Exhibit
10.1


 


EXECUTION COPY


 




 





FIRST AMENDED AND RESTATED CREDIT AGREEMENT


 


Dated as of August 1, 2006


 


Among


 


MXENERGY INC. and

MXENERGY ELECTRIC INC.


 


as Borrowers,


 


MXENERGY HOLDINGS INC. AND CERTAIN
SUBSIDIARIES THEREOF,


 


as Guarantors,


 


 THE
LENDERS FROM TIME TO TIME PARTY HERETO,


 


as Lenders,


 


and


 


SOCIÉTÉ GÉNÉRALE,


 


as Administrative Agent




 





 


WACHOVIA BANK, N.A.


 


Syndication Agent


 


SOCIÉTÉ GÉNERALÉ,


 


Lead Arranger and Sole Bookrunner


 




 





 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND ACCOUNTING
  TERMS

  	
  1

  
	
   

  	
   

  
	
   

  	
  Section 1.01

  	
  Certain Defined Terms

  	
  1

  
	
   

  	
  Section 1.02

  	
  Computation of Time Periods

  	
  30

  
	
   

  	
  Section 1.03

  	
  Accounting Terms

  	
  30

  
	
   

  	
  Section 1.04

  	
  Types of Advances

  	
  31

  
	
   

  	
  Section 1.05

  	
  Miscellaneous

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II THE ADVANCES

  	
  32

  
	
   

  	
   

  
	
   

  	
  Section 2.01

  	
  The Advances

  	
  32

  
	
   

  	
  Section 2.02

  	
  Method of Borrowing

  	
  36

  
	
   

  	
  Section 2.03

  	
  Fees

  	
  39

  
	
   

  	
  Section 2.04

  	
  Reduction of the Revolving Commitments

  	
  40

  
	
   

  	
  Section 2.05

  	
  Repayment

  	
  41

  
	
   

  	
  Section 2.06

  	
  Interest

  	
  41

  
	
   

  	
  Section 2.07

  	
  Prepayments

  	
  42

  
	
   

  	
  Section 2.08

  	
  Funding Losses

  	
  44

  
	
   

  	
  Section 2.09

  	
  Increased Costs

  	
  45

  
	
   

  	
  Section 2.10

  	
  Payments and Computations

  	
  46

  
	
   

  	
  Section 2.11

  	
  Taxes

  	
  47

  
	
   

  	
  Section 2.12

  	
  Sharing of Payments, Etc

  	
  50

  
	
   

  	
  Section 2.13

  	
  Applicable Lending Offices

  	
  50

  
	
   

  	
  Section 2.14

  	
  Letters of Credit

  	
  51

  
	
   

  	
  Section 2.15

  	
  Mitigation Obligations; Replacement of Lenders

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III CONDITIONS OF
  LENDING

  	
  57

  
	
   

  	
   

  
	
   

  	
  Section 3.01

  	
  Initial Conditions Precedent

  	
  57

  
	
   

  	
  Section 3.02

  	
  Conditions Precedent to Each Credit Event

  	
  61

  
	
   

  	
  Section 3.03

  	
  Determinations Under Section 3.01 and 3.02

  	
  62

  
	
   

  	
  Section 3.04

  	
  Post Closing Covenant

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND
  WARRANTIES

  	
  62

  
	
   

  	
   

  
	
   

  	
  Section 4.01

  	
  Existence; Subsidiaries

  	
  62

  
	
   

  	
  Section 4.02

  	
  Power and Authority

  	
  62

  



 


i

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  Section 4.03

  	
  Authorization and Approvals

  	
  63

  
	
   

  	
  Section 4.04

  	
  Enforceable Obligations

  	
  63

  
	
   

  	
  Section 4.05

  	
  Financial Statements; No Material Adverse Effect

  	
  63

  
	
   

  	
  Section 4.06

  	
  True and Complete Disclosure

  	
  64

  
	
   

  	
  Section 4.07

  	
  Litigation

  	
  64

  
	
   

  	
  Section 4.08

  	
  Compliance with Laws

  	
  64

  
	
   

  	
  Section 4.09

  	
  No Default

  	
  65

  
	
   

  	
  Section 4.10

  	
  Subsidiaries; Corporate Structure

  	
  65

  
	
   

  	
  Section 4.11

  	
  Condition of Properties

  	
  65

  
	
   

  	
  Section 4.12

  	
  Environmental Condition

  	
  65

  
	
   

  	
  Section 4.13

  	
  Insurance

  	
  66

  
	
   

  	
  Section 4.14

  	
  Taxes

  	
  66

  
	
   

  	
  Section 4.15

  	
  ERISA Compliance

  	
  67

  
	
   

  	
  Section 4.16

  	
  Security Interests

  	
  67

  
	
   

  	
  Section 4.17

  	
  Bank Accounts

  	
  68

  
	
   

  	
  Section 4.18

  	
  Labor Relations

  	
  68

  
	
   

  	
  Section 4.19

  	
  Intellectual Property

  	
  68

  
	
   

  	
  Section 4.20

  	
  Solvency

  	
  68

  
	
   

  	
  Section 4.21

  	
  Senior Indebtedness

  	
  69

  
	
   

  	
  Section 4.22

  	
  Margin Regulations

  	
  69

  
	
   

  	
  Section 4.23

  	
  Investment Company Act; Public Utility Holding
  Company Act

  	
  69

  
	
   

  	
  Section 4.24

  	
  Names and Locations

  	
  69

  
	
   

  	
  Section 4.25

  	
  Revisions or Updates to the Schedules

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V AFFIRMATIVE COVENANTS

  	
  70

  
	
   

  	
   

  
	
   

  	
  Section 5.01

  	
  Preservation of Existence, Etc

  	
  70

  
	
   

  	
  Section 5.02

  	
  Compliance with Laws, Etc

  	
  71

  
	
   

  	
  Section 5.03

  	
  Maintenance of Property

  	
  71

  
	
   

  	
  Section 5.04

  	
  Maintenance of Insurance

  	
  71

  
	
   

  	
  Section 5.05

  	
  Payment of Taxes, Etc

  	
  72

  



 


ii

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  Section 5.06

  	
  Reporting Requirements

  	
  72

  
	
   

  	
  Section 5.08

  	
  Books and Records; Inspection

  	
  77

  
	
   

  	
  Section 5.09

  	
  Use of Proceeds

  	
  77

  
	
   

  	
  Section 5.10

  	
  Nature of Business

  	
  77

  
	
   

  	
  Section 5.11

  	
  Risk Management Policy

  	
  77

  
	
   

  	
  Section 5.12

  	
  Additional Guarantors

  	
  78

  
	
   

  	
  Section 5.13

  	
  Additional Collateral Requirements

  	
  78

  
	
   

  	
  Section 5.12

  	
  Further Assurances in General

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI NEGATIVE COVENANTS

  	
  79

  
	
   

  	
   

  
	
   

  	
  Section 6.01

  	
  Liens, Etc

  	
  79

  
	
   

  	
  Section 6.02

  	
  Debts, Guaranties and Other Obligations

  	
  80

  
	
   

  	
  Section 6.03

  	
  Merger or Consolidation

  	
  81

  
	
   

  	
  Section 6.04

  	
  Asset Sales

  	
  82

  
	
   

  	
  Section 6.05

  	
  Investments and Acquisitions

  	
  82

  
	
   

  	
  Section 6.06

  	
  Restricted Payments

  	
  83

  
	
   

  	
  Section 6.07

  	
  Change in Nature of Business

  	
  84

  
	
   

  	
  Section 6.08

  	
  Transactions With Affiliates

  	
  84

  
	
   

  	
  Section 6.09

  	
  Agreements Restricting Liens and Distributions

  	
  84

  
	
   

  	
  Section 6.10

  	
  Limitation on Accounting Changes or Changes in
  Fiscal Periods

  	
  85

  
	
   

  	
  Section 6.11

  	
  Limitation on Speculative Hedging

  	
  85

  
	
   

  	
  Section 6.12

  	
  Operating Leases

  	
  85

  
	
   

  	
  Section 6.13

  	
  Sale and Leaseback Transactions and other
  Off-Balance Sheet Liabilities

  	
  85

  
	
   

  	
  Section 6.14

  	
  Subordinated Debt

  	
  85

  
	
   

  	
  Section 6.15

  	
  Amendment of Material Contracts

  	
  86

  
	
   

  	
  Section 6.16

  	
  Capital Expenditures

  	
  86

  
	
   

  	
  Section 6.17

  	
  Minimum Consolidated Tangible Net Worth

  	
  86

  
	
   

  	
  Section 6.18

  	
  Minimum Consolidated Working Capital

  	
  86

  
	
   

  	
  Section 6.19

  	
  Maximum Aggregate Negative EBITDA

  	
  86

  
	
   

  	
  Section 6.20

  	
  Interest Coverage Ratio

  	
  86

  



 


iii

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  Section 6.21

  	
  Average Leverage Ratio

  	
  87

  
	
   

  	
  Section 6.22

  	
  Monthly Leverage Ratio

  	
  87

  
	
   

  	
  Section 6.23

  	
  Minimum Borrowing Base Availability

  	
  87

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII EVENTS OF DEFAULT

  	
  87

  
	
   

  	
   

  
	
   

  	
  Section 7.01

  	
  Events of Default

  	
  87

  
	
   

  	
  Section 7.02

  	
  Optional Acceleration of Maturity

  	
  89

  
	
   

  	
  Section 7.03

  	
  Automatic Acceleration of Maturity

  	
  90

  
	
   

  	
  Section 7.04

  	
  Non-exclusivity of Remedies

  	
  90

  
	
   

  	
  Section 7.05

  	
  Right of Set-off

  	
  90

  
	
   

  	
  Section 7.06

  	
  Application of Proceeds

  	
  91

  
	
   

  	
  Section 7.07

  	
  Administrative Agent’s Account

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII GUARANTY

  	
  92

  
	
   

  	
   

  
	
   

  	
  Section 8.01

  	
  Liabilities Guaranteed

  	
  92

  
	
   

  	
  Section 8.02

  	
  Nature of Guaranty

  	
  92

  
	
   

  	
  Section 8.03

  	
  Agent’s Rights

  	
  93

  
	
   

  	
  Section 8.04

  	
  Guarantor’s Waivers

  	
  93

  
	
   

  	
  Section 8.05

  	
  Maturity of Obligations, Payment

  	
  94

  
	
   

  	
  Section 8.06

  	
  Agent’s Expenses

  	
  94

  
	
   

  	
  Section 8.07

  	
  Liability

  	
  95

  
	
   

  	
  Section 8.08

  	
  Events and Circumstances Not Reducing or Discharging
  any Guarantor’s Obligations

  	
  95

  
	
   

  	
  Section 8.09

  	
  Subordination of All Guarantor Claims

  	
  97

  
	
   

  	
  Section 8.10

  	
  Claims in Bankruptcy

  	
  98

  
	
   

  	
  Section 8.11

  	
  Payments Held in Trust

  	
  98

  
	
   

  	
  Section 8.12

  	
  Benefit of Guaranty

  	
  98

  
	
   

  	
  Section 8.13

  	
  Reinstatement

  	
  98

  
	
   

  	
  Section 8.14

  	
  Liens Subordinate

  	
  99

  
	
   

  	
  Section 8.15

  	
  Guarantor’s Enforcement Rights

  	
  99

  
	
   

  	
  Section 8.16

  	
  Limitation

  	
  99

  
	
   

  	
  Section 8.17

  	
  Contribution Rights

  	
  99

  



 


iv

















 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  Section 8.18

  	
  Release of Guarantors

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX THE ADMINISTRATIVE
  AGENT

  	
  100

  
	
   

  	
   

  
	
   

  	
  Section 9.01

  	
  Appointment and Authority

  	
  100

  
	
   

  	
  Section 9.02

  	
  Rights as a Lender

  	
  100

  
	
   

  	
  Section 9.03

  	
  Exculpatory Provisions

  	
  101

  
	
   

  	
  Section 9.04

  	
  Reliance by the Administrative Agent

  	
  101

  
	
   

  	
  Section 9.05

  	
  Delegation of Duties

  	
  102

  
	
   

  	
  Section 9.06

  	
  Resignation of the Administrative Agent

  	
  102

  
	
   

  	
  Section 9.07

  	
  Non-Reliance on Administrative Agent and Other
  Lenders

  	
  103

  
	
   

  	
  Section 9.08

  	
  Indemnification

  	
  103

  
	
   

  	
  Section 9.09

  	
  Collateral and Guaranty Matters

  	
  104

  
	
   

  	
  Section 9.10

  	
  Intercreditor Agreement and Security Documents

  	
  105

  
	
   

  	
  Section 9.11

  	
  No Other Duties, etc.

  	
  105

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X
          MISCELLANEOUS

  	
  105

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 10.01

  	
  Amendments, Etc

  	
  105

  
	
   

  	
  Section 10.02

  	
  Notices, Etc

  	
  107

  
	
   

  	
  Section 10.03

  	
  No Waiver; Cumulative Remedies

  	
  108

  
	
   

  	
  Section 10.04

  	
  Costs and Expenses

  	
  108

  
	
   

  	
  Section 10.05

  	
  Indemnification

  	
  109

  
	
   

  	
  Section 10.06

  	
  Successors and Assigns

  	
  110

  
	
   

  	
  Section 10.07

  	
  Confidentiality

  	
  113

  
	
   

  	
  Section 10.08

  	
  Execution in Counterparts

  	
  114

  
	
   

  	
  Section 10.09

  	
  Survival of Representations, etc

  	
  114

  
	
   

  	
  Section 10.10

  	
  Severability

  	
  114

  
	
   

  	
  Section 10.11

  	
  Interest Rate Limitation

  	
  114

  
	
   

  	
  Section 10.12

  	
  Governing Law

  	
  114

  
	
   

  	
  Section 10.13

  	
  Joint and Several Liability

  	
  115

  
	
   

  	
  Section 10.14

  	
  Submission to Jurisdiction

  	
  116

  
	
   

  	
  Section 10.15

  	
  Waiver of Jury

  	
  117

  
	
   

  	
  Section 10.16

  	
  Entire Agreement

  	
  117

  
	
   

  	
  Section 10.17

  	
  New Guarantors

  	
  117

  



 


v

















 


	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  –

  	
  Form of Assignment and Acceptance Agreement

  
	
  Exhibit B

  	
  –

  	
  Form of Borrowing Base Report

  
	
  Exhibit C

  	
  –

  	
  Form of Compliance Certificate

  
	
  Exhibit D

  	
  –

  	
  Form of Letter of Credit Request

  
	
  Exhibit E

  	
  –

  	
  Form of Note

  
	
  Exhibit F

  	
  –

  	
  Form of Notice of Borrowing

  
	
  Exhibit G

  	
  –

  	
  Form of Notice of Conversion or
  Continuation

  
	
  Exhibit H

  	
  –

  	
  Form of Pledge Agreement

  
	
  Exhibit I

  	
  –

  	
  Form of Security Agreement

  
	
  Exhibit J

  	
  –

  	
  Form of Qualifying Supplier Letter of
  Credit

  
	
  Exhibit K

  	
  –

  	
  Form of Risk Management Policy
  Certification

  
	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
  –

  	
  Tier II
  Eligible Exchange Accounts

  
	
  Schedule
  1.01(b)

  	
  –

  	
  Guarantors

  
	
  Schedule
  1.01(c)

  	
  –

  	
  LDCs

  
	
  Schedule 1.01(d)

  	
  –

  	
  SESCO Pro Forma EBITDA

  
	
  Schedule
  1.01(e)

  	
  –

  	
  Material
  Contracts

  
	
  Schedule 2.01

  	
  –

  	
  Commitments
  and Pro Rata Shares of the Lenders

  
	
  Schedule
  4.01

  	
  –

  	
  Licensed
  Jurisdictions

  
	
  Schedule
  4.10

  	
  –

  	
  Subsidiaries

  
	
  Schedule
  4.13

  	
  –

  	
  Insurance

  
	
  Schedule
  4.17

  	
  –

  	
  Bank
  Accounts

  
	
  Schedule
  4.18

  	
  –

  	
  SESCO
  Employment Contracts

  
	
  Schedule
  4.24

  	
  –

  	
  Locations

  
	
  Schedule
  6.01

  	
  –

  	
  Existing
  Liens

  
	
  Schedule
  6.02

  	
  –

  	
  Existing
  Debt

  
	
  Schedule
  6.05

  	
  –

  	
  Investments

  
	
  Schedule
  6.08

  	
  –

  	
  Affiliate
  Transactions

  
	
  Schedule
  6.09

  	
  –

  	
  Restrictive
  Agreements

  
	
  Schedule
  10.02

  	
  –

  	
  Addresses
  for Notice

  
				



 


i

















 


FIRST AMENDED AND RESTATED CREDIT AGREEMENT


 


This First Amended
and Restated Credit Agreement dated as of August 1, 2006 is among MxEnergy
Inc., a Delaware corporation (“MxEnergy”), MxEnergy Electric Inc., a
Delaware corporation (“MxEnergy Electric”; MxEnergy and MxEnergy
Electric are each individually, a “Borrower” and collectively, the “Borrowers”),
the Guarantors, the Lenders, and Société Générale, as Administrative Agent for
the Lenders.


 


Reference is made to the Credit Agreement dated as of December 19,
2005, as amended (the “Original Credit Agreement”) executed among the
Borrower, the Lenders party thereto, and the Administrative Agent, pursuant to
which the Lenders parties thereto agreed to make available to the Borrower a
revolving credit facility for loans and letters of credit upon the terms and
conditions set forth therein and in the other Loan Documents (as defined
therein).


 


The Borrower has requested the Lenders, and the Lenders have agreed, to
amend, restate and increase the Original Credit Agreement, subject to the terms
and conditions of this Agreement.


 


The Borrowers,
the Guarantors, the Lenders, and the Administrative Agent agree as follows:


 


ARTICLE I



DEFINITIONS AND ACCOUNTING TERMS


 


Section 1.01           Certain Defined Terms. Any
terms used in this Agreement that are defined in Article 9 of the Uniform
Commercial Code as adopted in the State of New York (“UCC”) shall have
the meanings assigned to those terms by the UCC as of the date of this
Agreement. As used in this Agreement, the terms defined above shall have the
meanings set forth therein and the following terms shall have the following
meanings (unless otherwise indicated, such meanings to be equally applicable to
both the singular and plural forms of the terms defined):


 


“Acceptable
Credit Support” means one or more letters of credit payable in Dollars for
the benefit of a Borrower or one of its Subsidiaries to support payment of an
Eligible Exchange Account or Eligible Account of such Loan Party, which letter
of credit is in form and substance acceptable to the Administrative Agent and
issued by a bank or other financial institution approved by the Administrative
Agent, each in its sole discretion, and for which an Acceptable Security
Interest exists on all letter-of-credit rights associated with such letter of
credit.


 


“Acceptable
Security Interest” in any Property means a Lien which (a) exists in favor
of the Administrative Agent for the benefit of the Secured Parties; (b) secures
the Obligations; and (c) is perfected and enforceable against the Loan Party
that created such security interest in preference to any rights of any Person
therein, other than Excepted Liens.


 


“Account
Control Agreement” shall mean, if any deposit or securities account of a
Borrower or any Loan Party is held with a financial institution that is not the
Administrative 


 


1

















 


Agent, an agreement or
agreements in form and substance reasonably acceptable to the Administrative
Agent between the Administrative Agent and such other financial institution
governing any such deposit accounts or securities accounts of such Borrower or
such Loan Party.


 


“Acquisition”
means any transaction, or any series of related transactions, consummated on or
after the date of this Agreement, by which the Parent or any of its
Subsidiaries (a) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise, (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election
of directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of
the outstanding ownership interests of a partnership or limited liability
company, or (c) acquires customers or customer lists and related assets from
another Person for consideration of $5,000,000.00 or more (whether in cash,
securities, or assumed debt).


 


“Acquisition
Agreement” means the Asset Purchase Agreement between SESCo and MxEnergy
dated as of May 12, 2006.


 


“Adjusted
Base Rate” means, for any day, a fluctuating rate of interest per annum
equal to the higher of (a) the Prime Rate in effect for such day and
(b) the sum of the Federal Funds Effective Rate in effect for such day
plus 1⁄2 of 1% per annum. Any change in the Adjusted Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or Federal Funds Effective
Rate.


 


“Administrative
Agent” means SG in its capacity as administrative agent for the Lenders
under the Loan Documents and any successor in such capacity appointed pursuant
to Section 9.06.


 


“Administrative
Agent’s Account” means account no. 193852 maintained at SG, and is the “Collateral
Account” established and maintained pursuant to Section 7.07, in the
name of the Borrowers but under the sole dominion and control of, and exclusive
right of withdrawal at the direction of, the Administrative Agent and subject
to the terms of this Agreement.


 


“Administrative
Questionnaire” means an administrative questionnaire in a form supplied by
the Administrative Agent.


 


“Affiliate”
of any Person, means any other Person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such Person or any Subsidiary of such Person. The term “control”
(including the terms “controlled by” or “under common control with”) means the
possession, directly or indirectly, of the power to (a) vote or direct the
voting of 10% or more of the outstanding shares of Voting Stock of such Person
or (b) direct or cause the direction of the management and policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.


 


“Agreement”
means this First Amended and Restated Credit Agreement dated as of August 1,
2006 among the Borrowers, the Guarantors, the Lenders, and the Administrative
Agent, as it may be amended or modified and in effect from time to time.


 


2

















 


“Applicable
Lending Office” means (a) with respect to any Lender, the office, branch,
subsidiary, affiliate or correspondent bank of such Lender specified in its
Administrative Questionnaire or such other office, branch, subsidiary,
affiliate or correspondent bank as such Lender may from time to time specify to
the Borrowers and the Administrative Agent from time to time and (b) with
respect to the Administrative Agent, the address specified for such Person on Schedule
10.02 or to such other address, facsimile number, electronic mail address
or telephone number as shall be designated by such party in a notice to the
other parties.


 


“Applicable
Margin” means, for any day, with respect to Revolving Advances of any Type,
letter of credit fees or commitment fees, the applicable percentage rate per
annum set forth below:


 


	
   

  	
   

  	
   

  	
   

  	
  Swing Line Advance

  	
   

  	
  Revolving Advance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Prime

  Rate

  	
   

  	
  Federal

  Funds

  Effective

  Rate

  	
   

  	
  Euro-

  dollar

  Advances

  	
   

  	
  Base

  Rate

  Advances

  	
   

  	
  Commitment

  Fees

  	
   

  	
  Letter of

  Credit

  Fees

  	
   

  
	
  1

  	
   

  	
  N/A

  	
   

  	
  1.125

  	
  %

  	
  3.00

  	
  %

  	
  2.375

  	
  %

  	
  1.375

  	
  %

  	
  0.500

  	
  %

  	
  2.000

  	
  %

  
	
  2

  	
   

  	
  >2.5x

  	
   

  	
  0.750

  	
  %

  	
  2.625

  	
  %

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  	
  0.500

  	
  %

  	
  1.750

  	
  %

  
	
  3

  	
   

  	
  <2.5x or >1.5x

  	
   

  	
  0.500

  	
  %

  	
  2.375

  	
  %

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  	
  0.500

  	
  %

  	
  1.500

  	
  %

  
	
  4

  	
   

  	
  <1.5x

  	
   

  	
  0.250

  	
  %

  	
  2.125

  	
  %

  	
  1.500

  	
  %

  	
  0.500

  	
  %

  	
  0.375

  	
  %

  	
  1.375

  	
  %

  



 


Until the earlier
of (a) the date that is 12 months following the Closing Date, (b) the date on
which the Parent’s S&P corporate credit rating is at least one notch higher
than B and Moody’s corporate family rating is at least one notch higher than B3,
and (c) the consummation of an Initial Public Offering, the Applicable Margin
for Revolving Advances, Swing Line Advances and Letter of Credit fees shall be
Pricing Level 1. Then, the Applicable Margin shall be based on the Leverage
Ratio set forth in the Compliance Certificate most recently delivered


 


3

















 


pursuant to Section 5.06(c)
in respect of the June, September, December, or March financial Statements. Thereafter,
any increase or decrease in the Applicable Margin for Revolving Advances, Swing
Line Advances and Letter of Credit fees resulting from a change in the Leverage
Ratio shall become effective as of the third Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 5.06(c)
in respect of the June, September, December and March financial statements; provided,
however, that if a Compliance Certificate is not delivered when due in
accordance with such Section, then Pricing Level 2 shall apply as of the first
Business Day after the date on which such Compliance Certificate was required
to have been delivered until such Compliance Certificate is delivered to the
Administrative Agent.


 


“Arranger”
means SG in its capacity as lead arranger and sole bookrunner.


 


“Asset
Disposition” or “Dispose” means the disposition, whether by sale,
lease, license, transfer, loss, damage, destruction, condemnation or otherwise,
of any or all of the Property of the Parent or any of its Subsidiaries other
than (a) any sale or issuance of Equity Interests of any of the Parent’s
Subsidiaries to any Loan Party, (b) sales of inventory in the ordinary course
of business, (c) dispositions of assets having a fair market value of $2,000,000.00
or less individually or in the aggregate of $5,000,000.00 or less in any fiscal
year of the Parent, (d) dispositions of accounts to LDCs under guaranteed
receivables agreements entered into in the ordinary course of business and (e)
dispositions of assets which have become obsolete or no longer useful in the
business of any Loan Party.


 


“Assignment
and Acceptance” shall mean an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06), and accepted by the Administrative Agent, in
substantially the form of Exhibit A or any other form approved by the
Administrative Agent in its sole discretion and the Borrowers, which consent by
the Borrowers shall not be unreasonably withheld or delayed.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any Capital Lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a Capital Lease.


 


“Audited
Financial Statements” means the audited consolidated balance sheet of (a) MxEnergy
and its Subsidiaries for each of the fiscal years ended June 30, 2002, 2003, and
2004 and the Parent and its Subsidiaries for the fiscal year ended June 30,
2005 and (b) SESCo for each of the fiscal years ended December 31, 2003, 2004
and 2005, in each case, together with the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year
of the Parent and its Subsidiaries and SESCo, as applicable, including the
notes thereto and including an unaudited reconciliation from GAAP to Non-GAAP
Financial Reporting.


 


“Base Rate
Advance” means a Revolving Advance that bears interest at a rate determined
by reference to the Adjusted Base Rate.


 


4

















 


“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act.


 


“Blocked
Accounts” has the meaning set forth in Section 5.13(b).


 


“Borrowing”
means a borrowing consisting of simultaneous Revolving Advances of the same
Type made, converted or continued on the same Business Day, and, in the case of
Eurodollar Advances, as to which a single Interest Period is in effect.


 


“Borrowing
Base” means, as of any date of determination, an amount equal to the sum of
the following (without duplication), determined as of the date of the Borrowing
Base Report then most recently delivered pursuant to this Agreement, but
subject to such additional eligibility requirements and reserves as may be
reasonably determined by the Administrative Agent after consultation with the
Borrowers (but not subject to the Borrowers’ approval thereof):


 


(a)           an amount equal to 100% of cash and
Cash Equivalents of the Borrowers and their Subsidiaries in Dollars that are
subject to an Acceptable Security Interest; plus


 


(b)           90% of Tier I Eligible Accounts; plus


 


(c)           80% of Tier II Eligible Accounts;
plus


 


(d)           85% of Tier I Unbilled Eligible
Accounts; plus


 


(e)           80% of Tier II Unbilled Eligible
Accounts; plus


 


(f)            80% of the positive value of
Eligible Exchange Accounts; plus


 


(g)           80% of the positive value of Imbalances;
plus


 


(h)           85% of Eligible Inventory; plus


 


(i)            85% of Eligible LDC Residual
Contract Rights; plus


 


(j)            80% of Undelivered Product Value; minus


 


(k)           120% of the Swap Termination Value owed
by a Borrower or any of its Subsidiaries for any Swap Contract between a
Borrower or any of its Subsidiaries and a Swap Counterparty; minus


 


(l)            100% of First Purchaser Liens; minus,


 


(m)          so long as the Borrowers have any
outstanding financial hedging positions with VPEM, the greater of (i) zero and
(ii) 10% of (A) the aggregate net mark-to-market exposure of the Borrowers to
VPEM minus (B) the Borrowers’ unpaid payables owed to VPEM and not supported
with Letters of Credit minus (C) $20,000,000.00.


 


“Borrowing
Base Availability” means the excess, if any, of the Borrowing Base over the
sum of the Revolving Advances, the Letter of Credit Exposure and the Swing Line
Advances.


 


5

















 


“Borrowing
Base Report” means a certificate and schedule duly executed by a Financial
Officer of the Parent appropriately completed and in substantially the form of Exhibit
B.


 


“Borrowing
Date” means the date on which any Revolving Advance or Swing Line Advance is
made or any Letter of Credit is issued hereunder.


 


“Bridge
Commitment Letter” means that certain Bridge Commitment Letter dated as of
May 12, 2006 between the Parent and Deutsche Bank AG Cayman Islands Branch and
Morgan Stanley Senior Funding, Inc., as the lenders.


 


“Bridge
Loan” means the $190,000,000.00 senior, unsecured bridge loan contemplated
by the terms and conditions of the term sheet attached to the Bridge Commitment
Letter.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York and, if such day relates to any Eurodollar Advance, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.


 


“Capital
Expenditures” means all expenditures of any Person in respect of the
purchase or other acquisition, construction or improvement of any fixed or
capital assets that are required to be capitalized under GAAP on a balance
sheet as property, plant, equipment or other fixed assets or intangibles;
provided, however that Capital Expenditures shall in any event exclude (a) normal
replacements and maintenance which are properly charged to current operations
and (b) amounts expended with the proceeds of insurance to repair or replace
fixed or capital assets.


 


“Capital
Lease” of a Person means any lease of any Property by such Person as lessee
that would, in accordance with GAAP, be required to be classified and accounted
for as a capital lease on the balance sheet of such Person.


 


“Cash
Equivalents” means:


 


(a)           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;


 


(b)           investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from S&P or
from Moody’s;


 


(c)           investments in certificates of
deposit, banker’s acceptances and time deposits maturing within one year from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, the Administrative Agent or
any domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined capital and
surplus and undivided profits of not less than $500,000,000.00;


 


6

















 


(d)           fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution satisfying the
criteria of clause (c) above; and


 


(e)           investments in “money market funds”
within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as
amended, substantially all of whose assets are invested in investments of the
type described in clauses (a) through (d) above.


 


“Change in
Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption of taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority (other
than any request, guideline or directive that provides that compliance is
optional and that there is no penalty or charge of any kind for failure to
comply).


 


“Change of
Control” means the occurrence of any of the following events:


 


(a)           prior to the consummation of an
Initial Public Offering, (i) the failure of either Jeffrey Mayer or Carol-Roberta
Artman-Hodge (each, a “Key Executive”) to be employed by the Parent on a
full-time basis in his or her capacity as President and Chief Executive
Officer, and Executive Vice President, respectively, and involved in the
day-to-day operations of the Parent and its Subsidiaries and (ii) if such
failure is due to death, accident, illness, or legal incapacity of one of the
Key Executives and the other Key Executive remains employed as required under
the foregoing clause (i), the Key Executive failing to be employed is not
replaced within 90 days after such failure with an executive consented to by
the Majority Banks in writing;


 


(b)           the failure of either Borrower to be
a Wholly-Owned Subsidiary of the Parent;


 


(c)           except for the consummation of an
Initial Public Offering, the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties
or assets of the Parent and its Subsidiaries taken as a whole to any “person”
(as that term is used in Section 13(d) of the Exchange Act, but excluding any
employee benefit plan of the Parent or any of its Subsidiaries, and any person
or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan);


 


(d)           except for the consummation of an
Initial Public Offering, the consummation of any transaction (including any
merger or consolidation) the result of which is that any “person” (as defined
above) (other than Sowood, Charterhouse Financial, Greenhill Capital Partners,
Jeffrey Mayer or Carol Roberta Artman-Hodge (or any of their Affiliates)) becomes
the Beneficial Owner, directly or indirectly, of more than 25% of the Voting
Stock of the Parent, measured by voting power rather than number of shares;


 


(e)           prior to the consummation of an
Initial Public Offering, Sowood fails to be the Beneficial Owner, directly or
indirectly, of at least 20% of the Voting Stock of the Parent;


 


7

















 


(f)            prior to the consummation of an
Initial Public Offering, the first day on which a majority of the members of
the Board of Directors of the Parent are not Continuing Directors; or


 


(g)           the Parent consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges
with or into, the Parent, in any such event pursuant to a transaction in which
any of the outstanding Voting Stock of the Parent or such other Person is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the Voting Stock of the Parent outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).


 


“Closing
Date” means August 1, 2006.


 


“Code”
means the United States Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute and all rules
and regulations promulgated thereunder.


 


“Collateral”
means all the “Collateral” as defined in any Security Document.


 


“Collecting
Banks” has the meaning set forth in Section 5.13.


 


“Compliance
Certificate” means a Compliance Certificate signed by a Financial Officer of
the Parent in substantially the form of the attached Exhibit C.


 


“Confidential
Information Memorandum” means the Confidential Information Memorandum dated
June 2006 (together with all amendments and supplements thereto) and furnished to
the initial Lenders in connection with the syndication of the Revolving Advances
made hereunder.


 


“Consolidated
Current Assets” means, as to any Person at any date, all amounts which
would, in conformity with GAAP, be included under current assets (other than
amounts owing to such Person from an Affiliate (other than a Subsidiary of such
Person) thereof) on a balance sheet of such Person determined on a consolidated
basis at such date.


 


“Consolidated
Current Liabilities” means, as to any Person at any date, (a) all amounts
which would, in conformity with GAAP, be included under current liabilities on
a balance sheet of a Person plus (b) to the extent not included in the
foregoing clause (a), all outstanding Revolving Advances, Swing Line Advances,
and Reimbursement Obligations, all determined on a consolidated basis at such
date.


