Document:

Exhibit 10.2

 

CHANGE OF CONTROL AGREEMENT

 

This Change of Control
Agreement (“Agreement”) is entered into on this         
day of                                 ,
2008 by and between                                                                     
(Name), an individual (the “Officer”), and Magnetek, Inc., a Delaware
corporation (the “Company”).

 

RECITALS

 

WHEREAS, the Board of
Directors of the Company (the “Board”) recognizes that the possibility of a
Change of Control (as hereinafter defined) exists and that the threat or the
occurrence of a Change of Control can result in significant distractions of its
key management personnel because of the uncertainties inherent in such a
situation;

 

WHEREAS, the Board has
determined that it is essential and in the best interest of the Company and its
stockholders to retain the services of the Officer in the event of a threat or
occurrence of a Change of Control and to ensure the Officer’s continued
dedication and efforts in such event without undue concern for personal
financial and employment security; and

 

WHEREAS, in order to
induce the Officer to remain in the employ of the Company, particularly in the
event of a threat or the occurrence of a Change of Control, the Company desires
to enter into this Agreement with the Officer to provide the Officer with
certain benefits in the event his or her employment is terminated as a result
of, or in connection with, a Change of Control.

 

AGREEMENT

 

NOW THEREFORE, in
consideration of the mutual covenants set forth herein, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties do
hereby agree as follows:

 

1.             Term of Agreement.  This Agreement shall commence as of the date
hereof and shall continue in effect until                             ,
20    ; provided, however, that on                               ,
20     and on each anniversary thereof, the term of this
Agreement shall automatically be extended for one year unless either the
Company or the Officer shall have given written notice to the other prior
thereto that the term of this Agreement shall not be so extended; provided, further, however, that notwithstanding any such notice by the Company
or the Officer not to extend, the term of this Agreement shall not expire prior
to the second anniversary of a Change of Control Date.  The benefits payable pursuant to Section 2
hereof shall be due in all events if a Change of Control occurs during the term
of this Agreement, and a Change of Control will be deemed to have occurred
during the term hereof if an agreement for a transaction resulting in a Change
of Control is entered into during the term hereof, notwithstanding that the
Change of Control Date occurs after the expiration of the term of this
Agreement.

 

 

 

2.             Benefits Upon Change of Control.

 

(a)           Events Giving Rise to Benefits.  The Company agrees to pay or cause to be paid
to the Officer the benefits specified in this Section 2 if (i) there
is a Change of Control, and (ii) within the Change of Control Period, (a) the
Company or the Successor terminates the employment of the Officer for any
reason other than Cause, death or Disability or (b) the Officer
voluntarily terminates employment for Good Reason.

 

(b)           Benefits Upon Termination of
Employment.  If the Officer is
entitled to benefits pursuant to this Section 2, the Company agrees to pay
or provide to the Officer as severance payment, the following:

 

(i)            A single lump sum payment, payable
in cash within five days of the Termination Date (or if later, the Change of
Control Date), equal to the sum of:

 

(A)          the accrued portion of any of the
Officer’s unpaid base salary and vacation through the Termination Date and any
unpaid portion of the Officer’s bonus for the prior fiscal year; plus

 

(B)           a portion of the Officer’s bonus for
the fiscal year in progress, prorated based upon the number of days elapsed
since the commencement of the fiscal year and calculated assuming that 100% of
the target under the bonus plan is achieved; plus

 

(C)           an amount equal to
the Officer’s Base Compensation times the Compensation Multiplier.

 

(ii)           Continuation, on
the same basis as if the Officer continued to be employed by the Company, of
Benefits for the Benefit Period commencing on the Termination Date.  The Company’s obligation hereunder with
respect to the foregoing Benefits shall be limited to the extent that the
Officer obtains any such benefits pursuant to a subsequent employer’s benefit
plans, in which case the Company may reduce the coverage of any Benefits it is
required to provide the Officer hereunder as long as the aggregate coverage and
benefits of the combined benefit plans is no less favorable to the Officer than
the Benefits required to be provided hereunder.

 

(iii)          Outplacement
services to be provided by an outplacement organization of national repute,
which shall include the provision of office space and equipment (including
telephone and personal computer) but in no event shall the Company be required
to provide such services for a value exceeding 17% of the Officer’s Base
Compensation.

 

(iv)          Accelerated vesting
of all outstanding stock options and of all previously granted restricted stock
awards.

 

(c)           Notwithstanding
anything to the contrary in this Agreement, if the Company determines (i) that
on the date the Executive’s employment with the Company terminates, or at such
other time that the Company determines to be relevant, the Executive is a “specified
employee” (as such term is defined under Section 409A of the Code) of the
Company and (b) that any payments to be provided to the Executive pursuant
to this Agreement are or may 

 

2

 

become subject to the additional tax under Section 409A(a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A of the
Code (“Section 409A Taxes”) if provided at the time otherwise required
under this Agreement, then such payments shall be delayed until the date that
is six months after date of the Executive’s “separation from service” (as such
term is defined under Section 409A of the Code) with the Company, or such
shorter period that, as determined by the Company, is sufficient to avoid the
imposition of Section 409A Taxes. 
The provisions of this Section 2(c) shall only apply to the
minimum extent required to avoid the Executive’s incurrence of any Section 409A
Taxes.

 

3.             Definitions.  When used in this Agreement, the following
terms have the meanings set forth below:

 

“Base Compensation” means the sum of (i) the Officer’s
annual salary in effect on the earlier of the Change of Control Date and the
Termination Date and (ii) 100% of the target under the bonus plan for the
fiscal year during which the Change of Control Date occurs.

 

“Benefits” means benefits that would be available under any
health and welfare plan of the Company on the Termination Date.

 

“Benefit Period” means 18 months.

 

“Cause” means:  (A) conviction
of a felony or misdemeanor involving moral turpitude, or (B) willful gross
neglect or willful gross misconduct in carrying out the Officer’s duties,
resulting in material economic harm to the Company or any Successor.

 

“Change of Control” means (i) any event described in Section 13.2
of the 2004 Stock Incentive Plan of the Company or any event so defined in any
stock incentive or similar plan adopted by the Company in the future unless, in
either case, such event occurs in connection with a Distress Sale and (ii) any
event which results in the Board ceasing to have at least a majority of its
members be “continuing directors.”  For
this purpose, a “continuing director” means a director of the Company who held
such position on September 29, 2005 or who thereafter was appointed or
nominated to the Board by a majority of continuing directors.

 

“Change of Control Date” means the date on which a Change of
Control is consummated.

 

“Change of Control
Period” means the period commencing on the earlier of (i) 180 days
prior to the Change of Control Date and (ii) the announcement of a
transaction expected to result in a Change of Control, and ending on the second
anniversary of the Change of Control Date.

 

“Code” means the
Internal Revenue Code of 1986, as amended. 
References herein to a specific section of the Code shall be deemed to
include comparable or analogous provisions of state, local and foreign law.

 

“Compensation Multiplier” means 1.5.

 

“Disability” means the inability of the Officer due to illness
(mental or physical), accident, or otherwise, to perform his or her duties for
any period of 180 consecutive days, as determined by a qualified physician.

 

3

 

“Distress Sale”
means a Change of Control occurring within 18 months of any of the
following:  (i) the Company’s
independent public accountants shall have made a “going concern” qualification
in their audit report (other than by reason of extraordinary occurrences, such
as material litigation, not attributable to poor management practices); (ii) the
Company shall lack sufficient capital for its operations by reason of
termination of its existing credit lines or the Company’s inability to secure
credit facilities upon acceptable terms; or (iii) the Company shall have
voluntarily sought relief under, consented to or acquiesced in the benefit of
application to it of the Bankruptcy Code of the United States of America or any
other liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments or similar
laws, or shall have been the subject of proceedings under such laws (unless the
applicable involuntary petition is dismissed within 60 days after its filing).

 

“Good
Reason” means (A) without the Officer’s prior written consent,
assignment to the Officer of duties materially inconsistent in any respect with
his or her position immediately prior to the Change of Control Date or any
other action by a Successor that results in a material diminution in the
Officer’s position, authority, duties, responsibilities, annual base salary or
target bonus when compared with the same immediately prior to the Change of
Control Date; or (B) assignment of the Officer, without his or her prior
written consent, to a place of business that is not within the metropolitan
area of the Officer’s current place of business.

