shall be
amended effective as of the Effective Date (as hereinafter defined) in the
manner provided in this Section 1.


 


1.1 Amended Definitions.


 


(a) The definitions of “Applicable Margin,” “Borrowing Base,” “Borrowing Base Report,” “Fixed Charge Coverage Ratio,” “Non-Financed Capital Expenditures”
and “Revolving Credit Maturity Date”
contained in Section 1.1 of the Credit Agreement shall be amended to read in
full as follows:


 


“Applicable Margin” shall
mean, on any day (a “determination day”) and with respect to any Revolving
Credit Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Fixed Charge Coverage
Ratio determined on the most recent Quarterly Date with respect to which
Borrower and Parent were required to deliver the Current Financials as of such
determination day (said calculation of the Fixed Charge Coverage Ratio to be
made by the Administrative Agent as soon as practicable after receipt by the
Administrative Agent of all required Current Financials for the applicable
period): 


 




	
  Fixed
  Charge

  Coverage Ratio

  	
   

  	
  LIBOR Loan

  Applicable Margin

  Percentage

  	
   

  	
  Base Rate Loan

  Applicable Margin

  Percentage

  
	
  Less than or equal to

  1.25 to 1.00

  	
   

  	
  2.750%

  	
   

  	
  0.500%

  
	
  Greater than 1.25 to

  1.00 but less than or

  equal to 1.50 to 1.00

  	
   

  	
  2.500%

  	
   

  	
  0.250%

  
	
  Greater than 1.50 to

  1.00 but less than or

  equal to 1.75 to 1.00

  	
   

  	
  2.250%

  	
   

  	
  0.000%

  
	
  Greater than 1.75 to

  1.00 but less than or

  equal to 2.00 to 1.00

  	
   

  	
  2.000%

  	
   

  	
  0.000%

  
	
  Greater than 2.00 to

  1.00

  	
   

  	
  1.750%

  	
   

  	
  0.000%

  






 


2

















 


Each
change in the Applicable Margin based on a change in the Fixed Charge Coverage
Ratio shall be effective as of the 5th Business Day following actual receipt by
the Administrative Agent of the Current Financials for the applicable Fiscal
Quarter (and based upon Current Financials for the Rolling Period ended as of
the last day of the Rolling Period for which such Current Financials are
provided). Notwithstanding the foregoing, for the period commencing on the
Notes Offering Issuance Date and continuing through and including the 5th
Business Day following receipt by the Administrative Agent of the Current Financials
for the Fiscal Quarter ended June 30, 2005, the Applicable Margin for (a) LIBOR
Loans shall be 2.250%, and (b) Base Rate Loans shall be 0.000% . In the
event Current Financials are not provided on any date required by Section 6.10(a),
Section 6.10(b) and Section 6.10(c), the LIBOR Loan Applicable
Margin Percentage shall be 2.750% and the Base Rate Loan Applicable Margin
Percentage shall be 0.500% from the date such Current Financials are due until
the 5th Business Day after the date the Administrative Agent receives such
Current Financials then due pursuant to Section 6.10(a), Section 6.10(b) and
Section 6.10(c).


 


“Borrowing Base” shall mean:


 


(a)                                  the Eligible Account Advance Percentage of
Eligible Accounts, plus


 


(b)                                 the Eligible Unbilled Account Advance
Percentage of Eligible Unbilled Accounts, plus,


 


(c)                                  the lesser of


 


(i)                                     85% of the Net Recovery Value of Eligible
Inventory, and


 


(ii)                                  the sum of the following valued at the lower
of cost (determined on a weighted average cost basis) or market value as
determined in accordance with GAAP consistently applied: (A) 72% of
Eligible Finished Goods Inventory, (B) 65% of Eligible In-Transit
Inventory, and (C) 58% of Eligible Raw Materials Inventory, minus


 


(d)                                 any Availability Reserves then in effect.


 


The
Borrowing Base in effect under this Agreement at any time shall be the
Borrowing Base reflected on the most recent Borrowing Base Report delivered to
the Lenders pursuant to Section 3.1(h) or Section 6.10(g) subject
to (i) adjustments on a weekly basis to reflect increases or decreases in
the components of the Borrowing Base reflected in each of the Inventory
Designation Report, the Interim Account Report and the PACA Reserve Report
required pursuant to Section 6.10(8), (ii) the right of the
Administrative Agent or the Required Lenders to redetermine any component of
the Borrowing Base or the calculation thereof if and to the extent the
Administrative Agent or the Required


 


3

















 


Lenders
believe, in good faith, such component or calculation to be incorrect (any such
redetermination made in good faith and absent manifest error shall be
conclusive and binding on Borrower), and (iii) immediate adjustment as a
result of (A) the establishment or release of Availability Reserves, (B) reduction
in advance rates provided for herein, (C) changes in eligibility criteria
or standards imposed by the Administrative Agent, and (D) the sale,
assignment, lease, license, transfer, exchange or other disposition by any
Credit Party of all or substantially all of its right, title and interest in
any Property.


 


“Borrowing Base Report”
shall mean the report of Borrower setting forth a calculation of the Borrowing
Base to be delivered pursuant to Section 6.10(g), substantially in
the form attached as Exhibit A to the Second Amendment.


 


“Fixed Charge Coverage Ratio”
shall mean for Parent and its consolidated Subsidiaries on a consolidated
basis, for any Fixed Charge Calculation Period, the ratio of: 


 


(a)                                  (i) EBITDA for such period, minus



 


(ii) Non-Financed
Capital Expenditures made during such period,  


 


minus


 


(iii) cash Taxes paid
or due for such period; to


 


(b)                                 the sum of:


 


(i) scheduled principal
payments on Indebtedness during such period,


 


plus


 


(ii) Interest Expense
for such period, plus


 


(iii) to the extent not already deducted in the calculation of
EBITDA and without duplication, the amount of Restricted Payments for such
period pursuant to Section 7.5(b) and management, advisory,
monitoring, servicing and other fees and payments described in Section 7.23
for such period,  plus


 


(iv) to the extent not included in Interest Expense or scheduled
principal payments pursuant to clauses (b)(i) and (ii) above, rent
expense for leases of the type described in clause (i) of the definition
of “Indebtedness.”


 


Notwithstanding
the above, for the purpose of calculating the Fixed Charge Coverage Ratio for
determining compliance with, Section 7.1(a), but not for the
purpose of determining the Applicable Margin, until Parent and Borrower either (i) obtain
the consent of the requisite holders of Equity in Nebraska Sub pursuant to Section 6.11
and comply with all other requirements of Section 6.11 with respect
thereto, or (ii) hold 80% of the Equity of Nebraska Sub and comply with
all requirements of Section 6.9 with respect thereto, the results
of operations of Nebraska Sub shall be excluded from the calculation of the
Fixed Charge


 


4

















 


Coverage
Ratio except that cash dividends actually paid by Nebraska Sub to Parent shall
be included in the calculation of consolidated EBITDA.


 


“Non-Financed Capital Expenditures”
shall mean Capital Expenditures made by any Credit Party which are not financed
pursuant to (a) the incurrence of Indebtedness (other than Indebtedness
incurred pursuant to this Agreement (except amounts owing to Borrower under the
Nebraska Note until Parent and Borrower either (i) obtain the consent of
the requisite holders of Equity in Nebraska Sub pursuant to Section 6.11
and comply with all other requirements of Section 6.11, with
respect thereto, or (ii) hold 80% of the Equity of Nebraska Sub and comply
with all requirements of Section 6.9 with respect thereto) and
trade payables incurred in the ordinary course of business), or (b) an
equity contribution made after the Closing Date; provided, that,
Non-Financed Capital Expenditures for any period shall be reduced to the extent
of payments received in cash during such period from Seller pursuant to the
indemnity provisions of the Purchase Agreement which are contributed in cash to
Parent and from Parent to Borrower, reimbursing or compensating Borrower for
Capital Expenditures made or to be made by Borrower (or otherwise compensating
Borrower for losses, deficiencies or defects pertaining to property, plant or
equipment).


 


“Revolving Credit Maturity Date”
shall mean December 31, 2008.


 


(b) Clause (b)(ii) of
the definition of “EBITDA”
shall be amended by deleting the “and” after clause (B) in the
parenthetical thereof, and adding the following phrase at the end of clause (C) in
such parenthetical:


 


and
(D) compensation expense in an aggregate amount not to exceed $6,000,000
associated with compensation paid to optionholders out of the Special Dividend
(as defined in Section 2 of the Second Amendment) and the related dividend
paid to holders of the Equity of Holdco on or about the Effective Date (as
defined in Section 3 of the Second Amendment), whether such compensation
is paid concurrently with the Special Dividend or at a later date,


 


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


 


“Collateral Agent”
shall mean the collateral agent for the holders of the Senior Secured Notes.


 


“Description of Notes”
shall mean the Description of Notes attached as Exhibit B to the
Second Amendment.


 


“Equity Distribution”
shall mean for any Person, the declaration or payment on its Equity, the making
of any payment to purchase, redeem, retire or otherwise acquire any of its Equity
now or hereafter outstanding, the return of any capital to its stockholders,
partners, members or other Equity holders, or the making of any distribution of
its assets, Equity, obligations or securities to its stockholders, partners,
members or other Equity holders.