 


“Consolidated
EBITDA” means, for any period, without duplication, the sum of the
following for the Parent and its Subsidiaries on a consolidated basis, each
calculated for such period:


 


(a)           Consolidated Net Income for such
period of determination plus


 


8

















 


(b)           to the extent deducted in determining
Consolidated Net Income, Consolidated Interest Expense, charges against income
for foreign, federal, state, and local taxes, depreciation and amortization expense
and other non-cash charges, extraordinary, unusual or non-recurring expenses or
losses, amortization or write off of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with letters of
credit or Debt, and any losses on sales of assets outside the ordinary course
of business minus


 


(c)           extraordinary or non-recurring gains
for such period minus


 


(d)           any gain realized upon the sale or other
disposition of any assets of the Parent or any of its Subsidiaries for such
period (other than in the ordinary course of business) minus


 


(e)           the income of any Person (other than Wholly-Owned
Subsidiaries of the Parent) in which the Parent or a Wholly-Owned Subsidiary of
the Parent has an ownership interest except to the extent such income is
received by the Parent or such Wholly-Owned Subsidiary in a cash distribution
during such period, all as determined on a consolidated basis in accordance
with GAAP, plus the loss or minus


 


(f)            the income of any Person accrued
prior to the date it becomes a Subsidiary of the Parent or is merged into or
consolidated with the Parent or any of its Subsidiaries, minus


 


(g)           non-cash gains (if the gain is the
result of an overhedged position), losses or adjustments under FASB Statement
133 as a result of changes in the fair market value of derivatives, plus
losses or minus gains


 


(h)           from settled financial hedges with a
term of one year or less for inventory before it is sold to customers.


 


“Consolidated
Interest Expense” means, for any period, the interest expense net of
interest income of the Parent and its Subsidiaries calculated on a consolidated
basis in accordance with GAAP for such period excluding, however, the amortization
of upfront fees and discounts paid in connection with this Agreement, the
Original Credit Agreement, the High Yield Notes Offering, the Master
Transaction Agreement dated as of August 1, 2006 between MxEnergy and SG, and
the Bridge Loan.


 


“Consolidated
Net Income” means, for any period, the net income of the Parent and its Subsidiaries
calculated on a consolidated basis for such period after taxes, as determined
in accordance with GAAP.


 


“Consolidated
Tangible Net Worth” means, as of any date of determination, for the Parent
and its Subsidiaries on a consolidated basis, (a) Shareholders’ Equity of the
Parent and its Subsidiaries on that date minus (b) the Intangible Assets
of the Parent and its Subsidiaries on that date, minus (c) assets that
are the result of non-cash gains or adjustments under FASB Statement 133 as a
result of changes in the fair market value of derivatives, plus (d)
liabilities that are the result of non-cash losses or adjustments under FASB
Statement 133 as a result of changes in the fair market value of derivatives minus
(e) any Accounts due from any Affiliates (other than Subsidiaries) of the
Parent plus (f) the book value of customer accounts plus (g) the
respective amounts reported on the balance sheet of the Parent as of such date
with respect to any series of


 


9

















 


preferred stock outstanding on
the Closing Date plus losses or minus gains (h) from settled
financial hedges with a term of one year or less for inventory before it is sold
to customers for the 12-month period ending as of such date.


 


“Consolidated
Working Capital” means the difference between Consolidated Current Assets
of the Parent (excluding all non-cash assets under FASB 133 and any accounts
due from any Affiliates (other than any Subsidiary) of the Parent) and
Consolidated Current Liabilities of the Parent (excluding non-cash obligations
under FASB 133 and any accounts due from any Affiliates (other than any
Subsidiary) of the Parent).


 


“Continue”,
“Continuation”, and “Continued” each refers to a continuation of Revolving
Advances for an additional Interest Period upon the expiration of the Interest
Period then in effect for such Revolving Advances.


 


“Continuing
Directors” means, as of any date of determination, any member of the Board
of Directors of the Parent who (a) was a member of such Board of Directors on
the Closing Date or (b) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election.


 


“Convert”,
“Conversion”, and “Converted” each refers to a conversion of Revolving
Advances of one Type into Revolving Advances of another Type pursuant to Section 2.02(b).


 


“Debt,”
means, for any Person, without duplication, all of the following, whether or
not included as indebtedness or liabilities in accordance with GAAP:


 


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


 


(b)           obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business);


 


(c)           Capital Leases;


 


(d)           all obligations of such Person in
respect of letters of credit, bankers’ acceptances, bank guarantees, surety
bonds or similar instruments which are issued upon the application of such
Person or upon which such Person is an account party or for which such Person
is in any way liable;


 


(e)           net obligations of such Person under
any Swap Contract;


 


(f)            Off-Balance Sheet Liabilities;


 


(g)           indebtedness secured by a Lien on
Property now or hereafter owned or acquired by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse (provided, that if such Person has not assumed
or otherwise become liable in


 


10

















 


respect of such Debt, such Debt
shall be deemed to be in an amount equal to the lesser of the amount of such
Debt and the fair market value of the Property encumbered by such Lien); and


 


(h)           all Guarantees of such Person in
respect of any of the foregoing.


 


For all
purposes hereof, the Debt of any Person shall include the Debt of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Debt is expressly made non-recourse to
such Person. The amount of any net obligation under any Swap Contract on any
date shall be deemed to be the Swap Termination Value thereof as of such date. The
amount of any Capital Lease or Off-Balance Sheet Liability as of any date shall
be deemed to be the amount of Attributable Indebtedness in respect thereof as
of such date.


 


“Default”
means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.


 


“Dollars”
and “$” means the lawful money of the United States of America.


 


“Domestic
Subsidiary” means a Subsidiary that is organized or incorporated under the
laws of the United States or a State thereof.


 


“Dominion”
means Dominion Resources, Inc., a Virginia corporation.


 


“Dominion
Guaranty” means a guaranty by Dominion of the obligations of VPEM to the
Loan Parties under the VPEM Agreement, in form and substance reasonably
acceptable to the Administrative Agent.


 


“Eligible
Accounts” means, as at any date of determination, accounts payable in
Dollars of a Borrower or any of its Subsidiaries resulting from the sale of
electricity or natural gas in the United States of America:


 


(a)           in which the Administrative Agent has
an Acceptable Security Interest;


 


(b)           that consist of valid, bona fide
accounts receivable and contract receivables, each owed to and owned by a
Borrower or one of its Subsidiaries arising out or resulting from goods
actually sold and delivered or for services fully rendered by such Loan Party;


 


(c)           that are payable within 30 days after
the invoice date and not unpaid for more than 60 days after the due date
specified in the original invoice or after the invoice date if no due date was
specified;


 


(d)           that are otherwise eligible with
respect to which the account debtor is owed a credit, discount, allowance or
other similar adjustment by a Borrower or one of its Subsidiaries, but only to
the extent such accounts are not subject to such credit, discount, allowance or
other similar adjustment;


 


(e)           with respect to which the account
debtor is not a Governmental Authority, unless, to the extent required, such
Borrower has, with respect to such accounts, complied with the 


 


11

















 


Federal Assignment of Claims
Act of 1940 as amended (31 U.S.C. Section 3727 et seq.) or any applicable
statute or municipal ordinance of similar purpose and effect;


 


(f)            with respect to which the account
debtor is not an Affiliate of the Parent or a director, officer, agent,
stockholder or employee of the Parent or any of its Affiliates;


 


(g)           that are not due from an account
debtor (i) for which more than 50% of the aggregate amount of accounts of such
Person to the Borrowers and their Subsidiaries collectively has at the time
remained unpaid for more than 60 days after due date specified in the original
invoice or after the invoice date if no due date was specified or (ii) that is
in default on any other Debt owed by such Person to the Borrowers and their
Subsidiaries, collectively;


 


(h)           with respect to which there is no
offset or counterclaim or unresolved dispute with the respective account debtor
(but only to the extent such accounts are not subject to such potential offset
or counterclaim or unresolved dispute);


 


(i)            in the case of Tier II Eligible
Accounts, and Tier II Unbilled Eligible Accounts that do not exceed 67% of all
Eligible Accounts;


 


(j)            with respect to which the account
debtor is the subject of no bankruptcy or other insolvency proceeding;


 


(k)           with respect to which the account
debtor’s obligation to pay is unconditional and not subject to a repurchase
obligation or right to return or with respect to which the goods or services
giving rise to such account have been delivered (or performed, as applicable)
and accepted by such account debtor;


 


(l)            with respect to which the account
debtor is not located in New Jersey or any other state denying creditors access
to its courts in the absence of a Notice of Business Activities Report or other
similar filing, unless the applicable Borrower or Subsidiary has either
qualified as a foreign corporation authorized to transact business in such
state or has filed a Notice of Business Activities Report or similar filing
with the applicable state agency for the then current year;


 


(m)          with respect to which the account
debtor is not a creditor of a Borrower or any of its Subsidiaries; provided, however,
that any such account shall only be ineligible as to that portion of such account
which is less than or equal to the amount owed by such Loan Party to such
Person;


 


(n)           that, if no invoice has been issued
for such accounts, have been included in a Borrowing Base Report during not
more than one calendar month, excluding the portion accumulated under budget
billing customer plans entered into in the ordinary course of business; and


 


(o)           that have not been deemed to be
ineligible for borrowing purposes by the Administrative Agent in its reasonable
credit judgment.


 


12

















 


“Eligible
Assignee” means (a) a Lender, (b) an Affiliate of a Lender, and (c) any
other Person (other than a natural person) approved by the Administrative Agent
in its sole discretion, and, so long as no Event of Default exists, the
Borrowers, in either case, such approval not to be unreasonably withheld or
delayed; provided that notwithstanding the foregoing, “Eligible Assignee”
shall not include any Borrower or any of any Borrower’s Affiliates or
Subsidiaries.


 


“Eligible
Exchange Account” means the amount of any account or general intangible of a
Borrower or any of its Subsidiaries that:


 


(a)           would otherwise be an Eligible
Account except that the consideration due to such Loan Party is natural gas or
electricity;


 


(b)           consists of an enforceable right of such
Loan Party to receive natural gas or electricity in exchange for the sale or
trade of natural gas or electricity previously delivered to the exchange debtor
by such Loan Party;


 


(c)           is evidenced by a written agreement
enforceable against the exchange debtor thereof;


 


(d)           is valued at the current market price
as reasonably determined by the Administrative Agent;


 


(e)           if such account or general intangible
is from a Tier II Account Party and all such accounts and general intangibles from
such Tier II Account Party exceeds $500,000.00, it is by a Tier II Account
Party listed on the attached Schedule 1.01(a) or pre-approved by the Majority
Lenders in their reasonable credit discretion or it is supported by Acceptable
Credit Support;


 


(f)            in the case of natural gas, provides
for the delivery to such Loan Party of natural gas that will constitute
Eligible Inventory, and


 


(g)           has not been otherwise determined by
the Administrative Agent in its sole discretion to be unacceptable.


 


“Eligible
Inventory” means, as at any date of determination, the value (determined at
the current market value as reasonably determined by the Borrowers and agreed
to by the Administrative Agent) of all inventory owned by a Borrower or any of
its Subsidiaries that is subject to an Acceptable Security Interest. Without
limiting the generality of the foregoing, the following is not Eligible
Inventory:


 


(a)           inventory that does not consist of natural
gas;


 


(b)           inventory located at any location
other than those identified pursuant to Section 4.24, as the same may be
updated from time to time;


 


(c)           inventory located at a leased
location or with a warehouseman, bailee, processor, supplier or similar third
party in each case unless (i) the Administrative Agent has given its prior
consent thereto, (ii) a Lien waiver and collateral access agreement, in form
and substance satisfactory to the Administrative Agent has been delivered to
the Administrative Agent, or (iii) 


 


13

















 


rent reserves reasonably
satisfactory to the Administrative Agent have been established with respect
thereto;


 


(d)           inventory which the Administrative
Agent determines in its reasonable credit judgment is unacceptable for
borrowing purposes due to quality or quantity;


 


(e)           inventory produced in violation of
the Fair Labor Standards Act and subject to the so-called “hot goods”
provisions contained in Title 29 U.S.C. 215 (a)(i) or any replacement statute;


 


(f)            inventory located at a vendor’s
location or with a consignee;


 


(g)           inventory with respect to which there
is an unresolved claim or dispute with the respective LDC or other Person that
has any contractual rights with respect to such inventory (but only to the
extent of the amounts the subject of the unresolved claim or dispute); and


 


(h)           inventory that has been specifically
reserved against by a Borrower or any of its Subsidiaries.


 


“Eligible
LDC Residual Contract Right” means, as at any date of determination, the
value (determined at the current market value as reasonably determined by the
Borrowers and agreed to by the Administrative Agent) of a Borrower’s or any of
its Subsidiaries’ enforceable right to receive payment for its natural gas that
an LDC holds, or to obtain the return of its natural gas from, an LDC (a) that is
subject to an Acceptable Security Interest, (b) that is approved by the
Administrative Agent in its sole discretion, and (c) with respect to which
there is no offset or counterclaim or unresolved claim or dispute with such LDC
(but only to the extent of the amounts of such offset or counterclaim or unresolved
claim or dispute).


 


“End User”
means a retail residential or commercial or industrial buyer of natural gas or
electricity from a Borrower or any of its Subsidiaries in deregulated energy markets.


 


“Environmental
Claim” means any allegation, notice of violation, action, lawsuit, claim,
demand, judgment, order or proceeding by any Governmental Authority or any
Person for liability or damage, including, without limitation, personal injury,
property damage, contribution, indemnity, direct or consequential damages,
damage to the environment, nuisance, pollution, or contamination, or for fines,
penalties, fees, costs, expenses or restrictions arising under or otherwise
related to an obligation under Environmental Law.


 


“Environmental
Law” means all former, current and future Federal, state, local and foreign
laws (including common law), treaties, regulations, rules, ordinances, codes,
decrees, judgments, directives, orders (including consent orders), and
agreements in each case, relating to protection of the environment, natural
resources, human health and safety or the presence, Release of, or exposure to,
Hazardous Materials, or the generation, manufacture, processing, distribution,
use, treatment, storage, transport, recycling or handling of, or the
arrangement for such activities with respect to, Hazardous Materials.


 


“Environmental
Liability” shall mean all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and
costs (including 


 


14

















 


administrative oversight costs,
natural resource damages and remediation costs), whether contingent or
otherwise, arising out of or relating to (a) compliance or non-compliance with
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.


 


“Environmental
Permit” means any permit, license, order, approval or other authorization
under any Environmental Law.


 


“Equity
Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from
time-to-time, and any successor statute and all rules and regulations
promulgated thereunder.


 


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


 


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


 


“Eurocurrency
Liabilities” has the meaning assigned to that term in Regulation D.


 


“Eurodollar
Advance” means a Revolving Advance that bears interest based on the
Eurodollar Rate.


 


“Eurodollar
Rate” means, with respect to a Eurodollar Advance for the relevant Interest
Period, the applicable British Bankers’ Association Interest Settlement Rate
for deposits in Dollars appearing on Page 3750 of the Dow Jones Markets Screen
as of 11:00 a.m. (London, England time) two Business Days prior to the first
day of such Interest Period, and having a


 


15

















 


maturity equal to such Interest
Period, provided that if the Dow Jones Markets Screen is not available
to the Administrative Agent for any reason, then the applicable Eurodollar Rate
for the relevant Interest Period shall instead be the rate determined by the
Administrative Agent to be the rate at which SG or one of its Affiliate banks
offers to place deposits in Dollars with first class banks in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, in the approximate amount of SG’s
relevant Eurodollar Advance and having a maturity equal to such Interest
Period.


 


“Eurodollar
Rate Reserve Percentage” of any Lender for the Interest Period for any
Eurodollar Advance means the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under regulations issued from
time-to-time by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period. The Eurodollar Rate Reserve Percentage shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.


 


“Events of
Default” has the meaning set forth in Section 7.01.


 


“Excepted
Liens” means:


 


(a)           Liens for taxes, assessments or
governmental charges or levies on its Property if the same shall not at the
time be delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings diligently conducted and
for which adequate reserves in accordance with and to the extent required by
GAAP shall have been set aside on its books;


 


(b)           Liens imposed by law, or arising by
operation of law, including, without limitation, carriers’, warehousemen’s,
landlord’s, mechanics’, materialmen’s, and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than
30 days past due or which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves shall have
been set aside on the books of the applicable Person;


 


(c)           Liens incurred and pledges or
deposits made in the ordinary course of business in connection with worker’s
compensation, unemployment insurance or other social security or retirement
benefits, or similar legislation, other than any Lien imposed by ERISA;


 


(d)           deposits to secure the performance of
bids and leases (other than Debt), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;


 


(e)           easements, rights-of-way,
restrictions and other similar encumbrances affecting real property which, in
the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;


 


16

















 


(f)            Liens in the Collateral (which Liens
may be superior to the Administrative Agent’s Lien in the Collateral) provided by
the Intercreditor Agreement; and


 


(g)           Liens on up to $40,000,000.00 in the
aggregate of cash and Cash Equivalents (i) deposited by a Borrower or any of
its Subsidiaries in margin accounts with or on behalf of futures contract
brokers or paid over to other counterparties or (ii) pledged or deposited as
collateral to a contract counterparty by a Borrower or any of its Subsidiaries,
in the case of clause (i) or (ii), to secure obligations
with respect to (A) contracts for trading activities in the ordinary course of
business and contracts (including physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase,
transmission, distribution, sale, lease or hedge of any energy-related
commodity or service or (B) commodity price management contracts or
derivatives.


 


“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank, the Swing Line Lender or any other recipient of any payment to be
made by or on account of any obligation of the Borrowers hereunder, (a) taxes
imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which
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 the applicable Lender is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.15), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 2.11(e), 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 the Borrowers with respect to such withholding tax
pursuant to Section 2.11(a).


 


“Federal
Funds Effective Rate” means, for any day, a fluctuating interest rate per
annum 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 on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00
a.m. (New York time) on such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.


 


“Federal
Reserve Board” means the Board of Governors of the Federal Reserve System
or any of its successors.


 


“Fee Letter”
means the letter agreement dated as of May 12, 2006 among the Borrowers, the
Administrative Agent and the Arranger.


 


“Financial
Officer” for any Person means the chief financial officer, treasurer or
senior financial officer of such Person, as applicable.


 


17

















 


“First
Purchaser Lien” means all accounts and inventory which are subject to a Lien
securing the obligations of a “first purchaser” of oil and gas production as
provided in Texas Bus. & Com. Code Section 9.343, or any other similar law
in any other jurisdiction, except for inventory which has been purchased by a Borrower
or any of its Subsidiaries pursuant to a Letter of Credit issued pursuant to
this Agreement.


 


“Foreign
Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which a Borrower is resident for tax purposes. 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.


 


“Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.


 


“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.


 


“GAAP”
means United States generally accepted accounting principles applied on a
consistent basis.


 


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


 


“Governmental
Proceedings” means any action or proceedings by or before any Governmental
Authority, including, without limitation, the promulgation, enactment or entry
of any Legal Requirement.


 


“Guarantors”
means (a) the Parent and each of its Subsidiaries listed on Schedule 1.01(b)
and (b) any other Person that becomes a guarantor of all or a portion of the
Obligations.


 


“Guarantee”
means, as to any Person, any (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Debt
payable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Debt of the payment or performance of such Debt, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Debt, or (iv) entered into for the purpose of assuring
in any other manner the owner of such Debt of the payment or performance
thereof or to protect such owner against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Debt of any
other Person, whether or not such Debt is assumed by such Person; provided,
however, that the term “Guarantee” shall not include 


 


18

















 


endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.


 


“Hazardous
Material” means (a) any petroleum products or byproducts and all other
hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting
substances and (b) any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any Environmental Law.


 


“High Yield
Notes Offering” means a private offering of unsecured debt securities with
gross cash proceeds to the Parent of at least $190,000,000.00 and which debt
securities: (i) contain a maturity date that is at least one year after the Maturity
Date, (ii) do not provide for any scheduled repayment of any principal amount
thereof prior to maturity; (iii) contain market high-yield covenants (any such
high-yield covenants being more restrictive than those contained in this
Agreement shall be automatically incorporated herein); and (iv) contain a
market interest rate.


 


“Imbalances”
means, for any period, the difference between the amount of natural gas or
electricity delivered by the Borrowers and their Subsidiaries to an LDC during
such period and the amount of natural gas or electricity consumed by End Users
that such LDC supplies during the same period that are subject to an Acceptable
Security Interest. For the purposes of calculating the Borrowing Base, (a)
positive Imbalances will only be included to the extent that those Imbalances
are reconciled by the applicable LDC on a monthly basis in a written report
that such LDC generates and is timely delivered to the Administrative Agent and
(b) negative Imbalances will be offset against (i) first, the maximum amount
available to be drawn under a Letter of Credit or surety bond issued for the
benefit of such LDC and (ii) second, Eligible Residual LDC Contract Rights, Eligible
Accounts and Eligible Inventory of the Borrowers and their Subsidiaries controlled
by or in the possession of a LDC.


 


“Indemnified
Taxes” means any Taxes other than Excluded Taxes.


 


“Initial
Public Offering” means an underwritten public offering of shares of the
Parent wherein the aggregate net proceeds to the Parent are at least
$50,000,000.00.


 


“Intangible
Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software (other than systems
software if accounted as a tangible asset under GAAP), copyrights, trade names,
trademarks, patents, franchises, licenses, unamortized deferred charges,
unamortized debt discount and capitalized research and development costs.


 


“Intercreditor
Agreement” means the Intercreditor Agreement dated as of December 19, 2005 among
the Loan Parties, VPEM, as Secured Counterparty, Sowood and the Administrative
Agent.


 


19

















 


“Interest
Period” means, for each Eurodollar Advance comprising part of a Borrowing,
the period commencing on the date of such Eurodollar Advance or the date of the
Conversion of any existing Base Rate Advance into such Eurodollar Advance and
ending on the last day of the period selected by the applicable Borrower
pursuant to the provisions below and Section 2.02 and, thereafter,
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the applicable
Borrower pursuant to the provisions below and Section 2.02. The
duration of each such Interest Period shall be one, two, three, or six months
(or, if available to all of the Lenders, nine or 12 months), in each case as
the applicable Borrower may select; provided, however, that:


 


(a)           Interest Periods commencing on the
same date for Revolving Advances by each Lender comprising part of the same
Borrowing shall be of the same duration;


 


(b)           whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day;


 


(c)           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 end on the last Business Day of the calendar month in which it
would have ended if there were a numerically corresponding day in such calendar
month; and


 


(d)           no Borrower may select any Interest
Period for any Revolving Advance which ends after the Maturity Date.


 


“Investment”
of any Person means any investment of such Person so classified under GAAP, and
whether or not so classified, any loan, advance (other than prepayments or
deposits made in the ordinary course of business), extension of credit that
constitutes Debt of the Person to whom it is extended, any direct or indirect
guaranty of the obligations of such Person, or contribution of capital by such
Person; and any stocks, bonds, mutual funds, partnership interests, notes
(including structured notes), debentures or other securities owned by such
Person (but excluding capital expenditures of such Person determined in
accordance with GAAP).


 


“Investment
Grade Rating” of a Person means that such Person has a minimum unenhanced investment
grade rating on its senior unsecured debt securities of at least BBB- as
determined by S&P, and Baa3 as determined by Moody’s.


 


“Issuing
Bank” means SG and any successor Issuing Bank pursuant to Section 2.14(h).


 


“LC Cash
Collateral Account” means special cash collateral accounts pledged by each Borrower
to the Administrative Agent for the ratable benefit of the Secured Parties
containing cash deposited pursuant to Section 2.14(e), 7.02 or 7.03
to be maintained at the Administrative Agent’s office in accordance with Section
2.14(g) and be invested in the Administrative Agent’s reasonable discretion.


 


20

















 


“LDC”
means a local distribution company that supplies natural gas or electricity beyond
the “citygate” or other specified delivery point to the End User on behalf of a
Borrower or any of its Subsidiaries and includes, without limitation, those
LDCs set forth on Schedule 1.01(c).


 


“Legal
Requirement” means, as to any Person, any law, statute, ordinance, decree,
award, requirement, order, writ, judgment, injunction, rule, regulation (or
official interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority which is binding on
such Person.


 


“Lenders”
means the lenders listed on the signature pages of this Agreement and any other
person that has become a party hereto pursuant to an Assignment and Acceptance
(other than any such person that has ceased to be a party hereto pursuant to an
Assignment and Acceptance).


 


“Letter of
Credit” means any letter of credit issued hereunder.


 


“Letter of
Credit Application” means (a) a request for issuance of a Letter of Credit
in substantially the form of the attached Exhibit D and (b) an
application and agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the Issuing Bank.


 


“Letter of
Credit Documents” means, with respect to any Letter of Credit, such Letter
of Credit, the related Letter of Credit Application and any agreements,
documents, and instruments entered into in connection with or relating to such
Letter of Credit.


 


“Letter of
Credit Exposure” means, at any time, the sum of (a) the aggregate
undrawn maximum face amount of each Letter of Credit at such time and
(b) the aggregate unpaid amount of all Reimbursement Obligations owing
with respect to such Letters of Credit at such time.


 


“Letter of
Credit Obligations” means any obligations of the Borrowers under this
Agreement in connection with the Letters of Credit, including the Reimbursement
Obligations.


 


“Leverage
Ratio” means, as of any date of determination, the ratio of (a) Total
Funded Debt on such date, to (b) Consolidated EBITDA for the period of the twelve
months most recently ended for which financial statements are available; provided
that, for the months of October 2005 through July 2006, Consolidated EBITDA
shall be determined on a pro forma basis giving effect to the SESCo Transaction
as set forth on the attached Schedule 1.01(d). For purposes of
calculating the Leverage Ratio, (i) in the definition of “Applicable Margin,”
all proceeds from the Initial Public Offering deposited and maintained in a
Blocked Account subject to an Acceptable Security Interest shall reduce Total
Funded Debt, (ii) under Section 6.21, Total Funded Debt shall be based
on the month-end average for the last 12 months most recently ended, and (iii)
under Section 6.22, Total Funded Debt shall be determined as of the end
of each month.


 


“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien
(statutory or other), pledge, assignment, preference, deposit arrangement,
encumbrance, charge, security interest, priority or other security or
preferential arrangement of any kind or nature whatsoever, whether voluntary or
involuntary in or on such asset, (b) the interest of a vendor or a


 


21

















 


lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.


 


“Loan
Documents” means this Agreement, any Notes issued pursuant to Section
2.02(g), the Letter of Credit Documents, the Security Documents, the Fee
Letter and each other agreement, instrument or document executed by any Loan
Party or any of their respective officers at any time in connection with this
Agreement, all as amended, restated, supplemented or modified from time to
time.


 


“Loan Party”
means any Borrower, the Parent, any Guarantor and any other Person (other than the
Administrative Agent or any Lender) that is or becomes a party to any Loan
Document.


 


“Majority
Lenders” means, as of any date of determination, (a) before the Revolving
Commitments terminate, Lenders holding at least 51% of the then aggregate
Revolving Commitments and (b) thereafter, Lenders holding at least 51% of the
aggregate unpaid principal amount of the Revolving Advances and participation
interests in the Letter of Credit Exposure at such time.


 


“Material
Adverse Effect” shall mean a material adverse effect upon (a) the business,
results of operations, prospects, Properties or condition (financial or
otherwise) of the Parent and its Subsidiaries taken as a whole, (b) the ability
of any Borrower or the Loan Parties taken as a whole to perform its or their
respective material obligations under the Loan Documents to which it is a party
or (c) the validity or enforceability against any Loan Party of any of the Loan
Documents or any of the material rights or remedies of the Administrative Agent
or the Lenders thereunder.


 


“Material
Contracts” means as of any date of determination, (a) each of the contracts
listed on Schedule 1.01(e), (b) any other similar agreement that
supersedes or replaces the agreement described in clause (a) and (c) any
contract of a Borrower or its Subsidiary with a LDC that provides for more than
(i) 10,000 residential End User accounts or (ii) 1,000 commercial or industrial
End User accounts.


 


“Maturity
Date” means December 19, 2008.


 


“Maximum
Rate” means the maximum nonusurious interest rate under applicable law
(determined under such laws after giving effect to any items which are required
by such laws to be construed as interest in making such determination,
including without limitation if required by such laws, certain fees and other
costs).


 


“Moody’s”
means Moody’s Investors Service, Inc.


 


“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3)
of ERISA, to which the Parent or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


22

















 


“Non-GAAP
Financial Reporting” means financial reporting in accordance with GAAP that
has been adjusted to exclude (a) non-cash gains, losses or adjustments under
FASB Statement 133, (b) settled hedge amounts related to purchases of inventory
prior to the inventory being sold to the end customer, and (c) other non-cash
charges.


 


 “Note” means a promissory note made by
the Borrowers in favor of a Lender evidencing Revolving Advances made by such
Lender substantially in the form of Exhibit E.


 


“Notice of
Borrowing” means a notice of borrowing in the form of the attached Exhibit F
signed by a Responsible Officer of the applicable Borrower.


 


“Notice of
Conversion or Continuation” means a notice of conversion or continuation in
the form of the attached Exhibit G signed by a Responsible Officer of
the applicable Borrower.


 


“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Revolving Advance, Swing Line Advance, Letter of Credit or any
Swap Contract to which a Lender or its Affiliate is a party, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors naming such Person as the debtor
in such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.


 


“Off-Balance
Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) Synthetic Lease Obligations, or (c) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, other than any lease that constitutes an Operating
Lease.


 


“Operating
Lease” of a Person means any lease of Property (other than a Capital Lease)
by such Person as lessee which has an original term (including any required
renewals and any renewals effective at the option of the lessor) of one year or
more.


 


“Original
Credit Agreement” has the meaning set forth in the recitals.


 


“Other
Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or under any other Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.


 


“Parent”
means MxEnergy Holdings Inc.


 


“PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.


 


“Permitted
Liens” has the meaning set forth in Section 6.01.


 


23














 


“Person”
means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.


 


“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the Parent or any ERISA
Affiliate or to which the Parent or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.


 


“Pledge
Agreement” means the First Amended and Restated Pledge Agreement in
substantially the form of Exhibit H among one or more of the Loan
Parties and the Administrative Agent for the benefit of the Secured Parties.


 


“Prime Rate”
means a fluctuating rate of interest per annum as shall be in effect from
time-to-time equal to the prime rate of interest publicly announced by the
Administrative Agent from time to time as its prime rate in effect at its
principal office in New York City, whether or not either Borrower has notice
thereof, when and as said prime rate changes.


 


“Pro Forma
Financial Statements” means (a) the unaudited pro forma consolidated balance
sheet of the Parent, its Subsidiaries and SESCo as of March 31, 2006 prepared in
accordance with GAAP and (b) Non-GAAP Financial Reporting consolidated balance
sheets of the Parent, its Subsidiaries and SESCo as of March 31, 2006,
including a reconciliation to GAAP, in each case giving effect to transactions
under, and consummated in connection with, this Agreement, the High Yield Notes
Offering, the Bridge Loan, and the Acquisition Agreement.


 


“Projections”
means the Parent’s forecasted consolidated annual with monthly breakdowns: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, in each case for fiscal years 2007, 2008, and
2009 incorporating the SESCo Transaction, the Bridge Loan, and the High Yield
Notes Offering, together with supporting details.


 


“Property”
of any Person means any interest of such Person in any property or asset
(whether real, personal or mixed, tangible or intangible).


 


“Pro Rata
Share” means, with respect to each Lender at any time, (a) before the
Revolving Commitments terminate, the ratio (expressed as a percentage) of such
Lender’s Revolving Commitment to the aggregate Revolving Commitments of all the
Lenders at such time and (b) thereafter, the ratio (expressed as a percentage)
of such Lender’s aggregate outstanding Revolving Advances at such time to the
aggregate outstanding Revolving Advances of all the Lenders at such time. The
initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.


 


24

















 


“Qualifying
Supplier Letter of Credit” means a Letter of Credit supporting the physical
purchase of gas or electricity by a Borrower in substantially the form of the
attached Exhibit J or other form acceptable to the Administrative Agent.


 


“Regulations
T, U, X and D” means Regulations T, U, X, and D of the Federal Reserve
Board, as the same is from time-to-time in effect, and all official rulings and
interpretations thereunder or thereof.


 


“Reimbursement
Obligations” means all of the obligations of the Borrowers to reimburse the
Issuing Bank for amounts paid by the Issuing Bank under Letters of Credit as
established by the Letter of Credit Applications and Section 2.14(c).


 


“Related
Parties” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.


 


“Release”
means any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through
the environment or within or upon any building, structure, facility or fixture.


 


“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA.


 


“Responsible
Officer” for any Person means, the Chief Executive Officer, President,
Chief Financial Officer, any Executive or Senior Vice President, Vice
President, Treasurer or any other member of senior management of such Person.


 


“Restricted
Payment” means: (a) the declaration or making by the Parent or any
Subsidiary of any dividend or other distribution (whether in cash, securities
or other property) with respect to any Equity Interest of such Person; (b) any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in the Parent
or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests in the Parent or any Subsidiary; (c) any payment of principal
of, premium, if any, or interest on, any Subordinated Indebtedness; and (d) any
management fee, consulting fee, advisory fee, investment banking or transaction
fee or commission, bonus, salary, or similar remuneration paid or payable, or
any loans, advances or similar investments made, to any Affiliate of the Parent
or any payment to any such Affiliate with respect to any allocation of overhead
costs and expenses, excluding salaries, bonuses and commissions payable to
officers, directors and employees and directors’ fees and executive
compensation and benefits, in each case, payable in the ordinary course of
business consistent with past practice.