 

“Stay
and Pay Agreement” means a “stay and pay” or retention agreement entered
into in contemplation of a sale by the Company of a division or business unit.

 

“Successor”
means any acquiror of all or substantially all of the stock, assets or business
of the Company.

 

“Termination
Date” means the last day of the Officer’s employment.

 

4.             Eligibility;
Effect on Other Agreements and Plans.

 

(a)           In
the event the Officer is also a party to a Stay and Pay Agreement or severance
agreement and becomes entitled to any payment thereunder, this Agreement shall
be null and void and the Officer shall not be entitled to any payment or
benefit hereunder.  Nothing in this
Agreement shall prevent or limit the Officer’s continuing or future
participation in any benefit, bonus, incentive or other plan or program
provided by the Company and for which the Officer may qualify, nor shall
anything herein limit or reduce such rights as the Officer may have under any
other agreements with the Company. 
Amounts that are vested benefits or that the Officer is otherwise
entitled to receive under any plan or program of the Company shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.

 

(b)           Plan
Amendments.  The Company shall adopt
such amendments to its employee benefit plans and insurance policies,
including, without limitation, the Plans, as are necessary to effectuate the
provisions of this Agreement.  If and to
the extent any benefits under Section 2 are not paid or payable or
otherwise provided to the Officer or his or her dependents or beneficiaries
under any such plan or policy (whether due to the terms of the plan or policy,
the termination thereof, applicable law, or otherwise), then the Company itself
shall pay or provide for such benefits (including any gross-up needed to
account for the less favorable tax treatment if the payments are made from the
Company and not from the Plans or other employee benefit plans).

 

4

 

5.             Golden
Parachute Tax.

 

(a)           In the event that
the Value (as hereinafter defined) attributable to the payments and benefits
provided in Section 2 above (“Agreement Payments”), in combination with
the Value attributable to other payments or benefits in the nature of
compensation to or for the benefit of the Executive (including but not limited
to the value attributable to accelerated vesting of options or other equity or
non-equity incentive compensation awards and, collectively with Agreement
Payments, “Payments”), would constitute an “excess parachute payment” (within
the meaning of Section 280G of the Code) such that the excise tax of Section 4999
of the Code (the “Excise Tax”) is imposed on the Executive, the Company shall
provide to the Executive (either directly or through payment of taxes via
required withholding), in cash, an additional payment (the “Gross-up Payment”)
such that the net amount retained by the Executive from the Payments and the
Gross-up Payment, after reduction for any Excise Tax upon the Payments and any
federal, state and local income and employment taxes and Excise Tax on the
Gross-up Payment, and any interest, penalties or additions to tax payable by
Executive with respect thereto, shall be equal to the Payments at the time such
Payments are to be made.

 

(b)           For purposes of this
Section 5, the Company and the Executive hereby irrevocably appoint the
persons who constituted the Compensation Committee of the Board immediately
prior to a Change of Control, or a three person panel named by a majority of
them, as arbitrators (the “Arbitrators”) to make all determinations required
under this Section 5, including but not limited to the Value of all
Payments (and the components thereof). 
For purposes of this Section 5, “Value” shall mean value as
determined by the Arbitrators applying the valuation procedures and
methodologies established pursuant to the Code section or sections applicable
to “excess parachute payments,” including any interpretive guidance (whether or
not binding) as the Arbitrators determine appropriate.  The determinations of the Arbitrators shall
be final and binding on both the Company and the Executive, and their
successors, assignees, heirs and beneficiaries, for purposes of determining the
amount payable under this Section 5. 
All fees and expenses of the Arbitrators (including attorneys’ and
accountants’ fees) shall be borne by the Company.  The arbitrators will be compensated, to the
extent they are not then members of the Board’s Compensation Committee, at the
rates at which they would have been compensated for their work as Committee
members in effect immediately prior to the Change of Control Date.”

 

6.             Employment
At-Will.  Notwithstanding anything to
the contrary contained herein, the Officer’s employment with the Company is not
for any specified term and may be terminated by the Officer or by the Company
at any time, for any reason, with or without cause, without liability except
with respect to the payments provided hereunder or as required by law or any
other contract or employee benefit plan.

 

7.             General.

 

(a)           Entire Agreement.  This document constitutes the final,
complete, and exclusive embodiment of the entire agreement and understanding
between the parties related to the subject matter hereof and supersedes and
preempts any prior or contemporaneous understandings, agreements, or
representations by or between the parties, written or oral.

 

5

 

(b)           Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by the Officer and the Company, and their
respective successors and assigns, except that the Officer may not assign any
of his or her duties hereunder and he or she may not assign any of his or her
rights hereunder without the prior written consent of the Company.

 

(c)           Amendments.  No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties.  No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other
entity not a party to this Agreement. 
Nothing in this Agreement, express or implied, is intended to confer
upon any third person any rights or remedies under or by reason of this
Agreement.

 

(d)           No Amounts Due.  The Officer acknowledges that no payments or
benefits whatsoever shall become due hereunder in the absence of a Change of
Control.

 

(e)           No Mitigation Obligation.  The parties hereto expressly agree that the
payment of the benefits by the Company to the Officer in accordance with the
terms of this Agreement will be liquidated damages, and that the Officer shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor shall any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Officer hereunder or otherwise except as expressly provided in
Sections 2(b)(ii) and 4(a).

 

(f)            Changes to Benefits.  In the event that, within 90 days of the
execution of this Agreement, the Company enters into an agreement for a Change
of Control in connection with a merger to be accounted for as a “pooling of
interests,” the Board will be entitled to modify or reduce the payments or
benefits due hereunder, or to abrogate this Agreement entirely, if and to the
extent that Ernst & Young opines to the Board such measures are
necessary in order to ensure that the proposed merger will be accounted for as
a “pooling of interests.”  The Board will
have no such authority after such 90-day period and, in the event such merger
does not eventuate or is ultimately not accounted for as a “pooling of
interests,” this Agreement, with or without any action by the Board or the
Officer, shall be automatically reinstated.

 

(g)           Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws of
the State of Delaware without giving effect to principles of conflicts of law.

 

(h)           ERISA.  This Agreement is pursuant to the Company’s
severance plan for Officers (the “Plan”) which is unfunded and maintained by
the Company primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees.  The Plan constitutes an employee welfare
benefit plan (“Welfare Plan”) within the meaning of Section 3(1) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  Any payments pursuant to this Agreement which
could cause the Plan not to constitute a Welfare Plan shall be deemed instead
to be made pursuant to a separate “employee pension benefit plan” within the
meaning of Section 3(2) of ERISA as to which the applicable portions
of the document constituting the Plan shall be deemed to be incorporated by
reference.  None of the benefits
hereunder may be assigned in any way.

 

(i)            Representation.  The Officer acknowledges that neither the
Company’s counsel nor its outside counsel law firms have represented the
Officer in connection with this Agreement and that he or she has had the
opportunity to consult with counsel before executing this Agreement.

 

6

 

(j)            Mutual Non-Disparagement.  The Company and subsidiaries agree, and the
Company shall use its best efforts to cause its respective officers and
directors to agree, that they will not make or publish any statement critical
of the Officer, or in any way adversely affecting or otherwise maligning the
Officer’s reputation.  The Officer agrees
that he or she will not make or publish any statement critical of the Company,
its affiliates and their respective officers and directors, or in any way
adversely affecting or otherwise maligning the business or reputation of the
Company, its affiliates and subsidiaries and their respective officers,
directors and employees.

 

 (k)          Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be
considered an original, and all of which shall be deemed one and the same
instrument.

 

(l)            Severability.          If any part of this Agreement shall
for any reason be found or held invalid or unenforceable by any court or
governmental agency of competent jurisdiction, such invalidity or
unenforceability shall not affect the remainder of this Agreement, which shall
survive and be construed as if such invalid or unenforceable part was not
included in this Agreement.