 


5

















 


“Escrow Account”
shall mean a securities account of Holdco under the control of the Trustee or
the Collateral Agent and held by JPMorgan Chase Bank, NA., in its capacity as
escrow agent and securities intermediary, into which a portion of the proceeds
of the Notes Offering shall be deposited as described in the Offering
Memorandum.


 


“First Amendment to Mortgage”
means the First Amendment to Mortgage, Assignment, Security Agreement and Financing
Statement, substantially in the form attached as Exhibit E to
the Second Amendment.


 


“First Amendment to Security
Agreement” means the First Amendment to Guaranty and Security
Agreement, substantially in the form attached as Exhibit D to
the Second Amendment.


 


“Indenture” shall
mean the Indenture pursuant to which the Senior Secured Notes are or will be
issued.


 


“Intercreditor Agreement”
shall mean that certain Intercreditor Agreement entered into between the
Administrative Agent and the Collateral Agent as of the Notes Offering Issuance
Date, acknowledged by Holdco, Borrower and Parent, and in the form attached
as Exhibit C to the Second Amendment.


 


“Nebraska Facility”
shall mean Nebraska Sub’s ethanol production facility, including, without
limitation, the Real Property and equipment, located in Aurora, Nebraska and
described on Schedule 5.24 hereto.


 


“Nebraska Note”
shall have the meaning provided in Section 7.6(k).


 


“Notes Collateral Account”
shall mean one or more deposit accounts of Borrower and/or Parent under the
control of the Collateral Agent into which certain proceeds of the primary
collateral for the Senior Secured Notes shall be deposited in accordance with
the terms of the Intercreditor Agreement.


 


“Notes Offering”
shall mean the offering by Holdco of the Senior Secured Notes.


 


“Notes Offering Issuance Date”
shall mean the date on which the Notes Offering is completed and the Senior
Secured Notes are issued.


 


“Offering Memorandum”
shall mean the preliminary Offering Memorandum dated November 29, 2004
setting forth the terms and conditions of the Notes Offering.


 


“Permitted Tax Distributions”
shall mean, with respect to any fiscal year, the distribution of an aggregate
amount in cash not to exceed 35% of the cumulative net income of Nebraska Sub
for such year. For purposes of this


 


6

















 


definition
and Section 7.6(k), “net income” shall mean net income determined
in accordance with GAAP.


 


“Second Amendment”
shall mean the Second Amendment to Credit Agreement dated as of December 8,
2004, by and among Borrower, Parent, the Administrative Agent and the Lenders.


 


“Second Amendment Documents”
means the Second Amendment, the First Amendment to Security Agreement and the
First Amendment to Mortgage.


 


“Senior Secured Notes”
shall mean Senior Secured Floating Rate Notes proposed to be issued by Holdco
in an aggregate principal amount not exceeding $160,000,000 and which satisfy
each of the following criteria: (a) an interest rate per annum at or below
the LIBOR Rate plus 9%, (b) a maturity date no earlier than 7 years after
date of issuance, (c) no scheduled amortization of principal, and (d) otherwise
on terms (1) that are not materially less favorable to Holdco, Parent,
Borrower or the Lenders than those set forth in the Description of Notes, and (2) which
are not materially inconsistent with those set forth in the Description of
Notes.


 


“Senior Secured Notes Documents”
shall have the meaning provided in Section 5.33.


 


“Trustee” shall
mean Wells Fargo Bank, N.A. or any successor thereto as trustee under the
Indenture.


 


1.3 Deleted Definitions. The definitions of
“Disposition” and “Fixed Asset Component” contained in Section 1.1
of the Credit Agreement are hereby deleted.


 


1.4 Amendment of Representation and Warranty.
Section 5.31 of the Credit Agreement is hereby amended by deleting the “and”
at the end of clause (c) thereof, and adding the following immediately
before the period at the end of such Section:


 


, and (e) the Notes
Collateral Account


 


1.5 Addition of Representation and Warranty.
Article 5 of the Credit Agreement is hereby amended to add a new Section 5.33
thereto which shall read in full as follows:


 


Section 5.33 Senior Secured Notes Documents. Borrower and Parent have provided to the
Administrative Agent a true and correct copy of the Offering Memorandum, the
Indenture and all other material agreements entered into by Holdco and/or any
Credit Party related to the Notes Offering, including all amendments and
modifications thereto (whether characterized as an amendment, modification,
waiver, consent or similar document) (collectively, the “Senior
Secured Notes Documents”). Each of the Senior Secured Notes
Documents is a valid, binding and enforceable obligation of Holdco and each
Credit Party that is a party thereto in accordance with its terms and is in
full force and effect.


 


7

















 


1.6 Amendment to Additional Liens Covenant.
Clause (b) of Section 6.9 of the Credit Agreement is hereby amended
and restated in its entirety to read in full as follows:


 


(c) If at any time after the Closing Date, (1) Parent becomes
the direct or indirect beneficial owner of 80% of the Equity of Nebraska Sub
(other than Equity held by management of Nebraska Sub issued pursuant to a
properly authorized management equity plan), Borrower and Parent shall comply
with all requirements of Section 6.11 hereto, and (2) Parent
becomes the direct or indirect beneficial owner of 100% of the Equity of
Nebraska Sub (other than Equity held by management of Nebraska Sub issued
pursuant to a properly authorized management equity plan), Borrower and Parent
shall cause Nebraska Sub to execute and deliver to the Administrative Agent for
the benefit of the Lenders and the Issuing Bank (A) a Guaranty and
Security Agreement, and (B) other appropriate Security Instruments
covering Nebraska Sub’s Property as security for the Lender Indebtedness, in form and
substance acceptable to the Administrative Agent.


 


1.7 Amendment to Indebtedness Covenant.
Section 7.2 of the Credit Agreement is hereby amended to delete the
reference to “Section 7.6(j); and” at the end of clause (e) and
replace it with “Section 7.6(j) or (k);”, to delete the
period at the end of clause (f) thereof, to insert in lieu of such period “;
and”, and to add thereto a new clause (g) which shall read in full as
follows:


 


(g) Indebtedness incurred in respect of the Notes Offering in an
aggregate principal amount not in excess of $160,000,000.


 


1.8 Amendment to Liens Covenant. Section 7.3
of the Credit Agreement is hereby amended to delete the “and” at the end of
clause (1), to delete the period at the end of clause (m) thereof, to insert in
lieu of such period “; and”, and to add thereto a new clause (n) which shall
read in full as follows:


 


(n) Liens securing the Senior Secured Notes, provided that such Liens
are subject to the terms of the Intercreditor Agreement.


 


1.9 Amendments to the Restricted Payment Covenant.


 


(a) The reference to December 31,
2004 in the first sentence of subsection (f) of Section 7.5 of
the Credit Agreement shall be replaced with a reference to December 31,
2005. The reference to January 1, 2004 in Section 7.5(f)(iii)(C) of
the Credit Agreement shall be replaced with a reference to January 1,
2005.


 


(b) Clause (e) of Section 7.5
of the Credit Agreement is hereby amended by replacing the “and” at the end of
clause (i) thereof with a comma, and adding the following immediately
before the semicolon at the end of such clause (e):


 


and (iii) to make regularly scheduled interest payments in respect
of the Senior Secured Notes as set forth in the Description of Notes


 


8

















 


1.10 Amendment to Investments. Loans, etc. Covenant.
Section 7.6 of the Credit Agreement is hereby amended to delete the “; and”
at the end of clause (i), to delete the period at the end of clause (j)
thereof, to insert in lieu of such period “; and”, and to add thereto a new
clause (k) which shall read in full as follows:


 


(k) loans by Borrower to Nebraska Sub in an aggregate principal amount
up to $8,000,000 evidenced by a promissory note (the “Nebraska Note”); provided, that,
(i) the proceeds from such loan shall be used exclusively for Capital
Expenditures at the Nebraska Facility in connection with the proposed expansion
thereof, (ii) amounts loaned and repaid by Nebraska Sub pursuant to the
Nebraska Note may not be reborrowed, and (iii) at any time when any
such loan by Borrower to Nebraska Sub is outstanding, no Equity Distribution,
except Permitted Tax Distributions, shall be made by Nebraska Sub, it being
understood that the limitation in this clause (iii) shall not apply to any
Equity Distributions in respect of the net income of Nebraska Sub for the
fiscal year ending December 31, 2004.


 


1.11 Amendment to Negative Pledge Agreements Covenant.
Section 7.11 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section 7.11 Negative Pledge Agreements. Create, incur, assume or suffer to exist,
or permit any other Credit Party to create, incur, assume or suffer to exist,
any contract, agreement or understanding, other than (a) this Agreement
and the other Financing Documents, (b) the Senior Secured Notes Documents,
and (c) any agreements governing any purchase money Liens or Capital Lease
Obligations or dispositions of assets otherwise permitted hereby provided
that any such prohibition or limitation is only
effective against the Property financed thereby, which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any
Property of any Credit Party, or which requires the consent of or notice to
other Persons in connection therewith.