 


“Revolving
Advance” means a loan by a Lender to a Borrower as part of a Borrowing and
refers to a Base Rate Advance or a Eurodollar Advance.


 


“Revolving
Commitment” means, as to each Lender, its obligation to (a) make Revolving
Advances to the Borrowers pursuant to Section 2.01, (b) purchase
participation in L/C Obligations pursuant to Section 2.14(b) and (c)
purchase participations in Swing Line Advances pursuant to Section 2.01(b),
in an aggregate principal amount at any one time outstanding not to


 


25

















 


exceed the amount set forth
opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement. The initial aggregate amount of the Revolving Commitments is $280,000,000.00.


 


“Risk
Management Policy” has the meaning set forth in Section 3.01(a)(xvi) and
includes any amendment thereto approved by the Administrative Agent in its sole
discretion.


 


“S&P”
means Standard & Poor’s Rating Agency Group, a division of Mc-Graw Hill
Companies, Inc., or any successor that is a national credit rating
organization.


 


“SEC”
means the Securities and Exchange Commission, and any successor entity.


 


“Secured
Counterparty” has the meaning set forth in the Intercreditor Agreement.


 


“Secured
Counterparty Contracts” means any gas supply contract or hedging
arrangements with a Secured Counterparty (other than VPEM).


 


“Secured
Counterparty Event” means:


 


(a)           in the case of a Secured Counterparty
(other than VPEM) for which any Borrower has received a guaranty from a Secured
Counterparty Parent that has an Investment Grade Rating, the failure of such
Secured Counterparty to be a Wholly-Owned Subsidiary of the Secured Counterparty
Parent;


 


(b)           (i) for any Secured Counterparty (other
than VPEM) that has provided a guaranty of its Secured Counterparty Parent to a
Borrower, such Borrower fails to maintain the guaranty of such Secured
Counterparty Parent or (ii) a Secured Counterparty that has not delivered a
guaranty of its Secured Counterparty Parent or a Secured Counterparty Parent
that has delivered a guaranty for such Secured Counterparty to a Borrower fails
to have an Investment Grade Rating;


 


(c)           the mark-to-market exposure of a
Secured Counterparty (other than VPEM) to a Borrower for which such Borrower
has received a guaranty from a Secured Counterparty Parent exceeds the amount
of such guaranty; or


 


(d)           an event of default or termination
event, however described or defined, with respect to a Secured Counterparty (other
than VPEM) shall occur under a Secured Counterparty Contract.


 


“Secured
Counterparty Parent” means a Person that is the sole direct or indirect
owner of the Equity Interests of a Secured Counterparty (other than VPEM).


 


“Secured
Parties” means the Administrative Agent, the Lenders, the Issuing Bank, the
Swing Line Lender, the Swap Counterparties and the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document.


 


26

















 


“Security
Agreement” means the First Amended and Restated Security Agreement in
substantially the form of Exhibit I among one or more of the Loan
Parties and the Administrative Agent for the benefit of the Secured Parties,
and each other document, instrument or agreement executed by any Loan Party in
connection therewith in order to comply with the Legal Requirements of any
jurisdiction other than the United States of America or any state thereof.


 


“Security
Documents” means the Security Agreement, the Pledge Agreement and each other
document, instrument or agreement executed in connection therewith or otherwise
executed in order to secure all or a portion of the Obligations.


 


“SESCo”
means Shell Energy Services Company, L.L.C., a Delaware limited liability
company.


 


“SESCo
Transaction” means the transactions contemplated by the Acquisition
Agreement.


 


“SG”
means Société Générale.


 


“Shareholders’
Equity” means, as of any date of determination, consolidated shareholders
equity of the Parent and its Subsidiaries as of that date determined in
accordance with GAAP.


 


“Sowood”
means Sowood Commodity Partners Fund LP, a Delaware limited partnership.


 


“Sowood
Document” has the meaning set forth in the Intercreditor Agreement.


 


“Subordinated
Indebtedness” means any Debt of the Parent or any of its Subsidiaries
(including the Borrowers) that is contractually subordinated to the Obligations
on terms and in form and substance reasonably acceptable to the Administrative
Agent.


 


“Subsidiary”
of a Person means any corporation, association, partnership or other business
entity of which more than 50% of the outstanding Equity Interests having by the
terms thereof ordinary voting power under ordinary circumstances to elect a
majority of the board of directors or Persons performing similar functions (or,
if there are no such directors or Persons, having general voting power) of such
entity (irrespective of whether at the time Equity Interests of any other class
or classes of such entity shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more Subsidiaries of such Person or
by one or more Subsidiaries of such Person. Unless otherwise indicated herein,
each reference to the term “Subsidiary” shall mean a Subsidiary of the Parent.


 


“Swap
Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, commodity futures contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any


 


27

















 


of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Swap
Counterparty” means any Lender or any Affiliate thereof that is party to a
Swap Contract with a Borrower or one of its Subsidiaries.


 


“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the
date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).


 


“Swing Line”
means the revolving credit facility made available by the Swing Line Lender
pursuant to Section 2.01(b).


 


“Swing Line
Lender” means SG in its capacity as provider of Swing Line Advances, or if
SG shall resign as Swing Line Lender, another Lender selected by the Administrative
Agent and reasonably acceptable to the Borrowers.


 


“Swing Line
Advance” has the meaning specified in Section 2.01(b)(i).


 


“Swing Line
Sublimit” means $25,000,000.00. The Swing Line Sublimit is part of, and not
in addition to, the Revolving Commitments.


 


“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of Property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).


 


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


 


“Tier I
Account Party” means an account debtor (a) that has an Investment Grade
Rating, (b) whose obligations with respect to Eligible Accounts owing to a
Borrower is guaranteed by a Person with an Investment Grade Rating or supported
with Acceptable Credit Support, or (c) that is guaranteed by an LDC or is an
LDC, in each case otherwise approved by the Administrative Agent in its reasonable
credit discretion.


 


28

















 


“Tier I
Eligible Account” means an Eligible Account due from a Tier I Account
Party.


 


“Tier I
Unbilled Eligible Account” means an Eligible Account due from a Tier I
Account Party, the invoice for which has not yet been issued by or on behalf of
the applicable Borrower or one of its Subsidiaries.


 


“Tier II
Account Party” means any account debtor that is not a Tier I Account Party.


 


“Tier II
Eligible Account” means an Eligible Account due from a Tier II Account
Party and, if the aggregate amount of all such Eligible Accounts from such Tier
II Account Party are greater than $500,000.00, then the Majority Lenders shall
have approved in their reasonable credit discretion any amount in excess of
$500,000.00.


 


“Tier II
Unbilled Eligible Account” means an Eligible Account due from a Tier II
Account Party, the invoice for which has not yet been issued by or on behalf of
the applicable Borrower or one of its Subsidiaries.


 


“Total
Funded Debt” means, as of any date of determination, for the Parent and its
Subsidiaries on a consolidated basis, the sum of (a) the outstanding
principal amount of all obligations, whether current or long-term, for borrowed
money (including (i) Obligations hereunder, (ii) obligations under the Bridge
Loan or High Yield Notes Offering and (iii) obligations under the Sowood
Documents outstanding on the last Business Day of the month) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Debt, (c) all direct
obligations arising under bankers’ acceptances, bank guaranties, surety bonds
and similar instruments, (d) all obligations in respect of the deferred
purchase price of property or services (other than trade accounts payable in
the ordinary course of business), (e) Attributable Indebtedness in respect
of Capital Leases, (f) without duplication, all Guarantees (but only to
the extent required to be recorded as a liability on the consolidated financial
statements of the Borrower pursuant to GAAP) with respect to outstanding Debt
of the types specified in clauses (a) through (e) above of Persons other than
the Parent or any Subsidiary, and (g)  all Debt of the types referred to
in clauses (a) through (f) above of any partnership or joint venture (other
than a joint venture that is itself a corporation or limited liability company)
in which the Parent or a Subsidiary is a general partner or joint venturer,
unless such Debt is expressly made non-recourse to the Parent or such
Subsidiary.


 


“Type”
has the meaning set forth in Section 1.04.


 


“UCC”
means the Uniform Commercial Code as in effect on the date hereof in the State
of New York, as amended from time to time, and any successor statute.


 


“Undelivered
Product Value” means an amount equal to the undrawn face amount of all
Qualifying Supplier Letters of Credit for which the gas or electricity has not
yet been physically delivered to a Borrower, and which, in the case of natural
gas, will become Eligible Inventory upon delivery to a Borrower or will result
in an Eligible Account Receivable or Eligible Exchange Receivable upon delivery
to a Person other than a Borrower. Values included in this category, Undelivered
Product Value, cannot simultaneously be included in other Borrowing Base
categories.


 


29

















 


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


 


“U.S.
Withholding Taxes” means any Taxes imposed by way of deduction or
withholding by the United States federal government.


 


“Voting
Stock” means, with respect to any Person, Equity Interests of such Person
of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of members of the Board of
Directors (or Persons performing similar functions) of such Person.


 


“VPEM”
means Virginia Power Energy Marketing, Inc., a Virginia corporation.


 


“VPEM
Agreement” has the meaning set forth in the Intercreditor Agreement.


 


“VPEM Event”
means:


 


(a)           the failure of VPEM to be a
Wholly-Owned Subsidiary of Dominion;


 


(b)           an event, circumstance, or condition
that could reasonably be expected to have a material adverse effect upon the
business, results of operations, prospects, Properties or condition (financial
or otherwise) of Dominion or VPEM shall occur and (i) the aggregate net
mark-to-market exposure of the Borrowers to VPEM minus (ii) the Borrowers’
unpaid payables owed to VPEM and not supported with Letters of Credit exceed
$20,000,000.00;


 


(c)           Dominion shall cease to have an
Investment Grade Rating; or


 


(d)           an event of default or termination
event, however described or defined, with respect to VPEM shall occur under any
Material Contract.


 


“Wholly-Owned
Subsidiary” of any Person shall mean a subsidiary of such Person of which
Equity Interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such Person or one or
more Wholly-Owned Subsidiaries of such Person or by such Person and one or more
Wholly-Owned Subsidiaries of such Person.


 


Section 1.02           Computation of Time Periods. In
this Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding”.


 


Section 1.03           Accounting Terms.


 


(a)           For purposes of this Agreement, all
accounting terms not otherwise defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in


 


30

















 


conformity with, GAAP applied
on a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Annual Financial Statements.


 


(b)           If at any time any Accounting Change
(as defined below) would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrowers or the
Majority Lenders shall so request, the Administrative Agent, the Lenders and
the Borrowers shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP
(subject to the approval of the Majority Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrowers shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP. “Accounting
Changes” means: (A) changes in accounting principles required by GAAP and
implemented by the Parent; (B) changes in accounting principles recommended by the
Parent’s accountants; and (C) changes in carrying value of the Parent’s or any
of its Subsidiaries’ assets, liabilities or equity accounts resulting from any
adjustments that, in each case, were applicable to, but not included in, the Audited
Financial Statements.


 


(c)           In addition, all calculations and
defined accounting terms used herein shall, unless expressly provided
otherwise, when referring to any Person, refer to such Person on a consolidated
basis and mean such Person and its consolidated subsidiaries.


 


Section 1.04           Types of Advances. Revolving Advances
are distinguished by “Type”. The “Type” of a Revolving Advance refers to the
determination whether such Revolving Advance is a Eurodollar Advance or a Base
Rate Advance, each of which constitutes a Type.


 


Section 1.05           Miscellaneous. The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein,” “hereof”
and “hereunder,” and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time and (f) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.


 


31

















 


ARTICLE II



THE ADVANCES


 


Section 2.01           The Advances.


 


(a)           Revolving Advances. Each
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make Revolving Advances to the Borrowers from time-to-time on any
Business Day before the Maturity Date in an aggregate amount up to but not to
exceed at any time outstanding (i) the lesser of (A) its Revolving Commitment and
(B) its Pro Rata Share of the Borrowing Base minus (ii) such Lender’s Pro Rata
Share of the Letter of Credit Exposure and the outstanding Swing Line Advances;
provided  however that the aggregate outstanding principal amount
of the sum of (x) all Revolving Advances plus (y) the Letter of Credit Exposure
plus (z) the Swing Line Advances shall not at any time exceed the lesser of
(1) aggregate amount of the Revolving Commitments and (2) the Borrowing
Base. Each Revolving Borrowing shall be in an aggregate amount not less than
$2,000,000.00 and in integral multiples of $1,000,000.00 in excess thereof and
shall consist of Revolving Advances of the same Type made on the same day by
the Lenders ratably according to their respective Revolving Commitments. Within
the limits of each Lender’s Revolving Commitment, each Borrower may from time-to-time
borrow, prepay pursuant to Section 2.07(b) and reborrow under this Section 2.01(a).


 


(b)           Swing Line Advances.


 


(i)            On the terms and conditions set
forth in this Agreement, the Swing Line Lender agrees to, from time-to-time on
any Business Day before the Maturity Date, make advances (“Swing Line
Advances”) in Dollars to the Borrowers for periods of up to seven Business
Days (but may be rolled over for an additional seven Business Day period upon
the due date of the Swing Line Advance, except that no Swing Line Advance may
mature after the Maturity Date), bearing interest at either the Prime Rate plus
the Applicable Margin or the Federal Funds Effective Rate plus the Applicable
Margin, as such Borrower elects, in an amount not less than $1,000,000.00 (or
if less, in the aggregate amount of the remaining unused portion of the
aggregate Revolving Commitments) and in integral multiples of $500,000.00 in
excess thereof and in an aggregate principal amount not to exceed the Swing
Line Sublimit outstanding at any time; provided that the sum of (A) the
aggregate principal amount of outstanding Revolving Advances plus (B)
the aggregate principal amount of outstanding Swing Line Advances plus
(C) the Letter of Credit Exposure shall never exceed the lesser of (1) the
aggregate Revolving Commitments at such time and (2) the Borrowing Base; and provided
further than no Swing Line Advance shall be made by the Swing Line
Lender if the statements set forth in Section 3.02 are not true in all
material respects on the date of such Swing Line Advance, it being agreed by
the Borrowers that the giving of the applicable Notice of Borrowing and the
acceptance by the applicable Borrower of the proceeds of such Swing Line
Advance shall constitute a representation and warranty by such Borrower that on
the date of such Swing Line Advance such statements are true in all material respects.
Subject to the other provisions hereof, each Borrower may from time-to-time
borrow, prepay (in whole or in part) and reborrow Swing Line Advances.


 


32

















 


(ii)           Each request for a Swing Line Advance
shall be made pursuant to telephone notice to the Swing Line Lender given no
later than 2:00 p.m. (New York time) on the date of the proposed Swing Line
Advance, promptly confirmed by a completed and executed Notice of Borrowing
telecopied to the Administrative Agent. The Swing Line Lender will promptly
make the Swing Line Advance available to the applicable Borrower at the
Administrative Agent’s Account, if any, or such other account as such Borrower
shall direct.


 


(iii)          The Borrowers and the Lenders agree
that in the event any Swing Line Advance is not repaid on the date due to the
Swing Line Lender, the Swing Line Lender shall give notice to the
Administrative Agent to request each Lender, including the Swing Line Lender,
to make a Revolving Advance in an amount equal to such Lender’s Pro Rata Share
of the outstanding principal balance of such Swing Line Advance outstanding on
the date such notice is given and such Advance shall be deemed to be a Base
Rate Advance made pursuant to such Lender’s Revolving Commitment, whether made
before or after termination of the Revolving Commitments, acceleration of the
Revolving Advances, or otherwise, and whether or not the conditions precedent
in Section 3.02 have been satisfied at the time of such Borrowing. The
Administrative Agent shall give each Lender notice of such Borrowing by 11:00
a.m. (New York time) on the date such Borrowing is to be made. Each Lender
shall, regardless of whether the conditions in Section 3.02 have been
met at the time of such Borrowing and regardless of whether there exists any
Default or Event of Default, make its Revolving Advance available to the
Administrative Agent for the account of the Swing Line Lender in immediately
available funds by 1:00 p.m. (New York time) on the date requested, and each Borrower
hereby irrevocably instructs the Swing Line Lender to apply the proceeds of
such Borrowing to the payment of the outstanding Swing Line Advances.


 


(iv)          At any time before or after a Default
or an Event of Default has occurred and is continuing, if the Revolving
Commitments have expired or been terminated while any Swing Line Advance is
outstanding, each Lender, at the sole option of the Swing Line Lender, shall be
deemed, without further action by any Person, to have purchased from the Swing
Line Lender a participation in such Swing Line Advance, in either case in an
amount equal to such Lender’s Pro Rata Share of the outstanding principal
balance of such Swing Line Advances. The Administrative Agent shall notify each
such Lender of the amount of such participation, and such Lender will transfer
to the Administrative Agent for the account of the Swing Line Lender on the
next Business Day following such notice, in immediately available funds, the
amount of such participation.


 


(v)           If any such Lender shall not have so
made its Revolving Advance or its percentage participation available to the
Administrative Agent pursuant to this Section 2.01(b), such Lender
agrees to pay interest thereon for each day from such date until the date such
amount is paid at the Federal Funds Effective Rate for such day for the first
three days and thereafter the interest rate applicable to Base Rate Advances. Whenever,
at any time after the Administrative Agent has received from any Lender such
Lender’s Revolving Advance or participating interest in a Swing Line Advance,
the Administrative Agent receives any payment on account thereof, the
Administrative Agent will pay to such Lender its participating interest in such
amount (appropriately adjusted, in the case


 


33

















 


of interest payments, to
reflect the period of time during which such Lender’s Revolving Advance or
participating interest was outstanding and funded), which payment shall be
subject to repayment by such Lender if such payment received by the
Administrative Agent is required to be returned. Each Lender’s obligation to
make Revolving Advances or purchase such participating interests pursuant to
this Section 2.01(b) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender or any other
Person may have against the Swing Line Lender, the Administrative Agent or any
other Person for any reason whatsoever; (B) the occurrence or continuance of a
Default or an Event of Default or the termination of the Revolving Commitments;
(C) the occurrence of any Material Adverse Effect; (D) any breach of this
Agreement by any Loan Party or any other Lender; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing. Each
Swing Line Advance, once so participated by any Lender, shall cease to be a
Swing Line Advance with respect to that amount for purposes of this Agreement,
but shall continue to be a Revolving Advance.


 


(vi)          The Swing Line Lender may resign at
any time by giving 60 days’ prior written notice to the Administrative Agent,
the Lenders and the Borrowers. Upon the acceptance of any appointment as the
Swing Line Lender hereunder by a Lender that shall agree to serve as successor
Swing Line Lender, such successor shall succeed to and become vested with all
the interests, rights and obligations of the retiring Swing Line Lender and the
retiring Swing Line Lender shall be discharged from its obligations to make
additional Swing Line Advances hereunder. At the time such resignation or
removal shall become effective, unless assumed by the replacement Swing Line
Lender, the Borrowers shall pay all outstanding Swing Line Advances, together
with accrued and unpaid interest thereon. The acceptance of any appointment as
the Swing Line Lender hereunder by a successor Lender shall be evidenced by an
agreement entered into by such successor, in a form satisfactory to the
retiring Swing Line Lender and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor Lender shall have all
the rights and obligations of the previous Swing Line Lender under this
Agreement and the other Loan Documents and (ii) references herein and in the
other Loan Documents to the term “Swing Line Lender” shall be deemed to refer
to such successor or to any previous Swing Line Lender, as the context shall
require.


 


(c)           Increase in Revolving Commitments.


 


(i)            Request for Increase. (A)
Provided there exists no Defaults, the Borrower may request a one time increase
in the aggregate Revolving Commitments by $20,000,000.00 (the “Initial Increase”).


 


(B) Provided there exists
no Default, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), the Borrowers may from time to time, request an increase
in the aggregate Revolving Commitments by an amount (for all such requests) not
exceeding $100,000,000.00; provided that (A) any such request for an increase
shall be in a minimum amount of $10,000,000.00 and (B) the Borrowers may make a
maximum of four such requests. At the time of


 


34

















 


sending such notice, the
Borrowers (in consultation with the Administrative Agent) shall specify the
time period within which each Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice
to the Lenders).


 


(ii)           Lender Elections to Increase. Except
for the Initial Increase, each Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Revolving
Commitment (such decision to be in each Lender’s sole discretion) and, if so,
whether by an amount equal to, greater than, or less than its Pro Rata Share of
such requested increase. Any Lender not responding within such time period
shall be deemed to have declined to increase its Revolving Commitment. For the
Initial Increase, the Borrowers shall select an Eligible Assignee to become a
Lender pursuant to a joinder agreement in form and substance reasonably
satisfactory to the Administrative Agent.


 


(iii)          Notification by Administrative
Agent; Additional Lenders. Except for the Initial Increase, the
Administrative Agent shall notify the Borrowers of the Lenders’ responses to
each request made hereunder. Except for the Initial Increase, to achieve the
full amount of a requested increase and subject to the approval of the
Administrative Agent and the Issuing Bank (which approvals shall not be
unreasonably withheld), the Borrowers may also invite additional Eligible
Assignees to become Lenders pursuant to a joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent.


 


(iv)          Effective Date and Allocations.
If the aggregate Revolving Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrowers shall determine the
effective date (the “Increase Effective Date”) and the final allocation
of such increase. The Administrative Agent shall promptly notify the Borrowers
and the Lenders of the final allocation of such increase and the Increase
Effective Date.


 


(v)           Conditions to Effectiveness of
Increase. As a condition precedent to such increase, (A) the Borrowers
shall deliver to the Administrative Agent a certificate of each Borrower and
each Guarantor dated as of the Increase Effective Date signed by a Responsible
Officer of such Person (1) except for the Initial Increase, certifying and attaching
the resolutions adopted by such Person approving or consenting to such
increase, and (2) in the case of each Borrower, certifying that, before and
after giving effect to such increase, (I) the representations and warranties
contained in Article IV and the other Loan Documents are true and correct in
all material respects on and as of the Increase Effective Date, except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects as
of such earlier date, and except that for purposes of this Section 2.01(c), the
representations and warranties contained in Section 4.05 shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 5.06, and (II) no Default exists and (B) except for
the Initial Increase, Sections 6.17 – 6.23 shall be amended in a manner, if
any, requested by the Majority Lenders. The Borrowers shall prepay any
Revolving Advances outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 2.08) to the extent 


 


35

















 


necessary to keep the
outstanding Revolving Advances ratable with any revised Pro Rata Shares arising
from any nonratable increase in the Revolving Commitments under this Section.


 


(vi)          Conflicting Provisions. This
Section shall supersede any provisions in Sections 2.12 or 10.01 to the
contrary.


 


Section 2.02           Method of Borrowing.


 


(a)           Notice. Each Borrowing shall
be made pursuant to a Notice of Borrowing, given not later than (i) if the
Borrowing is comprised of Eurodollar Advances, 11:00 a.m. (New York time)
on the third Business Day before the requested Borrowing Date and (ii) if the Borrowing
is comprised of Base Rate Advances, 11:00 a.m. (New York time) at least one
Business Day in advance of the requested Borrowing Date, in each case to the
Administrative Agent’s Applicable Lending Office. The Administrative Agent
shall give to each Lender prompt notice on the day of receipt of a timely
Notice of Borrowing. The Notice of Borrowing shall be in writing specifying (A)
the Borrowing Date (which shall be a Business Day), (B) the requested Type of Revolving
Advances comprising such Borrowing, (C) the aggregate amount of such Borrowing,
and (D) if such Borrowing is to be comprised of Eurodollar Advances,
the requested Interest Period. In the case of a requested Borrowing comprised
of Eurodollar Advances, the Administrative Agent shall promptly notify each
Lender of the applicable interest rate under Section 2.06(a)(ii). Each
Lender shall make available its Pro Rata Share of such Borrowing before
12:00 p.m. (New York time) on the Borrowing Date in immediately available
funds to the Administrative Agent at its Applicable Lending Office or such
other location as the Administrative Agent may specify by notice to the Lenders.
After the Administrative Agent’s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the
Administrative Agent will promptly make such funds available to the applicable Borrower
not later than 2:00 p.m. (New York time) at such account as such Borrower shall
specify in writing to the Administrative Agent.


 


(b)           Conversions and Continuations.
In order to elect to Convert or Continue a Revolving Advance under this
Section, a Borrower shall deliver an irrevocable Notice of Conversion or
Continuation to the Administrative Agent at its Applicable Lending Office no
later than (i) 11:00 a.m. (New York time) at least one Business Day in advance
of such requested Conversion date in the case of a Conversion of a Eurodollar
Advance to a Base Rate Advance or (ii) 11:00 a.m. (New York time) at least
three Business Days in advance of such requested Conversion date in the case of
a Conversion into or Continuation of a Eurodollar Advance to another Eurodollar
Advance. Each such Notice of Conversion or Continuation shall be in writing or
by telex, telecopier or telephone, confirmed promptly in writing specifying
(A) the requested Conversion or Continuation date (which shall be a
Business Day), (B) the amount, Type of the Revolving Advance to be
Converted or Continued, (C) whether a Conversion or Continuation is
requested, and if a Conversion, into what Type of Revolving Advance, and
(D) in the case of a Conversion to, or a Continuation of, a Eurodollar
Advance, the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Administrative Agent shall
provide each Lender with a copy thereof and, in the case of a Conversion to or
a Continuation of a Eurodollar Advance, notify each Lender of the interest rate
under Sections 2.06(a)(ii). Conversions of Eurodollar Advances and
Base Rate


 


36

















 


Advances may be made at any
time, subject to the obligation of the Borrowers to pay any amounts required
under Section 2.08. The portion of Revolving Advances comprising part of
the same Borrowing that are converted to Revolving Advances of another Type
shall constitute a new Borrowing. Swing Line Advances may not be Converted into
Eurodollar Advances.


 


(c)           Certain Limitations. Notwithstanding
anything in paragraphs (a) and (b) above:


 


(i)            at no time shall there be more than
eight Interest Periods applicable to outstanding Eurodollar Advances;


 


(ii)           if any Lender shall, at least one
Business Day before the date of any requested Borrowing, notify the
Administrative Agent that any Change in Law makes it unlawful for such Lender
or any of its Applicable Lending Offices to perform its obligations under this
Agreement to make Eurodollar Advances, or to fund or maintain Eurodollar
Advances, the right of the Borrowers to select Eurodollar Advances from such
Lender for such Borrowing or for any subsequent Borrowing shall be suspended
until such Lender shall notify the Administrative Agent that the circumstances
causing such suspension no longer exist, and such Lender’s Revolving Advance
for such Borrowing shall be a Base Rate Advance;


 


(iii)          if the Administrative Agent is unable
to determine the Eurodollar Rate for any requested Borrowing and the
Administrative Agent gives telephonic or telecopy notice thereof to the
Borrowers as soon as practicable, the right of the Borrowers to select
Eurodollar Advances or for any subsequent Borrowing and the obligation of the
Lenders to make such Eurodollar Advances shall be suspended until the
Administrative Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist, and each Revolving
Advance comprising such Borrowing shall be a Base Rate Advance;


 


(iv)          if the Majority Lenders shall, by
11:00 a.m. (New York time) at least one Business Day before the date of any
requested Borrowing, notify the Administrative Agent that the Eurodollar Rate
will not adequately reflect the cost to such Lenders of making or funding their
respective Eurodollar Advances and the Administrative Agent gives telephonic or
telecopy notice thereof to the Borrowers as soon as practicable, the right of
the Borrowers to select Eurodollar Advances for such Borrowing or for any
subsequent Borrowing and the obligation of the Lenders to make Eurodollar
Advances shall be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist, and each Revolving Advance comprising such Borrowing shall be a
Base Rate Advance;


 


(v)           if either Borrower shall fail to
select the duration or Continuation of any Interest Period for any Eurodollar
Advances in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01 and paragraphs (a) and (b) above or
shall fail to deliver a Notice of Conversion or Continuation, the
Administrative Agent will forthwith so notify the Borrowers and the Lenders and
such Revolving Advances will be made available to such Borrower on the date of
such Borrowing as Base Rate Advances or, if an existing Revolving Advance,
Convert into Base Rate Advances; and


 


37

















 


(vi)          no Revolving Advance may be Converted
or Continued as a Eurodollar Advance at any time when a Default or an Event of
Default has occurred and is continuing.


 


(d)           Notices Irrevocable. Each
Notice of Borrowing and each Notice of Conversion or Continuation delivered by a
Borrower shall be irrevocable and binding on such Borrower. In the case of the
initial Borrowing or any Borrowing which the related Notice of Conversion or
Continuation specifies is to be comprised of Eurodollar Advances, the Borrowers
shall indemnify each Lender against any loss, out-of-pocket cost or expense
actually incurred by such Lender as a result of any failure to fulfill on or
before the Borrowing Date or the date specified in such Notice of Conversion or
Continuation for such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss, cost or expense actually
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Revolving Advance to be made by such
Lender as part of such Borrowing when such Revolving Advance, as a result of
such failure, is not made on such date.


 


(e)           Administrative Agent Reliance.
Unless the Administrative Agent shall have received notice from a Lender before
the Borrowing Date that such Lender will not make available to the
Administrative Agent such Lender’s Pro Rata Share of the Borrowing, the
Administrative Agent may assume that such Lender has made its Pro Rata Share of
such Borrowing available to the Administrative Agent on the Borrowing Date in
accordance with paragraph (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower on the Borrowing Date a corresponding amount. If and to
the extent that such Lender shall not have so made its Pro Rata Share of such
Borrowing available to the Administrative Agent, such Lender and the applicable
Borrower severally agree to immediately repay to the Administrative Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to such Borrower until the
date such amount is repaid to the Administrative Agent, at (i) in the case of such
Borrower, the interest rate applicable on such day to Base Rate Advances and
(ii) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation. If such Lender shall repay to
the Administrative Agent such corresponding amount and interest as provided
above, such corresponding amount so repaid shall constitute such Lender’s Revolving
Advance as part of such Borrowing for purposes of this Agreement even though
not made on the same day as the other Revolving Advances comprising such
Borrowing. If such Lender’s Revolving Advance as part of such Borrowing is not
made available by such Lender within three Business Days of the Borrowing Date,
the applicable Borrower shall repay such Lender’s share of such Borrowing
(together with interest thereon at the interest rate applicable during such
period to Base Rate Advances) to the Administrative Agent not later than three
Business Days after receipt of written notice from the Administrative Agent
specifying such Lender’s share of such Borrowing that was not made available to
the Administrative Agent.


 


(f)            Lender Obligations Several. The
failure of any Lender to make a Revolving Advance to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any, to
make its Revolving Advance on the applicable Borrowing Date. No Lender 


 


38

















 


shall be responsible for the
failure of any other Lender to make a Revolving Advance to be made by such
other Lender on any applicable Borrowing Date.


 


(g)           Noteless Agreement; Evidence of
Indebtedness.


 


(i)            Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from the Revolving
Advances made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder.


 


(ii)           The Administrative Agent shall also
maintain accounts in which it will record (A) the amount of each Revolving
Advance made hereunder, the Type thereof and the Interest Period with respect
thereto, (B) the amount of any principal or interest due and payable or to
become due and payable from each Borrower to each Lender hereunder and (C) the
amount of any sum received by the Administrative Agent hereunder from each Borrower
and each Lender’s share thereof.


 


(iii)          The entries maintained in the accounts
maintained pursuant to paragraphs (i) and (ii) above shall be prima facie evidence
of the existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Administrative Agent or any Lender to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Obligations in accordance with their
terms.


 


(iv)          Any Lender may request that the Revolving
Advances owing to such Lender be evidenced by a Note. In such event, each Borrower
shall execute and deliver to such Lender a Note payable to the order of such
Lender and its registered assigns. Thereafter, the Revolving Advances evidenced
by such Note and interest thereon shall at all times (including after any assignment
pursuant to Section 10.06) be represented by one or more Notes payable
to the order of the payee named therein or any assignee pursuant to Section
10.06, except to the extent that any such Lender or assignee subsequently
returns any such Note for cancellation and requests that such Revolving Advances
once again be evidenced as described in paragraphs (i) and (ii) above.


 


Section 2.03           Fees.


 


(a)           Revolving Commitment Fees. Each
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee (a “Commitment Fee”) on the average daily amount
by which such Lender’s Revolving Commitment exceeds the sum of (i) the
aggregate principal amount of such Lender’s outstanding Revolving Advances and
(ii) such Lender’s Pro Rata Share of the Letter of Credit Exposure, from
the Closing Date until the Maturity Date at the Applicable Margin for
Commitment Fees. Swing Line Loans shall not count as usage of any Lender’s
Revolving Commitment for the purpose of calculating the Commitment Fees due
hereunder. The Commitment Fees payable pursuant to this clause (a) are due
quarterly in arrears on the last Business Day of each March, June, September
and December commencing September 30, 2006 and on the Maturity Date.


 


39

















 


(b)           Agent’s Fees. The Borrowers,
jointly and severally, agree to pay to the Administrative Agent and the
Arranger the fees as separately agreed upon by the Borrowers in the Fee Letter.


 


(c)           Letter of Credit Fees.


 


(i)            The Borrowers, jointly and
severally, agree to pay to the Administrative Agent for the pro rata benefit of
each Lender with respect to each Letter of Credit a letter of credit fee at a
per annum rate equal to the greater of (A) the Applicable Margin for Letters of
Credit in effect from time to time or (B) $700. Each such fee shall be based on
the maximum amount available to be drawn under such Letter of Credit from the
date of issuance of the Letter of Credit until its expiration date and shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December until the earlier of its expiration date or the Maturity
Date. All such fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.


 


(ii)           The Borrowers, jointly and severally,
agree to pay to the Issuing Bank, a fronting fee for each Letter of Credit
equal to 0.125% per annum of the initial stated amount of such Letter of Credit
(or, with respect to any subsequent increase to the stated amount of any such
Letter of Credit, such increase in the stated amount). Each such fee shall be
based on the maximum amount available to be drawn under such Letter of Credit
from the date of issuance of the Letter of Credit until its expiration date and
shall be payable quarterly in arrears on the last Business Day of each March,
June, September and December until the earlier of its expiration date or the
Maturity Date. All such fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days.