 

8.             Arbitration.

 

(a)           Except as provided in Section 5
hereof, any disputes or claims arising out of or concerning the Officer’s
employment or termination by the Company, whether arising under theories of
liability or damages based upon contract, tort or statute, will be determined
exclusively by arbitration before a single arbitrator in accordance with the
employment arbitration rules of the American Arbitration Association,
except as modified by this Agreement. 
The arbitrator’s decision will be final and binding on both
parties.  Judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction.  In recognition of the fact
that resolution of any disputes or claims in the courts is rarely timely or
cost effective for either party, the Company and the Officer enter this mutual
agreement to arbitrate in order to gain the benefits of a speedy, impartial and
cost-effective dispute resolution procedure. 
The parties further intend that the arbitration hereunder be conducted
in as confidential a manner as is practicable under the circumstances, and
intend for the award to be confidential unless that confidentiality would
frustrate the purpose of the arbitration or render the remedy awarded
ineffective.

 

(b)           Any arbitration will be held in
Menomonee Falls, Wisconsin.  The
arbitrator must be an attorney with substantial experience in employment
matters, selected by the parties alternately striking names from a list of five
such persons provided by the American Arbitration Association (AAA) office
located nearest to the place of employment, following a request by the party
seeking arbitration for a list of five such attorneys with substantial
professional experience in employment matters. 
If either party fails to strike names from the list, the arbitrator will
be selected from the list by the other party.

 

(c)           Each party will have the right to
take the deposition of one individual and any expert witness designated by the
other party.  Each party will also have
the right to propound requests for production of documents to any party and the
right to subpoena documents and 

 

7

 

witnesses for the arbitration.  Additional discovery may be made only where
the arbitrator selected so orders upon a showing of substantial need.  The arbitrator will have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party
and will apply the standards governing such motions under the Federal Rules of
Civil Procedure.

 

(d)           The Company and the Officer agree
that they will attempt, and they intend that they and the arbitrator should use
their best efforts in that attempt, to conclude the arbitration proceeding and
have a final decision from the arbitrator within 120 days from the date of
selection of the arbitrator; provided, however,
that the arbitrator will be entitled to extend such 120-day period for one
additional 120-day period.  The
arbitrator will deliver a written award with respect to the dispute to each of
the parties, who must promptly act in accordance therewith.

 

(e)           The Company will pay any and all
reasonable fees and expenses incurred by the Officer in seeking to obtain or
enforce any rights or benefits provided by this Agreement, including all
reasonable attorneys’ and experts’ fees and expenses, accountants’ fees and
expenses, and court costs (if any) that may be incurred by the Officer in
pursuing a claim for payment of compensation or benefits or other right or
entitlement under this Agreement, provided that
the Officer is successful as to material issues, resulting in an award of at
least $50,000.  In addition, the Company
will pay without regard to the results of the arbitration all costs and fees
not normally associated with a civil proceeding, such as any fees charged by
the arbitrator or any room rental charges.

 

(f)            In a contractual claim under this
Agreement, the arbitrator must act in accordance with the terms and provisions
of this Agreement and applicable legal principles and will have no authority to
add, delete or modify any term or provision of this Agreement.  In addition, the arbitrator will have no
authority to award punitive damages under any circumstances unless repudiating
the arbitrator’s authority to do so would cause this arbitration clause to be
ruled ineffective under applicable law.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date it is last executed below by either party.

 

	
   

  	
   

  
	
   

  	
  [Officer Name]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAGNETEK, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				

 

8Exhibit.10.1

 

 

AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

 

Dated as of
December 16, 2004

 

 

among

 

FARM &
HOME OIL COMPANY

 

as
Borrower,

 

and

 

UNIVEST
NATIONAL BANK AND TRUST CO.

 

as Agent,

 

WACHOVIA
BANK, NATIONAL ASSOCIATION, as Issuing Bank

 

and

 

the Lenders
named herein.

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.

  	
  EXISTING
  LOAN DOCUMENTS

  	
  1

  
	
  1.1

  	
  Existing
  Loan Documents

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  LOANS
  AND LETTERS OF CREDIT

  	
  2

  
	
  2.1

  	
  Working
  Capital Line of Credit

  	
  2

  
	
  2.2

  	
  Capital
  Expenditure Line of Credit

  	
  2

  
	
  2.3

  	
  [INTENTIONALLY
  OMITTED]

  	
  3

  
	
  2.4

  	
  Letters
  of Credit

  	
  3

  
	
  2.5

  	
  [Intentionally
  Deleted.]

  	
  5

  
	
  2.6

  	
  Loans
  Generally

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  INTEREST;
  PAYMENTS AND FEES

  	
  7

  
	
  3.1

  	
  Interest
  Calculation and Payments

  	
  7

  
	
  3.2

  	
  Principal
  Payments

  	
  8

  
	
  3.3

  	
  Cap
  Ex Line Fee

  	
  9

  
	
  3.4

  	
  Closing
  Fees

  	
  9

  
	
  3.5

  	
  Unused
  Line Fee

  	
  9

  
	
  3.6

  	
  Termination
  of Loans and Termination Fee

  	
  9

  
	
  3.7

  	
  Charges
  to Loan Account

  	
  9

  
	
  3.8

  	
  Taxes
  and Additional Costs

  	
  9

  
	
  3.9

  	
  Evidence
  of Amounts Outstanding, Etc.

  	
  10

  
	
  3.10

  	
  Eurodollar
  Deposits Unavailable or Interest Rate Unascertainable

  	
  10

  
	
  3.11

  	
  Changes
  in Law Rendering Eurodollar Loans Unlawful

  	
  11

  
	
  3.12

  	
  Funding
  Indemnity; Prepayment Fee

  	
  11

  
	
  3.13

  	
  Extensions
  and Conversions

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  GRANT
  OF SECURITY INTEREST

  	
  13

  
	
  4.1

  	
  Grant
  of Security Interest

  	
  13

  
	
  4.2

  	
  Obligations

  	
  13

  
	
  4.3

  	
  Collateral

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COLLECTION
  AND ADMINISTRATION

  	
  15

  
	
  5.1

  	
  Collections

  	
  15

  
	
  5.2

  	
  Payments

  	
  15

  
	
  5.3

  	
  Loan
  Account Statements

  	
  15

  
	
  5.4

  	
  Direct
  Collection

  	
  15

  
	
  5.5

  	
  Attorney-in-Fact

  	
  15

  
	
  5.6

  	
  Liability

  	
  16

  
	
  5.7

  	
  Administration
  of Accounts

  	
  16

  
	
  5.8

  	
  Documents

  	
  16

  
	
  5.9

  	
  Access

  	
  17

  
	
  5.10

  	
  Environmental
  Audits

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  ADDITIONAL
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
  17

  
	
  6.1

  	
  Incorporation,
  Good Standing, and Due Qualification

  	
  17

  

 

i

 

	
  6.2

  	
  Ownership;
  Power and Authority

  	
  17

  
	
  6.3

  	
  Legally
  Enforceable Agreement

  	
  18

  
	
  6.4

  	
  Closing
  Financial Statements

  	
  18

  
	
  6.5

  	
  Labor
  Disputes and Acts of God

  	
  18

  
	
  6.6

  	
  Other
  Agreements

  	
  18

  
	
  6.7

  	
  Litigation

  	
  18

  
	
  6.8

  	
  No
  Defaults on Outstanding Judgments or Orders

  	
  19

  
	
  6.9

  	
  Margin
  Stock

  	
  19

  
	
  6.10

  	
  Financial
  and Other Reports

  	
  19

  
	
  6.11

  	
  Trade
  Names

  	
  20

  
	
  6.12

  	
  Notices

  	
  20

  
	
  6.13

  	
  Books
  and Records

  	
  20

  
	
  6.14

  	
  Title;
  Lien Restrictions

  	
  21

  
	
  6.15

  	
  No
  Corporate Changes

  	
  21

  
	
  6.16

  	
  Insurance

  	
  21

  
	
  6.17

  	
  Compliance
  With Laws

  	
  22

  
	
  6.18

  	
  Equipment

  	
  22

  
	
  6.19

  	
  Affiliated
  and Other Transactions

  	
  22

  
	
  6.20

  	
  Fees
  and Expenses

  	
  22

  
	
  6.21

  	
  Further
  Assurances

  	
  23

  
	
  6.22

  	
  Environmental
  Matters

  	
  23

  
	