 


1.12 Amendment to Capital Expenditures Covenant.
Section 7.15 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section 7.15 Capital Expenditures. Make Capital Expenditures in excess of (a) $15,000,000
in the aggregate for any Fiscal Year, plus (b) up to an additional
$9,000,000 for the expansion of the Nebraska Facility, plus (c) up to an
additional $62,500,000 for the expansion of the production capacity at the
Pekin Facility so long as such Capital Expenditures under this clause (c) are
made solely from the proceeds of the Notes Offering deposited into the Escrow
Account; provided, that, no Capital Expenditures shall be made
if, before or after giving effect to the making of such Capital Expenditures, a
Default then exists or thereafter would exist, other than (x) safety and
environmental Capital Expenditures, (y) Capital Expenditures in respect of the
proposed expansion of the Pekin Facility financed with proceeds of the issuance
of the Senior Secured Notes on deposit in the Escrow Account and (z) Capital
Expenditures in respect of the proposed expansion of the Nebraska Facility, provided,
that, the Borrower


 


9

















 


shall
not be permitted to make loans to Nebraska Sub pursuant to Section 7.6(k)
to finance such Capital Expenditures during the continuance of any Default
(it being understood that the making of such Capital Expenditures shall not
operate as a waiver of any Default and nothing contained herein shall obligate
Administrative Agent or any Lender to fund a Borrowing or otherwise advance
funds for the purpose of paying the costs of any Capital Expenditure during the
existence of a Default).


 


1.13 Amendment to Intercompany Transactions Covenant.
Section 7.17 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section 7.17 Intercompany Transactions. Create or otherwise cause or permit to
exist or become effective, except as may be expressly permitted or
required by the Financing Documents or the Senior Secured Note Documents, any
consensual encumbrance or restriction of any kind on the ability of any Credit
Party to (a) make any Restricted Payment to any Credit Party, (b) pay
any indebtedness owed to any Credit Party, (c) make any loan or advance to
any Credit Party or any investment in any Credit Party, or (d) sell, lease
or transfer any of its Property to any Credit Party except, in each case, for
restrictions (i) contained in the Nebraska Sub Operating Agreement as in
effect on the Closing Date or set forth in resolutions of the membership
committee of Nebraska Sub adopted on June 21, 2001, and March 10,
2003, copies of which were provided to Administrative Agent prior to the
Closing Date, (ii) arising under any Governmental Requirement, (iii) set
forth in a lease or license permitted pursuant to the terms of the Financing
Documents and entered into in the ordinary course of business that restrict in
a customary manner the subletting, assignment or transfer of any property or
asset that is subject to such lease or license, or (iv) set forth in the
terms of any document or instrument evidencing any Permitted Liens (or the
Indebtedness secured thereby) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to
such Permitted Lien.


 


1.14 Amendment to Restricted Accounts Covenant.
Section 7.19 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section 7.19 Restricted Accounts. Have more than $100,000 in cash in the
aggregate at any time which is not on deposit in an account with an Approved
Depository Bank which is subject to a Restricted Account Agreement other than (i) a
Nebraska Sub payroll account, and (ii) the Notes Collateral Account.


 


1.15 Addition of Event of Default. Article 8
of the Credit Agreement is hereby amended to add a new Section 8.15
thereto which shall read in full as follows:


 


Section 8.15 Senior
Secured Notes. The occurrence of an event of default, after
giving effect to any applicable grace, notice or cure period, under the
Indenture.


 


10

















 


1.16 Amendment to Amendments and Waivers Section.
Clause (c) of Section 10.2 of the Credit Agreement is hereby amended
and restated in its entirety to read in full as follows:


 


(c) release any material part of the Collateral (other than
Term Priority Collateral as such term is defined in the Intercreditor
Agreement), without the written consent of all of the Lenders, except as
expressly permitted hereby, provided, that, the Administrative
Agent shall release (without consent from the Lenders) (i) any Collateral
sold, transferred or otherwise disposed of as permitted by Section 7.4
as such Section 7.4 may be amended from time to time in
accordance with this Agreement or (ii) any Term Priority Collateral in
accordance with the Intercreditor Agreement;


 


1.17 Amendment to Exhibit A (Form of Borrowing
Base Report) to the Credit
Agreement. Exhibit A to the Credit Agreement shall be
replaced with Exhibit A attached hereto which shall be deemed to be
incorporated into the Credit Agreement as of the effective date hereof.


 


SECTION 2. Limited Consent In reliance on the
representations, warranties, covenants and agreements contained in this Second
Amendment, and subject to the satisfaction of each condition precedent set
forth in Section 3 hereof, the Lenders hereby consent to (a) the
Notes Offering and the issuance of the Senior Secured Notes and (b) the
one-time use of proceeds of a Revolving Credit Loan in an amount up to
$15,500,000 to pay a portion of a dividend by Parent to Holdco (the “Special Dividend”); provided,
that, the Administrative Agent shall have received a Borrowing Base Report
prepared as of the date of payment of the Special Dividend setting forth the
Borrowing Base to be in effect on the date the Special Dividend is paid, and
reflecting that, after giving effect to the Special Dividend and after giving
effect to the new definitions of Borrowing Base and Borrowing Base Report set
forth in this Second Amendment, the average Availability for the five (5) Business
Days prior to the payment of the Special Dividend shall not be less than
$10,000,000; provided, further, that, the Special Dividend
is a limited one-time event and nothing contained herein shall obligate the
Lenders to grant any additional or future consent.


 


SECTION 3. Conditions Precedent. The effectiveness
of the amendments to the Credit Agreement contained in Section 1
hereof and the limited consent contained in Section 2 hereof is
subject to the satisfaction of each of the following conditions precedent (the
date on which each of the following conditions precedent shall be satisfied is
referred to herein as the “Effective Date”):


 


3.1 Consummation of the Notes Offering.
Borrower shall have completed the Notes Offering and issued the Senior Secured
Notes on or before December 31, 2004.


 


3.2 Fees and Expenses. Borrower and Parent
shall have paid all fees and expenses due and owing in connection with this
Second Amendment, including, without limitation, all fees and expenses of
Vinson & Elkins L.L.P., counsel to the Administrative Agent.


 


11

















 


3.3 Officers’ Certificates; Opinion, etc.
Borrower and Parent shall have delivered to the Administrative Agent such
certificates of authorized officers of Borrower and Parent, certificates of
Governmental Authorities, certified copies of the certificates of incorporation
and formation and bylaws and operating agreements, as applicable, of Borrower
and Parent (or certified confirmation that no amendments, modifications or revisions
have been to those previously certifies and delivered to the Administrative
Agent, as applicable), certified copies of resolutions of the board of
directors, managers or members, as applicable, of Borrower and Parent and such
other documents, instruments and agreements as the Administrative Agent shall
require to evidence the valid corporate existence and authority to conduct
business of Borrower and Parent and the due authorization, execution and
delivery of this Second Amendment any other documents related to this Second
Amendment and any other legal maters relating to Borrower, Parent, any
Subsidiary or the other Financing Documents by Borrower or Parent, all in a form and
substance satisfactory to the Administrative Agent and its counsel, including,
without limitation, an opinion of counsel to Borrower and Parent.


 


3.4 Officers’ Certificates; Opinion, etc.
Holdco shall have delivered to the Administrative Agent copies of such
certificates of authorized officers of Holdco, certificates of Governmental
Authorities, certified copies of the certificate of incorporation and bylaws of
Holdco, certified copies of resolutions of the board of directors of Holdco and
such other documents, instruments and agreements as are delivered to the
underwriter in connection with the Notes Offering and as the Administrative
Agent shall request to evidence the valid corporate existence and authority to
conduct business of Holdco and the due authorization, execution and delivery of
the Senior Secured Notes Documents, including, without limitation, a reliance
letter of counsel to Holdco with respect to certain opinions provided to the
underwriter in connection with the Notes Offering.


 


3.5 Intercreditor Agreement. The
Administrative Agent shall have received the Intercreditor Agreement, in the form attached
as Exhibit C hereto, duly completed and executed by Collateral
Agent and acknowledged by Borrower, Parent and Holdco.


 


3.6 Amendment to Guaranty and Security Agreement.
The Administrative Agent shall have received the First Amendment to Security
Agreement, duly completed and executed by Borrower and Parent.


 


3.7 Amendment to Mortgage. The
Administrative Agent shall have received the First Amendment to Mortgage, duly
completed and executed by Borrower, along with (i) an opinion of counsel
to Borrower in Illinois dated as of the Notes Offering Issuance Date addressed
to the Administrative Agent, the Issuing Banks and the Lenders and covering
such matters as the Administrative Agent, the Issuing Banks or the Lenders may reasonably
request in connection with the First Amendment to Mortgage, and (ii) a
draft title endorsement approved by the issuing title company with respect to
the First Amendment to Mortgage in form and substance reasonably
satisfactory to the Administrative Agent with respect to the title policy
issued in connection with the existing Mortgage.


 


3.8 Intercompany Note. The Administrative
Agent shall have received the Nebraska Note duly executed and completed, in form and
substance satisfactory to the Administrative Agent, along with an endorsement
thereof executed in blank.