 


(iii)          In addition, the Borrowers, jointly
and severally, agree to pay to the Issuing Bank all customary transaction costs
and fees charged by the Issuing Bank in connection with the issuance of a
Letter of Credit for such Borrower’s account, such costs and fees to be due and
payable on the date specified by the Issuing Bank in the invoice for such costs
and fees.


 


(d)           Generally. All such fees shall
be paid on the dates due, in immediately available Dollars to the
Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the fees payable pursuant to Section 2.03(c)(ii)
and (iii) shall be paid directly to the Issuing Bank. Once paid, absent
manifest error, none of these fees shall be refundable under any circumstances.


 


Section 2.04           Reduction of the Revolving
Commitments. The Borrowers shall have the right, upon at least five days’
irrevocable notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portion of the Revolving Commitments; provided
that each partial reduction of Revolving Commitments shall be in the minimum
aggregate amount of $5,000,000.00 and in integral multiples of $1,000,000.00 in
excess thereof (or such lesser amount as may then be outstanding); and provided further that the aggregate amount of the Revolving
Commitments may not be reduced below the aggregate principal amount of the
outstanding Revolving Advances plus the Letter of Credit Exposure plus
the outstanding principal amount of the Swing Line Advances. Any reduction or
termination of the Revolving


 


40

















 


Commitments pursuant to Section
2.04 shall be permanent, with no obligation of the Revolving Lenders to
reinstate such Revolving Commitments and the commitment fees provided for in
Section 2.03(a) shall thereafter be computed on the basis of the Revolving
Commitments as so reduced. The Administrative Agent shall give each Lender
prompt notice of any commitment reduction or termination.


 


Section 2.05           Repayment. The Borrowers shall,
jointly and severally, repay the outstanding principal amount of the Revolving
Advances on the Maturity Date.


 


Section 2.06           Interest. The Borrowers shall,
jointly and severally, pay interest on the unpaid principal amount of each Revolving
Advance made by each Lender to it from the date of such Revolving Advance until
such principal amount shall be paid in full, at the following rates per annum:


 


(a)           Revolving Advances.


 


(i)            Base Rate Advances. If such
Revolving Advance is a Base Rate Advance, a rate per annum equal to the
Adjusted Base Rate plus the Applicable Margin in respect of Base Rate
Advances in effect from time to time, payable in arrears on the earlier of (A) the
last Business Day of each calendar quarter and (B) on the date such Base Rate
Advance shall be paid in full.


 


(ii)           Eurodollar Advances. If such
Revolving Advance is a Eurodollar Advance, a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Margin in
respect of Eurodollar Advances in effect on each day of such Interest Period
for Eurodollar Advances, payable in arrears on the last day of such Interest
Period, and, in the case of Interest Periods of greater than three months, on each
Business Day which occurs at three month intervals from the first day of such
Interest Period.


 


(b)           Additional Interest on Eurodollar
Advances. The Borrowers shall, jointly and severally, pay to each Lender,
so long as any such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest on the
unpaid principal amount of each Eurodollar Advance of such Lender, from the
effective date of such Revolving Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest Period
for such Revolving Advance from (ii) the rate obtained by dividing such
Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Lender for such Interest Period, payable on each date on
which interest is payable on such Revolving Advance. Such additional interest
payable to any Lender shall be determined by such Lender and notified to the
Borrowers through the Administrative Agent (such notice to include the
calculation of such additional interest, which calculation shall be conclusive absent
demonstrable error, and be accompanied by any evidence indicating the need for
such additional interest as the Borrowers may reasonably request) within 90
days after such Lender becomes required to maintain such reserves.


 


41

















 


(c)           Usury Recapture. In the event
the rate of interest chargeable under this Agreement at any time (calculated
after giving affect to all items charged which constitute “interest” under
applicable laws, including fees and margin amounts, if applicable) is greater
than the Maximum Rate, the unpaid principal amount of the Revolving Advances or
Swing Line Advances, as applicable, shall bear interest at the Maximum Rate
until the total amount of interest paid or accrued on the Revolving Advances and
Swing Line Advances equals the amount of interest which would have been paid or
accrued on the Revolving Advances and Swing Line Advances if the stated rates
of interest set forth in this Agreement had at all times been in effect.


 


In the event,
upon payment in full of the Revolving Advances and the Swing Line Advances, the
total amount of interest paid or accrued under the terms of this Agreement and
the Revolving Advances and the Swing Line Advances is less than the total
amount of interest which would have been paid or accrued if the rates of interest
set forth in this Agreement had, at all times, been in effect, then the
Borrowers shall, to the extent permitted by applicable law, jointly and
severally pay the Administrative Agent for the account of the Lenders an amount
equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on its Revolving Advances and Swing Line
Advances if the Maximum Rate had, at all times, been in effect and (B) the
amount of interest which would have accrued on its Revolving Advances and Swing
Line Advances if the rates of interest set forth in this Agreement had at all
times been in effect and (ii) the amount of interest actually paid under
this Agreement on its Revolving Advances and Swing Line Advances.


 


In the event
the Lenders or the Swing Line Lender ever receives, collects or applies as
interest any sum in excess of the Maximum Rate, such excess amount shall, to
the extent permitted by law, be applied to the reduction of the principal
balance of the Revolving Advances or Swing Line Advances, as applicable, and if
no such principal is then outstanding, such excess or part thereof remaining
shall be paid to the Borrowers.


 


(d)           Default Interest. If a
Borrower shall default in the payment of the principal of or interest on any Revolving
Advance or Swing Line Advance or any other amount becoming due hereunder, by
acceleration or otherwise, or under any other Loan Document, such Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
on the outstanding Advances to but excluding the date of actual payment (after
as well as before judgment) (a) in the case of overdue principal, at the rate
otherwise applicable to such Revolving Advance and Swing Line Advance pursuant
to Section 2.06 or Section 2.01(b)(i), as applicable, plus 2.00%
per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the rate that would be applicable to a
Base Rate Advance plus 2.00%.


 


Section 2.07           Prepayments.


 


(a)           Right to Prepay. The Borrowers
shall have no right to prepay any principal amount of any Revolving Advance
except as provided in this Section 2.07.


 


(b)           Optional. The Borrowers may
elect to prepay, in whole or in part, any of the Revolving Advances owing by it
to the Lenders, after giving prior written notice of such election 


 


42

















 


by (i) 11:00 a.m. (New
York time) at least three Business Days before such prepayment date in the case
of Borrowings which are comprised of Eurodollar Advances, and (ii) 11:00 a.m.
(New York time) on or before the Business Day of such prepayment, in case of
Borrowings which are comprised of Base Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal amount
of such prepayment. If any such notice is given, the Administrative Agent shall
give prompt notice thereof to each Lender and the Borrowers shall prepay Revolving
Advances comprising part of the same Borrowing in whole or ratably in part in
an aggregate principal amount equal to the amount specified in such notice,
together with accrued interest to the date of such prepayment on the principal
amount prepaid and amounts, if any, required to be paid pursuant to Section 2.08
as a result of such prepayment being made on such date; provided, however,
that each partial prepayment shall be in an aggregate principal amount not less
than $2,000,000.00 and in integral multiples of $1,000,000.00 in excess thereof
(or such lesser amount as may then be outstanding). Either Borrower may elect
to prepay, in whole or in part, any of the Swing Line Advances owing by it to
the Swing Line Lender, after giving prior written notice of such election by
noon (New York time) on the Business Day of such prepayment to the
Administrative Agent and the Swing Line Lender stating the proposed date and
the aggregate principal amount of such prepayment.


 


(c)           Mandatory Prepayments of Revolving
Advances.


 


(i)            Deficiency. If the
outstanding principal amount of the Revolving Advances plus the Letter
of Credit Exposure plus the outstanding principal amount of the Swing
Line Advances exceeds the lesser of (A) the aggregate Revolving Commitments and
(B) the Borrowing Base, the Borrowers, jointly and severally, agree to make a
mandatory prepayment of the Revolving Advances and/or the Swing Line Advances,
together with accrued interest to the date of such prepayment on the principal
amount prepaid and amounts, if any, required to be paid pursuant to Section
2.08 as a result of such prepayment being made on such date, in the amount
of such excess, or if the Revolving Advances and the Swing Line Advances have
been repaid in full, make deposits into the LC Cash Collateral Account in the
remaining amount of such excess to provide cash collateral for the Letter of
Credit Exposure, not later than 3:00 p.m., New York City time, if the Borrowers
shall have received notice of such deficiency prior to 12:00 noon, New York
City time, on such date, or, if such notice has not been received by the
Borrowers prior to such time on such date, then not later than 12:00 noon, New
York City time, on the Business Day immediately following the day that the
Borrowers receive such notice. Amounts to be applied pursuant to this clause
(i) shall be applied first to reduce outstanding Base Rate Advances, second to
the LC Cash Collateral Account in an amount equal to the Lenders’ aggregate
Letter of Credit Exposure and third to reduce outstanding Eurodollar Advances.


 


(ii)           Reduction of Revolving Commitments.
On the date of each reduction of the aggregate Revolving Commitments pursuant
to Section 2.04, the Borrowers, jointly and severally, agree to make a
prepayment in respect of the outstanding amount of the Revolving Advances to
the extent, if any, that the aggregate unpaid principal amount of all Revolving
Advances plus the Letter of Credit Exposure plus the outstanding
principal amount of the Swing Line Advances exceeds the lesser of (i) the
Revolving Commitments and (ii) the Borrowing Base.


 


43

















 


(iii)          Application of Prepayments. Each
prepayment pursuant to this Section 2.07(c) shall be accompanied by
accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.08 as a
result of such prepayment being made on such date.


 


(d)           Illegality. If any Lender
shall notify the Administrative Agent and the Borrowers that any Change in Law
makes it unlawful for such Lender or its Applicable Lending Office to perform
its obligations under this Agreement or to make or maintain Eurodollar Advances
then outstanding hereunder, the Borrowers shall, no later than 11:00 a.m.
(New York time) (i) (A) if not prohibited by any Legal Requirement to
maintain such Eurodollar Advances for the duration of the Interest Period, on
the last day of the Interest Period for each outstanding Eurodollar Advance or
(B) if prohibited by any Legal Requirement to maintain such Eurodollar
Advances for the duration of the Interest Period, on the second Business Day
following its receipt of such notice, prepay all Eurodollar Advances of all of
the Lenders then outstanding, together with accrued interest on the principal
amount prepaid to the date of such prepayment and amounts, if any, required to
be paid pursuant to Section 2.08 as a result of such prepayment being
made on such date, (ii) each Lender shall simultaneously make a Base Rate
Advance or, if not otherwise prohibited, make an Eurodollar Advance in an
amount equal to the aggregate principal amount of the affected Eurodollar
Advances, and (iii) the right of the Borrowers to select Eurodollar Advances
shall be suspended until such Lender shall notify Administrative Agent that the
circumstances causing such suspension no longer exist. Each Lender agrees to
use commercially reasonable efforts (consistent with its internal policies and
subject to legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.


 


(e)           Ratable Payments; Effect of Notice.
Each payment of any Revolving Advance pursuant to this Section 2.07 or
any other provision of this Agreement shall be made in a manner such that all Revolving
Advances comprising part of the same Borrowing are paid in whole or ratably in
part. All notices given pursuant to this Section 2.07 shall be
irrevocable and binding upon the Borrowers.


 


Section 2.08           Funding Losses. If (a) any
payment of principal of any Eurodollar Advance is made other than on the last
day of the Interest Period for such Revolving Advance as a result of any
payment pursuant to Section 2.07 or the acceleration of the
maturity of the Revolving Advances pursuant to Article VII or (b)
if any Borrower fails to make a principal or interest payment with respect to
any Eurodollar Advance on the date such payment is due and payable, such Borrower
shall, within three Business Days of any written demand sent by any Lender to such
Borrower through the Administrative Agent, pay to Administrative Agent for the
account of such Lender any amounts (without duplication of any other amounts
payable in respect of breakage costs) required to compensate such Lender for
any additional losses, out-of-pocket costs or expenses which it actually incurs
as a result of such payment or nonpayment, including, without limitation, any
loss, cost or expense actually incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Revolving Advance. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to either Borrower and shall be conclusive absent
manifest error.


 


44

















 


Section 2.09           Increased Costs.


 


(a)           Increased Costs Generally. If
any Change in Law shall:


 


(i)            impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in the Eurodollar Rate Reserve Percentage), the Issuing Bank or the
Swing Line Lender;


 


(ii)           subject any Lender, the Issuing Bank or
any Swing Line Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Advance made by it, or change the basis of taxation of payments to
such Lender, the Issuing Bank or the Swing Line Lender in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 2.11 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender, the Issuing Bank or the Swing Line Lender); or


 


(iii)          impose on any Lender, the Issuing Bank,
the Swing Line Lender or the London interbank market any other condition, cost
or expense affecting this Agreement or Eurodollar Advances made by such Lender,
the Issuing Bank, the Swing Line Lender, or any Letter of Credit or
participation therein;


 


and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Advance (or of maintaining its obligation to make
any such Revolving Advance), or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender, the Issuing Bank or the Swing Line Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender, the
Issuing Bank or the Swing Line Lender, the Borrowers will, jointly and
severally, pay to such Lender, the Issuing Bank or the Swing Line Lender, as
the case may be (provided that such Lender has complied with its obligations
under Section 2.15), such additional amount or amounts as will
compensate such Lender, the Issuing Bank or the Swing Line Lender, as the case
may be, for such additional costs incurred or reduction suffered.


 


(b)           Capital Requirements. If any
Lender, the Issuing Bank or the Swing Line Lender determines that any Change in
Law affecting such Lender, the Issuing Bank or the Swing Line Lender or any
lending office of such Lender, the Issuing Bank or the Swing Line Lender or
such Lender’s, the Issuing Bank’s or the Swing Line Lender’s holding company,
if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s, the Issuing Bank’s or the Swing Line
Lender’s capital or on the capital of such Lender’s, the Issuing Bank’s or the
Swing Line Lender’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Revolving Advances made by, or
participations in Letters of Credit held by, such Lender, the Letters of Credit
issued by the Issuing Bank, or the Revolving Advances made by the Swing Line
Lender, to a level below that


 


45

















 


which such Lender, the Issuing
Bank or the Swing Line Lender or such Lender’s, the Issuing Bank’s or the Swing
Line Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s, the Issuing Bank’s or the Swing Line
Lender’s policies and the policies of such Lender’s, the Issuing Bank’s or the
Swing Line Lender’s holding company with respect to capital adequacy), then
from time to time the Borrowers will, jointly and severally, pay to such Lender,
the Issuing Bank or the Swing Line Lender, as the case may be (provided that
such Lender has complied with its obligations under Section 2.15), such
additional amount or amounts as will compensate such Lender, the Issuing Bank or
the Swing Line Lender or such Lender’s, the Issuing Bank’s or the Swing Line
Lender’s holding company for any such reduction suffered.


 


(c)           Certificates for Reimbursement.
A certificate of a Lender, the Issuing Bank or the Swing Line Lender’s setting
forth the amount or amounts necessary to compensate such Lender, the Issuing
Bank or the Swing Line Lender or any of their respective holding companies, as
the case may be, as specified in paragraph (a) or (b) of this Section and setting
forth a reasonably detailed description of the basis for calculating such
amount delivered to the Borrowers shall be conclusive absent manifest error.
The Borrowers shall, jointly and severally, pay such Lender, the Issuing Bank
or the Swing Line Lender, as the case may be, the amount shown as due on any
such certificate within 30 days after receipt thereof.


 


(d)           Delay in Requests. Failure or
delay on the part of any Lender, the Issuing Bank or the Swing Line Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s, the Issuing Bank’s or the Swing Line Lender’s right to demand
such compensation, provided that the Borrowers shall not be required to
compensate a Lender, the Issuing Bank or the Swing Line Lender pursuant to this
Section for any increased costs incurred or reductions suffered more than six months
prior to the date that such Lender, the Issuing Bank, or the Swing Line Lender,
as the case may be, notifies the Borrowers of the Change in Law giving rise to
such increased costs or reductions and of such Lender’s, the Issuing Bank’s or
the Swing Line Lender’s intention to claim compensation therefor (except that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof).


 


Section 2.10           Payments and Computations.


 


(a)           Payment Procedures. The
Borrowers shall make each payment under this Agreement not later than 12:00
p.m. (New York time) on the day when due to the Administrative Agent at the
Administrative Agent’s Applicable Lending Office in immediately available funds.
Each Revolving Advance shall be repaid and each payment of interest thereon
shall be paid in Dollars. All payments shall be made without setoff, deduction,
or counterclaim. The Administrative Agent will promptly thereafter, and in any
event prior to the close of business on the day any timely payment is made,
cause to be distributed like funds relating to the payment of principal, interest
or fees ratably (other than amounts payable solely to the Administrative Agent,
or a specific Lender pursuant to Section 2.03(b), 2.03(c), 2.08,
2.09 or 2.11, but after taking into account payments effected
pursuant to Section 10.04) in accordance with each Lender’s Pro Rata Share
to the Lenders for the account of their respective Applicable Lending Offices,
and like funds relating to the payment of any other amount payable to any
Lender to such Lender for the


 


46

















 


account of its Applicable
Lending Offices, in each case to be applied in accordance with the terms of
this Agreement.


 


(b)           Computations. All computations
of interest based on the Prime Rate shall be made by the Administrative Agent
on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Federal Funds Effective Rate or the
Eurodollar Rate and of fees shall be made by the Administrative Agent, on the
basis of a year of 360 days, in each case 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 shall be conclusive and binding for
all purposes, absent manifest error.


 


(c)           Non-Business Day Payments. Whenever
any payment shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or fees, as the case may be.


 


(d)           Agent Reliance. Unless the
Administrative Agent shall have received written notice from a Borrower prior
to the date on which any payment is due to the Lenders that such Borrower will
not make such payment in full, the Administrative Agent may assume that such Borrower
has made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be distributed
to each Lender on such date an amount equal to the amount then due to such
Lender. If and to the extent such Borrower shall not have so made such payment
in full to Administrative Agent, each Lender shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the greater of the Federal Funds Effective Rate for such day and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.


 


Section 2.11           Taxes.


 


(a)           Payments Free of Taxes. Any
and all payments by or on account of any obligation of any Loan Party hereunder
or under any other Loan Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes, provided
that if any Loan Party shall be required by any Legal Requirement to deduct any
Indemnified Taxes (including any Other Taxes) from such payments, then (i) 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) the Administrative Agent, such Lender, the Issuing Bank or the
Swing Line Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made; provided however,
that the Borrower shall not be required to increase any such amounts payable to
any Administrative Agent, Lender, Issuing Bank or Swing Line Lender with
respect to Indemnified Taxes or Other Taxes that (1) are attributable to
recipient’s failure to comply with the requirements of Section 2.11(e);
(2) are imposed solely as a result of the payment to the Administrative Agent,
Lender, Issuing Bank or Swing Line Lender hereunder and a connection between
such recipient and the taxing jurisdiction imposing such Indemnified Tax or
Other Tax, which connection is unrelated to the


 


47

















 


transactions set forth in any
Loan Document; or (3) that are U.S. Withholding Taxes imposed on amounts
payable to or for the account of an Administrative Agent, Lender, Issuing Bank
or Swing Line Lender at the time such recipient becomes a party to this
Agreement, except to the extent such U.S. Withholding Taxes are imposed or
increased as a result of a Change in Law, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall, jointly and severally, timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
Legal Requirements.


 


(b)           Payment of Other Taxes by the
Borrowers. Without limiting the provisions of paragraph (a) above, the
Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.


 


(c)           Indemnification by the Borrowers.
The Borrowers shall indemnify the Administrative Agent, each Lender, the
Issuing Bank and the Swing Line Lender, within 10 days after demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent, such
Lender, the Issuing Bank or the Swing Line Lender, as the case may be, 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. A
certificate as to the amount of such payment or liability and setting forth a
reasonably detailed description of the basis for calculating such amount delivered
to the Borrowers by a Lender, the Issuing Bank or the Swing Line Lender (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender, the Issuing Bank or the Swing Line Lender,
shall be conclusive absent manifest error.


 


(d)           Evidence of Payments. As soon
as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrowers to a Governmental Authority, the Borrowers shall 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 such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.


 


(e)           Status of Lenders. Any Foreign
Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which each Borrower is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to
payments hereunder or under any other Loan Document shall deliver to the
Borrowers (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrowers or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrowers or the
Administrative Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, the
Issuing Bank or the Swing Line Lender if requested by the Borrowers or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrowers or the Administrative
Agent as will enable the Borrowers or the Administrative Agent to determine whether
or not such Lender, the Issuing Bank or the Swing Line Lender is subject to
backup withholding or information reporting requirements.


 


48

















 


Without limiting
the generality of the foregoing, in the event that a Borrower is resident for
tax purposes in the United States of America, any Foreign Lender shall deliver
to the Borrowers and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:


 


(i)            two duly completed copies of
Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States of America is a party,


 


(ii)           two duly completed copies of Internal
Revenue Service Form W-8EC or Internal Revenue Service Form W-8IMY (or
successor form),


 


(iii)          in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under section
881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is
not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Parent within the meaning of section 881(c)(3)(B)
of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) two duly completed copies of Internal Revenue
Service Form W-8BEN, or


 


(iv)          any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrowers to
determine the withholding or deduction required to be made.


 


In addition, each Foreign
Lender shall deliver such forms discussed above promptly upon the obsolescence
or invalidity of any form previously delivered by such Foreign Lender. Each
Foreign Lender shall promptly notify the Borrower in writing at any time it
determines that it is no longer in a position to provide any previously
delivered certificate with relation to portfolio interest. Each Lender who is
not a Foreign Lender shall furnish an accurate and complete Internal Revenue
Form W-9 (or successor form) establishing that such Lender is not subject to
U.S. backup withholding, and to the extent it may lawfully do so at such times,
provide a new Form W-9 (or successor form) upon the expiration or obsolescence
of any previously delivered form.


 


(f)            Treatment of Certain Refunds.
If the Administrative Agent, a Lender, the Issuing Bank or the Swing Line
Lender determines, in good faith, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrowers or with
respect to which the Borrowers have paid additional amounts pursuant to this
Section, it shall pay to the Borrowers an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrowers under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all reasonable out-of-pocket expenses of the Administrative
Agent, such Lender, the Issuing Bank or the Swing Line Lender, as the case may
be, and without interest (other than any interest paid by the relevant
Governmental Authority


 


49

















 


with respect to such refund), provided
that the Borrowers, upon the request of the Administrative Agent, such Lender, the
Issuing Bank or the Swing Line Lender, agree to repay the amount paid over to
the Borrowers (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority that accrue during or in respect of the period
of time that the Borrowers hold such amount and that would have been payable by
the Borrowers pursuant to Section 2.11(a) or (b) had the Borrowers not
paid the amount refunded to the Borrowers pursuant to this Section 2.11(f))
to the Administrative Agent, such Lender, the Issuing Bank or the Swing Line
Lender in the event the Administrative Agent, such Lender, the Issuing Bank or
the Swing Line Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Administrative
Agent, any Lender, the Issuing Bank or the Swing Line Lender to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrowers or any other Person.


 


Section 2.12           Sharing of Payments, Etc. If
any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Advances or other obligations hereunder resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of its Revolving
Advances and accrued interest thereon or other such obligations greater than
its Pro Rata Share, then the Lender receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Revolving Advances and such other obligations
of the other Lenders, or make such other adjustments as shall be equitable, so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Advances and other amounts owing them, provided
that: (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and (ii) the provisions of this paragraph shall not be
construed to apply to (x) any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement or (y) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation
in any of its Revolving Advances or participations in Letters of Credit to any
assignee or participant, other than to the Borrowers or any Subsidiary thereof
(as to which the provisions of this paragraph shall apply). Each Loan Party
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against each Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of each Loan Party in the amount of such participation.


 


Section 2.13           Applicable Lending Offices. Each
Lender may book its Revolving Advances at any Applicable Lending Office
selected by such Lender and may change its Applicable Lending Office from time
to time. All terms of this Agreement shall apply to any such Applicable Lending
Office and the Revolving Advances shall be deemed held by each Lender for the
benefit of such Applicable Lending Office. Each Lender may, by written notice
to the Administrative Agent and the Borrowers designate replacement or
additional Applicable Lending Offices through which Revolving Advances will be
made by it and for whose account repayments are to be made.


 


50

















 


Section 2.14           Letters of Credit.


 


(a)           Issuance. Subject to the terms
of this Agreement, from time-to-time from the Closing Date until 30 days before
the Maturity Date, at the request of a Borrower, the Issuing Bank shall, on the
terms and conditions hereinafter set forth, issue, increase, or extend the
expiration date of Letters of Credit for the account of such Borrower or for
the account of any Subsidiary of a Borrower (in which case such Borrower and
such Subsidiary shall be co-applicants with respect to such Letter of Credit)
on any Business Day. All Letters of Credit outstanding under the Original
Credit Agreement will deemed to be issued under this Agreement on the Closing
Date. No Letter of Credit will be issued, increased, or extended:


 


(i)            if such issuance, increase, or
extension would cause the Letter of Credit Exposure to exceed the lesser of (A) the
aggregate Revolving Commitments minus the sum of the aggregate
outstanding principal amount of all Revolving Advances and the aggregate
outstanding principal amount of the Swing Line Advances and (B) the Borrowing
Base minus the sum of the aggregate outstanding principal amount of all
Revolving Advances and the aggregate outstanding principal amount of the Swing
Line Advances;


 


(ii)           unless such Letter of Credit has an
expiration date not later than the earlier of (A) one year after the date
of issuance thereof and (B) 180 days after the Maturity Date; provided
that, any such Letter of Credit with a one-year tenor may expressly provide
that it is renewable at the option of the Issuing Bank for additional one-year
periods (which shall in no event extend beyond the 180th day after the
Maturity Date) if such Letter of Credit is cancelable upon at least 30 days’
notice given by the Issuing Bank to the beneficiary of such Letter of Credit;


 


(iii)          unless such Letter of Credit is in
form and substance acceptable to the Issuing Bank in its sole discretion;


 


(iv)          unless such Borrower has delivered to
the Issuing Bank a completed and executed Letter of Credit Application; and


 


(v)           unless such Letter of Credit is
governed by the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, or any
successor to such publication or to the International Standby Practices (1998),
International Chamber of Commerce Publication No. 590, or any successor to such
publication.


 


If the terms of any letter of credit application
referred to in the foregoing clause (iv) conflicts with the terms of this
Agreement, the terms of this Agreement shall control.


 


(b)           Participations. Upon the date
of the issuance or increase of a Letter of Credit occurring on or after the
Closing Date, the Issuing Bank shall be deemed to have sold to each other
Lender and each other Lender shall have been deemed to have purchased from the
Issuing Bank a participation in the related Letter of Credit Obligations equal
to such Lender’s Pro Rata Share at such date. The Issuing Bank shall promptly
give notice of the issuance or increase of


 


51

















 


each Letter of Credit to the
Administrative Agent and the Lenders. In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, for the account of the Issuing Bank, such Lender’s
Pro Rata Share of each payment or disbursement made by an Issuing Bank pursuant
to a Letter of Credit and not reimbursed by a Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.14(c). Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by fax, to the Administrative Agent and the applicable
Borrower of such demand for payment and whether the Issuing Bank has made or
will make disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve such Borrower of its obligation
to reimburse the Issuing Bank and the Lenders with respect to any such payment
or disbursement. The Administrative Agent shall promptly give each Lender notice
thereof.


 


(c)           Reimbursement. If the Issuing
Bank shall make any disbursement in respect of a Letter of Credit, the
Borrowers jointly and severally agree to reimburse such disbursement by paying
to the Administrative Agent an amount equal to such disbursement not later than
12:00 noon, New York City time, on the date that such disbursement is made, if
the Borrowers shall have received notice of such disbursement prior to 10:00
a.m., New York City time, on such date, or, if such notice has not been received
by the Borrowers prior to such time on such date, then not later than 12:00
noon, New York City time, on (i) the Business Day that the Borrowers receive such notice, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt, or
(ii) the Business Day immediately following the day that the Borrowers receive
such notice, if such notice is not received prior to such time on the day of
receipt; provided that the Borrowers shall conclusively be deemed,
subject to the conditions to borrowing set forth herein (including the
conditions stated in Section 3.02), to have requested that such payment
be financed with an Base Rate Advance in an equivalent amount and, to the
extent so financed, the Borrowers’ obligation to make such payment shall be
discharged and replaced by the resulting Base Rate Advance. If the Borrowers
fail to make such payment when due, the Administrative Agent shall notify each
Lender of the applicable disbursement, the payment then due from the Borrowers
in respect thereof and such Lender’s Pro Rata Share thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Pro Rata Share of the payment then due from the Borrowers, in the same manner
as provided in Section 2.02 with respect to Revolving Advances made by
such Lender (and Section 2.02 shall apply, mutatis  mutandis,
to the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the Lenders.
If such reimbursement is not made by any Lender to the Issuing Bank on the same
day on which the Issuing Bank shall have made payment on any such draw, such
Lender shall pay interest thereon to the Issuing Bank at a rate per annum equal
to the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.


 


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(d)           Obligations Unconditional. The
obligations of the Borrowers under this Agreement in respect of each Letter of
Credit shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, notwithstanding the following circumstances:


 


(i)            any lack of validity or
enforceability of any Letter of Credit Documents, any Loan Document, or any
term or provision therein;


 


(ii)           any amendment or waiver of or any
consent to departure from all or any of the provisions of any Letter of Credit
Document or any Loan Document;


 


(iii)          the existence of any claim, set-off,
defense or other right which either Borrower, any other party guaranteeing, or
otherwise obligated with, such Borrower, any subsidiary or other Affiliate
thereof or any other Person may have at any time against any beneficiary or
transferee of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, any Lender
or any other Person, whether in connection with this Agreement, any other Loan
Document, the transactions contemplated in this Agreement or in any Letter of
Credit Documents or any unrelated transaction;


 


(iv)          any draft or other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;


 


(v)           payment by the Issuing Bank under
such Letter of Credit against presentation of a draft or certificate which does
not strictly comply with the terms of such Letter of Credit; or


 


(vi)          any other act or omission to act or
delay of any kind of the Issuing Bank, the Administrative Agent the Lenders or
any other Person or any other event, circumstance or happening whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of either
Borrower’s obligations hereunder.


 


Without limiting the
generality of the foregoing, it is expressly understood and agreed that the
absolute and unconditional obligation of each Borrower hereunder to reimburse
each payment or disbursement made by an Issuing Bank pursuant to a Letter of
Credit will not be excused by the gross negligence or willful misconduct of the
Issuing Bank; provided that the foregoing shall not be construed to
excuse the Issuing Bank from liability to the Borrowers to the extent of any
damages that are caused by the Issuing Bank’s failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination.


 


(e)           Prepayments of Letters of Credit.
In the event that any Letters of Credit shall be outstanding or shall be drawn
and not reimbursed on the fifth Business Day prior to the Maturity Date, the
Borrowers shall on or before such date either (i) jointly and severally, pay to
the 


 


53

















 


Administrative Agent an amount
equal to 105% of the Letter of Credit Exposure allocable to such Letters of
Credit to be held in the LC Cash Collateral Account and applied in accordance
with paragraph (g) below or (ii) provide the Issuing Bank with a substitute
letter of credit naming the Issuing Bank as beneficiary, in form and substance
and from a financial institution reasonably satisfactory to the Issuing Bank,
with a face amount equal to 105% of the aggregate Letter of Credit Exposure
allocable to such outstanding Letters of Credit.


 


(f)            Liability of Issuing Bank. Each
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for:


 


(i)            the use which may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith;


 


(ii)           the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged;


 


(iii)          payment by the Issuing Bank against
presentation of documents which do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the relevant Letter of Credit; or


 


(iv)          any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit (including the
Issuing Bank’s own negligence),


 


except
that in each case, the Borrowers shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to, and shall promptly pay to, the
Borrowers, to the extent of any direct, as opposed to consequential (claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law), damages suffered by the Borrowers which the Borrowers prove
were caused by the Issuing Bank’s willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit strictly
comply with the terms of such Letter of Credit it is understood that the applicable
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to constitute willful misconduct or gross
negligence of the Issuing Bank.


 


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(g)                                 LC
Cash Collateral Account.


 


(i)                                     If
the Borrowers are required to deposit funds in the LC Cash Collateral Account
pursuant to Sections 2.07(c), 2.14(e), 7.02(b) or
7.03(b), then the Borrowers and the Administrative Agent shall establish
the LC Cash Collateral Account and the Borrowers shall execute any documents
and agreements, including the Administrative Agent’s standard form assignment
of deposit accounts, that the Administrative Agent requests in connection
therewith to establish the LC Cash Collateral Account and grant the
Administrative Agent an Acceptable Security Interest in such account and the
funds therein. The Borrowers hereby pledge to the Administrative Agent and
grant the Administrative Agent a security interest in the LC Cash Collateral Account,
whenever established, all funds held in the LC Cash Collateral Account from
time to time and all proceeds thereof as security for the payment of the
Obligations.


 


(ii)                                  Funds
held in the LC Cash Collateral Account shall be held as cash collateral for
obligations with respect to Letters of Credit and promptly applied by the
Administrative Agent at the request of the Issuing Bank to any reimbursement or
other obligations under Letters of Credit that exist or occur. To the extent
that any surplus funds are held in the LC Cash Collateral Account above 105% of
the Letter of Credit Exposure during the existence of an Event of Default the
Administrative Agent may (A) hold such surplus funds in the LC Cash
Collateral Account as cash collateral for the Obligations or (B) apply
such surplus funds to any Obligations in any manner directed by the Majority
Lenders. If no Default or Event of Default exists, the Administrative Agent
shall release to the Borrowers at either Borrower’s written request any funds
held in the LC Cash Collateral Account above the amounts required by Section 2.14(e) or
otherwise.