  6.23

  	
  Restrictions
  on Additional Indebtedness

  	
  25

  
	
  6.24

  	
  Issuance
  of Stock

  	
  25

  
	
  6.25

  	
  Limitations

  	
  25

  
	
  6.26

  	
  Restricted
  Payments

  	
  25

  
	
  6.27

  	
  Tax
  Returns

  	
  25

  
	
  6.28

  	
  Current
  Compliance

  	
  26

  
	
  6.29

  	
  Pension
  Plan Representations

  	
  26

  
	
  6.30

  	
  Intellectual
  Property

  	
  26

  
	
  6.31

  	
  Payment
  of Principal, Interest and Other Amounts Due

  	
  26

  
	
  6.32

  	
  Disposition
  of Assets

  	
  26

  
	
  6.33

  	
  Taxes;
  Claims for Labor and Materials

  	
  26

  
	
  6.34

  	
  Pension
  Plan Covenants

  	
  27

  
	
  6.35

  	
  Bank
  of Account

  	
  27

  
	
  6.36

  	
  Maintenance
  of Management

  	
  27

  
	
  6.37

  	
  Accounts
  Receivable

  	
  27

  
	
  6.38

  	
  Derivatives
  Contracts

  	
  28

  
	
  6.39

  	
  Through-put
  Agreements

  	
  28

  
	
  6.40

  	
  Financial
  Covenants

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  EVENTS
  OF DEFAULT AND REMEDIES

  	
  29

  
	
  7.1

  	
  Events
  of Default

  	
  29

  
	
  7.2

  	
  Remedies

  	
  31

  
	
  7.3

  	
  Application
  of Proceeds

  	
  32

  
	
  7.4

  	
  Agent’s
  Cure of Third Party Agreement

  	
  32

  
	
  7.5

  	
  Set-Off

  	
  32

  
	
  7.6

  	
  Delay
  or Omission Not Waiver

  	
  33

  
	
  7.7

  	
  Time
  is of the Essence

  	
  33

  
	
  7.8

  	
  Waivers

  	
  33

  

 

ii

 

	
  7.9

  	
  Forbearance

  	
  33

  
	
  7.10

  	
  Limitation
  on Liability

  	
  33

  
	
  7.11

  	
  Indemnification

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  JURY
  TRIAL WAIVER; CERTAIN OTHER WAIVERS AND CONSENTS

  	
  34

  
	
  8.1

  	
  Jury
  Trial Waiver

  	
  34

  
	
  8.2

  	
  Counterclaims

  	
  34

  
	
  8.3

  	
  Jurisdiction

  	
  35

  
	
  8.4

  	
  [Intentionally
  Deleted.]

  	
  35

  
	
  8.5

  	
  No
  Waiver by Agent or Lenders

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  TERM
  OF AGREEMENT; MISCELLANEOUS

  	
  35

  
	
  9.1

  	
  Term

  	
  35

  
	
  9.2

  	
  Additional
  Cash Collateral

  	
  35

  
	
  9.3

  	
  Notices

  	
  35

  
	
  9.4

  	
  Severability

  	
  35

  
	
  9.5

  	
  Entire
  Agreement; Amendments; Assignments

  	
  36

  
	
  9.6

  	
  Discharge
  of Borrower

  	
  36

  
	
  9.7

  	
  Usage

  	
  36

  
	
  9.8

  	
  Governing
  Law

  	
  36

  
	
  9.9

  	
  Holidays

  	
  36

  
	
  9.10

  	
  Integration

  	
  36

  
	
  9.11

  	
  Exhibits
  and Schedules

  	
  36

  
	
  9.12

  	
  Headings

  	
  36

  
	
  9.13

  	
  Counterparts

  	
  36

  
	
  9.14

  	
  Joint
  and Several Liability

  	
  36

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  ADDITIONAL
  DEFINITIONS AND TERMS

  	
  37

  
	
  10.1

  	
  Certain
  Definitions

  	
  37

  
	
  10.2

  	
  Letters
  of Credit

  	
  43

  
	
  10.3

  	
  Addresses

  	
  43

  
	
  10.4

  	
  Interest/Fees

  	
  44

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  SETTLEMENT
  AMONG LENDERS

  	
  44

  
	
  11.1

  	
  Between
  Settlement Dates

  	
  44

  
	
  11.2

  	
  Settlement
  Date

  	
  45

  
	
  11.3

  	
  Remittance
  to Agent

  	
  45

  
	
  11.4

  	
  Alternate
  Procedures

  	
  46

  
	
  11.5

  	
  Failure
  to Advance

  	
  46

  
	
  11.6

  	
  Defaulting
  Lender

  	
  46

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  AGENT

  	
  47

  
	
  12.1

  	
  Appointment
  of Agent

  	
  47

  
	
  12.2

  	
  Holding
  of Collateral and Collections

  	
  47

  
	
  12.3

  	
  Fees

  	
  47

  
	
  12.4

  	
  Collections
  and Disbursements

  	
  47

  
	
  12.5

  	
  Delegation
  of Duties; Discretion; Instructions

  	
  49

  
	
  12.6

  	
  Nature
  of Duties

  	
  49

  
	
  12.7

  	
  Lack
  of Reliance on the Agent

  	
  49

  

 

iii

 

	
  12.8

  	
  Resignation

  	
  50

  
	
  12.9

  	
  Certain
  Rights of Agent

  	
  50

  
	
  12.10

  	
  Reliance

  	
  50

  
	
  12.11

  	
  Notice
  of Default

  	
  50

  
	
  12.12

  	
  The
  Agent in its Capacity as Lender

  	
  50

  
	
  12.13

  	
  Other
  Loans

  	
  51

  
	
  12.14

  	
  Disclosure
  of Information; Audits

  	
  51

  
	
  12.15

  	
  Actions
  by Agent; Amendments; Waivers

  	
  51

  
	
  12.16

  	
  Sharing
  of Risk; Indemnification; Expenses

  	
  52

  
	
  12.17

  	
  Consultation
  with Counsel

  	
  53

  
	
  12.18

  	
  Documents

  	
  53

  
	
  12.19

  	
  Several
  Obligations

  	
  53

  
	
  12.20

  	
  No
  Third Party Beneficiary

  	
  53

  
	
  12.21

  	
  Participations
  and Assignments

  	
  53

  

 

iv

 

List of Schedules

 

	
  Schedule
  A

  	
   

  	
  Pro
  Rata Line Percentages and Pro Rata Cap Ex Percentages

  
	
   

  	
   

  	
   

  
	
  Schedule
  B

  	
   

  	
  Closing
  Conditions

  
	
   

  	
   

  	
   

  
	
  Schedule
  C

  	
   

  	
  Form of
  Borrowing Base Certificate

  
	
   

  	
   

  	
   

  
	
  Schedule
  D

  	
   

  	
  Assignment
  and Acceptance Agreement

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1

  	
   

  	
  Existing
  Loan Documents

  
	
   

  	
   

  	
   

  
	
  Schedule
  2.6(g-1)

  	
   

  	
  Form of
  Working Capital Notes

  
	
   

  	
   

  	
   

  
	
  Schedule
  2.6(g-2)

  	
   

  	
  Form of
  Cap Ex Notes and Allonges

  
	
   

  	
   

  	
   

  
	
  Schedule
  4.3(a)

  	
   

  	
  Commercial
  Tort Claims

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.2

  	
   

  	
  Stock
  Ownership

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.7

  	
   

  	
  Pending
  Litigation

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.10(b)

  	
   

  	
  Form of
  Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.14

  	
   

  	
  Permitted
  Liens

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.22(a)

  	
   

  	
  Environmental
  Matters

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.23

  	
   

  	
  Permitted
  Indebtedness

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.29

  	
   

  	
  Employee
  Pension Benefit Plans

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.30

  	
   

  	
  Intellectual
  Property

  
	
   

  	
   

  	
   

  
	
  Schedule
  10.3(c)

  	
   

  	
  Location
  of Collateral

  
	
   

  	
   

  	
   

  
	
  Schedule
  10.3(d)

  	
   

  	
  Borrower’s
  Trade Names

  

 

 

AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

 

This
Amended and Restated Loan and Security Agreement (the “Agreement”) dated as of December 16,
2004, is among Farm & Home Oil Company (“Borrower”), the financial institutions which are now or which
hereafter become party to this Agreement (collectively, the “Lenders” and individually, each a “Lender”, which term shall include Agent
and Issuing Bank in their capacities as Lenders) and Univest National Bank and
Trust Co. (“Univest”), as agent
for Lenders (Univest in such capacity, together with its successors in such
capacity the “Agent”), and
Wachovia Bank, National Association (“WBNA”)
as issuing bank (WBNA, in such capacity, together with its successors in such
capacity, the “Issuing Bank”)
concerning loans and other credit accommodations to be made by Lenders to
Borrower.  All capitalized terms
appearing herein which are not otherwise defined have such meaning as provided
in Section 10 below.