 


12

















 


3.9 Documentation. The Administrative Agent
shall have received such other
documents, instruments and agreements as it or any Lender may reasonably
request, all in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders.


 


3.10 No Defaults. No Default or Event of
Default shall exist.


 


SECTION 4. Representations and Warranties. In
order to induce the Administrative Agent and each Lender to enter into this
Second Amendment, Borrower and Parent hereby jointly and severally represent
and warrant to the Administrative Agent and each Lender, as of the Effective
Date, that:


 


4.1 Accuracy of Representations and Warranties.
Each of the representations and warranties of Borrower and Parent contained in
the Financing Documents (as modified hereby and in the other Second Amendment
Documents) is true and correct in all material respects as of the Effective
Date (except to the extent that such representations and warranties are
expressly made as of a particular date, in which event such representations and
warranties were true and correct as of such date).


 


4.2 Due Authorization, No Conflicts. The
execution, delivery and performance by Borrower and Parent of this Second
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this Second Amendment, are within
Borrower’s corporate or Parent’s limited liability company powers, as applicable,
have been duly authorized by all necessary corporate or limited liability
company action, as applicable, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not violate or
constitute a default under any provision of applicable law or any material
agreement binding upon Borrower, Parent or their Subsidiaries, or result in the
creation or imposition of any Lien upon any of the assets of Borrower, Parent
or their Subsidiaries except for Permitted Liens.


 


4.3 Validity and Binding Effect. This
Second Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this Second Amendment each constitute the
valid and binding obligations of Borrower or Parent enforceable in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors’ rights
generally, and the availability of equitable remedies may be limited by
equitable principles of general application.


 


4.4 Absence of Defaults. Neither a Default
nor an Event of Default has occurred which is continuing.


 


4.5 No Defense. Neither Borrower nor Parent
has any defense to payment, counterclaim or right of set-off with respect to
the Lender Indebtedness on the date hereof.


 


SECTION 5. Miscellaneous.


 


5.1 Reaffirmation of Financing Documents; Extension of
Liens. Any and all of the terms and provisions of the Credit
Agreement and the Financing Documents shall, except as amended and modified
hereby or by the other Second Amendment Documents, remain in full force and
effect. Borrower and Parent hereby extend each Lien granted by Borrower and


 


13

















 


Parent
to secure the Lender Indebtedness until the Lender Indebtedness has been paid
in full, and agree 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,
all of which are ratified and confirmed.


 


5.2 Parties in Interest. All of the terms
and provisions of this Second Amendment shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.


 


5.3 Counterparts, Effectiveness of Second Amendment.
This Second Amendment may be executed in counterparts, and all parties
need not execute the same counterpart; however, no party shall be bound by this
Second Amendment until this Second Amendment has been executed by Borrower,
Parent, the Administrative Agent and all Lenders. Facsimiles shall be effective
as originals.


 


5.4 COMPLETE AGREEMENT. THIS SECOND
AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


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


 


5.6 No Implied Waivers. No failure or delay
on the part of the Lenders or the Administrative Agent in exercising, and
no course of dealing with respect to, any right, power or privilege under this
Second Amendment, the Credit Agreement or any other Financing Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Second Amendment, the Credit Agreement or
any other Financing Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.


 


5.7 Review and Construction of Documents.
Borrower and Parent hereby acknowledge, and represent and warrant to the
Lenders, that (a) Borrower and Parent have had the opportunity to consult
with legal counsel of their own choice and have been afforded an opportunity to
review this Second Amendment with their legal counsel, (b) Borrower and
Parent have reviewed this Second Amendment and fully understand the effects
thereof and all terms and provisions contained herein, (c) Borrower and
Parent have executed this Second Amendment of their own free will and volition,
and (d) this Second Amendment shall be construed as if jointly drafted by
Borrower, the Parent and the Lenders. The recitals contained in this Second
Amendment shall be construed to be part of the operative terms and
provisions of this Second Amendment.


 


5.8 Arms-Length/Good Faith. This Second
Amendment has been negotiated at arms-length and in good faith by the parties
hereto.


 


14

















 


5.9 Interpretation. Wherever the context
hereof shall so require, the singular shall include the plural, the masculine
gender shall include the feminine gender and the neuter and vice versa. The
headings, captions and arrangements used in this Second Amendment are for
convenience only and shall not affect the interpretation of this Second
Amendment.


 


5.10 Severability. In case any one or more
of the provisions contained in this Second Amendment shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof,
and this Second Amendment shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.


 


5.11 Further Assurances. Borrower and Parent
agree to execute, acknowledge, deliver, file and record such further
certificates, instruments and documents, and to do all other acts and things,
as may be requested by the Lenders or the Administrative Agent as
necessary or advisable to carry out the intents and purposes of this Second
Amendment.


 


5.12 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT
ALLOWED BY APPLICABLE LAW, EACH OF BORROWER, PARENT, THE ADMINISTRATIVE AGENT,
THE ISSUING BANK AND THE LENDERS (i) IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY FINANCING
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVE 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; (iii) CERTIFY 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 WAIVERS; AND (iv) ACKNOWLEDGE THAT IT HAS
BEEN INDUCED TO ENTER INTO THIS SECOND AMENDMENT, THE CREDIT 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.


 


[Signature Pages Follow]


 


15

















 


SIGNATURE PAGE

TO

SECOND AMENDMENT TO CREDIT AGREEMENT

DATED DECEMBER 8, 2004

BY AND AMONG

AVENTINE RENEWABLE ENERGY, INC., AS BORROWER,

AVENTINE RENEWABLE ENERGY, L.L.C., AS PARENT,

JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER, AS THE ISSUING BANK

AND AS ADMINISTRATIVE AGENT,

AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS


 


IN WITNESS WHEREOF, the
parties hereto have executed this Second Amendment as of the day and year first
above written. 


 


	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth R. Eckhardt

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kenneth R. Eckhardt

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					



 


	
  PARENT:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth R. Eckhardt

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kenneth R. Eckhardt

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					



 


	
  ADMINISTRATIVE AGENT, ISSUING

  	
   

  
	
  BANK AND THE LENDERS:

  	
  JPMORGAN CHASE BANK, N.A., individually

  
	
   

  	
  as a Lender, as the Issuing Bank and as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher D. Capriotti,

  
	
   

  	
   

  	
  Vice President

  
					



 


[Signature Page]


 

















 


SIGNATURE PAGE

TO

SECOND AMENDMENT TO CREDIT AGREEMENT

DATED DECEMBER 8, 2004

BY AND AMONG

AVENTINE RENEWABLE ENERGY, INC., AS BORROWER,

AVENTINE RENEWABLE ENERGY, L.L.C., AS PARENT,

JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER, AS THE ISSUING BANK

AND AS ADMINISTRATIVE AGENT,

AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Curtis A. Schrieber

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Curtis A. Schrieber

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


	
   

  	
  FOOTHILL CAPITAL CORPORATION, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. Graham Sones

  	
   

  
	
   

  	
   

  	
  Name:

  	
  C. Graham Sones

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


[Signature Page]


 

















 


SIGNATURE PAGE

TO

SECOND AMENDMENT TO CREDIT AGREEMENT

DATED DECEMBER 8, 2004

BY AND AMONG

AVENTINE RENEWABLE ENERGY, INC., AS BORROWER,

AVENTINE RENEWABLE ENERGY, L.L.C., AS PARENT,

JPMORGAN CHASE BANK, INDIVIDUALLY AS A LENDER, AS THE ISSUING BANK

AND AS ADMINISTRATIVE AGENT,

AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


	
   

  	
  WELLS FARGO FOOTHILL, INC., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick McCormack

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patrick McCormack

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
					



 


	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. Graham Sones

  	
   

  
	
   

  	
   

  	
  Name:

  	
  C. Graham Sones

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 


[Signature Page]


 














 


THIRD AMENDMENT TO CREDIT AGREEMENT


 


THIS THIRD AMENDMENT TO
CREDIT AGREEMENT (this “Third Amendment”)
is executed as of the 19th day of August, 2005, by and among AVENTINE RENEWABLE ENERGY, INC., a
Delaware corporation (“Borrower”),
AVENTINE RENEWABLE ENERGY, LLC, a
Delaware limited liability company (“Parent”),
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), individually
as a Lender, as the Issuing Bank and as the Administrative Agent, and each of
the other Lenders that is a signatory hereto.


 


W I T N E S S E T H:


 


WHEREAS, Borrower, Parent,
the Administrative Agent and the Lenders are parties to that certain Credit
Agreement dated as of May 30, 2003 (as amended by that certain First
Amendment to Credit Agreement dated as of March 19, 2004, that certain
Second Amendment to Credit Agreement dated as of December 8, 2004, and as
further amended from time to time, the “Credit
Agreement”; unless otherwise defined herein, all capitalized
terms used herein which are defined in the Credit Agreement shall have the
meaning given such terms in the Credit Agreement, including, to the extent
applicable, after giving effect to this Third Amendment), pursuant to which the
Lenders provide certain financing to Borrower in accordance with the terms and
conditions set forth therein; and


 


WHEREAS, Borrower and Parent
have requested that the Lenders amend certain provisions of the Credit
Agreement as set forth herein; and


 


WHEREAS, subject to the
terms and conditions set forth herein, the Lenders have agreed to Borrower’s
and Parent’s requests.