 


(iii)                               Funds
held in the LC Cash Collateral Account shall be invested in Cash Equivalents
maintained with, and under the sole dominion and control of, the Administrative
Agent or in another investment if mutually agreed upon by the Borrowers and the
Administrative Agent, but the Administrative Agent shall have no other
obligation to make any other investment of the funds therein. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the LC Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.


 


(h)                                 Resignation
or Removal of the Issuing Bank. The Issuing Bank may resign at any
time by giving written notice to the Administrative Agent, the Lenders and the
Borrowers, such resignation to be effective upon the appointment of a successor
Issuing Bank, or, if no successor Issuing Bank has been appointed, 60 days
after the retiring Issuing Bank gives notice of its intention to resign or
receives notice of its removal. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint, and provided that no Default
or Event of Default exists, with the consent of the Borrowers (which consent
shall not be unreasonably withheld or delayed), a successor Issuing Bank. If no
successor Issuing Bank shall have been so appointed by the Majority Lenders
within such time period, then the Issuing Bank may appoint,


 


55

















 


and
provided that no Default or Event of Default exists, with the consent of the
Borrowers (which consent shall not be unreasonably withheld or delayed), a
successor Issuing Bank. Subject to the next succeeding sentence, upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the
retiring Issuing Bank and the retiring Issuing Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such resignation shall become effective, the Borrowers shall pay all accrued
and unpaid fees pursuant to Sections 2.03(c)(ii) and (iii). The
acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory
to the retiring Issuing Bank and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor Lender shall have
all the rights and obligations of the previous Issuing Bank under this
Agreement and the other Loan Documents and (ii) references herein and in
the other Loan Documents to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the resignation or
removal of the Issuing Bank hereunder, the retiring Issuing Bank shall remain a
party hereto and shall continue to have all the rights and obligations of the
Issuing Bank under this Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation, but shall not be
required to issue additional Letters of Credit.


 


Section 2.15                                Mitigation
Obligations; Replacement of Lenders.


 


(a)                                  If
any Lender requests compensation under Section 2.09, or if the
Borrowers are required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.11, then such Lender
shall use reasonable efforts to promptly designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.09 or Section 2.11,
as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense (unless the Borrowers pay, as a condition precedent to such Lender’s
agreement to take such action, for any such cost or expense) and would
not otherwise be disadvantageous to such Lender. The Borrowers hereby, jointly
and severally agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.


 


(b)                                 If
any Lender requests compensation under Section 2.09 or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.11,
or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to promptly assign and delegate,
without recourse, all its interests, rights and obligations under this Agreement
to an assignee acceptable to the
Borrowers in their reasonable discretion (it being understood that it shall not
be unreasonable for the Borrowers to withhold their consent to an assignment to
a Foreign Lender that would subject the Borrowers to withholding in respect of
this Agreement at the time of such assignment) that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrowers shall have
received the prior


 


56

















 


written
consent of the Administrative Agent and the Issuing Bank, which consent shall
not unreasonably be withheld
or delayed, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from
a claim for compensation under Section 2.09 or payments required to
be made pursuant to Section 2.11, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrowers
to require such assignment and delegation cease to apply.


 


ARTICLE III



CONDITIONS OF LENDING


 


Section 3.01                                Initial
Conditions Precedent. The effectiveness of the amendment and restatement of
the Original Credit Agreement is subject to the following conditions precedent:


 


(a)                                  Documentation.
On or before the day on which the initial Borrowing is made or the initial Swing
Line Advance is made, or the initial Letter of Credit is issued, the
Administrative Agent and the Lenders shall have received the following, each
dated on or before such day, duly executed by all the parties thereto, each in form and
substance satisfactory to the Administrative Agent and the Lenders:


 


(i)                                     this
Agreement and all attached Exhibits and Schedules;


 


(ii)                                  any
Note requested by a Lender pursuant to Section 2.02(g) payable
to the order of such requesting Lender in the amount of its Revolving
Commitment;


 


(iii)                               the
Security Agreement executed by the Borrowers and each of the Guarantors,
together with any other documents, agreements or instruments necessary to
create an Acceptable Security Interest in the Collateral described therein;


 


(iv)                              the
Pledge Agreement executed by the Parent and each of its Subsidiaries that has a
Subsidiary pledging to the Administrative Agent for the benefit of the Secured
Parties all of the Equity Interest of the Domestic Subsidiaries of such Loan
Party and 65% of the Equity Interest of the Foreign Subsidiaries of such Loan
Party, together with any other documents, agreements or instruments necessary
to create an Acceptable Security Interest in such Equity Interest;


 


(v)                                 an
Account Control Agreement among the Borrower, the Administrative Agent and each
institution at which the Borrower or any of its Subsidiaries maintains a
deposit account, including the accounts acquired under, or opened in connection
with, the Acquisition Agreement;


 


(vi)                              a
certificate dated as of the Closing Date from a Responsible Officer of the
Borrowers stating that (A) all representations and warranties of such
Person set forth in


 


57

















 


this Agreement and
in the other Loan Documents to which it is a party are true and correct in all
material respects; (B) no Default has occurred and is continuing; and (C) the
conditions in this Section 3.01 have been met;


 


(vii)                           to the
extent any have been entered into on or after December 19, 2005, copies of
amendments to the certificate or articles of incorporation or other equivalent
organizational documents of each Loan Party, certified as of a recent date by
the Secretary of State of the state of its organization;


 


(viii)                        a
certificate of the Secretary or Assistant Secretary of each Loan Party dated
the Closing Date and certifying (A) that attached thereto is a true and
complete copy of any amendments to the organizational documents of such Loan
Party as in effect on the Closing Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such Loan Party is a party and, in
the case of the Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation or other organizational documents
of such Loan Party have not been amended since the date of the last amendment
thereto shown on the certified copy thereof furnished pursuant to clause (viii) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document, Notices of Borrowing or any other document
delivered in connection herewith on behalf of such Loan Party;


 


(ix)                                a
certificate of another officer of each Loan Party as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ix) above;


 


(x)                                   certificates
from the appropriate Governmental Authority certifying as to the good standing,
existence and authority of each of the Loan Parties in all jurisdictions where
required by the Administrative Agent;


 


(xi)                                a
favorable opinion dated as of the Closing Date of Paul, Hastings, Janofsky &
Walker LLP, counsel to the Loan Parties substantially similar to the opinion it
delivered pursuant to the Original Credit Agreement;


 


(xii)                             a
certificate from a Financial Officer of each Borrower dated as of the Closing
Date addressed to the Administrative Agent and each of the Lenders regarding
the matters set forth in Section 4.20;


 


(xiii)                          a copy
of, or a certificate as to coverage under, the insurance policies required by Section 5.04
and the applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a customary lender’s loss payable
endorsement and to name the Administrative Agent as an additional insured;


 


(xiv)                         a
Borrowing Base Report giving pro forma effect to the SESCo Transaction dated as
of July 15, 2006;


 


58

















 


(xv)                            a copy
of the risk management policy of the Borrowers (the “Risk Management Policy”)
in form and substance satisfactory to the Majority Lenders;


 


(xvi)                         copies of
any amendments to Material Contracts reflected on Schedule 1.01(c) to
the Original Credit Agreement in effect on or after December 19, 2005 and each
of the Material Contracts in effect on or after December 19, 2005 that are
not reflected on Schedule 1.01(c) to the Original Credit Agreement,
including the Acquisition Agreement, the Secured Counterparty Contracts, the
Material Contracts assumed by any Loan Party in connection with the SESCo
Transaction, the Bridge Commitment Letter and any amendments to the Sowood
Documents and the Secured Counterparty Contracts necessary to permit the
transactions under this Agreement and comply with the terms of the
Intercreditor Agreement, each certified as of the Closing Date by a Responsible
Officer of the Borrowers (A) as being true and correct copies of such
documents as of the Closing Date, (B) as being in full force and effect
and (C) that no material term or conditions thereof shall have been
amended, modified or waived after the execution thereof without the prior
written consent of the Administrative Agent;


 


(xvii)                      copies of
the resolutions duly adopted by the applicable Board of Directors authorizing (A) the
execution, delivery and performance by MxEnergy of the Acquisition Agreement
and the consummation of the SESCo Transaction and (B) the Loan Parties to
incur additional indebtedness pursuant to the Bridge Loan and/or High Yield
Notes Offering;


 


(xviii)                   copies of the
consents obtained from VPEM and Sowood to the transactions contemplated by this
Agreement, the SESCo Transaction, the Bridge Loan, the High Yield Notes
Offering and the Secured Counterparty Contracts;


 


(xix)                           such
other documents, governmental certificates and agreements as the Administrative
Agent or any Lender may reasonably request.


 


(b)                                 Payment
of Fees. On the Closing Date, the Borrowers shall have paid the fees
required to be paid to the Administrative Agent, the Arranger, and the Lenders
on the Closing Date, including, without limitation, the fees set forth in the
Fee Letter and all other costs and expenses which have been invoiced and are
payable pursuant to Section 10.04.


 


(c)                                  Due
Diligence; Corporate Structure. The Administrative Agent and the Lenders
shall have completed satisfactory due diligence review of the assets,
liabilities, business and operations acquired or assumed in connection with the
SESCo Transaction, and all legal, financial, accounting, governmental, tax and
regulatory matters, and fiduciary aspects of the proposed financing and the
terms and conditions of all material obligations of the Loan Parties arising
from the Assumed Liabilities (as described in the Acquisition Agreement). The
documentation reflecting the ownership, capital, corporate, tax, organizational
and legal structure of the Loan Parties shall be acceptable to the
Administrative Agent.


 


(d)                                 Security
Documents. The Administrative Agent shall have received all appropriate
evidence required by the Administrative Agent in its sole discretion necessary
to determine that arrangements have been made for the Administrative Agent for
the benefit of


 


59

















 


Secured
Parties to have an Acceptable Security Interest in the Collateral, including,
without limitation, (i) the delivery to the Administrative Agent of such
financing statements under the Uniform Commercial Code for filing in such
jurisdictions as the Administrative Agent may require and (ii) lien,
tax and judgment searches conducted on SESCo reflecting no Liens other than
Permitted Liens against any of the Collateral as to which perfection of a Lien
is accomplished by the filing of a financing statement.


 


(e)                                  Financial
Statements. The Lenders shall have received true and correct copies of (i) the
Audited Financial Statements, (ii) the unaudited consolidated balance
sheets and related statements of operations, cash flows and stockholders’
equity of the Parent and its Subsidiaries, each as of and for the periods ended
March 31, 2006 and May 31, 2006 and including a reconciliation from
GAAP to mark-to-market accounting, (iii) the Pro Forma Financial
Statements, (iv) the Projections in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders, and (v) such
other financial information as the Administrative Agent may reasonably
request.


 


(f)                                    Authorizations and Approvals. All Governmental Authorities and
Persons shall have approved or consented to the transactions contemplated
hereby and by the SESCo Transaction, including, without limitation, approvals
and permits from Georgia authorizing MxEnergy to operate the business acquired
from SESCo and to become a natural gas marketer in Georgia and those required
in connection with the continued operation of the Parent and its Subsidiaries,
to the extent required, and such approvals shall be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened that would restrain, prevent or otherwise impose adverse
conditions on this Agreement and the actions contemplated hereby.


 


(g)                                 Field
Examination. The Administrative Agent shall have received a field
examination and review of the Collateral in form and substance
satisfactory to the Administrative Agent.


 


(h)                                 No
Proceeding or Litigation; No Injunctive Relief. No action, suit,
investigation or other proceeding (including, without limitation, the enactment
or promulgation of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be threatened or pending and no preliminary or
permanent injunction or order by a state or federal court shall have been
entered (i) in connection with this Agreement, the Secured Counterparty
Contracts or any transaction contemplated hereby or thereby or (ii) which,
in any case, in the reasonable judgment of the Administrative Agent, could
reasonably be expected to cause a Material Adverse Effect.


 


(i)                                     No
Default. No Default shall have occurred and be continuing or would result
from such Advance or from the application of the proceeds therefrom.


 


(j)                                     Representations
and Warranties. The representations and warranties contained in Article IV
hereof and in each other Loan Document shall be true and correct before and
after giving effect to the Revolving Advances and to the application of the
proceeds from such Revolving Advances from the date of the Revolving Advances,
as though made on and as of such date.


 


60

















 


(k)                                  No
Material Adverse Effect. Since June 30, 2005, there has been no
material adverse change in the condition (financial or otherwise), results of
operations, assets, properties, business or prospects of the Parent and its
Subsidiaries, taken as a whole, after giving effect to the SESCo Transaction,
but excluding any change resulting from the SESCo Transaction, the Bridge Loan
and the High Yield Notes Offering. No Material Adverse Effect (as defined in
the Acquisition Agreement) shall have occurred.


 


(l)                                     Funding
of Acquisition Debt. Either funding of the loans under the Bridge Loan or
placement of the senior debt securities under the High Yield Notes Offering
shall have occurred.


 


(m)                               SESCO
Transaction. (i) All conditions precedent to the SESCo Transaction
shall have been satisfied, without waiver except with the written consent of
the Administrative Agent, (ii) the SESCo Transaction shall have been
consummated in accordance with the terms of the Acquisition Agreement and
applicable laws, (iii) the Base Amount (as defined in the Acquisition
Agreement) paid to SESCo under the Acquisition Agreement shall not have
exceeded $62,500,000, as adjusted in accordance with the terms thereof, and (iv) the
Acquisition Agreement shall be in full force and effect.


 


Section 3.02                                Conditions
Precedent to Each Credit Event. The obligation of each Lender to make a
Revolving Advance on the occasion of each Borrowing (including the initial
Borrowing) or Convert to or Continue a Eurodollar Advance, the obligation of
the Swing Line Lender to make any Swing Line Advance, and the obligation of the
Issuing Bank to issue, extend or increase Letters of Credit shall be subject to
the further conditions precedent that on the Borrowing Date, the date of
Continuation or Conversion, the date of the Swing Line Advance, or issuance,
extension or increase date of such Letters of Credit, the following statements
shall be true (and each of the giving of the applicable Notice of Borrowing or
Notice of Conversion or Continuation and the acceptance by the applicable Borrower
of the proceeds of such Revolving Advance or Swing Line Advance or the request
for the issuance, extension or increase of a Letter of Credit shall constitute
a representation and warranty by such Borrower that on the date of such Revolving
Advance or Swing Line Advance, the date of such Conversion or Continuation, or
the date of such issuance, extension or increase such statements are true):


 


(a)                                  the
representations and warranties contained in Article IV and in each other
Loan Document are true and correct in all material respects on and as of the
date of such Revolving Advance or Swing Line Advance, Continuation or
Conversion, or the issuance, extension or increase of such Letter of Credit
before and after giving effect to such Revolving Advance or Swing Line Advance
and to the application of the proceeds from such Revolving Advance or Swing
Line Advance, such Continuation or Conversion, or to the issuance, extension or
increase of such Letter of Credit, as applicable, as though made on, and as of
such date;


 


(b)                                 no
Default has occurred and is continuing or would result from such Revolving
Advance or Swing Line Advance or from the application of the proceeds therefrom
or from such issuance, extension or increase of such Letter of Credit;


 


(c)                                  the
Borrowing Base Availability is greater than or equal to zero after giving
effect to such Borrowing or the issuance, increase, or extension of such Letter
of Credit; and


 


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(d)                                 no
material adverse change has occurred and is continuing with respect to the
Collateral detailed in the then current Borrowing Base Report.


 


Section 3.03                                Determinations
Under Sections 3.01 and 3.02. For purposes of determining compliance with
the conditions specified in Sections 3.01 and 3.02, each Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless an officer of
the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received written notice from such Lender prior to the
Borrowings hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender’s ratable portion
of such Borrowings.


 


Section 3.04                                Post
Closing Covenant. The Borrowers shall deliver to the Administrative Agent
and the Lenders within seven Business Days after the Closing Date evidence of
compliance with the covenants set forth in Sections 6.17 through 6.22 as of May 31,
2006 on a pro forma basis after giving effect to the SESCo Transaction, the
High Yield Offering, and the Bridge Loan.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES


 


Each Loan Party jointly and severally represents and warrants as
follows:


 


Section 4.01                                Existence;
Subsidiaries. Each of the Loan Parties is (a) duly formed, validly
existing, and in good standing under the laws of the jurisdiction of its
formation, (b) duly qualified as a foreign entity and is licensed and in
good standing in each jurisdiction where its ownership, lease or operation of
Property or conduct of its business requires such qualification or license
other than such failures to so qualify that could not, individually or in the
aggregate reasonably be expected to have a Material Adverse Effect. Each of the
Loan Parties is licensed and in good standing to supply natural gas or
electricity or related products by each of the state public utility commissions
identified on Schedule 4.01, as the same may be updated from
time to time.


 


Section 4.02                                Power
and Authority. Each of the Loan Parties has the requisite power and
authority and all requisite governmental licenses, authorizations, consents and
approvals to (a) own its assets and carry on its business, including
without limitation, to supply natural gas or electricity or related products to
End Users in each of the jurisdictions identified in Schedule 4.01,
and (b) execute, deliver and perform the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution,
delivery, and performance by each Loan Party of this Agreement and the other
Loan Documents to which it is a party and the consummation of the transactions
contemplated hereby (a) have been duly authorized by all necessary
organizational action, (b) do not and will not (i) contravene the
terms of any such Person’s organizational documents, (ii) violate any material
Legal Requirement, or (iii) conflict with or result in any breach or
contravention of, or the creation of any Lien under (A) the provisions of
any indenture, instrument or material agreement to which such Loan Party is a


 


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party
or is subject, or by which it, or its Property, is bound or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject.


 


Section 4.03                                Authorization
and Approvals. No authorization, approval, consent, exemption, or other
action by, or notice to or filing with, any Governmental Authority or any other
Person is necessary or required on the part of any Loan Party in
connection with (a) the execution, delivery and performance by, or
enforcement against, any Loan Party of this Agreement and the other Loan
Documents to which it is a party or the consummation of the Transactions or the
transactions contemplated hereby or thereby, (b) the grant by any Loan
Party of the Liens granted by it pursuant to the Loan Documents, or (c) the
perfection or maintenance of the Liens created under the Loan Documents
(including the first priority nature thereof) (other than the filing of UCC-1
Financing Statements), all of which have been duly obtained, taken, given or
made and are in full force and effect, except actions by, and notices to or
filings with, Governmental Authorities (including, without limitation, the SEC)
that may be required in the ordinary course of business from time to time
or that may be required to comply with the express requirements of the
Loan Documents (including, without limitation, to release existing Liens on the
Collateral or to comply with requirements to perfect, and/or maintain the
perfection of, Liens created for the benefit of the Secured Parties).


 


Section 4.04                                Enforceable
Obligations. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is a party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, or similar law affecting creditors’ rights generally or
general principles of equity.


 


Section 4.05                                Financial
Statements; No Material Adverse Effect.


 


(a)                                  The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the
financial condition of the Parent and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness
and other liabilities, direct or contingent, of the Parent and its Subsidiaries
as of the date thereof, including liabilities for taxes, material commitments
and Debt.


 


(b)                                 The
Pro Forma Financial Statements and the Projections have been prepared in good
faith by the Parent, based on assumptions believed by the Parent to be
reasonable on the date hereof, and the Pro Forma Financial Statements present
fairly, in all material respects, on a pro forma basis the estimated
consolidated financial position of the Parent and its consolidated Subsidiaries
as of the Closing Date.


 


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(c)                                  Schedule 4.05
sets forth all material indebtedness and other liabilities, direct or
contingent, of the Parent and its Subsidiaries as of the date of such financial
statements, including liabilities for taxes, contingent liabilities and Debt.


 


(d)                                 Since
June 30, 2005, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.


 


(e)                                  The
Borrowers are in compliance with the covenants set forth in Sections 6.17
through 6.22 as of May 31, 2006 on a pro forma basis after giving effect
to the SESCo Transaction, the High Yield Offering, and the Bridge Loan.


 


Section 4.06                                True
and Complete Disclosure. As of the Closing Date, each Loan Party has
disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of (a) the Confidential Information Memorandum or (b) any
other information, report, financial statement, exhibit or schedule furnished
by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any misstatement
of material fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided
that, with respect to projected financial information, the Loan Parties represent
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.


 


Section 4.07                                Litigation.
There are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of any Responsible Officer of a Loan Party after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Loan Party or any of their
Subsidiaries or against any of their properties or revenues that (a) purport
to affect or pertain to this Agreement or any other Loan Document, or any of
the transactions contemplated thereby, or (b) either individually or in
the aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect. No regulatory commission is currently conducting and
has conducted within the five-year period immediately preceding the date
hereof, an investigation of the Parent or any of its Subsidiaries, other than
an investigation conducted by such regulatory commission in its routine general
administrative practice.


 


Section 4.08                                Compliance
with Laws. None of the Loan Parties or any of the Subsidiaries or any of the
Loan Parties’ operation of their respective material properties (a) is in
violation of, nor will the continued operation by the Loan Parties of their
material properties as currently conducted violate, any Legal Requirement
(including any Environmental Law, but excluding any Legal Requirement with
respect to their ability to supply natural gas or electricity or related
products to End Users in each of the jurisdictions identified in Schedule 4.01)
the violation of which could reasonably be expected to have a Material Adverse
Effect, (b) is in default with respect to any judgment, writ, injunction,
decree or order of any Governmental Authority the default of which could
reasonably be expected to have a Material Adverse Effect,


 


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or (c) in
material violation of any Legal Requirement with respect to their ability to
supply natural gas or electricity or related products to End Users in each of
the jurisdictions identified in Schedule 4.01.


 


Section 4.09                                No
Default. None of the Loan Parties or any of its Subsidiaries is a party to
any agreement or instrument or subject to any corporate restriction that has
resulted or could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of the Parent or any of its
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Debt, any Material Contract or any
other material agreement or instrument to which it is a party or by which it or
any of its properties or assets are or may be bound, where such default
could reasonably be expected to result in a Material Adverse Effect. No Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.


 


Section 4.10                                Subsidiaries;
Corporate Structure. Schedule 4.10 sets forth as of the Closing
Date a list of all Subsidiaries of the Parent and, as to each such Subsidiary,
the jurisdiction of formation and the outstanding Equity Interests therein and
the percentage of each class of such Equity Interests owned by the Parent
and the Subsidiaries. The Equity Interests indicated to be owned by the Parent
and the Subsidiaries on Schedule 4.10 are fully paid and
non-assessable and are owned by the persons indicated on such Schedule, free
and clear of all Liens (other than Permitted Liens).


 


Section 4.11                                Condition
of Properties.


 


(a)                                  Each
Loan Party has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such minor defects in title that do not materially
interfere with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes. None of the
property of Loan Parties is subject to Liens, other than Permitted Liens.


 


(b)                                 Each
Loan Party has complied in all material respects with all obligations under all
material leases to which it is a party and all such leases are in full force
and effect. Each Loan Party enjoys peaceful and undisturbed possession under
all such material leases.


 


(c)                                  Neither
the business nor the material Properties of any Loan Party has been affected 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 a Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy.


 


Section 4.12                                Environmental
Condition.


 


(a)                                  Except
as could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, the Loan Parties (i) have obtained all
Environmental Permits necessary for the ownership and operation of their
respective material Properties and the conduct of their respective businesses; (ii) have
been and are in compliance with all terms and conditions of such Environmental
Permits and with all other requirements of applicable Environmental


 


65

















 


Laws; (iii) have
not received notice of any violation or alleged violation of any Environmental
Law or Environmental Permit; and (iv) are not subject to any actual or
contingent Environmental Claim.


 


(b)                                 None
of the present or previously owned or operated Properties of the Loan Parties
or of any of their present or former Subsidiaries, wherever located, (i) has
been placed on or proposed to be placed on the National Priorities List,
CERCLIS, or their state or local analogs, nor has the Parent or any of its Subsidiaries
been otherwise notified of the designation, listing or identification of any
Property of such Loan Party or any of its present or former Subsidiaries as a
potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws (except as
such activities may be required by permit conditions); (ii) is
subject to a Lien, arising under or in connection with any Environmental Laws,
that attaches to any revenues or to any Property owned or operated by the Loan
Parties or any of their present or former Subsidiaries, wherever located; or (iii) has
been the site of any Release (as defined under any Environmental Law) of
Hazardous Substances from present or past operations which has caused at the
site or at any third-party site any condition that has resulted in or could
reasonably be expected to result in the need for Response (as defined under any
Environmental Law) and none of the Loan Parties or any of their present or
former Subsidiaries has generated or transported or has caused to be generated
or transported Hazardous Substances to any third party site which could
reasonably be expected to result in the need for Response.


 


(c)                                  Without
limiting the foregoing, the present and future liability, if any, of the Parent
or any of its Subsidiaries, which could reasonably be expected to arise in
connection with requirements under Environmental Laws could not reasonably be
expected to have a Material Adverse Effect.


 


Section 4.13                                Insurance.


 


(a)                                  Schedule 4.13
sets forth a true, complete and correct description of all insurance maintained
by the Loan Parties as of the Closing Date. As of such date, such insurance is
in full force and effect and all premiums have been duly paid.


 


(b)                                 The
properties of the Loan Parties are insured with financially sound and reputable
insurance companies not Affiliates of any Loan Party, in such amounts, with
such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where applicable Loan Party operates.


 


Section 4.14                                Taxes.
Each Loan Party has filed all material Federal, state and other tax returns and
reports required to be filed, and have paid all material Federal, state and
other taxes, assessments, fees and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP. There is no written proposed tax assessment against the
Parent or any Subsidiary thereof that would, if made, have a Material Adverse
Effect.


 


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Section 4.15                                ERISA
Compliance.


 


(a)                                  Except
as could not, individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect, the Parent and its ERISA Affiliates is in compliance
in all material respects with the applicable provisions of ERISA and the Code
and the regulations and published interpretations thereunder.


 


(b)                                 Except
as could not, individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect, each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Parent, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Parent and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.


 


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


 


Section 4.16                                Security
Interests.


 


(a)                                  The
Pledge Agreement is effective to create in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in such Pledge Agreement) and,
when such Collateral (to the extent such Collateral constitutes a certificated
security under the applicable Uniform Commercial Code) is delivered to
such Administrative Agent, such Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title
and interest of the pledgors thereunder in such Collateral, in each case prior
and superior in right to any other person.


 


(b)                                 The
Security Agreement is effective to create in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in such Security Agreement)
and, when financing statements in appropriate form are filed in the
offices specified on Schedule 1 to the Security Agreement, such Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such portion of the
Collateral in which a security interest may be perfected by the filing of
a financing statement under the applicable 


 


67

















 


Uniform Commercial
Code, in each case prior and superior in right to any other person, other than Permitted
Liens.


 


Section 4.17                                Bank
Accounts. Schedule 4.17 sets forth the account numbers and
locations of all bank accounts of the Loan Parties as of the Closing Date.


 


Section 4.18                                Labor
Relations. Except as could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, there (a) is no
unfair labor practice complaint pending against the Parent or any of its
Subsidiaries or, to the knowledge of any Responsible Officer of a Loan Party,
threatened against any of them, before the National Labor Relations Board (or
any successor United States federal agency that administers the National Labor
Relations Act), and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Parent or
any of its Subsidiaries or, to the knowledge of any Responsible Officer of a
Loan Party, threatened against any of them, (b) are no strikes, lockouts,
slowdowns or stoppage against the Parent or any Subsidiary pending or, to
the knowledge of any Loan Party, threatened and (c) no union
representation petition existing with respect to the employees of the Parent or
any of its Subsidiaries and no union organizing activities are taking place. The
hours worked by and payments made to employees of the Parent and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable federal, state, provincial, local or foreign law dealing with
such matters, except where such violation, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect. All
payments due from the Parent or any Subsidiary, or for which any claim may be
made against the Parent or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Parent or such Subsidiary, except where the
failure to do the same, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The consummation
of the transactions contemplated hereby will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Parent or any Subsidiary is bound.


 


Section 4.19                                Intellectual
Property. Each Loan Party owns or is licensed or otherwise has full legal
right to use all of the patents, trademarks, service marks, trade names,
copyrights, franchises, authorizations and other rights that are reasonably
necessary for the operation of its business, without conflict with the rights
of any other Person with respect thereto that could reasonably be expected to
have a Material Adverse Effect.


 


Section 4.20                                Solvency.
Immediately following the making of each Revolving Advance and Swing Line
Advance and after giving effect to the application of the proceeds of each Revolving
Advance and Swing Line Advance, (a) the fair value of the assets of each
of the Borrowers, Holdings and the Loan Parties, taken as a whole, will exceed
their respective debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each of the Borrowers, Holdings
and the Loan Parties, taken as a whole, will be greater than the amount that
will be required to pay the probable liability of their respective debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each of the Borrowers,
Holdings and the Loan Parties, taken as a whole, will be able to pay their
respective debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) each of
the


 


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Borrowers,
Holdings and the Loan Parties, taken as a whole, will not have unreasonably
small capital with which to conduct the business in which they are engaged as
such business is now conducted and is proposed to be conducted following the
Closing Date.


 


Section 4.21                                Senior
Indebtedness. The obligations of the Loan Parties hereunder constitute
senior indebtedness (however denominated) in respect of any Subordinated Indebtedness
of the Parent and its Subsidiaries.


 


Section 4.22                                Margin
Regulations. None of the Loan Parties is engaged and will engage,
principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U), or
extending credit for the purpose of purchasing or carrying margin stock. No part of
the proceeds of any Revolving Advance or Swing Line Advance will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry any margin stock (within the meaning of
Regulation U) or to refinance any Debt originally incurred for such purpose, or
for any other purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.


 


Section 4.23                                Investment
Company Act. None of the Parent, any Person Controlling the Parent, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.


 


Section 4.24                                Names
and Locations. As of the Closing Date, Schedule 4.24 sets forth (a) all
legal names and all other names (including trade names, fictitious names and
business names) under which the Loan Parties currently conduct business, or has
at any time during the past five years conducted business, (b) the name of
any entity which any Loan Party has acquired in whole or in part or from
whom any Loan Party has acquired a significant amount of assets within the past
five years, (c) the state or other jurisdiction of organization or
incorporation for each Loan Party and sets forth each Loan Party’s
organizational identification number or specifically designates that one does
not exist, and (d) the location of all offices of the Loan Parties and the
locations of all inventory of the Borrowers and their Subsidiaries.


 


Section 4.25                                Revisions
or Updates to the Schedules. Should any of the information or disclosures
provided on Schedules 1.01(c), 4.01 or 4.24 originally
attached hereto become outdated or incorrect in any material respect, the
Borrowers from time to time shall deliver to the Administrative Agent and the
Lenders such revisions or updates to such schedule(s) whereupon such schedules
shall be deemed to be amended by such revisions or updates, as may be
necessary or appropriate to update or correct such schedule(s), provided that,
notwithstanding the foregoing, no such revisions or updates shall be deemed to
have amended, modified, or superseded any such schedules as originally attached
hereto, or to have cured any breach of warranty or representation resulting
from the inaccuracy or incompleteness of any such schedules, unless and until
the Administrative Agent shall have accepted in writing such revisions or
updates to any such schedules.


 


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Section 4.26                                Acquisition.


 


(a)                                  The
Acquisition Agreement is in full force and effect, no material breach, default
or waiver of any term or provision thereof by MxEnergy or, to the Borrowers’
knowledge, the other parties thereto, has occurred (except for such breaches,
defaults and waivers, if any, consented to in writing by Administrative Agent)
and no action has been taken by any competent authority which restrains,
prevents or imposes any material adverse condition upon, or seeks to restrain, prevent
or impose any material adverse condition upon, any component of the
Acquisition.


 


(b)                                 At
the time of consummation of the Acquisition contemplated by the Acquisition
Agreement, each component of the Acquisition shall have been consummated in
accordance with the terms of the Acquisition Agreement and all applicable laws.


 


(c)                                  At
the time of consummation of the Acquisition contemplated by the Acquisition
Agreement, all consents and approvals of, and filings and registrations with,
and all other actions in respect of, all governmental agencies, authorities or
instrumentalities and third parties required in order to make or consummate
each component of the Acquisition shall have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained).


 


(d)                                 All
applicable waiting periods with respect to the Acquisition have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the consummation of any component of
the Acquisition.


 


(e)                                  At
the time of consummation of the Acquisition contemplated by the Acquisition
Agreement, no action, suit or proceeding (including, without limitation, any
inquiry or investigation) is pending or, to the Borrowers’ knowledge,
threatened against Parent or any of its Subsidiaries or with respect to the
Acquisition Agreement, the Acquisition, the financing contemplated hereby or
any documentation executed in connection therewith, unless such action, suit or
proceeding could not reasonably be expected to result in a Material Adverse
Effect, and no injunction or other restraining order is issued or a hearing
therefore pending or noticed with respect to the Acquisition Agreement, the
Acquisition, this Agreement or the transactions contemplated hereby or thereby.