 

SECTION 1.         EXISTING
LOAN DOCUMENTS

 

1.1           Existing Loan Documents. 
Univest and Borrower are parties to those certain loan documents
described on Schedule 1.1
attached hereto (collectively, the “Existing
Loan Documents”), Univest’s interest in which WBNA (formerly First
Union National Bank) purchased a participation interest..

 

1.2           Ratification of Existing Loan Documents.

 

(a)           The Existing Loan Documents are valid,
binding and in full force and effect as of the date hereof.

 

(b)           Neither this Agreement, the other Loan
Documents, nor any other document in connection therewith shall be deemed or
construed to be a compromise, satisfaction, novation or release of any of the
Existing Loan Documents or any rights or obligations thereunder, nor shall the
credit facilities under this Agreement be deemed to be a repayment of any of
the indebtedness evidenced thereby.  The
credit facilities under this Agreement are being extended to recast, in
accordance with the terms and conditions of this Agreement, the obligations
evidenced and secured by the Existing Loan Documents.  All obligations under the Existing Loan
Documents are superseded by the Loan Documents.

 

(c)           All liens, security interests, rights and
remedies granted to Agent (for itself or for the benefit of the Lenders) or
Lenders under the Existing Loan Documents are hereby ratified, confirmed and
continued in favor of Agent, for the benefit of Lenders as provided for herein,
and shall secure the performance by Borrower of its obligations under this
Agreement and all of the other Loan Documents.

 

(d)           Borrower has no defense, setoff, counterclaim
or challenge against the payment of the sums currently owing under the Existing
Loan Documents or the enforcement of any of the terms and conditions of the
Existing Loan Documents.  Agent, Lenders,
Issuing Bank and Borrower each agree that the principal balance due under the
Existing Loan Documents as of the date hereof is Forty-Six Million Twelve
Thousand Two Hundred Twenty-Seven and 94/100 Dollars ($46,012,227.94).

 

 

(e)           This Agreement and the other Loan Documents supersede and replace the
Existing Loan Documents.  In the event of
any inconsistencies between the terms and conditions of the Existing Loan
Documents and the terms and conditions of the Loan Documents, the terms and
conditions of the Loan Documents shall control.

 

SECTION 2.         LOANS
AND LETTERS OF CREDIT

 

2.1           Working Capital Line of
Credit.

 

(a)           Lenders will establish for Borrower for and
during the period from the date hereof and until October 31, 2006 (as such
period may be extended from time to time pursuant to Section 2.1(c) below, the “Working Capital Line Contract Period”),
subject to the terms and conditions hereof, a revolving working capital credit
facility (the “Working Capital Line”),
pursuant to which Lenders will from time to time in accordance with their
respective Pro Rata Line Percentage, severally and not jointly, make advances
to Borrower in an aggregate amount not exceeding (i) during any
Non-Seasonal Period, the Maximum Non-Seasonal Working Capital Line Amount and (ii) during
any Seasonal Period, the lesser of (A) the Maximum Seasonal Working
Capital Line Amount and (B) the Borrowing Base Amount.  Within the limitations set forth in this
Agreement, Borrower may borrow, repay and reborrow under the Working Capital
Line.  The Working Capital Line shall be
subject to all of the terms and conditions set forth in the Loan Documents,
which terms and conditions are incorporated herein.  Subject to the terms and conditions of this
Agreement, each Lender agrees to lend to Borrower the amount equal to such
Lender’s respective Pro Rata Line Percentage of each advance requested by
Borrower under the Working Capital Line. 
The outstanding amount of the advances (including without limitation
then outstanding L/C Obligations) by each Lender under the Working Capital Line
shall not exceed such Lender’s Pro Rata Line Share (as such amount may change
from time to time in accordance with this Agreement).

 

(b)           Borrower shall use the proceeds of the
Working Capital Line for working capital purposes and to finance Approved
Margin Deposits.  Upon consummation of
the transactions contemplated herein, a portion of the outstanding balance
under the Existing Documents in the amount of Forty-One Million Five Hundred
Sixty-Five Thousand Four Hundred Forty and 52/100 Dollars ($41,565,440.52)
shall be deemed an advance under the Working Capital Line.

 

(c)           Borrower may from time to time request that
Lenders extend the Working Capital Line Contract Period for successive one year
periods, by providing Agent with written notice of such request not later than
sixty (60) days prior to the expiration of the then current Working Capital
Line Contract Period, together with the financial statements to be delivered
pursuant to Section 6.10(a) hereof,
a covenant compliance certificate and such other documents as Agent shall
reasonably request, all of which must be in form and content reasonably
satisfactory to the Required Lenders. 
Borrower acknowledges and agrees that Lenders have no obligation to
extend the Working Capital Line Contract Period at any time and Lenders may
determine not to do so for any or no reason, or may determine to do so on the
same terms as set forth herein or on such additional or different terms as they
deem appropriate, in their sole discretion..

 

2.2           Capital Expenditure Line of
Credit.

 

(a)           Cap Ex Line Lenders will establish for Borrower
for and during the period from the date hereof and until October 31, 2006
(the “Cap Ex Contract Period”),
subject to the terms and conditions hereof, a revolving capital expenditure
credit facility (the “Cap Ex Line”),

 

2

 

pursuant
to which Cap Ex Line Lenders will from time to time in accordance with their
respective Pro Rata Cap Ex Percentage, severally and not jointly, make advances
to Borrower in individual amounts not to exceed one hundred percent (100%) of
the Invoice Value of the equipment being purchased by Borrower with the
proceeds of such advance; provided, however, at no time shall the aggregate of
all outstanding advances under the Cap Ex Line exceed the Maximum Cap Ex Line
Amount.  Within the limitations set forth
in this Agreement, Borrower may borrow, repay and reborrow under the Cap Ex
Line.  The Cap Ex Line shall be subject
to all of the terms and conditions set forth in the Loan Documents, which terms
and conditions are incorporated herein. 
Subject to the terms and conditions of this Agreement, each Cap Ex Line
Lender agrees to lend to Borrower the amount equal to such Cap Ex Line Lender’s
respective Pro Rata Cap Ex Percentage of each advance requested by Borrower
under the Cap Ex Line.  The outstanding
amount of the advances by each Cap Ex Line Lender shall not exceed such Cap Ex
Line Lender’s Pro Rata Cap Ex Share (as such amount may change from time to
time in accordance with this Agreement).

 

(b)           Together with each request for an advance
under the Cap Ex Line, Borrower shall deliver to Agent copies of invoices for
the equipment being purchased with the proceeds of such advance, together with
such other information with respect thereto as Agent shall reasonably require.

 

(c)           Borrower shall use proceeds of the Cap Ex
Line to finance the costs of acquisition of equipment to be used in the normal
course of Borrower’s business.  Upon
consummation of the transactions contemplated herein, a portion of the
outstanding balance under the Existing Documents in the amount of Two Million
Thirty-Seven Thousand Four Hundred Ninety-Nine and 77/100 Dollars
($2,037,499.77) shall be deemed an advance under the Cap Ex Line.

 

2.3           [INTENTIONALLY OMITTED].