 


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. In reliance on the
representations, warranties, covenants and agreements contained in this Third
Amendment, and subject to the satisfaction of each condition precedent
contained in Section 2 hereof, the Credit Agreement shall be
amended effective as of the Effective Date (as hereinafter defined) in the
manner provided in this Section 1.


 


1.1 Deleted Definition. The definition of “Permitted Tax Distributions” contained
in Section 1.1 of the Credit Agreement is hereby deleted.


 


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


 


“Nebraska Credit Agreement”
shall have the meaning provided in Section 7.6(k).


 


1

















 


“Third Amendment”
shall mean the Third Amendment to Credit Agreement dated as of August 19,
2005, by and among Borrower, Parent, the Administrative Agent, the Issuing Bank
and the Lenders.


 


1.3 Amendment to Investments, Loans, etc. Covenant.
Clause (k) of Section 7.6 of the Credit Agreement is hereby amended and
restated in its entirety to read in full as follows:


 


(k) loans by Borrower to Nebraska Sub in an aggregate principal amount
not to exceed $5,000,000 made pursuant to a credit agreement dated as of the
Effective Date (as defined in the Third Amendment) between Borrower and
Nebraska Sub (a true and correct copy of which is attached as Exhibit A
to the Third Amendment, the “Nebraska
Credit Agreement”) and evidenced by the promissory note
referenced therein (the “Nebraska Note”);
provided, that, (i) the proceeds from such loans shall be
used by Nebraska Sub for Capital Expenditures and related expenses at the
Nebraska Facility in connection with the expansion thereof, and (ii) no
Equity Distribution shall be made by Nebraska Sub at any time a Default (as
defined in the Nebraska Credit Agreement) exists.


 


1.4 Amendment to Transactions with Affiliates Covenant.
Section 7.12 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section 7.12 Transactions with Affiliates. Except as set forth on Schedule 7.12,
enter into, or permit any other Credit Party to enter into, any transaction or series of
transactions with Affiliates of any Credit Party which involve an outflow of
money or other Property from any Credit Party to an Affiliate of any Credit
Party other than Borrower, including, but not limited to, repayment of
Indebtedness, management fees, compensation, salaries, asset purchase payments
or any other type of fees or payments similar in nature except for those which
are in the ordinary course of business of the Credit Parties and are on fair
and reasonable terms no less favorable than would be obtained in a comparable
arm’s length transaction with a Person not an Affiliate. Notwithstanding the
foregoing, the following shall be permitted: (a) the payment of
management, monitoring, advisory, service and similar fees and payments
permitted pursuant to Section 7.23, (b) the provision of
investment banking and advisory services actually rendered by Affiliates of the
Morgan Stanley Funds to any Credit Party in the ordinary course of such
Affiliates’ business, (c) Restricted Payments permitted pursuant to Section 7.5,
(d) transactions between or among Credit Parties who are Guarantors and (e) the
execution, delivery and performance of the Nebraska Credit Agreement and the
transactions contemplated therein.


 


1.5 Amendment to Modification of
Indebtedness Agreements Covenant. Section 7.16 of the
Credit Agreement is hereby amended to delete the “; and” at the end of clause
(b), to delete the period at the end of clause (c) thereof, to insert in
lieu of such period “; and”, and to add thereto a new clause (d) which
shall read in full as follows:


 


2

















 


(d) Amend, modify, or waive any provision of the Nebraska Credit
Agreement, the Nebraska Note or any instrument, document or agreement related
thereto if (i) the effect of such amendment, modification or waiver would
reduce or cancel the principal amounts owing by Nebraska Sub to Borrower
thereunder or (ii) an Event of Default has occurred and is continuing.


 


SECTION 2. Conditions Precedent. The effectiveness
of the amendments to the Credit Agreement contained in Section 1
hereof is subject to the satisfaction of each of the following conditions
precedent (the date on which each of the following conditions precedent shall
be satisfied is referred to herein as the “Effective
Date”):


 


2.1 Fees and Expenses. Borrower and Parent
shall have paid all fees and expenses due and owing in connection with this
Third Amendment, including, without limitation, all fees and expenses of Vinson &
Elkins L.L.P., counsel to the Administrative Agent.


 


2.2 Nebraska Credit Agreement. The
Administrative Agent shall have received a copy of the Nebraska Credit
Agreement duly executed and completed.


 


2.3 Documentation. The Administrative Agent
shall have received such other documents, instruments and agreements as it or
any Lender may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders.


 


2.4 No Defaults. No Default or Event of
Default shall exist.


 


SECTION 3. Post Closing Obligation. Within fifteen
(15) Business Days after the Effective Date, the Administrative Agent shall
have received the original Nebraska Note as referenced in the Nebraska Credit
Agreement, along with an endorsement thereof executed in blank.


 


SECTION 4. Representations and Warranties. In
order to induce the Administrative Agent and each Lender to enter into this
Third Amendment, Borrower and Parent hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender, as of the Effective Date,
that:


 


4.1 Accuracy of Representations and Warranties.
Each of the representations and warranties of Borrower and Parent contained in
the Financing Documents (as modified hereby) is true and correct in all
material respects as of the Effective Date (except to the extent that such
representations and warranties are expressly made as of a particular date, in
which event such representations and warranties were true and correct as of
such date).


 


4.2 Due Authorization, No Conflicts. The
execution, delivery and performance by Borrower and Parent of this Third
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this Third Amendment, are within Borrower’s
corporate or Parent’s limited liability company powers, as applicable, have
been duly authorized by all necessary corporate or limited liability company
action, as applicable, require no action by or in respect of, or filing with,
any governmental body, agency or official and do not violate or constitute a
default under any provision of applicable law or any material agreement binding
upon Borrower, Parent or their Subsidiaries, or result in the


 


3

















 


creation or imposition of any Lien upon any of the
assets of Borrower, Parent or their Subsidiaries except for Permitted Liens.


 


4.3 Validity and Binding Effect. This Third
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this Third Amendment each constitute the
valid and binding obligations of Borrower or Parent enforceable in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors’ rights
generally, and the availability of equitable remedies may be limited by
equitable principles of general application.


 


4.4 Absence of Defaults. Neither a Default
nor an Event of Default has occurred which is continuing.


 


4.5 No Defense. Neither Borrower nor Parent
has any defense to payment, counterclaim or right of set-off with respect to
the Lender Indebtedness on the date hereof.


 


SECTION 5. Miscellaneous.


 


5.1 Reaffirmation of Financing Documents; Extension of
Liens. Any and all of the terms and provisions of the Credit
Agreement and the Financing Documents shall, except as amended and modified
hereby, remain in full force and effect. Borrower and Parent hereby extend each
Lien granted by Borrower and Parent to secure the Lender Indebtedness until the
Lender Indebtedness has been paid in full, and agree 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, all of which are ratified and confirmed.


 


5.2 Parties in Interest. All of the terms
and provisions of this Third Amendment shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.


 


5.3 Counterparts, Effectiveness of Third Amendment.
This Third Amendment may be executed in counterparts, and all parties need
not execute the same counterpart; however, no party shall be bound by this
Third Amendment until this Third Amendment has been executed by Borrower,
Parent, the Administrative Agent and the Required Lenders. Facsimiles shall be
effective as originals.


 


5.4 COMPLETE AGREEMENT. THIS THIRD
AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


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


 


4

















 


5.6 No Implied Waivers. No failure or delay
on the part of the Lenders or the Administrative Agent in exercising, and
no course of dealing with respect to, any right, power or privilege under this
Third Amendment, the Credit Agreement or any other Financing Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Third Amendment, the Credit Agreement or
any other Financing Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.


 


5.7 Review and Construction of Documents.
Borrower and Parent hereby acknowledge, and represent and warrant to the
Lenders, that (a) Borrower and Parent have had the opportunity to consult
with legal counsel of their own choice and have been afforded an opportunity to
review this Third Amendment with their legal counsel, (b) Borrower and
Parent have reviewed this Third Amendment and fully understand the effects
thereof and all terms and provisions contained herein, (c) Borrower and
Parent have executed this Third Amendment of their own free will and volition,
and (d) this Third Amendment shall be construed as if jointly drafted by
Borrower, the Parent and the Lenders. The recitals contained in this Third
Amendment shall be construed to be part of the operative terms and
provisions of this Third Amendment.


 


5.8 Arms-Length/Good Faith. This Third
Amendment has been negotiated at arms-length and in good faith by the parties
hereto.


 


5.9 Interpretation. Wherever the context
hereof shall so require, the singular shall include the plural, the masculine
gender shall include the feminine gender and the neuter and vice versa. The
headings, captions and arrangements used in this Third Amendment are for
convenience only and shall not affect the interpretation of this Third
Amendment.


 


5.10 Severability. In case any one or more
of the provisions contained in this Third Amendment shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof, and
this Third Amendment shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.