 


ARTICLE V



AFFIRMATIVE COVENANTS


 


So long as the Revolving Advances or Swing Line Advances or any amount
under any Loan Document shall remain unpaid, any Lender shall have any Revolving
Commitment hereunder, or there shall exist any Letter of Credit Exposure,
unless the Majority Lenders shall otherwise consent in writing, each Loan Party
shall:


 


Section 5.01                                Preservation
of Existence, Etc. Except as permitted by Section 6.03, (a) preserve,
renew and maintain in full force and effect its legal existence and good
standing under the Legal Requirements of the jurisdiction of its formation, (b) in
the case of the Borrowers and


 


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their
Subsidiaries, be licensed and in good standing to supply natural gas or
electricity or related products by each of the state public utility commissions
identified on Schedule 4.01 so long as the such Loan Party is still
supplying natural gas or electricity or related products in the relevant
jurisdiction, (c) take all reasonable action to obtain, preserve, renew,
extend, maintain and keep in full force and effect all rights, privileges,
permits, licenses, authorizations and franchises necessary or desirable in the
normal conduct of its business, including, in the case of the Borrowers and
their Subsidiaries, those rights, privileges, permits, licenses, authorizations
and franchises necessary to supply natural gas or electricity or related
products to End Users in each of the jurisdictions identified in Schedule 4.01
so long as the such Loan Party is still supplying natural gas or electricity or
related products in the relevant jurisdiction, and (d) qualify and remain
qualified as a foreign entity in each jurisdiction in which qualification is
necessary in view of its business and operations or the ownership of its
Properties other than such failures to so qualify that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 5.02                                Compliance
with Laws, Etc. Comply (a) with all Legal Requirements (including
without limitation, all Environmental Laws and ERISA but excluding, in the case
of the Borrowers and their Subsidiaries, any Legal Requirement with respect to
their ability to supply natural gas or electricity or related products to End
Users in each of the jurisdictions identified in Schedule 4.01) applicable
to it or to its business or property, except in such instances in which such
Legal Requirement is being contested in good faith by appropriate proceedings
diligently conducted and for which the failure to so comply could not
reasonably be expected to have a Material Adverse Effect and (b) in all
material respects with, in the case of the Borrowers and their Subsidiaries,
any Legal Requirement with respect to their ability to supply natural gas or
electricity or related products to End Users in each of the jurisdictions
identified in Schedule 4.01.


 


Section 5.03                                Maintenance
of Property. (a) Maintain and preserve all Property material to the
conduct of its business and keep such Property in good repair, working order
and condition, (b) from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times and (c) use the standard of
care typical in the industry in the operation and maintenance of its facilities.


 


Section 5.04                                Maintenance
of Insurance.


 


(a)                                  Maintain
with financially sound and reputable insurance companies not Affiliates of any
Loan Party, insurance with respect to its Properties and business, to the
extent and against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons and such other insurance as may be required by law.


 


(b)                                 (i) Cause
all such policies covering any Collateral to be endorsed or otherwise amended
to include a customary lender’s loss payable endorsement, in form and substance
reasonably satisfactory to the Administrative Agent, which endorsement shall
provide that, from and after the Closing Date, if the insurance carrier shall
have received written notice from the Administrative Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all


 


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proceeds
otherwise payable to a Loan Party under such policies directly to the Administrative
Agent; (ii) deliver original or certified copies of all such policies to
the Administrative Agent; cause each such policy to provide that it shall not
be canceled, modified or not renewed upon not less than 30 days’ prior written
notice thereof by the insurer to the Administrative Agent; and (iii) deliver
to the Administrative Agent, prior to the cancellation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the Administrative
Agent) together with evidence satisfactory to the Administrative Agent of
payment of the premium therefor.


 


Section 5.05                                Payment
of Taxes, Etc. Pay and discharge as the same shall become due and payable,
all its obligations and liabilities in accordance with their terms, including (a) all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its Property, unless the same
are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
the applicable Loan Party; (b) all lawful claims which, if unpaid, might
by law become a Lien upon its Property in violation of this Agreement; and (c) all
Debt, as and when due and payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing such Debt, including,
without limitation, the Intercreditor Agreement.


 


Section 5.06                                Reporting
Requirements. Deliver to the Administrative Agent and each Lender, in form and
detail reasonably satisfactory to the Administrative Agent and the Lenders:


 


(a)                                  Audited
Annual Financials. As soon as available and in any event not later than 120
days after the end of each fiscal year of the Parent (beginning for the fiscal
year ending June 30, 2006), copies of (i) the audited consolidated and
unaudited consolidating balance sheets of the Parent and its Subsidiaries, in
each case, as at the end of such fiscal year, together with, in each case, the
related audited consolidated and unaudited consolidating statements of income
or operations, shareholders’ equity and cash flows for such fiscal year, and
the notes thereto, all in reasonable detail and setting forth in each case in
comparative form the audited consolidated figures as of the end of and for
the previous fiscal year, all in reasonable detail and prepared in accordance
with GAAP (subject only to normal year-end audit adjustments and the absence of
footnotes with respect to any consolidating statements) and (x) in the case of
each of such audited consolidated financial statements (excluding any
statements in comparative form to be corresponding figures from the
consolidated budget), accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Lenders, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject
to any “going concern” or like qualification or exception or any qualification
or exception as to the scope of such audit and shall state that such
consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Parent and its respective Subsidiaries
as at the end of such fiscal year and their consolidated results of operations
and cash flows for such fiscal year in conformity with GAAP; or words
substantially similar to the foregoing and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards, and (y) in the
case of such unaudited consolidating financial statements, certified by a Financial
Officer of the Parent that such financial statements have been prepared in
accordance with GAAP consistently applied and


 


72

















 


presents
fairly, in all material respects, the information contained therein as at the
date and for the periods covered thereby and (ii) the consolidated and
consolidating unaudited Non-GAAP Financial Reporting financial statements of
the Parent and its Subsidiaries for such fiscal year including a reconciliation
to the GAAP financial statements;


 


(b)                                 Monthly
Financials. As soon as available and in any event not later than 45 days
after the end of each month (beginning with the month ending June 30, 2006),
(i) a consolidated and consolidating balance sheet of the Parent and its
Subsidiaries as at the end of such month, and the related consolidated and
consolidating statements of income or operations, shareholders’ equity and cash
flows for such month and for the portion of the Parent’s fiscal year then
ended, and setting forth in each case with respect to such consolidated
statements, in comparative form the consolidated figures for the
corresponding month of the previous fiscal year and the corresponding portion
of the previous fiscal year, all in reasonable detail and certified by a Financial
Officer of the Parent as fairly presenting in all material respects the
financial condition, results of operations, shareholders’ equity and cash flows
of the Parent and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes and (ii) the
Parent’s and its Subsidiaries’ consolidated and consolidating Non-GAAP
Financial Reporting financial statements including a reconciliation with the
GAAP financial statements described in the foregoing clause (i) and a
management discussion and analysis of the financial results;


 


(c)                                  Compliance
Certificates. (i) Concurrently with the delivery of the financial
statements referred to in Section 5.06(a), a certificate of its
independent certified public accountants rendering the report thereon stating
whether, in connection with their audit examination, anything has come to their
attention which would cause them to believe that any Default or Event of
Default with respect to accounting matters existed on the date of such
financial statements, and if such a condition or event has come to their
attention, specifying in reasonable detail the nature and period, if known, of existence
thereof and (ii) concurrently with the delivery of the financial
statements referred to in Sections 5.06(a) and (b), a duly
completed Compliance Certificate signed by a Financial Officer of the Parent;


 


(d)                                 Management
Letters. Promptly upon receipt thereof, copies of any detailed audit
reports, management letters and any reports as to material inadequacies in
accounting controls (including reports as to the absence of any such
inadequacies) or recommendations submitted to the board of directors (or the
audit committee of the board of directors) of the Parent by independent
accountants in connection with the accounts or books of the Parent or any
Subsidiary thereof, or any audit of any of them;


 


(e)                                  Borrowing
Base Reports. Within seven Business Days after the fifteenth and last Business
Day of each calendar month, a Borrowing Base Report as of the end of such
applicable period, together with supporting documentation reasonably acceptable
to the Administrative Agent, including without limitation, aggregate account
receivable agings for each LDC and of End Users by LDC, accounts payable
agings, aggregate account receivables past due for each LDC and End Users by
LDC, a schedule of Imbalances and Eligible LDC Residual Contract Rights, copies
of all Imbalance statements from LDCs received since the delivery of the last
Borrowing Base Report, potential First Purchaser Liens, cash reconciliations, a
schedule of inventory balances, a schedule of any net mark to market
gains or losses with respect to Swap


 


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Contracts,
and a listing of outstanding loans, letters of credit and offset
reconciliations, each in such reasonable detail and in a format as the Administrative
Agent may require;


 


(f)                                    Risk
Management Policy Certification and Report. (i) Within seven Business
Days after the fifteenth and last Business Day of each calendar month, a
certificate in substantially the form of the attached Exhibit K from
a Responsible Officer of a Borrower certifying that the Borrowers are in
compliance with the Borrower’s Risk Management Policy; and (ii) within
seven Business Days after the last Business Day of each calendar month, a
monthly comprehensive risk management report in a format reasonably acceptable
to the Administrative Agent, setting forth the Borrowers’ overall hedging
positions, forward book, inventory positions, and transportation and storage
capacities;


 


(g)                                 Marketing
Report. Within seven Business Days after the last Business Day of each
calendar month, a monthly comprehensive marketing report detailing (i) the
Borrowers’ and their Subsidiaries’ acquisition of any new End User accounts by
LDC and by fixed or floating price contract and specifying the weighted average
costs for each new End User and whether such acquisitions were through organic
customer growth or acquisition from a third party and (ii) the natural gas
and electricity break even price for each LDC, all in a format reasonably
acceptable to the Administrative Agent; provided, that such report shall contain
a separate break-out of the foregoing items (i) and (ii) solely with
respect to the assets acquired in the SESCo Transaction;


 


(h)                                 Securities
Law Filings and other Public Information. Promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of the Parent, and copies of
all annual, regular, periodic and special reports and registration statements
which the Parent may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934 or any other securities
Governmental Authority, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;


 


(i)                                     USA
Patriot Act. Promptly, following a request by any Lender, all documentation
and other information that such Lender reasonably requests in order to comply
with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA Patriot
Act; and


 


(j)                                     Parent
Guarantees. (i) With the delivery of the financial statements under Section 5.01(b),
a list of the Parent’s guarantees of obligations of its Subsidiaries, including
the name of each beneficiary and the maximum amount guaranteed, and (ii) promptly,
and in any event with five Business Days after receipt thereof, any notice of
default or claim delivered under any such guarantees; and


 


(k)                                  Other
Information. Such other information respecting the business, Properties or
Collateral, or the condition or operations, financial or otherwise, of the
Parent and its Subsidiaries as the Administrative Agent or any Lender may from
time to time reasonably request.


 


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Section 5.07                                Other
Notices. Deliver to the Administrative Agent and each Lender prompt written
notice of the following:


 


(a)                                  Defaults.
The occurrence of any Default or Event of Default or any other Debt of any Loan
Party being declared when due and payable before its expressed maturity, or any
holder of such Debt having the right to declare such Debt due and payable
before its expressed maturity, because of the occurrence of any default (or any
event which, with notice and/or the lapse of time, shall constitute any default)
under such Debt;


 


(b)                                 Litigation.
The filing or commencement of, or any threat or notice of intention of any
person to file or commence, any action, suit or proceeding, whether at law or
in equity or by or before any Governmental Authority, against the Parent, any
Subsidiary or any Affiliate thereof, or any material development in any such
action, suit, proceeding, that, in either case, could reasonably be expected to
result in a Material Adverse Effect; and


 


(c)                                  ERISA
Events. The occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result
in liability of the Loan Parties in an aggregate amount exceeding $500,000.00;


 


(d)                                 Environmental
Notices. A copy of any form of notice, summons, material correspondence
or citation received from any Governmental Authority or any other Person,
concerning (i) material violations or alleged violations of Environmental
Laws, which seeks or threatens to impose liability therefor, (ii) any
material action or omission on the part of the Parent or any of its
Subsidiaries in connection with Hazardous Material, (iii) any notice of
potential responsibility or liability under any Environmental Law, or (iv) concerning
the filing of a Lien other than a Permitted Lien upon, against or in connection
with the Parent or any of its Subsidiaries, or any of their leased or owned
material Property, wherever located;


 


(e)                                  Collateral.
Furnish to the Administrative Agent:


 


(i)                                     written
notice of:


 


(A)                              any change
of its legal name, corporate structure, jurisdiction of organization or
formation or its organizational identification number within 30 days before the
occurrence thereof;


 


(B)                                an
Asset Disposition within 30 days before the occurrence thereof;


 


(C)                                a casualty
or condemnation with respect to any portion of Collateral with a market value
in excess of $500,000.00 promptly and in any event within five Business Days
after the occurrence thereof;


 


(D)                               an account
in excess of $250,000.00 or accounts in excess of $500,000.00 in the aggregate
becoming subject to any dispute or claim or other circumstances known to any
Loan Party that may materially impair the validity or collectibility of
such accounts promptly and in any event within five Business Days after the
occurrence thereof;


 


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(E)                                 any
material correspondence received by any Loan Party from any insurer with
respect to any insurance maintained in accordance with Section 5.04
promptly and in any event with five Business Days after the receipt thereof;


 


(F)                                 a
Borrower or any of its Subsidiaries holding or obtaining any (1) Chattel
Paper, (2) Instrument, or (3) Letter of Credit, each in excess of
$250,000.00 individually and $500,000.00 in the aggregate promptly and in any
event with two Business Days after the receipt thereof;


 


(G)                                Collateral
with an aggregate value in excess of $500,000.00 at any time being in the
possession or control of any warehouse or bailee not previously disclosed
promptly and in any event within 10 Business Days before the occurrence
thereof;


 


(H)                               Collateral
with an aggregate value in excess of $500,000.00 being of a type where a Lien may be
registered, recorded or filed under, or notice thereof given under, any federal
statute or regulation or any material Collateral constitutes a claim against
the United States of America, or any State or municipal government or any
department, instrumentality or agency thereof, the assignment of which claim is
restricted by law promptly and in any event within five Business Days of the
existence thereof;


 


(I)                                    a
new LDC with which a Borrower or any of its Subsidiaries has entered into any
agreement and a copy of all such agreements within five Business Days after the
occurrence thereof; and


 


(J)                                   any
notice received from an LDC of default or claim under any agreement between a
Borrower or any of its Subsidiaries and such LDC promptly and in any event
within two Business Days after the receipt thereof and


 


(ii)                                  from
time to time upon request, statements and schedules further identifying, updating,
and describing the Collateral and such other information, reports and evidence
concerning the Collateral, as Collateral Agent may reasonably request, all
in reasonable detail;


 


(f)                                    Casualties
and Takings. Any actual or constructive loss by reason of fire, explosion,
theft or other casualty, of any Property of any Loan Party or any taking of
title to, or the use of, any Property of any Loan Party pursuant to eminent
domain or condemnation proceedings or any settlement or compromise thereof, in
each case, with a value equal to or greater than $1,000,000.00, and a
certificate of a Responsible Officer of the Borrowers describing the nature and
status of such occurrence;


 


(g)                                 Material
Contracts. Prompt written notice of (i) any nonrenewal of the initial
term or any renewal term under any Material Contract, (ii) any event or
condition which results in, or could be expected to result in, an early
termination or cancellation of any Material Contract, and (iii) any
default by a Borrower or, to the knowledge of a Borrower, any other Person
party to any Material Contract; and


 


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(h)                                 Material
Changes. Any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.


 


Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrowers setting forth details of the occurrence
referred to therein and stating what action the Borrowers have taken and
propose to take with respect thereto. Each notice pursuant to Section 5.07(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.


 


Section 5.08                                Books
and Records; Inspection. (a) Keep proper records and books of account
in which full, true and correct entries will be made in accordance with GAAP
and all Legal Requirements, reflecting all financial transactions and matters
involving the assets and business of the Loan Parties and their Subsidiaries; (b) maintain
such books and records of account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
the Loan Parties and their Subsidiaries, as the case may be; (c) from
time-to-time during regular business hours upon reasonable prior notice to the applicable
Loan Party or Subsidiary, permit representatives and independent contractors of
the Administrative Agent and each Lender, for purposes of performing a
Collateral field examination, (i) to visit and inspect any of its
Properties, (ii) to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom and (iii) to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, all at the
expense of the Borrowers and at such reasonable times during normal
business hours and as often as may be reasonably desired, (d) permit
the Administrative Agent, upon request, to conduct, or hire a third party to
conduct, on behalf of the Secured Parties, a review of position reports and
Risk Management Policies of the Borrowers and their Subsidiaries, and (e) within
180 days after the Closing, permit the Administrative Agent or its designee to
perform, on behalf of the Secured Parties and at the expense of the Borrowers,
one assessment of the Borrowers’ procedures, policies and systems relating to
the Risk Management Policy. Unless a Default has occurred and is continuing, the
Collateral field exams shall be performed no more often than on a semi-annual
basis commencing on the date three months following the Closing Date at the
Borrowers’ expense. Any additional Collateral field examinations shall be at
the Lenders’ expense unless a Default has occurred and is continuing at the
time of such review.


 


Section 5.09                                Use
of Proceeds. Use the proceeds of the Revolving Advances, the Swing Line
Advances, and Letters of Credit only for working capital purposes, including
the purchase and sale of natural gas or electricity, including to facilitate
the Borrowers’ and their Subsidiaries’ purchase, transportation, storage and
sale of natural gas or electricity, for Swap Contracts related to hedging of
natural gas or electricity, for margin financing of natural gas or electricity.


 


Section 5.10                                Nature
of Business. Maintain and operate such business in substantially the manner
in which it is presently conducted and operated.


 


Section 5.11                                Risk
Management Policy. Comply with the Risk Management Policy delivered on the
Closing Date and any amendments to such Risk Management Policy that are
acceptable to the Majority Lenders.


 


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Section 5.12                                Additional
Guarantors. Notify the Administrative Agent at the time that any Person
becomes a Subsidiary of the Parent, and promptly thereafter (and in any event
within 30 days), (a) cause such Person to (i) become a Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty or such other document as the Administrative Agent shall deem appropriate
for such purpose, (ii) deliver to the Administrative Agent documents of
the types referred to in clauses Section 3.01(a)(viii), (ix) and
(x) and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability
of the documentation referred to in clause (i)), all in form, content and scope
reasonably satisfactory to the Administrative Agent and (iii) execute such
other Security Documents as the Administrative Agent or any Lender may reasonably
request, in each case to secure the Obligations and (b) cause the
stockholder of such Person to execute a Pledge Agreement pledging 100% of its
interests in the Equity Interest of such Person to secure the Obligations and
such evidence of corporate authority to enter into and such legal opinions in
relation to such Pledge Agreement as the Administrative Agent may reasonably
request, along with share certificates pledged thereby and appropriately
executed stock powers in blank; provided that, no new Subsidiary that is a
controlled foreign corporation under Section 957 of the Code shall be
required to become a Guarantor or enter into any Security Documents if such
Guaranty or the entering into of such Security Documents would reasonably be expected
to result in any material incremental income tax liability and the Parent or
any Subsidiary domiciled in the United States that is an equity holder of a
controlled foreign corporation under Section 957 of the Code shall only be
required to pledge 65% of the Equity Interest of such controlled foreign
corporation pursuant to the applicable Pledge Agreement.


 


Section 5.13                                Additional
Collateral Requirements.


 


(a)                                  Accounts.
At their own expense, use its reasonable efforts to assure prompt payment of
all amounts due or to become due under accounts;


 


(b)                                 Deposit
Accounts. Establish lockboxes and blocked accounts (collectively, “Blocked
Accounts”) in the name of a Borrower or any of its Subsidiaries with such
banks (“Collecting Banks”) as are reasonably acceptable to the
Administrative Agent (subject to irrevocable instructions acceptable to
Administrative Agent as hereinafter set forth) or with the Administrative Agent
and all invoices evidencing accounts (other than accounts payable to an LDC) shall
bear a notice that such invoices are payable to such Blocked Accounts and in
which a Borrower or one of its Subsidiaries, as applicable, and each LDC will
immediately deposit all payments made for inventory or other payments
constituting proceeds of Collateral, in the case of the Borrowers and their
Subsidiaries, in the identical form in which such payment was made,
whether by cash or check. The Collecting Banks shall acknowledge and agree,
pursuant to an Account Control Agreement, that all payments made to the Blocked
Accounts are for the benefit of the Administrative Agent and the Secured
Parties, and that the Collecting Banks have no right to setoff against the
Blocked Accounts, other than for customary charges of the Collecting Bank for
depositary services. Upon the occurrence and continuance of an Event of
Default, each Borrower and each Subsidiary shall irrevocably instruct each
Collecting Bank to promptly transfer all payments or deposits (with certain
exceptions as agreed to by the Administrative Agent) into the Blocked Accounts
into the Administrative Agent’s Account on each Business Day. If any Loan Party
shall receive any monies, checks, notes, drafts or any other payments relating
to and/or proceeds of accounts or other Collateral, such Person shall hold such


 


78

















 


instrument
or funds in trust for the Administrative Agent, and, immediately upon receipt
thereof, shall remit the same or cause the same to be remitted, in kind, to the
Blocked Accounts or after the occurrence and continuance of an Event of
Default, to the Administrative Agent at its address set forth in Section 10.02
below.


 


Section 5.14                                Further
Assurances in General. Execute
any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing or continuation statements or amendments thereto (or similar
documents required by any laws of any applicable jurisdiction)), which may be
required under any Legal Requirement, or which the Administrative Agent or the
Majority Lenders may reasonably request, all at the expense of the
Borrowers. Each Borrower also agrees to provide to the Administrative Agent,
from time to time upon request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Documents. Each Borrower agrees not to effect or permit
any change referred to in Section 5.07(e)(i)(A) unless all
filings have been made under the Uniform Commercial Code or otherwise that
are required in order for the Administrative Agent to continue at all times
following such change to have, and each Loan Party agrees to take all necessary
action to ensure that the Administrative Agent does continue at all times to
have, a valid, legal and perfected security interest in all the Collateral.
Each Borrower also agrees promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.


 


Section 5.15                                Secured
Counterparty Guaranty. Maintain in full force (a) for any Secured
Counterparty (other than VPEM) without an Investment Grade Rating, a Secured Counterparty
Parent Guaranty or Acceptable Credit Support and (b) so long as VPEM is a
Secured Counterparty, maintain in full force the Dominion Guaranty or
Acceptable Credit Support.


 


ARTICLE VI



NEGATIVE COVENANTS


 


So long as the Revolving Advances or the Swing Line Advances or any
amount under any Loan Document shall remain unpaid, any Lender shall have any
Revolving Commitment, or there shall exist any Letter of Credit Exposure,
unless the Majority Lenders otherwise consent in writing, no Loan Party shall:


 


Section 6.01                                Liens,
Etc. Create, assume, incur or suffer to exist, any Lien on or in respect of
any of its Property whether now owned or hereafter acquired, other than the
following (“Permitted Liens”):


 


(a)                                  Liens
pursuant to any Loan Document;


 


(b)                                 Excepted
Liens;


 


(c)                                  Liens
existing on the Closing Date and described in Schedule 6.01; provided
that such Liens shall secure only those obligations which they secure on the
date hereof and extensions, renewals and replacements thereof permitted
hereunder;


 


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(d)                                 Liens
arising out of judgments or awards in respect of which the Parent or any of the
Subsidiaries shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall be secured a subsisting stay of
execution pending such appeal or proceedings; provided
that the aggregate amount of all such judgments or awards (and any cash and the
fair market value of any property subject to such Liens) does not exceed $500,000.00
at any time outstanding;


 


(e)                                  Liens
securing Debt permitted under Section 6.02(e)(i) and purchase
money security interests securing Debt permitted under Section 6.02(e)(ii) in
any fixed or capital assets and improvements thereto or equipment hereafter
acquired (or, in the case of improvements, constructed) by the Parent or any of
its Subsidiaries; provided that (i) such Liens do not at any time
encumber any property other than the property financed by such Debt and the
Proceeds thereof, (ii) the Debt secured thereby does not exceed the lesser
of the cost or fair market value of the property being acquired or financed on
the date of acquisition or financing, and (iii) in the case of purchase
money security interests, such security interests are created within 120 days
after such acquisition (or completion of such improvements);


 


(f)                                    rights
of set-off of banks and other Persons in the ordinary course of banking and
trading arrangements;


 


(g)                                 Liens
in favor of the Secured Counterparties (as defined in the Intercreditor
Agreement) and Sowood which are subject to the Intercreditor Agreement;


 


(h)                                 security
interests (i) in inventory held by and granted to an LDC in the ordinary
course of business and (ii) in accounts purchased and collected by and
granted to an LDC that has agreed to make payment to the Borrowers or one of
their Subsidiaries for such accounts in the ordinary course of business; and


 


(i)                                     other
Liens securing obligations, actual or contingent, in an aggregate amount not
greater than $200,000.00 at any time.


 


Section 6.02                                Debts,
Guaranties and Other Obligations. Create, assume, suffer to exist or in any
manner become or be liable, in respect of any Debt except:


 


(a)                                  Debt
under the Loan Documents;


 


(b)                                 (i) Debt
existing on the Closing Date and described in Schedule 6.02,  Debt under the Sowood Documents, Debt under
the Bridge Loan and/or the High Yield Notes Offering and (ii) any
refinancings, extensions, renewals or replacements of such Debt to the extent
the principal amount of such Debt is not increased (it being understood that
any accrued but unpaid fees or interest added to any principal amount shall not
constitute an increase of such Debt for these purposes), neither the final
maturity nor the weighted average life to maturity of such Debt is decreased,
such Debt, if subordinated to the obligations of a Loan Party hereunder,
remains so subordinated on terms (in their entirety) no less favorable to the
Lenders and no more restrictive on the Loan Parties than the Subordinated Indebtedness
being refinanced;


 


(c)                                  Debt
of the Borrowers to Guarantors, and of Guarantors to the Borrowers or other
Guarantors; provided that (i) such Debt is subordinated to the
Obligations pursuant to a


 


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subordination
agreement in form and substance reasonably acceptable to the
Administrative Agent; and (ii) any such loans and advances made by a Loan
Party shall be evidenced by a promissory note pledged to the Administrative
Agent for the ratable benefit of the Secured Parties;


 


(d)                                 Guarantees
of the Parent or any Wholly-Owned Subsidiary in respect of Debt or other obligations
otherwise permitted hereunder of the Parent or any Wholly-Owned Subsidiary;


 


(e)                                  (i) Debt
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets and (ii) Debt in respect of Capital Leases and Synthetic
Lease Obligations and extensions, renewals and replacements of any such Debt
that do not increase the outstanding principal amount thereof; provided that (i) in
the case of Debt to finance the acquisition, construction or improvements of
fixed or capital assets, such Debt is incurred prior to or within 120 days
after such acquisition or the completion of such construction or improvement
and (ii) the aggregate principal amount of Debt permitted by this
paragraph shall not exceed $4,000,000.00 at any time outstanding;


 


(f)                                    obligations
(contingent or otherwise) of any Borrower or any Wholly-Owned Subsidiary
existing or arising under any Swap Contract, provided that such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view”; and


 


(g)                                 unsecured
Debt in an aggregate principal amount not to exceed $2,000,000.00 at any time
outstanding.


 


Section 6.03                                Merger
or Consolidation. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:


 


(a)                                  any
Subsidiary may merge with (i) a Borrower or the Parent, provided
that such Borrower or the Parent, as the case may be, shall be the
continuing or surviving Person, or (ii) any one or more other Wholly-Owned
Subsidiaries, provided that when any Guarantor is merging with another Wholly-Owned
Subsidiary, the Guarantor shall be the continuing or surviving Person and when
any Wholly-Owned Subsidiary is merging with another Subsidiary, the
Wholly-Owned Subsidiary shall be the continuing or surviving Person; and


 


(b)                                 any
Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Parent, any Borrower or to another Wholly-Owned
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be a Borrower or a Guarantor.


 


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Section 6.04                                Asset
Sales. Make any Asset Disposition or enter into any agreement to make any
Asset Disposition, except:


 


(a)                                  Asset
Dispositions of equipment or real property to the extent that (i) Asset
Disposition is in the ordinary course of business and (ii) (x) such
property is exchanged for credit against the purchase price of similar
replacement property or (y) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;


 


(b)                                 Asset
Dispositions of property by the Parent or any Wholly-Owned Subsidiary to the
Parent or to a Wholly-Owned Subsidiary in the ordinary course of business; provided
that if the transferor of such property is a Guarantor, the transferee thereof
must either be a Borrower or a Guarantor; and


 


(c)                                  Asset
Dispositions by the Parent and its Wholly-Owned Subsidiaries to any Person that
is not a Loan Party or a Subsidiary of any Loan Party not otherwise permitted
under this Section 6.04; provided that (i) at the time
of such Disposition, no Default or Event of Default shall exist or would result
from such Disposition and (ii) the aggregate book value of all property
Disposed of in reliance on this clause (c) in any fiscal year shall not
exceed $1,000,000.00 (or the equivalent in any other currency); and


 


(d)                                 Asset
Dispositions permitted by Section 6.03, Investments permitted by Section 6.05
and Restricted Payments permitted by Section 6.06.


 


Section 6.05                                Investments
and Acquisitions. Make any Investments or Acquisitions except:


 


(a)                                  Investments
held by any Loan Party in the form of Cash Equivalents;


 


(b)                                 Existing
Investments in Subsidiaries and other Investments in existence on the Closing
Date and described in Schedule 6.05;


 


(c)                                  advances
to officers, directors and employees of the Parent and Wholly-Owned Subsidiaries
in an aggregate amount not to exceed $500,000.00 at any time outstanding, for
travel, entertainment, relocation and analogous ordinary business purposes;


 


(d)                                 Investments
of a Loan Party in another Loan Party;


 


(e)                                  Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;


 


(f)                                    Guarantees
permitted by Section 6.02;


 


(g)                                 Investments
in newly-formed Subsidiaries that become Guarantors pursuant to Section 5.10;


 


(h)                                 Investments
under Swap Contracts permitted under Section 6.02(g);


 


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(i)                                     Acquisitions
so long as:


 


(i)                                     both
before and after giving effect to such acquisition, no Default or Event of
Default exists or will exist or would result therefrom;


 


(ii)                                  as soon as available, but not less than five Business
Days prior to such acquisition, the Parent has provided to the Lenders a copy of the information provided to the
board of directors of the Parent or other Loan Party making such acquisition;


 


(iii)                               the cash consideration paid in connection with such acquisition does
not exceed for each consecutive
twelve-month period commencing with the date of this Agreement $5,000,000.00
for each such consecutive twelve-month period;


 


(iv)                              if such acquisition is
an acquisition of the Capital Stock of a Person, the acquisition is structured
so that the acquired Person shall become a Subsidiary of the Parent (and a
Guarantor pursuant to the terms of this Agreement); provided, however,
that such acquisition is not hostile, and if such acquisition is an acquisition
of assets, the acquisition is structured so that a Borrower or one of its
Subsidiaries shall acquire such assets;


 


(v)                                 no Loan Party shall, as a result of or in
connection with any such acquisition, assume or incur any direct or contingent
liabilities (whether relating to environmental, tax, litigation, or other
matters) that could reasonably be expected, as of the date of such acquisition,
to result in the existence or occurrence of a Material Adverse Effect; and


 


(vi)                              such acquisition is of assets to be used in
the Borrowers’ and their Subsidiaries’ business or is of Equity Interests of a
Person engaged in business substantially the same as that of the Borrowers, in
each case compared to the business of the Borrowers as conducted on the date of
this Agreement; and


 


(j)                                     other
Investments not exceeding $1,000,000.00 in the aggregate in any fiscal year of
the Parent.


 


Section 6.06                                Restricted
Payments. Declare or make, directly or indirectly, any Restricted Payment
or defease, redeem, repurchase, retire or acquire the notes issued under the
High Yield Notes Offering or incur any obligation (contingent or otherwise) to
do so, except that:


 


(a)                                  each
Wholly-Owned Subsidiary of the Parent may make Restricted Payments to any
other Wholly-Owned Subsidiary or the Parent;


 


(b)                                 the
Parent may declare and make dividend payments or other distributions payable
to the holders of its Equity Interests solely in the common stock or other
common equity interests of such Person;


 


(c)                                  the
Parent may (i) purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire
any such shares held by


 


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any
current or former officer, director or employee (or their assigns, heirs or
estates); provided that the aggregate price paid for all such purchases,
redemptions or acquisitions shall not exceed $2,000,000.00 in any twelve month
period and (ii) repurchase Equity Interests deemed to occur upon the
exercise of stock options or warrants to the extent such Equity Interests
represent a portion of the exercise price of those options or warrants or
corresponding statutory withholding taxes due in connection with such exercise;


 


(d)                                 the
Parent may purchase, redeem or otherwise acquire shares of its stock or
other equity interests or warrants or options to acquire any such shares with
the proceeds received from the substantially concurrent issue of new shares of
its stock or other equity interests;


 


(e)                                  any
defeasance, redemption, repurchase, retirement or acquisition of Subordinated
Indebtedness or the notes issued under the High Yield Notes Offering with the
net cash proceeds from a substantially concurrent incurrence of Debt permitted
by Section 6.02(b) or the net proceeds from the issuance of
Equity Interests;


 


(f)                                    the
Parent or any of its Subsidiaries may pay management, consulting, advisory
fees, and other transactions fees to (i) Greenhill Capital Partners
pursuant to the agreements listed on the attached Schedule 6.08 in
the amounts set forth in such agreements and (ii) its Affiliates in the
ordinary course of business not to exceed $250,000.00 (not including legal fees
and expenses) in any fiscal year; and


 


(g)                                 any
payments permitted under Section 6.14 may be made.


 


Section 6.07                                Change
in Nature of Business. Engage in any line of business substantially
different from those lines of business conducted by the Parent and its
Subsidiaries on the date hereof or any business substantially related or
incidental thereto.