 

2.4           Letters of Credit.

 

(a)           Issuing Bank may, in its sole discretion,
issue under the Working Capital Line, from time to time at Borrower’s request
and on terms and conditions and for purposes satisfactory to Agent and Issuing
Bank, letters of credit for Borrower’s account (“Letters of Credit”).  Borrower shall execute and perform
additional agreements relating to the Letters of Credit in form and substance
acceptable to Agent and Issuing Bank, all of which  shall supplement the rights and remedies granted herein.  Any payments made by any Lender or Issuing
Bank in connection with the Letters of Credit shall constitute additional
advances to Borrower under the Working Capital Line.  Letters of Credit shall have a term not to
exceed (i) with respect to standby Letters of Credit, 365 days from the
date of issuance thereof and (ii) with respect to commercial Letters of
Credit, 180 days from the date of issuance thereof; provided, however, no
Letter of Credit shall expire on a date later than the last day of the Working
Capital Line Contract Period then in effect without the prior written approval
of Agent and Issuing Bank and, with respect to any such Letter of Credit,
Borrower hereby agrees to deliver on or before the last day of the Working
Capital Line Period cash collateral in an amount equal to one hundred five
percent (105%) of the outstanding undrawn face amount of each such Letter of
Credit, to be held pursuant to Section 9.2
hereof.

 

(b)           In addition to the fees and costs of the
Agent and Issuing Bank in connection with issuing or administering the Letters
of Credit, Borrower shall pay to Issuing Bank, upon the issuance of any Letter
of Credit and on each renewal thereof, a charge equal to the amount set forth 

 

3

 

in
Section 10.2 (the “Letter of Credit Charges”), as applicable
with respect to the type of Letter of Credit issued.

 

(c)           No Letter of Credit will be issued if (i) the
sum of (A) the stated amount of the Letter of Credit requested, plus (B) fees
and costs for issuance, plus (C) all advances under the Working Capital
Line and Letters of Credit then outstanding, would exceed (1) during any
Non-Seasonal Period, the Maximum Non-Seasonal Working Capital Line Amount, and (2) during
any Seasonal Period, the lesser of (x) the Maximum Seasonal Working Capital
Line Amount and (z) the Borrowing Base Amount, or (ii) the aggregate
stated amount of all outstanding Letters of Credit would exceed, at any time,
the Letter of Credit sublimit set forth in Section 10.2(b).  For purposes of determining availability for
advances under the Working Capital Line and the issuance of Letters of Credit,
the face amount of all outstanding Letters of Credit and all unreimbursed
Letter of Credit charges and other amounts included in the term “L/C Obligations” defined below shall be
deemed advances under the Working Capital Line.

 

(d)           All indebtedness, liabilities and obligations
of any  sort whatsoever, however
arising, whether present or future, fixed or contingent, secured or unsecured,
due or to become due, paid or incurred, arising or incurred in connection with
any Letter of Credit shall be included in the term “Obligations”,  as
defined herein, and shall include, without limitation, (i) all amounts due
or which may become due under or in connection with any Letter of Credit; (ii) all
amounts charged or chargeable to Borrower, Agent, any Lender or Issuing Bank by
any bank, other financial institution or correspondent bank which opens, issues
or is involved with any Letter of Credit; (iii) the Letter of Credit
Charges and all other fees, costs and other charges of Agent, any Lender and
Issuing Bank in connection with any Letters of Credit; and (iv) to the
extent paid by Issuing Bank and not reimbursed by Borrower all duties, freight,
taxes, costs, insurance and all such other charges and expenses which may
pertain directly or indirectly to any Obligations or Letters of Credit or to
the goods or documents relating thereto (collectively, the “L/C Obligations”).

 

(e)           Borrower unconditionally agrees to indemnify
and hold Agent, Lenders and Issuing Bank harmless from any and all loss, claim
or liability (including reasonable attorneys’ fees) arising from any
transactions or occurrences relating to any Letter of Credit established or
opened for Borrower’s account, the Collateral relating thereto and any drawings
thereunder, including any such loss or claim due to any action taken by Agent,
any Lender or Issuing Bank in connection with any Letters of Credit.  Borrower further agrees to indemnify and hold
Agent, Lenders and Issuing Bank harmless for any errors or omissions in
connection with the Letters of Credit, whether caused by Agent, Lenders or
Issuing Bank or otherwise.  Borrower’s
unconditional obligation to indemnify and hold Agent, Lenders and Issuing Bank
harmless under this provision shall not be modified or diminished for any
reason or in any manner whatsoever, except for Agent’s, Lenders’ or Issuing
Bank’s willful misconduct or gross negligence. 
Borrower agrees that any charges made to Agent, any Lender or Issuing
Bank by any issuer of any Letter of Credit shall be conclusive on Borrower and
may be charged to Borrower’s account.

 

(f)            None of Agent, any Lender or Issuing Bank
shall be responsible for:  the conformity
of any goods to the documents presented; the validity or genuineness of any
documents; delay, default, or fraud by Borrower or shipper and/or anyone else
in connection with the Letters of Credit or any underlying transaction;
provided, however, Agent, Lenders and Issuing Bank shall be responsible for any
such default, delay or fraud caused by Agent’s, Lenders’ or Issuing Bank’s
gross negligence or willful misconduct.

 

4

 

(g)           Borrower agrees that any action taken by Agent, any Lender or Issuing
Bank, if taken in good faith and without gross negligence or willful
misconduct, under or in connection with any Letter of Credit, shall be binding
on Borrower and shall not create any resulting liability to Agent, such Lender
or Issuing Bank.  In furtherance thereof,
Agent and Issuing Bank shall have the full right and authority to clear and
resolve anyquestions of non-compliance of documents; to give any instructions
as to acceptance or rejection of any documents or goods; to execute for
Borrower’s account any and all applications for steamship or airway guarantees,
indemnities or delivery orders; to grant any extensions of the maturity of time
of payment for, or time of presentation of, any drafts, acceptances, or
documents; and to agree to any amendments, renewals, extensions, modifications,
changes or cancellations of any of the terms or conditions of any of the
applications or Letters of Credit.  All
of the foregoing actions may be taken in Agent’s or Issuing Bank’s sole name,
and Issuing Bank shall be entitled to comply with and honor any and all such
documents or instruments executed by or received solely from Agent or Issuing
Bank, all without any notice to or any consent from Borrower.  None of the foregoing actions described in
this subsection (g) may be taken by Borrower without Agent’s express
written consent nor shall Agent or Issuing Bank be liable in any way with
respect thereto.

 

(h)           Immediately upon the issuance of any Letter of Credit, Issuing Bank is
deemed to have granted to each Lender, and each Lender is deemed to have
acquired from Issuing Bank, an undivided participating interest (without
recourse to or warranty by Issuing Bank), in accordance with each such Lender’s
respective Pro Rata Line Percentage of the Working Capital Line, in all of
Issuing Bank’s rights and liabilities with respect to such Letter of
Credit.  Each Lender shall be directly
and unconditionally obligated without deduction or setoff of any kind, to
Issuing Bank, according to such Lender’s Pro Rata Line Percentage to reimburse
Issuing Bank for draws honored or paid by Issuing Bank at any time (including,
without limitation, following commencement of any bankruptcy, reorganization,
receivership or dissolution proceeding with respect to Borrower) under any such
Letter of Credit.

 

2.5           [Intentionally Deleted.]

 

2.6           Loans Generally.

 

(a)           For purposes hereof, “Loan” shall mean any advance under the
Working Capital Line or the Cap Ex Line and shall include any extension or
conversion of an existing Loan (or portion thereof); “Eurodollar Loan” shall mean any Loan (or portion thereof)
bearing interest at a rate determined by reference to LIBOR as defined herein; “Base Rate Loan” shall mean any Loan (or
portion thereof) bearing interest at a rate of interest determined by reference
to the Prime Rate as defined herein; and “Fixed
Rate Loan” shall mean any Loan bearing interest determined by
reference to a Fixed Rate as defined below.

 

(b)           Subject to the provisions of Section 3.10 and 3.11 below, each (i) Loan
under the Working Capital Line may be a Eurodollar Loan or a Base Rate Loan, as
Borrower may request pursuant to the terms hereof; and (ii) Loan under the
Cap Ex Line may be a Eurodollar Loan, a Base Rate Loan or a Fixed Rate Loan, as
Borrower may request pursuant to the terms hereof.  Eurodollar Loans having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.  During the
Non-Seasonal Period, Borrower may not have more than six (6) separate
Eurodollar Loans outstanding at any one time under the Working Capital Line.
During the Seasonal Period, Borrower may not have more than ten (10) separate
Eurodollar Loans outstanding at any one time under the Working Capital
Line.  Eurodollar Loans under the Working

 

5

 

Capital
Line shall be made in minimum principal amounts of at least Three Million
Dollars ($3,000,000.00) and in increments of Two Hundred Fifty Thousand Dollars
($250,000.00).There are no restrictions on the number or amount of Eurodollar
Loans under the Cap Ex Line.