 


5.11 Further Assurances. Borrower and Parent
agree to execute, acknowledge, deliver, file and record such further certificates,
instruments and documents, and to do all other acts and things, as may be
requested by the Lenders or the Administrative Agent as necessary or advisable
to carry out the intents and purposes of this Third Amendment.


 


5.12 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW, EACH
OF BORROWER, PARENT, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS
(i) IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO ANY FINANCING DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVE 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;


 


5

















 


(iii) CERTIFY 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 WAIVERS; AND (iv) ACKNOWLEDGE
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS THIRD AMENDMENT, THE CREDIT
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.


 


[Signature Pages Follow]


 


6

















 


IN WITNESS WHEREOF, the
parties hereto have executed this Third Amendment as of the day and year first
above written.


 


	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
  PARENT:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
  ADMINISTRATIVE AGENT, ISSUING

  	
   

  
	
  BANK AND THE LENDERS:

  	
  JPMORGAN CHASE BANK, N.A., individually as

  a Lender, as the Issuing Bank and as Administrative

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher D. Capriotti,

  
	
   

  	
   

  	
  Vice President

  
					



 


[Signature Page]


 

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a

  
	
   

  	
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  WELLS FARGO FOOTHILL, INC., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
						



 


	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


[Signature Page]


 

















 


Exhibit A


 


Nebraska Credit Agreement


 


A-1














Exhibit 10.03.04


 


FOURTH
AMENDMENT TO CREDIT AGREEMENT


 


THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”) is executed as of
the 30th day of November, 2005, by and among AVENTINE
RENEWABLE ENERGY, INC., a Delaware corporation (“Borrower”), AVENTINE RENEWABLE ENERGY, LLC, a Delaware limited liability
company (“Parent”),
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), individually
as a Lender, as the Issuing Bank and as the Administrative Agent, and each of
the other Lenders that is a signatory hereto.


 


W I T N E S S E T H:


 


WHEREAS, Borrower, Parent, the Administrative Agent
and the Lenders are parties to that certain Credit Agreement dated as of May
30, 2003 (as amended by that certain First Amendment to Credit Agreement dated
as of March 19, 2004, that certain Second Amendment to Credit Agreement dated
as of December 8, 2004, that certain Third Amendment to Credit Agreement dated
as of August 19, 2005, and as further amended from time to time, the “Credit Agreement” unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the meaning given such terms in the Credit
Agreement, including, to the extent applicable, after giving effect to this
Fourth Amendment), pursuant to which the Lenders provide certain financing to
Borrower in accordance with the terms and conditions set forth therein; and


 


WHEREAS, Borrower and Parent have requested that the
Lenders amend certain provisions of the Credit Agreement as set forth herein;
and


 


WHEREAS, subject to the terms and conditions set
forth herein, the Lenders have agreed to Borrower’s and Parent’s requests.


 


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.
In reliance on the representations, warranties, covenants and agreements
contained in this Fourth Amendment, and subject to the satisfaction of each
condition precedent contained in Section 2 hereof, the Credit Agreement
shall be amended effective as of the Effective Date (as hereinafter defined) in
the manner provided in this Section 1.


 


1.1
The definitions of “Applicable Margin,”
“Change of Control,” “Funded Indebtedness,” “Leverage Ratio”, “Morgan Stanley Funds” and “Qualified Public Offering” contained in Section 1.1 of the Credit
Agreement shall be amended to read in full as follows:


 


“Applicable Margin” shall mean, on any
day (a “determination day”) and with respect to any Revolving Credit Loan, the
applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Leverage Ratio determined on the most
recent Quarterly Date with respect to


 


1

















 


which Borrower and Parent
were required to deliver the Current Financials as of such determination day
(said calculation of the Leverage Ratio to be made by the Administrative Agent
as soon as practicable after receipt by the Administrative Agent of all
required Current Financials for the applicable period): 


 




	
  Fixed
  Charge

  Coverage Ratio

  	
   

  	
  LIBOR Loan

  Applicable Margin

  Percentage

  	
   

  	
  Base Rate Loan

  Applicable Margin

  Percentage

  	
   

  
	
  Greater than 5.00 to 1.0

  	
   

  	
  2.250

  	
  %

  	
  0.500

  	
  %

  
	
  Greater than 4.00 to 1.0

  but less than or equal to

  5.00 to 1.0

  	
   

  	
  2.000

  	
  %

  	
  0.375

  	
  %

  
	
  Greater than 3.00 to1.0

  but less than or equal to

  4.00 to 1.0

  	
   

  	
  1.750

  	
  %

  	
  0.250

  	
  %

  
	
  Greater than 2.00 to 1.0

  but less than or equal to

  3.00 to 1.0

  	
   

  	
  1.500

  	
  %

  	
  0.000

  	
  %

  
	
  Less than or equal to

  2.00 to 1.00

  	
   

  	
  1.250

  	
  %

  	
  0.000

  	
  %

  






 


Each
change in the Applicable Margin based on a change in the Leverage Ratio shall
be effective as of the 5th Business Day following actual receipt by the Administrative
Agent of the Current Financials for the applicable Fiscal Quarter (and based
upon Current Financials for the Rolling Period ended as of the last day of the
Rolling Period for which such Current Financials are provided). Notwithstanding
the foregoing, for the period commencing on November 30, 2005 and continuing
through and including the 5th Business Day following receipt by the
Administrative Agent of the Current Financials for the Fiscal Quarter ended
June 30, 2006, the Applicable Margin for (a) LIBOR Loans shall be 1.500%, and
(b) Base Rate Loans shall be 0.000% . In the event Current Financials are not
provided on any date required by Section 6.10(a), Section 6.10(b)
and Section 6.10(c), the LIBOR Loan Applicable Margin Percentage shall
be 2.250% and the Base Rate Loan Applicable Margin Percentage shall be 0.500%
from the date such Current Financials are due until the 5th Business Day after
the date the Administrative Agent receives such Current Financials then due
pursuant to Section 6.10(a), Section 6.10(b) and Section
6.10(c).


 


“Change of Control” shall mean the
occurrence of any event which results in any of the following statements being
incorrect: (i) before a Qualified Public Offering is consummated, (a) Parent
holds legal and beneficial title to 100% of the outstanding Equity of Borrower
of every class, (b) Parent holds legal


 


2

















 


and beneficial title to not
less than 78.42% of the outstanding Equity of Nebraska Sub of every class
(subject to dilution that may result in a reduction to Parent’s interest in the
Equity of Nebraska Sub to not less than 75% as a result of the issuance of
Equity to management of Nebraska Sub pursuant to a properly authorized
management equity plan), (c) Holdco holds legal and beneficial title to not
less than 85% of the outstanding Equity of Parent of every class, (d) Holdco II
holds legal and beneficial title to not less than 85% of the outstanding Equity
of Holdco of every class, (e) the Morgan Stanley Funds hold legal and
beneficial title to not less than 85% of the outstanding Equity of Holdco II of
every class, (f) Holdco does not have any outstanding Indebtedness other than
(I) Indebtedness that is held by Holdco II or the Morgan Stanley Funds, (2)
purchase price adjustments (if any) pursuant to the Purchase Agreement and (3)
other Indebtedness in an aggregate outstanding principal amount not to exceed
$5,000,000 at any time, and (g) Holdco II does not have any outstanding
Indebtedness other than (1) Indebtedness that is held by the Morgan Stanley
Funds, and (2) other Indebtedness in an aggregate outstanding principal amount
not to exceed $5,000,000 at any time or (ii) after a Qualified Public Offering
is consummated, (a) no person or group (within the meaning of the Securities
and Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in
effect on the date hereof), other than Morgan Stanley Funds, holds, directly or
indirectly, beneficially or of record, Equity Interests representing more than 30%
of either the aggregate Voting Equity or the aggregate equity value represented
by the issued and outstanding Equity Interests in Holdco, (b) Parent holds
legal and beneficial title to 100% of the outstanding Equity of Borrower of
every class, (c) Parent holds legal and beneficial title to not less than
78.42% of the outstanding Equity of Nebraska Sub of every class (subject to
dilution that may result in a reduction to Parent’s interest in the Equity of
Nebraska Sub to not less than 75% as a result of the issuance of Equity to
management of Nebraska Sub pursuant to a properly authorized management equity
plan), (d) Holdco holds legal and beneficial title to not less than 85% of the
outstanding Equity of Parent of every class, and (e) Holdco does not have any
outstanding Indebtedness other than (1) Indebtedness that is held by Holdco II
or the Morgan Stanley Funds, (2) purchase price adjustments (if any) pursuant
to the Purchase Agreement, and (3) other Indebtedness in an aggregate amount
not to exceed $5,000,000 at any time. Without limiting the foregoing, neither
the Notes Offering and the issuance of the Senior Secured Notes nor the
consummation of a Qualified Public Offering shall, in and of themselves,
constitute a Change of Control.


 


“Funded Indebtedness” shall mean, as to
any Person, without duplication, indebtedness of the type described in clause
(a) of the definition of “Indebtedness”.