 


Section 6.08                                Transactions
With Affiliates. Enter into any transaction of any kind with any Affiliate
of the Parent, whether or not in the ordinary course of business, including,
without limitation, any payment by the Parent or any of its Wholly-Owned
Subsidiaries of any management, consulting or similar fees to any Affiliate,
whether pursuant to a management agreement or otherwise, other than on fair and
reasonable terms substantially as favorable or more favorable to the Parent or
such Subsidiary as would be obtainable by the Parent or such Subsidiary at the
time in a comparable arm’s length transaction with a Person other than an
Affiliate, other than (a) transactions between Loan Parties, (b) employment
agreements entered into the ordinary course of business, (c) the issuance
of equity securities, (d) Restricted Payments and Investments permitted by
this Agreement, (e) otherwise expressly provided for in this Agreement, or
(f) pursuant to arrangements existing on the date hereof and set forth on Schedule 6.08.


 


Section 6.09                                Agreements
Restricting Liens and Distributions. Create or otherwise cause or suffer to
exist any prohibition, encumbrance or restriction which prohibits or otherwise (a) restricts
the ability (i) of any Subsidiary to make Restricted Payments to any Loan
Party or to otherwise transfer property to any Loan Party, (ii) of any
Subsidiary to Guarantee the Debt of any Loan Party, or (iii) of the Parent
or any Subsidiary to create, incur, assume or suffer to exist Liens on property
of such Person; provided, however, that the preceding
restrictions shall not


 


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apply
to prohibitions, encumbrances or restrictions under or by reason of: (A) agreements
or instruments governing Debt set forth on Schedule 6.09 and any
amendments or other modifications thereto (including any refinancing thereof);
provided that such amendments or modifications are no more restrictive, taken
as a whole, with respect to such prohibition, encumbrance or restriction than
those contained in those agreements as in effect on the Closing Date, (B) applicable
law, rule, regulation or order, (C) customary non-assignment provisions in
contracts, leases, real property licenses entered into in the ordinary course
of business or (D) (with respect to clause (iii) only), any negative
pledge incurred or provided in favor of any holder of Debt permitted under Section 6.02(e) solely
to the extent any such negative pledge relates to the Property financed by or
the subject of such Debt; or (b) requires the grant of a Lien to secure an
obligation of such Person if a Lien is granted to secure another obligation of
such Person.


 


Section 6.10                                Limitation
on Accounting Changes or Changes in Fiscal Periods. Permit (a) any
change in any of its accounting policies affecting the presentation of
financial statements or reporting practices, except as required or permitted by
GAAP or (b) the fiscal year of the Parent or any of its Subsidiaries to
end on a day other than June 30 or change the Parent’s method of
determining fiscal quarters.


 


Section 6.11                                Limitation
on Speculative Hedging. (a) Purchase, assume, or hold a speculative
position in any commodities market or futures market or enter into any Swap
Contract for speculative purposes, (b) be party to or otherwise enter into
any Swap Contract which (i) is entered into for reasons other than as a part of
its normal business operations as a risk management strategy and/or hedge
against changes resulting from market conditions related to the Borrowers’ or
their Subsidiaries’ operations, (ii) is longer than three years in
duration, or (iii) obligates any Loan Party to any margin call
requirements not permitted under this Agreement, or (c) change its Risk
Management Policy without the Administrative Agent’s prior written consent.


 


Section 6.12                                Operating
Leases. Enter into or remain liable upon any Operating Lease, except for
Operating Leases which have Operating Lease Obligations of not more than $2,000,000.00
at any one time outstanding.


 


Section 6.13                                Sale
and Leaseback Transactions and other Off-Balance Sheet Liabilities. Enter
into or suffer to exist any (a) Sale and Leaseback Transaction or (b) any
other transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities, except for Swap Contracts permitted to be incurred under the terms
of Section 6.02.


 


Section 6.14                                Subordinated
Debt. Except as expressly permitted in Section 2 of the Intercreditor
Agreement: (a) make any optional, mandatory or scheduled payments on
account of principal or interest (whether by redemption, purchase, retirement,
defeasance, set-off or otherwise) in respect of Subordinated Indebtedness; or (b) permit
any waiver, supplement, modification, amendment, termination or release of any
indenture, instrument or agreement pursuant to which any Subordinated
Indebtedness is outstanding if such waiver, supplement, modification,
amendment, termination or release would (i) increase the maximum principal
amount of such Subordinated Indebtedness or the ordinary interest rate or the
default interest rate on such Subordinated Indebtedness; (ii) change the
dates upon which payments of principal or


 


85

















 


interest
are due on such Subordinated Indebtedness; (iii) change any event of
default or add any covenant with respect to such Subordinated Indebtedness; (iv) change
the payment, redemption or prepayment provisions of such Subordinated
Indebtedness; (v) change the subordination provisions thereof; or (vi) change
or amend any other term if such change or amendment would materially increase
the obligations of the obligor or confer additional material rights on the
holder of such Subordinated Indebtedness in a manner adverse to any Loan Party
or any Secured Party.


 


Section 6.15                                Amendment
of Material Contracts. Amend, modify or supplement any Material Contract,
including the Acquisition Agreement, the Secured Counterparty Contracts, the
Bridge Loan and the High Yield Notes Offering, if such amendment, modification
or supplement would materially increase the obligations of the obligor or be
materially adverse to the interests of any Loan Party or any Secured Party.


 


Section 6.16                                Capital
Expenditures. Make or become legally obligated to make any Capital
Expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations but including Acquisitions), except for Capital
Expenditures resulting from the consummation of the SESCo Transaction and
Capital Expenditures in the ordinary course of business not exceeding in the
aggregate for the Parent and its Subsidiaries $3,000,000.00 for each fiscal
year; provided, however that the amount of permitted Capital
Expenditures in respect of any fiscal year commencing with the fiscal year
ending on June 30, 2007, shall be increased by the unused amount of
permitted Capital Expenditures for the immediately preceding fiscal year (and
in determining any such unused amount, Capital Expenditures during any fiscal
year will be applied first against any amounts carried forward from the prior
year).


 


Section 6.17                                Minimum
Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth at
any time to be less than the sum of (a) $55,000,000.00 plus (b) an
amount equal to 50% of the sum of (i) the positive year-to-date
Consolidated Net Income through such date and (ii) other than for the then
current fiscal year, the positive Consolidated Net Income for each full fiscal year
ending on and after June 30, 2007 plus (c) an amount equal to
100% of the net proceeds from any equity issued by the Parent.


 


Section 6.18                                Minimum
Consolidated Working Capital. Permit the Consolidated Working Capital at
any time to be less than $130,000,000.00.


 


Section 6.19                                Maximum
Aggregate Negative EBITDA. Permit the negative Consolidated EBITDA to be less
than ($2,000,000.00) during any consecutive three-month period beginning with
the first full month before any day on which the Borrowing Base Availability is
less than $30,000,000.00 and continuing for each three-month period thereafter
until the Borrowing Base Availability is more than $30,000,000.00 for three
consecutive months.


 


Section 6.20                                Interest
Coverage Ratio. Permit, as of the end of any fiscal quarter, the ratio of
Consolidated EBITDA for the four quarters then ending to Consolidated Interest
Expense for such period to be less than 2.0 to 1.0. For the months of October 2005
through July 2006, Consolidated EBITDA and Consolidated Interest Expense shall
be determined on a pro


 


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forma
basis giving effect to the SESCo Transaction and High Yield Notes Offering as
set forth on the attached Schedule 1.01(d).


 


Section 6.21                                Average
Leverage Ratio. Permit the Leverage Ratio at any time during the relevant
period set forth below to be greater than the ratio set forth below opposite
such period:


 




	
  Relevant Period

  	
   

  	
  Maximum

  Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  From the Closing Date through June 30, 2007

  	
   

  	
  4.25 to 1.00

  
	
   

  	
   

  	
   

  
	
  From July 1, 2007 through June 30, 2008

  	
   

  	
  4.00 to 1.00

  
	
   

  	
   

  	
   

  
	
  From July 1, 2008 through the Maturity Date

  	
   

  	
  3.75 to 1.00

  






 


Section 6.22                                Monthly
Leverage Ratio. Permit the Leverage Ratio at any time at the end of each
month to be greater than 4.50 to 1.00.


 


Section 6.23                                Minimum Borrowing Base Availability. Permit the Borrowing Base Availability to
be less than $25,000,000.00 at any time during the period in which the Bridge
Loan is outstanding.


 


ARTICLE VII



EVENTS OF DEFAULT


 


Section 7.01                                Events
of Default. The occurrence of any of the following events shall constitute
an “Event of Default” under any Loan Document:


 


(a)                                  Payment.
Any Borrower shall fail to pay (i) any principal of any Revolving Advance
or Swing Line Advance (including, without limitation, any mandatory prepayment
required by Section 2.07) or reimburse any drawing under any Letter
of Credit when the same becomes due and payable, or (ii) any interest on
the Revolving Advances or Swing Line Advances, any fees, reimbursements,
indemnifications, or other amounts payable in connection with the Obligations,
this Agreement or under any other Loan Document within three Business Days
after the same becomes due and payable;


 


(b)                                 Representation
and Warranties. Any representation or statement made or deemed to be
made by any Borrower or any other Loan Party (or any of their respective
officers) in this


 


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Agreement,
in any other Loan Document, or in connection with this Agreement or any other
Loan Document shall prove to have been incorrect in any material respect when
made or deemed to be made;


 


(c)                                  Covenant
Breaches. Any Loan Party shall (i) fail to perform or observe any
covenant contained in Sections 5.01, 5.07(a), 5.09, 5.11,
and 5.12 and Article VI of this Agreement (provided
that, with respect to Section 6.23 only, such failure shall remain
unremedied for 15 days) or (ii) fail to perform or observe any
other term or covenant set forth in this Agreement or in any other Loan
Document which is not covered by clause (i) above or any other
provision of this Section 7.01 if such failure shall remain
unremedied for 30 days;


 


(d)                                 Cross-Default.
(i)  Any Loan Party shall fail to pay any principal of or premium or
interest on any of its Debt which, individually or in the aggregate, is
outstanding in a principal amount of at least $5,000,000.00 (or the equivalent
in any other currency) individually or when aggregated with all such Debt of
the Person so in default (but excluding Debt evidenced by the Revolving Advances
and the Swing Line Advances) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), (ii) any
other event shall occur or condition shall exist under any agreement or
instrument relating to Debt which is outstanding in a principal amount of at
least $5,000,000.00 (or the equivalent in any other currency) individually or
when aggregated with all such Debt of the Person so in default (but excluding
Debt evidenced by the Revolving Advances and the Swing Line Advances), if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or (iii) any such Debt shall
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;


 


(e)                                  Insolvency.
Any Loan Party shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, commences
negotiations with one or more of its creditors with a view to rescheduling any
of its indebtedness which it would not otherwise be able to pay as it falls due
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Parent or any of its
Subsidiaries seeking to adjudicate it as a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against such Person, either such
proceeding shall remain undismissed for a period of 60 days or any of the
actions sought in such proceeding shall occur; or such Person shall take any
action to authorize any of the actions set forth above in this paragraph (e) or
any analogous procedure or step is taken in any jurisdiction.


 


(f)                                    Judgments.
Any judgment, decree or order for the payment of money shall be rendered
against any Loan Party in an amount in excess of $2,500,000.00 (or the
equivalent in any other currency) and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;


 


88






 










 


(g)                                 ERISA.
(i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability
of a Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan
or the PBGC in an aggregate amount in excess of $5,000,000.00, or (ii) the
Parent or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $5,000,000.00; or


 


(h)                                 Loan
Documents. Any Loan Document, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect; or any
Loan Party or any other Person contests in any manner the validity or
enforceability of any Loan Document; or any Loan Party denies that it has any
or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or


 


(i)                                     Security
Documents. The Administrative Agent and the Lenders shall fail to have an
Acceptable Security Interest in a material portion of the Collateral;


 


(j)                                     Material
Contracts. There shall have been a termination or cancellation of, or a
default that would permit the termination or cancellation of, any Material
Contract and such termination or cancellation could reasonably be expected to
have a Material Adverse Effect; or


 


(k)                                  Change
in Control. A Change of Control shall occur; or


 


(l)                                     Secured
Counterparty Event. A VPEM Event or a Secured Counterparty Event shall
occur.


 


Section 7.02                                Optional
Acceleration of Maturity. If any Event of Default (other than an Event of
Default pursuant to paragraph (e) of Section 7.01)
shall have occurred and be continuing, then, and in any such event:


 


(a)                                  the
Administrative Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrowers, declare the
Commitments and the obligation of each Lender, the Swing Line Lender, and the
Issuing Bank to make extensions of credit hereunder, including making Revolving
Advances, Swing Line Advances, and issuing Letters of Credit, to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Majority Lenders, by notice to
the Borrowers, declare all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon all such
amounts shall become and be forthwith due and payable in full, without notice
of intent to demand, demand, presentment for payment, notice of nonpayment, protest,
notice of protest, grace, notice of dishonor, notice of intent to accelerate,
notice of acceleration, and all other notices, all of which are hereby
expressly waived by each Borrower;


 


(b)                                 each
Borrower shall, on demand of the Administrative Agent at the request or with
the consent of the Majority Lenders, deposit with the Administrative Agent into
the LC Cash Collateral Account an amount of cash in Dollars equal to 105% of
the outstanding Letter of


 


89

















 


Credit
Exposure as security for the Obligations to the extent the Letter of Credit
Obligations are not otherwise paid at such time; and


 


(c)                                  the
Administrative Agent shall at the request of, or may with the consent of,
the Majority Lenders proceed to enforce its rights and remedies under the
Security Documents, this Agreement, and any other Loan Document for the ratable
benefit of the Lenders by appropriate proceedings.


 


Section 7.03                                Automatic
Acceleration of Maturity. If any Event of Default pursuant to
paragraph (e) of Section 7.01 shall occur:


 


(a)                                  (i) the
Commitments and the obligation of each Lender, the Swing Line Lender and the
Issuing Bank to make extensions of credit hereunder, including making Revolving
Advances and Swing Line Advances and issuing Letters of Credit, shall
terminate, and (ii) all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement and the
other Loan Documents shall become and be forthwith due and payable in full,
without notice of intent to demand, demand, presentment for payment, notice of
nonpayment, protest, notice of protest, grace, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices, all of
which are hereby expressly waived by each Borrower;


 


(b)                                 each
Borrower shall deposit with the Administrative Agent into the LC Cash
Collateral Account an amount of cash in Dollars equal to 105% of the
outstanding Letter of Credit Exposure as security for the Obligations to the
extent the Letter of Credit Obligations are not otherwise paid at such time;
and


 


(c)                                  the
Administrative Agent shall at the request of, or may with the consent of,
the Majority Lenders proceed to enforce its rights and remedies under the
Security Documents, this Agreement, and any other Loan Document for the ratable
benefit of the Lenders by appropriate proceedings.


 


Section 7.04                                Non-exclusivity
of Remedies. No remedy conferred upon the Administrative Agent, the Swing
Line Lender, the Issuing Bank and the Lenders is intended to be exclusive of
any other remedy, and each remedy shall be cumulative of all other remedies
existing by contract, at law, in equity, by statute or otherwise.


 


Section 7.05                                Right
of Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Bank, the Swing Line Lender, and each of their
respective Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, Swing Line Lender, the Issuing Bank
or any such Affiliate to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender, the
Swing Line Lender, or the Issuing Bank, irrespective of whether or not such
Lender, the Swing Line Lender, or the Issuing Bank shall have made any demand
under this Agreement or any other Loan Document and although such obligations
of such Loan


 


90

















 


Party may be
contingent or unmatured or are owed to a branch or office of such Lender, the
Swing Line Lender, or the Issuing Bank different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each
Lender, the Swing Line Lender, the Issuing Bank and their respective Affiliates
under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Lender, the Swing Line Lender, the Issuing
Bank or their respective Affiliates may have. Each Lender, the Swing Line
Lender, and the Issuing Bank agrees to notify the Parent and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.


 


Section 7.06                                Application
of Proceeds. From and during the continuance of any Event of Default, any
monies or property actually received by the Administrative Agent pursuant to
this Agreement or any other Loan Document, the exercise of any rights or
remedies under any Security Document or any other agreement with any Loan Party
which secures any of the Obligations, shall be applied in the following order:


 


(a)                                  First,
to payment of the reasonable expenses, liabilities, losses, costs, duties,
fees, charges or other moneys whatsoever (together with interest payable
thereon) as may have been paid or incurred in, about or incidental to any
sale or other realization of Collateral, including reasonable compensation to
the Administrative Agent and its agents and counsel, and to the ratable payment
of any other unreimbursed reasonable expenses and indemnities for which the Administrative
Agent or any Secured Party is to be reimbursed pursuant to this Agreement or
any other Loan Document, in each case that are then due and payable;


 


(b)                                 Second,
to the ratable payment of accrued but unpaid fees of the Administrative Agent,
commitment fees, letter of credit fees, and fronting fees owing to the
Administrative Agent, the Issuing Bank, and the Lenders in respect of the Revolving
Advances, and Letters of Credit under this Agreement;


 


(c)                                  Third,
to the ratable payment of accrued but unpaid interest on the Revolving Advances
and the Swing Line Advances then due and payable under this Agreement;


 


(d)                                 Fourth,
ratably, according to the then unpaid amounts thereof, without preference or
priority of any kind among them, to the ratable payment of all other
Obligations then due and payable which relate to Revolving Advances, the Swing
Line Advances, and Letters of Credit and which are owing to the Administrative
Agent, the Issuing Bank, the Swing Line Lender and the Lenders;


 


(e)                                  Fifth,
ratably, according to the unpaid termination amounts thereof, to the payment of
all obligations of any Borrower or its Subsidiaries owing to any Swap
Counterparty under any Swap Contract, if any, then due and payable;


 


(f)                                    Sixth,
to the ratable payment of any other outstanding Obligations then due and
payable; and


 


(g)                                 Seventh,
any excess after payment in full of all Obligations shall be paid to the Parent
or any other Loan Party as appropriate or to such other Person who may be
lawfully entitled to receive such excess.


 


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Section 7.07                                Administrative
Agent’s Account. The Borrowers and the Administrative Agent shall establish
a Collateral Account and each Borrower shall execute any documents and
agreements, including the Administrative Agent’s standard form assignment
of deposit accounts, that the Administrative Agent reasonably requests in
connection therewith to establish the Collateral Account and grant the
Administrative Agent an Acceptable Security Interest in such account and the
funds therein. Each Borrower hereby pledges to the Administrative Agent and
grants the Administrative Agent a security interest in the Collateral Account,
all funds held therein from time to time, and all proceeds thereof as security
for the payment of the Obligations. Funds held in the Collateral Account shall
be held as cash collateral for the Obligations and promptly applied by the
Administrative Agent to any outstanding Obligations for Revolving Advances,
Letter of Credit Exposure, or Swing Line Advances that exist or occur. After
the occurrence and continuance of an Event of Default, funds held in the
Collateral Account shall be held as cash collateral for the Obligations and
promptly applied by the Administrative Agent to any outstanding Obligations
that exist or occur. Provided that no Default or Event of Default has occurred
and is continuing, to the extent that any surplus funds are held in the
Collateral Account above the sum of the outstanding Revolving Advance and Swing
Line Advances, the Administrative Agent may release to the Borrowers at either
Borrower’s written request any funds held in the Collateral Account. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Collateral Account and shall be deemed to
have exercised such care if such funds are accorded treatment substantially
equivalent to that which the Administrative Agent accords its own property, it
being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds. Funds held in the Administrative Agent’s
Account shall be invested in Cash Equivalents maintained with, and under the
sole dominion and control of, the Administrative Agent or in another investment
if mutually agreed upon by the Borrowers and the Administrative Agent, but the
Administrative Agent shall have no other obligation to make any other
investment of the funds therein. The Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in the
Administrative Agent’s Account and shall be deemed to have exercised such care
if such funds are accorded treatment substantially equivalent to that which the
Administrative Agent accords its own property, it being understood that the
Administrative Agent shall not have any responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such funds.


 


ARTICLE VIII



THE GUARANTY


 


Section 8.01                                Liabilities
Guaranteed. Each Guarantor hereby, jointly and severally, irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.


 


Section 8.02                                Nature
of Guaranty. This guaranty is an absolute, irrevocable, completed and
continuing guaranty of payment and not a guaranty of collection, and no notice
of the Obligations or any extension of credit already or hereafter contracted
by or extended to any Borrower need be given to any Guarantor. This guaranty may not
be revoked by any Guarantor and shall continue to be effective with respect to
the Obligations arising or created after any attempted revocation by such
Guarantor and shall remain in full force and effect until the


 


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Obligations
are paid in full and the Commitments are terminated, notwithstanding that from
time to time prior thereto no Obligations may be outstanding. The Borrowers
and the Lenders may modify, alter, rearrange, extend for any period and/or
renew from time to time, the Obligations, and the Lenders may waive any
Default or Events of Default without notice to any Guarantor and in such event
each Guarantor will remain fully bound hereunder on the Obligations. This
guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of the Obligations is rescinded or must otherwise be
returned by any of the Lenders upon the insolvency, bankruptcy or
reorganization of any Borrower or otherwise, all as though such payment had not
been made. This guaranty may be enforced by the Administrative Agent and
any subsequent holder of any of the Obligations and shall not be discharged by
the assignment or negotiation of all or part of the Obligations. Each
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Default or Event of
Default, and also notice of acceptance of this guaranty, acceptance on the part of
the Lenders being conclusively presumed by the Lenders’ request for this
guaranty and the Guarantors’ being party to this Agreement.


 


Section 8.03                                Agent’s
Rights. Each Guarantor authorizes the Administrative Agent, without notice
or demand and without affecting any Guarantor’s liability hereunder, to take
and hold security for the payment of its obligations under this Article VIII
and/or the Obligations, and exchange, enforce, waive and release any such
security; and to apply such security and direct the order or manner of sale
thereof as the Administrative Agent in its discretion may determine, and
to obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of
such other Persons from their obligations under such guaranties.


 


Section 8.04                                Guarantor’s
Waivers.


 


(a)                                  General.
Each Guarantor waives any right to require any of the Lenders to (i) proceed
against either Borrower or any other person liable on the Obligations, (ii) enforce
any of their rights against any other guarantor of the Obligations, (iii) proceed
or enforce any of their rights against or exhaust any security given to secure
the Obligations, (iv) have either Borrower joined with any Guarantor in
any suit arising out of this Article VIII and/or the Obligations,
or (v) pursue any other remedy in the Lenders’ powers whatsoever. It is
agreed between the Guarantors and the Lenders that the foregoing waivers are of
the essence of the transaction contemplated by this Agreement and the other
Loan Documents and that, but for this Guaranty and such waivers, the Lenders
would not extend or continue to extend credit under this Agreement. The Lenders
shall not be required to mitigate damages or take any action to reduce, collect
or enforce the Obligations. Each Guarantor waives any defense arising by reason
of any disability, lack of corporate authority or power, or other defense of any
Borrower or any other guarantor of the Obligations, and shall remain liable
hereon regardless of whether any Borrower or any other guarantor be found not
liable thereon for any reason. Whether and when to exercise any of the remedies
of the Lenders under any of the Loan Documents shall be in the sole and
absolute discretion of the Administrative Agent, and no delay by the
Administrative Agent in enforcing any remedy, including delay in conducting a
foreclosure sale, shall be a defense to any Guarantor’s liability under this Article VIII.


 


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(b)                                 Marshalling,
etc. In addition to the waivers contained in Section 8.04(a) hereof,
the Guarantors waive, and agree that they shall not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or advantage of,
any appraisal, valuation, stay, extension, marshaling of assets or redemption
laws, or exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by the Guarantors of their
obligations under, or the enforcement by the Administrative Agent or the
Lenders of, this Guaranty. The Guarantors hereby waive diligence, presentment
and demand (whether for nonpayment or protest or of acceptance, maturity, extension
of time, change in nature or form of the Obligations, acceptance of
further security, release of further security, composition or agreement arrived
at as to the amount of, or the terms of, the Obligations, notice of adverse
change in the Borrowers’ financial condition or any other fact which might
materially increase the risk to the Guarantors) with respect to any of the
Obligations or all other demands whatsoever and waive the benefit of all
provisions of law which are or might be in conflict with the terms of this Article VIII.
The Guarantors, jointly and severally, represent, warrant and agree that, as of
the date of this Guaranty, their obligations under this Guaranty are not
subject to any offsets or defenses of any kind against the Administrative
Agent, the Lenders, the Borrowers or any other Person that executes a Loan
Document. The Guarantors further jointly and severally agree that their
obligations under this Guaranty shall not be subject to any counterclaims,
offsets or defenses of any kind which may arise in the future against the
Administrative Agent, the Lenders, the Borrowers or any other Person that
executes a Loan Document.


 


(c)                                  Subrogation.
Until the Obligations have been paid in full, each Guarantor waives all rights
of subrogation or reimbursement against the Borrowers, whether arising by
contract or operation of law (including, without limitation, any such right
arising under any federal, state or other applicable bankruptcy or insolvency
laws) and waives any right to enforce any remedy which the Lenders now have or may hereafter
have against any Borrower, and waives any benefit or any right to participate
in any security now or hereafter held by the Administrative Agent or any
Lender.


 


Section 8.05                                Maturity
of Obligations, Payment. Each Guarantor agrees that if the maturity of any
of the Obligations is accelerated by bankruptcy or otherwise, such maturity
shall also be deemed accelerated for the purpose of this Article VIII
without demand or notice to any Guarantor. Each Guarantor will, forthwith upon
notice from the Administrative Agent, jointly and severally pay to the
Administrative Agent the amount due and unpaid by the Borrowers and guaranteed
hereby. The failure of the Administrative Agent to give this notice shall not
in any way release any Guarantor hereunder.


 


Section 8.06                                Agent’s
Expenses. If any Guarantor fails to pay the Obligations after notice from
the Administrative Agent of any Borrower’s failure to pay any Obligations at
maturity, and if the Administrative Agent obtains the services of an attorney
for collection of amounts owing by any Guarantor hereunder, or obtaining advice
of counsel in respect of any of their rights under this Article VIII,
or if suit is filed to enforce this Article VIII, or if proceedings
are had in any bankruptcy, probate, receivership or other judicial proceedings
for the establishment or collection of any amount owing by any Guarantor
hereunder, or if any amount owing by any Guarantor hereunder is collected
through such proceedings, each Guarantor jointly and severally agrees to pay to
the Administrative Agent the Administrative Agent’s reasonable attorneys’ fees.


 


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Section 8.07                                Liability.
It is expressly agreed that the liability of each Guarantor for the payment of
the Obligations guaranteed hereby shall be primary and not secondary.


 


Section 8.08                                Events
and Circumstances Not Reducing or Discharging any Guarantor’s Obligations.
Each Guarantor hereby consents and agrees to each of the following to the
fullest extent permitted by law, and agrees that each Guarantor’s obligations
under this Article VIII shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which each Guarantor
might otherwise have as a result of or in connection with any of the following:


 


(a)                                  Modifications,
etc. Any renewal, extension, modification, increase, decrease, alteration
or rearrangement of all or any part of the Obligations, or this Agreement
or any instrument executed in connection therewith, or any contract or
understanding between any Borrower and any of the Lenders, or any other Person,
pertaining to the Obligations, or the waiver or consent by the Administrative
Agent or the Lenders with respect to any of the provisions hereof or thereof,
or any modification or termination of the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors against any
Guarantor or Borrower are subordinated to the claims of the Lenders or pursuant
to which the Obligations are subordinated to claims of other creditors;


 


(b)                                 Adjustment,
etc. Any adjustment, indulgence, forbearance or compromise that might be
granted or given by any of the Lenders to any Borrower or any Guarantor or any
Person liable on the Obligations;


 


(c)                                  Condition
of any Borrower or any Guarantor. The insolvency, bankruptcy arrangement,
adjustment, composition, liquidation, disability, dissolution, death or lack of
power of any Borrower or any other Guarantor or any other Person at any time
liable for the payment of all or part of the Obligations; or any
dissolution of any Borrower or any other Guarantor, or any sale, lease or
transfer of any or all of the assets of any Borrower or any other Guarantor, or
any changes in the shareholders, partners, or members of any Borrower or any other
Guarantor; or any reorganization of any Borrower or any other Guarantor;


 


(d)                                 Invalidity
of Obligations. The invalidity, illegality or unenforceability of all or
any part of the Obligations, or any document or agreement executed in
connection with the Obligations, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the
amount permitted by law, the act of creating the Obligations or any part thereof
is ultra vires, the officers or representatives executing the documents or
otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, either Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from such Borrower, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any document or instrument representing part of the
Obligations or executed in connection with the Obligations, or given to secure
the repayment of the Obligations) is illegal, uncollectible, legally impossible
or unenforceable, or this Agreement or other documents or instruments
pertaining to the Obligations have been forged or otherwise are irregular or
not genuine or authentic;


 


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(e)                                  Release
of Obligors. Any full or partial release of the liability of either Borrower
from the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by any Guarantor that such Guarantor may be
required to pay the Obligations in full without assistance or support of any
other Person, and no Guarantor has been induced to enter into this Article VIII
on the basis of a contemplation, belief, understanding or agreement that other
parties other than the Borrowers will be liable to perform the
Obligations, or the Lenders will look to other parties to perform the
Obligations;


 


(f)                                    Other
Security. The taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Obligations;


 


(g)                                 Release
of Collateral etc. Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;


 


(h)                                 Care
and Diligence. The failure of the Lenders or any other Person to exercise
diligence or reasonable care in the preservation, protection, enforcement, sale
or other handling or treatment of all or any part of such collateral,
property or security;


 


(i)                                     Status
of Liens. The fact that any collateral, security, security interest or lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other security interest
or lien, it being recognized and agreed by each Guarantor that no Guarantor is
entering into this Article VIII in reliance on, or in contemplation
of the benefits of, the validity, enforceability, collectibility or value of
any of the collateral for the Obligations;


 


(j)                                     Payments
Rescinded. Any payment by either Borrower to the Lenders is held to
constitute a preference under the bankruptcy laws, or for any reason the
Lenders are required to refund such payment or pay such amount to the Borrowers
or someone else; or


 


(k)                                  Other
Actions Taken or Omitted. Any other action taken or omitted to be taken
with respect to this Agreement, the Obligations, or the security and collateral
therefor, whether or not such action or omission prejudices any Guarantor or
increases the likelihood that any Guarantor will be required to pay the
Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal
intention of each Guarantor that each Guarantor shall be obligated to joint and
severally pay the Obligations when due, notwithstanding any occurrence,
circumstance, event, action, or omission whatsoever, whether contemplated or
uncontemplated, and whether or not otherwise or particularly described herein,
except for the full and final payment and satisfaction of the Obligations.


 


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Section 8.09                                Subordination
of All Guarantor Claims.


 


(a)                                  As
used herein, the term “Guarantor Claims” shall mean all debts and liabilities
of either Borrower or any Subsidiary of either Borrower to any Guarantor,
whether such debts and liabilities now exist or are hereafter incurred or
arise, or whether the obligation of such Borrower or such Subsidiary thereon be
direct, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or liabilities be evidenced
by note, contract, open account, or otherwise, and irrespective of the person
or persons in whose favor such debts or liabilities may, at their inception,
have been, or may hereafter be created, or the manner in which they have
been or may hereafter be acquired by any Guarantor. The Guarantor Claims
shall include without limitation all rights and claims of any Guarantor against
either Borrower or any Subsidiary of either Borrower arising as a result of
subrogation or otherwise as a result of such Guarantor’s payment of all or a
portion of the Obligations. Until the Obligations shall be paid and satisfied
in full, all Revolving Commitments have expired or been terminated and all
Letters of Credit have expired or been cash collateralized on the terms set
forth in this Agreement and each Guarantor shall have performed all of its
obligations hereunder, no Guarantor shall receive or collect, directly or
indirectly, from either Borrower or any Subsidiary of either Borrower or any
other party any amount upon the Guarantor Claims.


 


(b)                                 Each
Borrower and each Guarantor hereby (i) authorizes the Administrative Agent
and the Lenders to demand specific performance of the terms of this Section 8.09,
whether or not either Borrower or any Guarantor shall have complied with any of
the provisions hereof applicable to it, at any time when it shall have failed
to comply with any provisions of this Section 8.09 which are
applicable to it and (ii) irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance.


 


(c)                                  Upon
any distribution of assets of any Loan Party in any dissolution, winding up,
liquidation or reorganization (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):


 


(i)                                     The
Lenders shall first be entitled to receive payment in full of the Obligations
before either Borrower or any Guarantor is entitled to receive any payment on
account of the Guarantor Claims.


 


(ii)                                  Any
payment or distribution of assets of any Loan Party of any kind or character,
whether in cash, property or securities, to which either Borrower or any
Guarantor would be entitled except for the provisions of this Section 8.09(c),
shall be paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to the Lenders, to the extent necessary to
make payment in full of all Obligations remaining unpaid after giving effect to
any concurrent payment or distribution or provisions therefor to the Lenders.


 


(d)                                 No
right of the Lenders or any other present or future holders of any Obligations
to enforce the subordination provisions herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any
Loan Party or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by either Borrower or any Guarantor with the terms
hereof, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with.


 


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Section 8.10                                Claims
in Bankruptcy. In the event of receivership, bankruptcy, reorganization,
arrangement, debtor’s relief, or other insolvency proceedings involving either Borrower
or any Subsidiary of either Borrower, as debtor, the Lenders shall have the
right to prove their claim in any proceeding, so as to establish their rights
hereunder and receive directly from the receiver, trustee or other court
custodian, dividends and payments which would otherwise be payable upon
Guarantor Claims. Each Guarantor hereby assigns such dividends and payments to
the Lenders. Should the Administrative Agent or any Lender receive, for
application upon the Obligations, any such dividend or payment which is
otherwise payable to any Guarantor, and which, as between either Borrower or
any Subsidiary of either Borrower and any Guarantor, shall constitute a credit
upon the Guarantor Claims, then upon payment in full of the Obligations and the
expiration or cash collateralization of the Letters of Credit in accordance
with the terms of this Agreement and termination of the Revolving Commitments,
such Guarantor shall become subrogated to the rights of the Lenders to the
extent that such payments to the Lenders on the Guarantor Claims have
contributed toward the liquidation of the Obligations and such subrogation
shall be with respect to that proportion of the Obligations which would have
been unpaid if the Administrative Agent or a Lender had not received dividends
or payments upon the Guarantor Claims.