 

(c)           Borrower shall give Agent written notice
(which may be by telecopy) (i) in the case of a Eurodollar Loan under the
Working Capital Line and any Loan under the Cap Ex Line, not later than 10:00 a.m.,
Eastern Standard time, two (2) Business Days before a proposed borrowing
and (ii) in the case of a Base Rate Loan under the Working Capital Line,
not later than 10:00 a.m., Eastern time, on the day of the proposed
borrowing.  Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify (A) whether
the Loan then being requested is to be a Eurodollar Loan or Base Rate Loan; (B) the
date of such borrowing (which shall be a Business Day) and the amount thereof; (C) if
such Loan is to be a Eurodollar Loan, the Interest Period with respect thereto,
provided, however, that Borrower shall not specify any Interest Period which
expires after the end of the Working Capital Line Contract Period or the Cap Ex
Line Contract Period, as applicable.  If
no election as to the type of Loan is specified in any such notice, then the
requested Loan shall be a Base Rate Loan. 
If no Interest Period with respect to any Eurodollar Loan is specified
in any such notice, then Borrower shall be deemed to have selected an Interest
Period of one month’s duration.  In
addition to the foregoing, each request for an advance under the Cap Ex Line
shall include the applicable invoice and such other information as Agent shall
reasonably require in connection with the equipment being purchased with the
proceeds of such advance.

 

(d)           Borrower may request that Cap Ex Line Lenders
quote a fixed rate of interest (a “Fixed Rate”)
in respect of any advance under the Cap Ex Line.  If Borrower elects a Fixed Rate, such Fixed
Rate shall remain in effect from the effective date thereof through the term of
the applicable advance under the Cap Ex Line.

 

(e)           Required Lenders may, in their sole
discretion, make or permit Loans or the Issuing Bank may issue or permit the
issuance of Letters of Credit in excess of the Maximum Non-Seasonal Working
Capital Line Amount, the Maximum Seasonal Working Capital Line Amount, or any
other applicable formulas or sublimits. 
The Cap Ex Lenders may, in their sole discretion, make or permit Loans
in excess of the Maximum Cap Ex Line Amount or any other applicable formulas or
sublimits.  If Lenders or Issuing Bank,
as applicable, make or permit any such accommodations, all or any portion of
such excess(es) shall be immediately due and payable upon Agent’s demand.  Should any such excess occur without Lenders’
prior written consent, such excess shall be due and payable immediately and
without demand by Agent.

 

(f)            Borrower may prepay (i) Loans which are
Base Rate Loans on any Business Day and (ii) subject to the provisions of Section 3.12 hereof, upon three (3) Business
Days’ written notice to Agent, Loans which are Eurodollar Loans on a day other
than the last day of the applicable Interest Period and Loans which are Fixed
Rate Loans on a day other than the last day of the applicable term
thereof.  Notwithstanding the foregoing,
all Hedging Agreements (including without limitation, swap agreements, as
defined in 11 U.S.C. § 101, as in effect from time to time), if any,
between Borrower and any Lender or its affiliates are independent agreements
governed by the written provisions of said Hedging Agreements, which will
remain in full force and effect, unaffected by any repayment, prepayment,
acceleration, reduction, increase or change in the terms of this Agreement or
any other Loan Document, except as otherwise expressly provided in said written
Hedging Agreement.

 

6

 

(g)           Borrower’s obligation to repay sums advanced
under the Working Capital Line shall be evidenced by Borrower’s promissory note
to each Lender in the face amount of such Lender’s Pro Rata Line Share
(collectively, the “Working Capital Line
Notes”), which shall be in the form of Schedule 2.6(g-1)  attached hereto.  Borrower’s obligations to repay sums advanced
under the Cap Ex Line shall be evidenced by Borrower’s promissory note to each
Cap Ex Line Lender in the face amount of such Cap Ex Line Lender’s Pro Rata Cap
Ex Share, together with allonges thereto delivered by Borrower to Lenders on
the date of and as a condition to the applicable advance under the Cap Ex Line,
each allonge being in the amount of such Cap Ex Line Lender’s Pro Rata Cap Ex
Percentage of the applicable advance, which notes and allonges shall each be in
the forms of Schedule 2.6(g-2)  attached
hereto (such notes, together with each allonge thereto, collectively “Cap Ex Notes”).  The Working Capital Line Notes, and the Cap
Ex Notes may be referred to collectively as the “Notes”.

 

(h)           Each Lender’s agreement to extend any Loans
(including without limitation advances pursuant to Section 11.1 hereof) or Issuing
Bank’s obligation to issue any Letters of Credit after the date hereof is
expressly subject to (i) the satisfaction of each of the Closing
Conditions described on Schedule B;
(ii) all representations and warranties of Borrower contained in the Loan
Documents being true and complete as of the date of the making of such Loan or
the issuance of such Letter of Credit; and (iii) no Event of Default, nor
any event or condition which with the passage of time or delivery of notice or
otherwise would constitute any such Event of Default, existing.

 

(i)            Excess collected balances in the Borrower’s
operating checking account maintained with Agent (“Excess Funds”) shall be automatically swept on a daily basis
to pay down Base Rate Loan balances outstanding under the Working Capital Line
or, if no Base Rate Loan balances are outstanding under the Working Capital Line,
Excess Funds shall be automatically swept to a daily repurchase agreement
account of Borrower maintained with Agent. 
If collected balances in the Borrower’s operating checking account are
negative for any given day, funds shall be automatically advanced under the
Working Capital Line (to the extent of availability thereunder) to balance the
Borrower’s operating checking account. 
Borrowings under this automatic sweep feature shall be Base Rate
Loans.  Nothing in this Section 2.6(i) shall limit
Borrower’s obligations in respect of overdrafts or require Lenders to make any
advances if an Event of Default shall have occurred.

 

SECTION 3.         INTEREST;
PAYMENTS AND FEES

 

3.1           Interest Calculation and Payments.

 

(a)           Interest accruing on Base Rate Loans and
Fixed Rate Loans shall be payable by Borrower on the first day of each month,
calculated upon the closing daily balances in the loan account of Borrower for
each day during the immediately preceding month.  Interest on Base Rate Loans shall accrue at
the Adjusted Base Rate  then in
effect.  The Adjusted Base Rate shall
increase or decrease in an amount equal to each increase or decrease,
respectively, in the Prime Rate, effective as of the date of each such change.  Interest on Eurodollar Loans shall be payable
by Borrower on the last day of each Interest Period, and, if the Interest
Period exceeds three months, also on the last day of the three month
period commencing on the first day of the applicable Interest Period; all
calculated upon the outstanding principal amount of such Eurodollar Loan during
the immediately preceding period at the Adjusted LIBOR Rate then in
effect.  On and after any Event of
Default or termination or non-renewal of the credit facilities under this Agreement,
interest on all unpaid Obligations shall accrue at a rate equal to two and
one-half percent (2.5%) per annum in excess of Prime Rate (the “Default Rate”) until such time as all
Obligations are indefeasibly paid in full

 

7

 

(notwithstanding
entry of any judgment against Borrower or the exercise of any other right or
remedy by Agent or any Lender), and all such interest shall be payable on
demand.  In no event shall charges
constituting interest exceed the rate permitted under any applicable law or
regulation, and if any provision of this Agreement is in contravention of any
such law or regulation, such provision shall be deemed amended to conform
thereto.

 

(b)           The “Prime
Rate” is the rate of interest publicly announced by Agent, its successors
and assigns, in Souderton, Pennsylvania, as its “prime rate” with each change
in such prime rate being effective on the date of such change (the Prime Rate
is not intended to be the lowest rate of interest charged by Agent to its
borrowers).  The “Adjusted Base Rate” is the rate of
interest equal to the sum of the Prime Rate then in effect, plus the Applicable
Percentage  for Loans which are
Base Rate Loans as set forth in Section 10.4(a).