 


“Leverage Ratio” shall mean the ratio,
determined for Parent and its consolidated Subsidiaries on each Quarterly Date
of (a) Net Funded Indebtedness determined as of such Quarterly Date, to (b)
EBITDA for the Rolling Period ending on such Quarterly Date.


 


3

















 


“Morgan Stanley Funds” shall mean Morgan
Stanley Dean Witter Capital Partners IV, L.P., Morgan Stanley Dean Witter
Capital Investors IV, L.P., MSCP IV 892 Investors, L.P. and Metalmark Capital
LLC, collectively.


 


“Qualified Public Offering” shall mean
(a) the first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offering and sale of Equity of Holdco on a firm commitment basis in which
the aggregate net proceeds received by Holdco at the public offering price is
at least $20,000,000 or (b) the first private placement covering the offering
and sale of Equity of Holdco in which the aggregate net proceeds received by
Holdco at the offering price is at least $20,000,000 and pursuant to which
Holdco is thereafter required to file a registration statement under the
Securities Act of 1933, as amended, with respect to a shelf registration
statement for the resale of such Equity of Holdco on a public securities
market.


 


1.2
Additional Definitions.
Section 1.1 of the Credit Agreement shall be amended to add thereto in
alphabetical order the following defined terms:


 


“Activation Notice” shall mean a written
notice to Borrower by the Administrative Agent, which notice may be given at
any time that an Activation Period is in effect, that the Administrative Agent
is activating its right to have all funds on deposit in the Blocked Account be
subject to the absolute dominion and control of the Administrative Agent.


 


“Activation Period” shall mean any
period commencing on the date that either (a) Availability is less than
$20,000,000 or (b) a Default or an Event of Default occurs, and in each case
continuing throughout the term of this Agreement.


 


“Fourth Amendment” shall mean the Fourth
Amendment to Credit Agreement dated as of November 30, 2005, by and among
Borrower, Parent, the Administrative Agent, the Issuing Bank and the Lenders
party thereto.


 


“Net Funded Indebtedness” shall mean the
remainder of the following determined for Parent and its consolidated
Subsidiaries on each Quarterly Date: (a) all Funded Indebtedness, plus
(b) all guarantees of Funded Indebtedness of other Persons (other than a Credit
Party, the incurrence of which is permitted by Section 7.2 hereof), minus
(c) cash and investments of the types described in clauses (b), (c), (d), (e)
and (1) of Section 7.6.


 


1.3
Amendment to Letter of Credit Provision.
Section 2.3(a) of the Credit Agreement is hereby amended to replace the
reference to “$10,000,000” set forth therein with a reference to “$20,000,000”.


 


1.4
Amendment to Interest Provision.
Clause (f) of Section 2.6 of the Credit Agreement is hereby amended and
restated in its entirety to read in full as follows:


 


4

















 


(f)
Collection Charge. Solely
for purposes of determining the amount of interest which accrues and is payable
in respect of Revolving Credit Loans, payments of principal will be deemed to
be applied to the outstanding principal balance of the Revolving Credit Loans
on the first Business Day following receipt by the Administrative Agent of
collected funds; provided, that, funds received by the
Administrative Agent by wire transfer of immediately available funds shall be
deemed to be applied to the outstanding principal balance of the Revolving
Credit Loans on the Business Day of receipt.


 


1.5
Amendment to Mandatory Prepayment
Provision. Clause (b)(2) of Section 2.10 of the Credit Agreement
is hereby amended and restated in its entirety to read in fill as follows:


 


(2)
Subject to the provisions of Section 2.8(d) hereof, prior to the
delivery of an Activation Notice, the Administrative Agent shall transfer and
apply the funds on deposit in the Blocked Account in accordance with the
instructions of Borrower. At any time the Activation Period is in effect, the
Administrative Agent may, in its sole discretion, and shall, at the request of
the Required Lenders, deliver an Activation Notice to the Borrower. Subject to
the provisions of Section 2.8(d) hereof, from and after delivery of an
Activation Notice, on or before 12:00 noon (New York, New York time) on each
Business Day, the Administrative Agent shall disburse to each Lender, for
application to the principal amount of the outstanding Revolving Credit Loans
of each Lender, such Lender’s Revolving Credit Percentage of all amounts then
on deposit in the Blocked Account, not to exceed such Lender’s Revolving Credit
Exposure, which the Administrative Agent shall have determined constitute “collected
funds” in accordance with the policies of the Administrative Agent then in
effect and reasonably consistent with industry custom and practice.


 


1.6
Amendment to Blocked Account Provision.
Section 4.3 of the Credit Agreement is hereby amended and restated in its
entirety to read in full as follows:


 


Section
4.3 Establishment of Blocked Account.
From and after the Closing Date, so long as this Agreement is in effect or any
Lender Indebtedness shall be outstanding, Borrower and Parent agree that all
funds received by Borrower or any Guarantor from any source, including any of
the foregoing which constitutes any part of the Collateral, shall be deposited
(and Borrower and Parent shall cause each other Guarantor to deposit all funds
received by such Person) in the Blocked Account not later than one Business Day
following the date of receipt. Such deposit shall be made in the exact form
received subject only to any necessary endorsements. Borrower and Parent hereby
acknowledge and agree (a) that, from and after delivery of an Activation
Notice, they have no power of withdrawal over the funds in the Blocked Account,
(b) that they have granted a Lien on, and pledged to the Administrative Agent
as additional collateral security for the Lender Indebtedness, the Blocked
Account and all funds on deposit in the Blocked Account and “control” has been
established with respect to the Blocked Account as defined in Section 9-104 of
the UCC, (c) that


 


5

















 


they
may not unilaterally terminate the Blocked Account, and (d) that, from and
after delivery of an Activation Notice, the Blocked Account and all funds on
deposit therein shall be subject to the absolute dominion and control of the
Administrative Agent. Borrower and Parent each agree that the Blocked Account
is a “deposit account” within the meaning of Section 9-102 of the UCC and that,
for purposes of Section 9-304 of the UCC, the State of New York shall be the “jurisdiction”
of the Administrative Agent.


 


1.7
Amendment to Indebtedness Covenant.
Clause (f) of Section 7.2 of the Credit Agreement is hereby amended and restated
in its entirety to read in full as follows:


 


(f)
other unsecured Indebtedness; provided, that, the aggregate
amount of such other unsecured Indebtedness shall not exceed $4,000,000
outstanding at any time; and


 


1.8
Amendment to Restricted Payments Covenant.
Section 7.5 of the Credit Agreement is hereby amended to delete the “; and” at
the end of clause (e), to delete the period at the end of clause (I) thereof,
to insert in lieu of such period “; and”, and to add thereto a new clause (g)
which shall read in full as follows:


 


(g)
Borrower shall be permitted to make Restricted Payments to Parent, and Parent
shall be permitted to make related Restricted Payments to Holdco to repurchase
Senior Secured Notes; provided, that, (i) such Restricted
Payments shall not be permitted if a Default or Event of Default shall be
continuing, (ii) the aggregate amount of Restricted Payments made pursuant to
this clause (g) shall not exceed $20,000,000, (iii) the average Availability is
not less than $20,000,000 calculated for the ninety (90) day period ending on
the date of such Restricted Payment, (iv) prior to and after giving effect to
the making of any such Restricted Payment, including any Borrowing made
hereunder to finance such Restricted Payment, Availability shall not be less
than $20,000,000, and (v) not less than five (5) Business Days prior to making
any Restricted Payment pursuant to this clause (g), Borrower shall deliver to
the Administrative Agent a certificate executed by the chief financial officer
of Borrower setting forth in reasonable detail information and calculations
necessary to verify that such Restricted Payment will be in compliance with the
requirements of this clause (g).


 


1.9
Amendments to Investments. Loans. etc.
Covenant.


 


(a)
Subsection (i) of clause (i) of Section 7.6 of the Credit Agreement is hereby
amended and restated in its entirety to read in full as follows:


 


(i)
investments in Marketing Alliance Partners (1) made prior to the Closing Date
and listed on Schedule 5.7  hereto and (2) made after the Closing Date in an aggregate amount not
to exceed $20,000,000, provided, that, (A) average Availability
is not less than $10,000,000 calculated for the ninety (90) day period ending
on the date of each investment made pursuant to this clause (i)(2), (B) prior
to and after giving effect to the making of any investment made pursuant to
this clause


 


6

















 


(i)(2), including any
Borrowing made hereunder to finance such investment, Availability shall not be
less than $10,000,000, (C) such investments shall not be permitted if a Default
or Event of Default shall exist and be continuing, and (D) the aggregate
maximum investments permitted pursuant to this clause (i)(2) in any one
Marketing Alliance Partner shall not exceed $3,000,000,


 


(b)
Section 7.6 of the Credit Agreement is hereby amended to delete the “; and” at
the end of clause (j), to delete the period at the end of clause (k) thereof,
to insert in lieu of such period “; and”, and to add thereto a new clause (1)
which shall read in full as follows:


 


(1)
investments in money market mutual funds having assets in excess of
$2,000,000,000 that primarily hold investments of the types described in
clauses (b), (c), (d) and (e) of this Section 7.6.