 


Section 8.11                                Payments
Held in Trust. In the event that notwithstanding Sections 8.09 and 8.10
above, any Guarantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, such Guarantor agrees to
hold in trust for the Lenders an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, and each
Guarantor covenants promptly to pay the same to the Administrative Agent.


 


Section 8.12                                Benefit
of Guaranty. The provisions of this Article VIII are for the
benefit of the Lenders, their successors, and their permitted transferees,
endorsees and assigns. In the event all or any part of the Obligations are
transferred, endorsed or assigned by the Lenders, as the case may be, to
any Person or Persons in accordance with the terms of this Agreement, any
reference to the “Lenders” herein, as the case may be, shall be deemed to
refer equally to such Person or Persons.


 


Section 8.13                                Reinstatement.
This Article VIII shall remain in full force and effect and
continue to be effective in the event any petition is filed by or against any
Borrower, any Guarantor or any other Loan Party for liquidation or
reorganization, in the event that any of them becomes insolvent or makes an
assignment for the benefit of creditors or in the event a receiver, trustee or
similar Person is appointed for all or any significant part of any of
their assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned by the Lenders, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.


 


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Section 8.14                                Liens
Subordinate. Each Guarantor agrees that any liens, security interests,
judgment liens, charges or other encumbrances upon either Borrower’s or any
Subsidiary of either Borrower’s assets securing payment of the Guarantor Claims
shall be and remain inferior and subordinate to any liens, security interests,
judgment liens, charges or other encumbrances upon either Borrower’s or any
Subsidiary of either Borrower’s assets securing payment of the Obligations,
regardless of whether such encumbrances in favor of any Guarantor, the
Administrative Agent or the Lenders presently exist or are hereafter created or
attach.


 


Section 8.15                                Guarantor’s
Enforcement Rights. Without the prior written consent of the Lenders, no
Guarantor shall (a) exercise or enforce any creditor’s right it may have
against either Borrower or any Subsidiary of either Borrower, or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any lien, mortgages, deeds
of trust, security interest, collateral rights, judgments or other encumbrances
on assets of either Borrower or any Subsidiary of either Borrower held by
Guarantor.


 


Section 8.16                                Limitation.
It is the intention of the Guarantors and each Secured Party that the amount of
the Obligations guaranteed by each Guarantor shall be in, but not in excess of,
the maximum amount permitted by fraudulent conveyance, fraudulent transfer and
similar Legal Requirement applicable to such Guarantor. Accordingly,
notwithstanding anything to the contrary contained in this Article VIII
or in any other agreement or instrument executed in connection with the payment
of any of the Obligations guaranteed hereby, the amount of the Obligations
guaranteed by a Guarantor under this Article VIII shall be limited
to an aggregate amount equal to the largest amount that would not render such
Guarantor’s obligations hereunder subject to avoidance under Section 548
of the United States Bankruptcy Code or any comparable provision of any other
applicable law.


 


Section 8.17                                Contribution
Rights.


 


(a)                                  To
the extent that any payment is made under this Guaranty (a “Guarantor
Payment”), by a Guarantor, which Guarantor Payment, taking into account all
other Guarantor Payments then previously or concurrently made by all other
Guarantors, exceeds the amount which such Guarantor would otherwise have paid
if each Guarantor had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Guarantor’s Allocable Amount
(as defined below) (in effect immediately prior to such Guarantor Payment) bore
to the aggregate Allocable Amounts of all of the Guarantors in effect immediately
prior to the making of such Guarantor Payment, then, following the date on
which the Obligations shall be paid and satisfied in full and the expiration or
cash collateralization of the Letters of Credit in accordance with the terms of
this Agreement and termination of the Revolving Commitments and each Guarantor
shall have performed all of its obligations hereunder, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each of the other Guarantors for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately prior
to such Guarantor Payment.


 


(b)                                 As
of any date of determination, the “Allocable Amount” of any Guarantor shall be
equal to the maximum amount of the claim which could then be recovered from
such


 


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Guarantor
under this Guaranty without rendering such claim voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.


 


(c)                                  This
Section 8.17 is intended only to define the relative rights of the
Guarantors and nothing set forth in this Section 8.17 is intended
to or shall impair the obligations of the Guarantors, jointly and severally, to
pay any amounts as and when the same shall become due and payable in accordance
with the terms of this Guaranty.


 


(d)                                 The
rights of the parties under this Section 8.17 shall be exercisable
upon the date the Obligations shall be paid and satisfied in full and the
expiration or cash collateralization of the Letters of Credit in accordance
with the terms of this Agreement and termination of the Revolving Commitments and
each Guarantor shall have performed all of its obligations hereunder.


 


(e)                                  The
parties hereto acknowledge that the right of contribution and indemnification
hereunder shall constitute assets of any Guarantor to which such contribution
and indemnification is owing.


 


Section 8.18                                Release
of Guarantors. Upon the sale or disposition of any Guarantor pursuant to
the terms of this Agreement to any Person other than either Borrower or any
other Guarantor, the Collateral Agent shall, at the Borrowers’ expense, execute
and deliver to such Guarantor such documents as such Guarantor shall reasonably
require and take any other actions reasonably required to evidence or effect
the release of such Guarantor from this Agreement and the other Loan Documents.


 


ARTICLE IX



THE ADMINISTRATIVE AGENT 


 


Section 9.01                                Appointment
and Authority. Each of the Lenders and the Issuing Bank hereby irrevocably
appoints SG to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to such
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto. The provisions of this Article are solely
for the benefit of the Administrative Agent, the Lenders and the Issuing Bank,
and no Loan Party shall have rights as a third party beneficiary of any of such
provisions.


 


Section 9.02                                Rights
as a Lender. The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with the Parent


 


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or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.


 


Section 9.03                                Exculpatory
Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:


 


(a)                                  shall
not be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing;


 


(b)                                 shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Majority Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or applicable law; and


 


(c)                                  shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Parent or any of its Affiliates that is
communicated to or obtained by the Person serving as Agent or any of its
Affiliates in any capacity.


 


The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Majority Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Parent or
either Borrower, a Lender or the Issuing Bank.


 


The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article III or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.


 


Section 9.04                                Reliance
by the Administrative Agent. The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine


 


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and to
have been signed, sent or otherwise authenticated by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Revolving Advance, Swing Line
Advance, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or the Issuing Bank, the
Administrative Agent may presume that such condition is satisfactory to
such Lender or the Issuing Bank unless the Administrative Agent shall have
received notice to the contrary from such Lender or the Issuing Bank prior to
the making of such Revolving Advance, Swing Line Advance, or the issuance of
such Letter of Credit. The Administrative Agent may consult with legal
counsel (who may be counsel for a Loan Party), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.


 


Section 9.05                                Delegation
of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may perform any
and all of its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as the Administrative Agent.


 


Section 9.06                                Resignation
of the Administrative Agent. The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Bank and the
Borrowers. Upon receipt of any such notice of resignation, the Majority Lenders
shall have the right, and provided that no Default or Event of Default exists,
with the consent of the Borrowers (which consent shall not be unreasonably
withheld or delayed), to appoint a successor, which shall be a Lender with an
office in New York, or an Affiliate of any such Lender with an office in New
York. If no such successor shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within 60 days after the retiring
Agent gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent meeting the qualifications set forth above provided and consented to by
the Borrowers (provided that no Default or Event of Default exists and which
consent shall not be unreasonably withheld or delayed) that if the Administrative
Agent shall notify the Borrowers and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall
be discharged from its duties and obligations hereunder and under the other
Loan Documents (except that in the case of any collateral security held by the Administrative
Agent on behalf of the Lenders or the Issuing Bank under any of the Loan
Documents, the retiring Administrative Agent shall continue to hold such
collateral security until such time as a successor Administrative Agent is
appointed) and (2) all payments, communications and determinations
provided to be made by, to or through such Administrative Agent shall instead be
made by or to each Lender and the Issuing Bank directly, until such time as the
Majority Lenders appoint a successor Administrative Agent as provided for above
in this paragraph. Upon the acceptance of a successor’s appointment as Agent
hereunder, such


 


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successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this paragraph). The fees payable by the Borrowers to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting
as Administrative Agent.


 


Section 9.07                                Non-Reliance
on Administrative Agent and Other Lenders. Each Lender and the Issuing Bank
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the Issuing Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or any related agreement or any document furnished hereunder or thereunder.


 


Section 9.08                                Indemnification.
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED, THE LENDERS SEVERALLY AGREE TO INDEMNIFY UPON DEMAND
THE ADMINISTRATIVE AGENT AND THE ISSUING BANK, IN THEIR CAPACITY AS
ADMINISTRATIVE AGENT AND ISSUING BANK, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING (TO THE EXTENT NOT REIMBURSED BY THE LOAN PARTIES), ACCORDING TO
THEIR RESPECTIVE PRO RATA SHARES, AND HOLD HARMLESS SUCH INDEMNITEE FROM AND
AGAINST ANY AND ALL INDEMNIFIED LIABILITIES (AS DEFINED IN SECTION 10.05)
IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF
THE NEGLIGENCE OF ANY RELATED PARTY; PROVIDED, HOWEVER THAT NO
LENDER SHALL BE LIABLE FOR THE PAYMENT TO ANY INDEMNITEE FOR ANY PORTION OF
SUCH INDEMNIFIED LIABILITIES TO THE EXTENT DETERMINED IN A FINAL, NONAPPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH
RELATED PARTY’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER,
THAT NO ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE MAJORITY LENDERS
SHALL BE DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT FOR
PURPOSES OF THIS SECTION. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER
AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT AND THE ISSUING BANK PROMPTLY UPON
DEMAND FOR ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES,
EXPENSES AND DISBURSEMENTS OF ANY LAW FIRM OR OTHER EXTERNAL COUNSEL INCURRED
BY THE ADMINISTRATIVE AGENT OR THE ISSUING BANK IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, TO THE EXTENT THAT THE ADMINISTRATIVE AGENT OR THE
ISSUING BANK IS NOT REIMBURSED


 


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FOR SUCH
BY THE LOAN PARTIES. THE UNDERTAKING IN THIS SECTION SHALL SURVIVE
TERMINATION OF THE COMMITMENTS, THE PAYMENT OF ALL OTHER OBLIGATIONS AND THE
RESIGNATION OF THE ADMINISTRATIVE AGENT.


 


Section 9.09                                Collateral
and Guaranty Matters.


 


(a)                                  The
Lenders irrevocably authorize the Administrative Agent, at its option and in its
discretion, without the necessity of any notice to or further consent from the
Secured Parties:


 


(i)                                     to
release any Lien on any property granted to or held by the Administrative Agent
under any Security Document (i) upon termination of the Revolving Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii) that
is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) subject to Section 10.01,
if approved, authorized or ratified in writing by the Majority Lenders;


 


(ii)                                  to
take any actions with respect to any Collateral or Security Documents which may be
necessary to perfect and maintain Acceptable Security Interests in and Liens
upon the Collateral granted pursuant to the Security Documents; and


 


(iii)                               to
take any action in exigent circumstances as may be reasonably necessary to
preserve any rights or privileges of the Secured Parties under the Loan
Documents or applicable Legal Requirements.


 


(b)                                 Upon
the request of the Administrative Agent at any time, the Lenders will confirm
in writing the Administrative Agent’s authority to release particular types or
items of Collateral pursuant to this Section 9.09.


 


(c)                                  Each
Loan Party hereby irrevocably appoints the Administrative Agent as such Loan
Party’s attorney-in-fact, with full authority to, after the occurrence and
during the continuance of an Event of Default, act for such Loan Party and in
the name of such Loan Party to, in the Administrative Agent’s discretion upon
the occurrence and during the continuance of an Event of Default, (i) file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of
such Loan Party where permitted by law, (ii) to receive, endorse, and
collect any drafts or other instruments, documents, and chattel paper which are
part of the Collateral, (iii) to ask, demand, collect, sue for,
recover, compromise, receive, and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral, (iv) to
file any claims or take any action or institute any proceedings which the Administrative
Agent may reasonably deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Administrative
Agent with respect to any of the Collateral and (v) if any Loan Party
fails to perform any covenant contained in this Agreement or the other
Security Documents after the expiration of any applicable grace periods, the Administrative
Agent may itself perform, or cause performance of, such covenant, and such
Loan Party shall pay for the expenses of the Administrative Agent incurred in
connection therewith in accordance with Section 10.04. The power of
attorney granted hereby is coupled with an interest and is irrevocable.


 


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(d)                                 The
powers conferred on the Administrative Agent under this Agreement and the other
Security Documents are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Beyond the safe
custody thereof, the Administrative Agent and each Lender shall have no duty
with respect to any Collateral in its possession or control (or in the
possession or control of any agent or bailee) or with respect to any income
thereon or the preservation of rights against prior parties or any other rights
pertaining thereto. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Administrative Agent accords its own property. Neither the
Administrative Agent nor any Lender shall be liable or responsible for any loss
or damage to any of the Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any warehouseman, carrier, forwarding
agency, consignee, broker or other agent or bailee selected by Borrower or
selected by the Administrative Agent in good faith.


 


Section 9.10                                Intercreditor
Agreement and Security Documents. Each Lender hereby further authorizes the
Administrative Agent, on behalf of and for the benefit of Secured Parties,
without further authorization or consent of the Lenders, to enter into the
Intercreditor Agreement, Amendment No. 1 to the Intercreditor Agreement in
substantially in the form distributed to the Lenders, and each Security
Document as secured party, exercise all the powers, rights and remedies under
the Intercreditor Agreement and the other Security Documents for the benefit of
Secured Parties in accordance with the terms thereof, and each Lender agrees to
be bound by the terms of the Intercreditor Agreement and each such Security
Document, provided that the Administrative Agent shall not enter into or
consent to any amendment, modification, termination or waiver of any provision
contained in any such Security Document or the Intercreditor Agreement except
as otherwise permitted by Section 10.01.


 


Section 9.11                                No
Other Duties, etc. Anything herein to the contrary notwithstanding, none of
the Arranger or the Syndication Agent or Sole Bookrunner listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the Issuing Bank.


 


ARTICLE X



MISCELLANEOUS


 


Section 10.01                          Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any other Loan Document (other than the Fee Letter), and
no consent to any departure by the Parent or any other Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders or by the Administrative Agent, with the consent of the
Majority Lenders and the Borrowers and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or
consent shall:


 


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(a)                                  waive
any condition set forth in Section 3.01 without the written consent
of each Lender;


 


(b)                                 extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 7.02) without the written consent of
such Lender;


 


(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any payment or
mandatory prepayment of principal, interest, fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby;


 


(d)                                 reduce
the principal of, or the rate or amount of interest specified herein on, any Revolving
Advance, Swing Line Advance, or Reimbursement Obligation, or (subject to clause
(v) of the second proviso to this Section 10.01) any fees or
other amounts payable hereunder or under any other Loan Document without the
prior written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Majority Lenders shall be
necessary to waive any obligation of either Borrower to pay interest at the
Default Rate;


 


(e)                                  change
Section 2.02 or 2.12 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each
Lender;


 


(f)                                    change
any provision of this Section, or the definition of “Majority Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender directly affected thereby;


 


(g)                                 release
any Guarantor from the Guaranty or all or any substantial portion of the
Collateral without the written consent of each Lender; provided, however, that
any Guarantor or Collateral may be released if they are sold or
transferred as permitted hereunder; or


 


(h)                                 amend,
modify, terminate or waive any provision contained in Section 2, 3, or 5
of the Intercreditor Agreement without the consent of all of the Lenders,


 


and, provided
further, that (i) no amendment, waiver or consent shall, unless in writing
and signed by the Issuing Bank in addition to the Lenders required above,
affect the rights or duties of the Issuing Bank under this Agreement or any
Letter of Credit Application relating to any Letter of Credit issued or to be
issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Lender in addition to the Lenders required
above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; (iv) Section 10.06(g) may not
be amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Revolving Advances are being funded by a
SPC at the time of such amendment, waiver or other modification; and (v) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto.


 


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Section 10.02                          Notices,
Etc.


 


(a)                                  General.
Except in the case of notices and other communications expressly permitted to
be given by telephone (and except as provided in paragraph (c) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail, sent by telecopier or (subject to subsection (c) below)
electronic mail address as follows:


 


(i)                                     if
to either Borrower or any other Loan Party, the Administrative Agent, the
Issuing Bank or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on Schedule 10.02
or to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the other
parties; and


 


(ii)                                  if
to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such
other address, facsimile number, electronic mail address or telephone number as
shall be designated by such party in a notice to the Administrative Agent.


 


Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given on the next Business Day for the recipient) and confirmed received.
Notices delivered through electronic communications to the extent provided in
paragraph (c) below, shall be effective as provided in said paragraph (c).
In no event shall a voicemail message be effective as a notice, communication
or confirmation hereunder.


 


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


 


(c)                                  Limited
Use of Electronic Mail. Notices and other communications to the Lenders and
the Issuing Bank hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent in its sole discretion, provided
that the foregoing shall not apply to notices to any Lender or the Issuing Bank
pursuant to Article II if such Lender or the Issuing Bank, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The
Administrative Agent or the Borrowers may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications. Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from


 


107

















 


the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


(d)                                 Reliance
by Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Notices and Swing Line Loan Notices) purportedly given by
or on behalf of a Loan Party even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof,
as understood by the recipient, varied from any confirmation thereof. THE BORROWERS SHALL, JOINTLY AND SEVERALLY, INDEMNIFY
THE ADMINISTRATIVE AGENT, THE ISSUING BANK, EACH LENDER AND THEIR RELATED
PARTIES FROM ALL LOSSES, COSTS, EXPENSES AND LIABILITIES RESULTING FROM THE
RELIANCE BY SUCH PERSON ON EACH NOTICE PURPORTEDLY GIVEN BY OR ON BEHALF OF A
BORROWER; PROVIDED THAT SUCH INDEMNITY SHALL NOT BE AVAILABLE TO THE EXTENT
THAT SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS,
DEMANDS, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PERSON SEEKING INDEMNIFICATION. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.


 


Section 10.03                          No
Waiver; Cumulative Remedies. No failure on the part of any Lender or the
Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided in this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.


 


Section 10.04                          Costs
and Expenses. The Borrowers shall, jointly and severally pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and
their Affiliates (including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent) in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Bank (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the Issuing Bank) in connection with the
enforcement or


 


108

















 


protection
of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection
with the Revolving Advances or Swing Line Advances made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent and
the cost of independent public accountants and other outside experts retained
by the Administrative Agent or any Lender. All amounts due under this Section 10.04
shall be payable within ten Business Days after demand therefor. The agreements
in this Section shall survive the termination of the Commitments and
repayment of all other Obligations.


 


Section 10.05                          Indemnification.
THE BORROWERS SHALL, JOINTLY AND SEVERALLY
INDEMNIFY THE ADMINISTRATIVE AGENT, EACH LENDER AND THE ISSUING BANK, AND EACH
RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS (INCLUDING ALL
REASONABLY INCURRED FEES, EXPENSES AND DISBURSEMENTS OF ANY LAW FIRM OR OTHER
EXTERNAL COUNSEL) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE IN ANY WAY RELATING TO OR
ARISING OUT OF OR IN CONNECTION WITH (A) THE EXECUTION, DELIVERY,
ENFORCEMENT, PERFORMANCE, OR ADMINISTRATION OF THIS AGREEMENT, ANY LOAN DOCUMENT,
OR ANY OTHER AGREEMENT, LETTER OR INSTRUMENT DELIVERED IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED THEREBY, (B) ANY COMMITMENT, REVOLVING ADVANCE, SWING LINE
ADVANCE, OR LETTER OF CREDIT OR THE USE OR PROPOSED USE OF THE PROCEEDS
THEREFROM (INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH
SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (C) ANY
ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT OR THE ISSUING BANK UNDER
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (INCLUDING THE ADMINISTRATIVE AGENT’S
AND THE ISSUING BANK’S OWN NEGLIGENCE), (D) ANY ACTUAL OR ALLEGED PRESENCE
OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY
OWNED OR OPERATED BY THE BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR
ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER, ANY SUBSIDIARY
OR ANY OTHER LOAN PARTY, OR (E) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY (INCLUDING ANY
INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY PENDING OR THREATENED
CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION
BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.


 


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TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
NO LOAN PARTY SHALL ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE,
ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION
WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREOF. NO INDEMNITEE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY
UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT
THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION
SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


ALL AMOUNTS DUE UNDER THIS SECTION 10.05
SHALL BE PAYABLE WITHIN TEN BUSINESS DAYS AFTER DEMAND THEREFOR. THE AGREEMENTS
IN THIS SECTION SHALL SURVIVE THE RESIGNATION OF THE ADMINISTRATIVE AGENT,
THE REPLACEMENT OF ANY LENDER, THE TERMINATION OF THE COMMITMENTS AND THE
REPAYMENT, SATISFACTION OR DISCHARGE OF ALL THE OTHER OBLIGATIONS.


 


Section 10.06                          Successors
and Assigns.


 


(a)                                  Generally.
The terms and provisions of this Agreement and the other Loan Documents shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, (iii) by way of
pledge or assignment of a security interest subject to the restrictions of subsection (f) or
(i) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.


 


(b)                                 Assignments
by Lenders. Any Lender may assign to one or more Eligible Assignees
all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the Revolving
Advances owing to it, participations in Letter of Credit Obligations and in
Swing Line Advances) at the time owing to it); provided, however,
that


 


(i)                                     except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Revolving Commitment and the Revolving Advances owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an SPC (as
defined in subsection (g) of this Section) with respect to a Lender,
the aggregate amount of the


 


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Revolving Commitments
and Revolving Advances of such Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall not be less than $5,000,000.00;


 


(ii)                                  the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance; and


 


(iii)                               each
Eligible Assignee (other than an Eligible Assignee that is a Lender or an
Affiliate of a Lender) shall pay to the Administrative Agent a $3,500
processing and recording fee. Any such assignment need not be ratable as among
the Facilities.


 


Upon such execution, delivery,
acceptance and recording thereof by the Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified
in each Assignment and Acceptance, (A) the Eligible Assignee thereunder
shall be a party hereto for all purposes and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (B) such
assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such 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 Sections 2.09, 2.11, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date
of such assignment). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d) of
this Section.


 


(c)                                  Register.
The Administrative Agent shall maintain at its Applicable Lending Office a copy
of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Revolving Advances owing to, each
Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
each of the Loan Parties, the Administrative Agent, the Issuing Bank, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by any Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.


 


(d)                                 Participations.
Any Lender may at any time, without the consent of, or notice to, the
Borrowers or the Administrative Agent, sell participations to any Person (other
than a natural person or either Borrower or any of either Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Revolving Commitment and/or the Revolving Advances (including such
Lender’s participations in Letter of Credit Obligations and/or Swing Line
Advances) owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent and the


 


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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, waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant. Subject to subsection (e) of
this Section, the Borrowers agree that each Participant shall be entitled to
the benefits of Sections 2.08, 2.09, 2.11, 10.04
and 10.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 7.05 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.12
as though it were a Lender.


 


(e)                                  A
Participant shall not be entitled to receive any greater payment under Section 2.09
or 2.11 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 the Borrowers’ 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 2.11
unless the Borrowers are notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.11(e) as
though it were a Lender.


 


(f)                                    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 any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.


 


(g)                                 Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle identified as such in
writing from time to time by the Granting Lender to the Administrative Agent
and the Borrowers (an “SPC”) the option to provide all or any part of
any Revolving Advance that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to fund any Revolving Advance, and (ii) if
a SPC elects not to exercise such option or otherwise fails to make all or any part of
such Revolving Advance, the Granting Lender shall be obligated to make such Revolving
Advance pursuant to the terms hereof. Each party hereto hereby agrees that (i) neither
the grant to any SPC nor the exercise by any SPC of such option shall increase
the costs or expenses or otherwise increase or change the obligations of the
Borrowers under this Agreement, (ii) no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder and
retain all obligations under this Agreement. The making of a Revolving Advance
by a SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Revolving Advance were made by such Granting
Lender. In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the


 


112

















 


payment
in full of all outstanding commercial paper or other senior debt of any SPC, it
will not institute against, or join any other Person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State thereof.
Notwithstanding anything to the contrary contained herein, any SPC may (i) with
notice to, but without prior consent of the Borrowers and the Administrative
Agent and without paying any processing fee therefor, assign all or any portion
of its right to receive payment with respect to any Revolving Advance to the
Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Revolving Advances to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.


 


(h)                                 Notwithstanding anything to the contrary
contained herein, any Lender that is a Fund may create a security interest
in all or any portion of the Revolving Advances owing to it and the Note, if
any, held by it to the trustee for holders of obligations owed, or securities
issued, by such Fund as security for such obligations or securities, provided
that unless and until such trustee actually becomes a Lender in compliance with
the other provisions of this Section 10.06, (i) no such pledge
shall release the pledging Lender from any of its obligations under the Loan
Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents even though such trustee may have
acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.


 


Section 10.07                          Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be
disclosed (a) 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), (b) to the extent requested by any regulatory
authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d) to
any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrowers and its obligations, (g) with the
consent of the Borrowers or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrowers. For purposes of
this Section, “Information” means all information received from any Loan Party
relating to any Loan Party or any of their respective businesses, other than
any such information that is available to the Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party, provided
that, in the case of information received from a Loan 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 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


 


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confidentiality
of such Information as such Person would accord to its own confidential
information.


 


Section 10.08                          Execution
in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


 


Section 10.09                          Survival
of Representations, etc. All representations and warranties made hereunder
and in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of
any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Revolving Advance or
Swing Line Advance, and shall continue in full force and effect as long as any Revolving
Advance or Swing Line Advance or any other Obligation hereunder shall remain
unpaid or unsatisfied or any Letter of Credit shall remain outstanding.


 


Section 10.10                          Severability.
If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.


 


Section 10.11                          Interest
Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
applicable Law (the “Maximum Rate”). If the Administrative Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Revolving Advances or,
if it exceeds such unpaid principal, refunded to the Borrowers. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.


 


Section 10.12                          Governing
Law. This Agreement and each of the other Loan Documents shall be governed
by and construed in accordance with the laws of the State of New York and the
applicable laws of the United States of America.


 


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Section 10.13                          Joint
and Several Liability.


 


(a)                                  Each
of the Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Secured
Parties under this Agreement with respect to the Revolving Advances, Swing Line
Advances, and Reimbursement Obligations, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the undertakings
of each of the Borrowers to accept joint and several liability for the Obligations
of each of them.


 


(b)                                 Each
of the Borrowers jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrower, with respect to the payment and performance
of all of the Obligations arising under this Agreement, it being the intention
of the parties hereto that all the Obligations shall be the joint and several
obligations of all the Borrowers without preferences or distinction among them.


 


(c)                                  If
and to the extent that any of the Borrowers shall fail to make any payment with
respect to any of the Obligations hereunder as and when due or to perform any
of such Obligations in accordance with the terms thereof, then in each such
event the other Borrower will make such payment with respect to, or perform,
such Obligation.


 


(d)                                 The
obligations of each Borrower under the provisions of this Section 10.13
constitute full recourse obligations of such Borrower enforceable against it to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstance
whatsoever.


 


(e)                                  Except
as otherwise expressly provided herein or in the other Loan Documents, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any and all Revolving Advances or Swing Line Advances made or Letters
of Credit issued under this Agreement, notice of occurrence of any Default or Event
of Default, or of any demand for any payment under this Agreement, notice of
any action at any time taken or omitted by any Secured Party under or in
respect of any of the Obligations hereunder, any requirement of diligence and,
generally, all demands, notices and other formalities of every kind in
connection with this Agreement. Each Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any of
the Obligations hereunder, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by any Secured Party at any
time or times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Secured Parties in respect of
any of the Obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such Obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on
the part of the Secured Parties including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 10.13, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its
obligations under this Section 10.13, it being the


 


115

















 


intention
of each Borrower that, so long as any of the Obligations hereunder remain
unsatisfied, the obligations of such Borrower under this Section 10.13
shall not be discharged except by performance and then only to the extent of
such performance. The obligations of each Borrower under this Section 10.13
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to the other Borrower. The joint and several liability of the
Borrowers hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of either Borrower.


 


(f)                                    The
provisions of this Section 10.13 are made for the benefit of the Secured
Parties and their successors and assigns, and may be enforced by them in
accordance with the terms of this Agreement from time to time against either of
the Borrowers as often as occasion therefor may arise and without
requirement on the part of any Secured Party first to marshall any of
their claims or to exercise any of their rights against the other Borrower or
to exhaust any remedies available to them against the other Borrower or to
resort to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 10.13
shall remain in effect until all the Obligations hereunder shall have been paid
in full or otherwise fully satisfied and the Revolving Commitments have been
terminated. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored
or returned by any Secured Party upon the insolvency, bankruptcy or
reorganization of the Borrowers, or otherwise, the provisions of this Section 10.13
will forthwith be reinstated in effect, as though such payment had not been
made.


 


Section 10.14                          SUBMISSION TO JURISDICTION.


 


(a)                                  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
EASTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWERS, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW
OF SUCH STATE.


 


(b)                                 Each
Loan Party has irrevocably appointed CT Corporation System (the “Process
Agent”), with an office on the date hereof at 111 Eighth Ave., New York,
New York, 10011, as its agent to receive on its behalf and on behalf of its
property service of copies of any summons or complaint or any other process
which may be served in any action. Such service may be made by
mailing or delivering a copy of such process to such Loan Party in care of the
Process Agent at the Process Agent’s above address, and each Loan Party hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of


 


116

















 


service,
each Loan Party also irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing of copies of such process to it
at the address specified for it on the signature pages of this Agreement.


 


(c)                                  Nothing
in this Section 10.14 shall affect the right of the Administrative
Agent or any other Lender to serve legal process in any other manner permitted
by law or affect the right of the Administrative Agent or any Lender to bring
any action or proceeding against any Loan Party (as a Borrower or as a
Guarantor) in the courts of any other jurisdiction.


 


Section 10.15                          WAIVER OF JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.


 


Section 10.16                          ENTIRE AGREEMENT. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.


 


Section 10.17                          New Guarantors. By executing this
Agreement, MxEnergy Services Inc. and Infometer.com Inc. become Guarantors even
though they are not Guarantors under the Original Agreement.


 


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EXECUTED
as of the date first above written.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  MXENERGY
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/

  	
  Carole R.
  Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President and COO

  
	
   

  	
   

  
	
   

  	
  MXENERGY
  ELECTRIC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/

  	
  Carole R.
  Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  MXENERGY
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/

  	
  Carole R.
  Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President and COO

  
	
   

  	
   

  
	
   

  	
  ONLINE
  CHOICE INC.

  
	
   

  	
  MXENERGY GAS
  CAPITAL HOLDINGS

  
	
   

  	
  CORP.

  
	
   

  	
  MXENERGY
  ELECTRIC CAPITAL HOLDINGS

  
	
   

  	
  CORP.

  
	
   

  	
  MXENERGY GAS
  CAPITAL CORP.

  
	
   

  	
  MXENERGY
  ELECTRIC CAPITAL CORP.

  
	
   

  	
  TOTAL GAS &
  ELECTRIC INC.

  
	
   

  	
  TOTAL GAS &
  ELECTRICITY (PA) INC.

  
	
   

  	
  MXENERGY
  CAPITAL HOLDINGS CORP.

  
	
   

  	
  MXENERGY
  CAPITAL CORP.

  
	
   

  	
  MXENERGY
  SERVICES INC.

  
	
   

  	
  INFOMETER.COM
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/

  	
  Carole R.
  Artman-Hodge

  	
   

  
	
   

  	
   

  	
   

  	
  Carole R.
  Artman-Hodge

  
	
   

  	
   

  	
   

  	
  Vice
  President

  



 


S-1

















 


	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
   

  	
  SOCIÉTÉ
  GÉNÉRALE,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Emmanuel
  Chesneau

  	
   

  
	
   

  	
  Name:
  Emmanuel Chesneau

  
	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chung-Taek Oh

  	
   

  
	
   

  	
  Name: Chung
  Taek-Oh

  
	
   

  	
  Title:
  Associate

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
  SOCIÉTÉ
  GÉNÉRALE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Emmanuel
  Chesneau

  	
   

  
	
   

  	
  Name:
  Emmanuel Chesneau

  
	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chung-Taek Oh

  	
   

  
	
   

  	
  Name: Chung
  Taek-Oh

  
	
   

  	
  Title:
  Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diane
  Bredehoft

  	
   

  
	
   

  	
  Name: Diane
  Bredehoft

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CoBANK, ACB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David B.
  Willis

  	
   

  
	
   

  	
  Name: David
  B. Willis

  
	
   

  	
  Title: Vice
  President

  



 


S-2

















 


	
   

  	
  MORGAN
  STANLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jaap
  Tonckens

  	
   

  
	
   

  	
  Name: Jaap
  Tonckens

  
	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David C.
  Bond

  	
   

  
	
   

  	
  Name: David
  C. Bond

  
	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALLIED IRISH
  BANK, p.l.c.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Connelly

  	
   

  
	
   

  	
  Name: Mark
  Connelly

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aidan
  Lanigan

  	
   

  
	
   

  	
  Name: Aidan
  Lanigan

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RZB FINANCE
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric
  Salat

  	
   

  
	
   

  	
  Name: Eric
  Salat

  
	
   

  	
  Title: Group
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hermine
  Kirolos

  	
   

  
	
   

  	
  Name:
  Hermine Kirolos

  
	
   

  	
  Title: Group
  Vice President

  



 


S-3