 


(c)
Section 7.6 of the Credit Agreement is hereby amended to delete the following
sentence at the end of such Section:


 


Notwithstanding
the foregoing, Parent and Borrower shall be prohibited from having Investments
of the types described in clauses (b), (c), (d) and (e) of this Section 7.6
at any time that the principal balance of the Revolving Credit Loans then
outstanding exceeds $2,000,000.


 


SECTION
2. Conditions Precedent.
The effectiveness of the amendments to the Credit Agreement contained in Section
1 hereof is subject to the satisfaction of each of the following conditions
precedent (the date on which each of the following conditions precedent shall
be satisfied is referred to herein as the “Effective
Date”):


 


2.1
Fees and Expenses. Borrower
and Parent shall have paid all fees and expenses due and owing in connection
with this Fourth Amendment, including, without limitation, all fees and
expenses of Vinson & Elkins L.L.P., counsel to the Administrative Agent.


 


2.2
Officers’ Certificates, etc.
Borrower and Parent shall have delivered to the Administrative Agent such
certificates of authorized officers of Borrower and Parent, certificates of
Governmental Authorities, certified copies of the certificates of incorporation
and formation and bylaws and operating agreements, as applicable, of Borrower
and Parent (or certified confirmation that no amendments, modifications or
revisions have been to those previously certifies and delivered to the
Administrative Agent, as applicable), certified copies of resolutions of the board
of directors, managers or members, as applicable, of Borrower and Parent and
such other documents, instruments and agreements as the Administrative Agent
shall require to evidence the valid corporate existence and authority to
conduct business of Borrower and Parent and the due authorization, execution
and delivery of this Fourth Amendment any other documents related to this
Fourth Amendment and any other legal maters relating to Borrower, Parent, any
Subsidiary or the other Financing Documents by Borrower or Parent, all in a
form and substance satisfactory to the Administrative Agent and its counsel.


 


7

















 


2.3
Documentation. The
Administrative Agent shall have received such other documents, instruments and
agreements as it or any Lender may reasonably request, all in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders.


 


2.4
No Defaults. No Default or
Event of Default shall exist.


 


SECTION
3. Post Closing Obligation.
Contemporaneously with the closing of a Qualified Public Offering, the
Administrative Agent shall have received copies of such certificates of
authorized officers of Holdco, certificates of Governmental Authorities,
certified copies of the certificate of incorporation and bylaws of Holdco,
certified copies of resolutions of the board of directors of Holdco and such
other documents, instruments and agreements as are delivered to the underwriter
in connection with such Qualified Public Offering and as the Administrative
Agent shall request to evidence the valid corporate existence and authority to
conduct business of Holdco and the due authorization, execution and delivery of
the documents and agreements related to the Qualified Public Offering.


 


SECTION
4. Representations and Warranties.
In order to induce the Administrative Agent and each Lender to enter into this
Fourth Amendment, Borrower and Parent hereby jointly and severally represent
and warrant to the Administrative Agent and each Lender, as of the Effective
Date, that:


 


4.1
Accuracy of Representations and Warranties.
Each of the representations and warranties of Borrower and Parent contained in
the Financing Documents (as modified hereby) is true and correct in all
material respects as of the Effective Date (except to the extent that such
representations and warranties are expressly made as of a particular date, in
which event such representations and warranties were true and correct as of
such date).


 


4.2
Due Authorization. No Conflicts.
The execution, delivery and performance by Borrower and Parent of this Fourth
Amendment and all other documents, instruments or agreements executed by
Borrower or Parent in connection with this Fourth Amendment, are within
Borrower’s corporate or Parent’s limited liability company powers, as
applicable, have been duly authorized by all necessary corporate or limited
liability company action, as applicable, require no action by or in respect of,
or filing with, any governmental body, agency or official and do not violate or
constitute a default under any provision of applicable law or any material
agreement binding upon Borrower, Parent or their Subsidiaries, or result in the
creation or imposition of any Lien upon any of the assets of Borrower, Parent
or their Subsidiaries except for Permitted Liens.


 


4.3
Validity and Binding Effect.
This Fourth Amendment and all other documents, instruments or agreements
executed by Borrower or Parent in connection with this Fourth Amendment each
constitute the valid and binding obligations of Borrower or Parent enforceable
in accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors’
rights generally, and the availability of equitable remedies may be limited by
equitable principles of general application.


 


4.4
Absence of Defaults.
Neither a Default nor an Event of Default has occurred which is continuing.


 


8

















 


4.5
No Defense. Neither
Borrower nor Parent has any defense to payment, counterclaim or right of
set-off with respect to the Lender Indebtedness on the date hereof.


 


SECTION
5. Miscellaneous.


 


5.1
Reaffirmation of Financing Documents;
Extension of Liens. Any and all of the terms and provisions of
the Credit Agreement and the Financing Documents shall, except as amended and
modified hereby, remain in full force and effect. Borrower and Parent hereby
extend each Lien granted by Borrower and Parent to secure the Lender
Indebtedness until the Lender Indebtedness has been paid in full, and agree
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, all of which are
ratified and confirmed.


 


5.2
Parties in Interest. All of
the terms and provisions of this Fourth Amendment shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.


 


5.3
Counterparts, Effectiveness of Fourth
Amendment. This Fourth Amendment may be executed in
counterparts, and all parties need not execute the same counterpart; however,
no party shall be bound by this Fourth Amendment until this Fourth Amendment
has been executed by Borrower, Parent, the Administrative Agent and all the
Lenders. Facsimiles shall be effective as originals.


 


5.4
COMPLETE AGREEMENT. THIS
FOURTH AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


5.5
Headings. The headings,
captions and arrangements used in this Fourth Amendment are, unless specified
otherwise, for convenience only and shall not be deemed to limit, amplify or
modify the terms of this Fourth Amendment, nor affect the meaning thereof.


 


5.6
No Implied Waivers. No
failure or delay on the part of the Lenders or the Administrative Agent in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Fourth Amendment, the Credit Agreement or any other
Financing Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Fourth Amendment,
the Credit Agreement or any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.


 


5.7
Review and Construction of Documents.
Borrower and Parent hereby acknowledge, and represent and warrant to the
Lenders, that (a) Borrower and Parent have had the opportunity to consult with
legal counsel of their own choice and have been afforded an opportunity to
review this Fourth Amendment with their legal counsel, (b) Borrower and Parent
have reviewed this Fourth Amendment and fully understand the effects thereof
and all terms and


 


9

















 


provisions
contained herein, (c) Borrower and Parent have executed this Fourth Amendment
of their own free will and volition, and (d) this Fourth Amendment shall be
construed as if jointly drafted by Borrower, the Parent and the Lenders. The
recitals contained in this Fourth Amendment shall be construed to be part of
the operative terms and provisions of this Fourth Amendment.


 


5.8
Arms-Length/Good Faith.
This Fourth Amendment has been negotiated at arms-length and in good faith by
the parties hereto.


 


5.9
Interpretation. Wherever
the context hereof shall so require, the singular shall include the plural, the
masculine gender shall include the feminine gender and the neuter and vice
versa. The headings, captions and arrangements used in this Fourth Amendment
are for convenience only and shall not affect the interpretation of this Fourth
Amendment.


 


5.10
Severability. In case any
one or more of the provisions contained in this Fourth Amendment shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provision hereof, and this Fourth Amendment shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.


 


5.11
Further Assurances.
Borrower and Parent agree to execute, acknowledge, deliver, file and record
such further certificates, instruments and documents, and to do all other acts
and things, as may be requested by the Lenders or the Administrative Agent as
necessary or advisable to carry out the intents and purposes of this Fourth
Amendment.


 


5.12
WAIVER OF JURY TRIAL. TO THE
MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW, EACH OF BORROWER, PARENT, THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS (1) IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY
WAIVE 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; (iii) CERTIFY 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 WAIVERS; AND (iv) ACKNOWLEDGE THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS FOURTH AMENDMENT, THE CREDIT 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.


 


[Signature Pages Follow]


 


10

















 


IN
WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of
the day and year first above written. 


 


	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William J. Brennan

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William
  J. Brennan

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Accounting and Compliance Officer

  
					



 


	
  PARENT:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William J. Brennan

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William
  J. Brennan

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Accounting and Compliance Officer

  
					



 


	
  ADMINISTRATIVE AGENT, ISSUING

  	
   

  
	
  BANK AND THE LENDERS:

  	
  JPMORGAN CHASE BANK, N.A., individually

  
	
   

  	
  as
  a Lender, as the Issuing Bank and as

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher D. Capriotti

  	
   

  
	
   

  	
   

  	
  Christopher
  D. Capriotti,

  
	
   

  	
   

  	
  Vice
  President

  
					



 


Signature Page to Fourth
Amendment to Credit Agreement


 

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Curtis A. Schrieber

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Curtis
  A. Schrieber

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick McCormack

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patrick
  McCormack

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robyn Pingree

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robyn
  Pingree

  
	
   

  	
   

  	
  Title:

  	
  AVP

  
					



 


Signature Page to Fourth
Amendment to Credit Agreement