 

(c)           “LIBOR” is, with respect to any Eurodollar Loan for
the Interest Period applicable thereto, the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) - British Bankers Association Interest Settlement
Rates, as the London interbank offered rate for deposits in U.S. dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, (i) if more than one rate is specified on
Telerate Page 3750 (or any successor page), the applicable rate shall be
the arithmetic mean of all such rates (ii) if such rate is not reported,
then the applicable rate shall be as determined by the Agent from another
recognized source or interbank quotation, and provided, further, LIBOR shall be
increased by any then applicable or subsequently imposed Eurocurrency liability
reserve requirement imposed by the Board of Governors of the Federal
Reserve.  The “Adjusted LIBOR Rate” is the rate of interest equal to the sum
of LIBOR then in effect, plus the Applicable Percentage for Eurodollar Loans  set forth in Section 10.4(a).

 

(d)           “Interest Period” is, as to any Eurodollar Loan, the period
commencing on the date of the borrowing (including extensions and conversions
thereof) and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is
one (1), two (2), three (3) or six (6) months thereafter, as Borrower
may elect; provided, however, that if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and provided, further, that no Interest Period
shall extend beyond the end of the Working Capital Line Contract Period or Cap
Ex Line Contract Period, as applicable, then in effect.  Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period.

 

3.2           Principal Payments.

 

(a)           The outstanding principal balance under the
Working Capital Line, together with all accrued and unpaid interest thereon and
all other sums due in connection therewith shall be due and payable, in full,
on the last day of the Working Capital Line Contract Period.

 

(b)           The outstanding principal balance of each
advance under the Cap Ex Line shall be repaid in sixty (60) equal and
consecutive monthly installments, each in an amount equal to the original
principal amount of such advance divided by sixty (60), with the first such
payment due

 

8

 

 

on
the first day of the first calendar month after the date of such advance and
subsequent payments due on the first day of each calendar month thereafter.

 

(c)           Notwithstanding anything in this Agreement or
any of the other Loan Documents to the contrary, in the event the Working
Capital Line is terminated as the result of an Event of Default, expiration
(without renewal) of the Working Capital Line Contract Period, or otherwise,
the outstanding principal balance of the Working Capital Line and the Cap Ex
Line, together with all accrued and unpaid interest thereon, all other sums due
in connection therewith, and all other sums due hereunder shall be immediately
due and payable in full.

 

3.3           Cap Ex Line Fee.  As a
condition to and contemporaneously with each advance under the Cap Ex Line,
Borrower shall pay to Agent, for the benefit of Cap Ex Line Lenders, a fee in
an amount equal to one-half of one percent (.50%) of the amount of each such
advance.

 

3.4           Closing Fees.  On
the date of closing hereunder, Borrower shall pay to Agent, for the benefit of
Lenders on a pro rata basis, a fee in the amount of Thirty-Seven Thousand Five
Hundred Dollars ($37,500.00).

 

3.5           Unused Line Fee. 
Borrower shall pay Agent, for the benefit of the Lenders, quarterly in
arrears, within five (5) days of Borrower’s receipt of an invoice for such
fee from Agent, an Unused Line Fee for each calendar quarter during the Working
Capital Contract Period at the rate per annum set forth in Section 10.4(b), calculated on a
daily basis upon the amount, if any, by which (a) the Maximum Non-Seasonal
Working Capital Line Amount or the Maximum Seasonal Working Capital Line Amount
(as applicable for each day during such quarter) exceeds (b) the sum of
the average outstanding daily principal balance during the preceding calendar
quarter of all Revolving Loans and any Letters of Credit under Working Capital
Line of the Working Capital Line.

 

3.6           Termination of Loans and
Termination Fee.  Subject to the provisions of Section 3.12 below, Borrower may
terminate the Working Capital Line or the Cap Ex Line and prepay any Loans upon
not less than thirty (30) days’ written notice to Agent.  Once a notice of intention to terminate
and/or prepay is delivered, such notice shall be irrevocable.  In the event Agent exercises its right to
accelerate payments under the Loans following an Event of Default, any tender
of payment of the amount necessary to repay all or part of the Eurodollar Loans
or the Fixed Rate Loans made thereafter at any time by Borrower, its successors
or assigns or by anyone on behalf of Borrower and any receipt by Agent of
proceeds of Collateral in payment of the Loans shall be deemed to be a
voluntary prepayment and, in connection therewith, Agent shall be entitled to
receive the premium required to be paid under Section 3.12  below.

 

3.7           Charges to Loan Account.  At
Agent’s option, all payments of principal, interest, fees, costs, expenses and
other charges provided for in this Agreement or in any other agreement now or
hereafter existing between Agent or any Lender, and Borrower, may be charged on
the date when due, as Loans under the Working Capital Line.  Interest, fees for Letters of Credit, the
Unused Line Fee, any Cap Ex Line fee and any other amounts payable by Borrower
to Agent based on a per annum rate shall be calculated on the basis of actual
days elapsed over a 360-day year.

 

3.8           Taxes and Additional Costs.

 

(a)           “Taxes; “Netting Up.”  All payments under this Agreement, under the
Notes (including, without limitation, payments of principal and interest) and
under any other instruments,

 

9

 

agreements
or documents relating hereto or thereto shall be payable to Agent free and
clear of any and all future taxes, levies, imposts, duties, deductions,
withholdings, fees and similar charges (the “Taxes”).  If any Taxes are required to be withheld or
deducted from any amount payable under this Agreement, the Notes or such other
instruments, agreements or documents, the amount payable under the Agreement,
the Notes or such other instruments, agreements or documents will be increased
to the amount which, after deduction from such increased amount of all Taxes
required to be withheld or deducted therefrom, will yield to Agent the amount
stated to be payable under this Agreement, the Notes or such other instruments,
agreements or documents.  Borrower will
execute and deliver to Agent at its request such further instruments as may be
necessary to give full force and effect to any such increase.  If any of the Taxes specified in this Section are
paid by Agent or Lenders, Borrower will, upon demand of Agent, immediately
reimburse Agent or the applicable Lender for such payments, whether or not such
Taxes are correctly or properly asserted. 
Nothing contained herein shall apply to taxes measured by the overall
net income of Agent or Lenders.  If
either party hereto shall receive actual notice that any payment must be
adjusted pursuant to this subsection, it shall give written notice to the other
party with reasonable promptness.

 

(b)           Additional Costs.  In
the event that any applicable law or regulation, or the interpretation thereof
by any governmental authority charged with the administration thereof,
hereafter subjects Agent or any Lender to any tax of any kind whatsoever, whether
foreign or domestic, with respect to this Agreement, the Notes or any other
instruments, agreements or documents relating hereto or thereto, or imposes,
modifies or deems applicable any reserve requirement against assets held by or
deposits in or for the account of, or loans by, Agent or any Lender or imposes
on Agent, or any Lender directly or indirectly, any other charges or conditions
affecting this Agreement, the Notes or any other instruments, agreements or
documents relating hereto or thereto, or in the event Agent or any Lender is
subject to any change in its capital adequacy requirements with respect to
loans such as the Loans or other extensions of credit such as the Letters of
Credit, and the result of any of the foregoing is to materially increase the
cost to Agent or any Lender of maintaining the Working Capital Line or the Cap
Ex Line, then Borrower will pay to Agent the additional amount or amounts
specified in writing to Borrower by Agent to be necessary to compensate Agent
or Lenders for such additional cost.

 

(c)           Repayment of Tax.  If
any withholding tax paid by Borrower pursuant to this section shall be
reimbursed to Agent or Lenders by any taxing authority, Agent or the applicable
Lender shall repay such amount with reasonable promptness to Borrower.

 

3.9           Evidence of Amounts
Outstanding, Etc.  Agent shall enter in its internal records the
date and amount of each Loan and Letter of Credit made or issued by Agent, any
Lender or Issuing Bank to Borrower hereunder, and the date and amount of each
repayment of principal and interest. 
Entries made in such internal records reflecting said information as to
the Loans and Letters of Credit shall, absent manifest error, constitute prima
facie evidence of the transactions represented by such entries; provided,
however, that the failure by Agent to make an entry in such records shall not
limit or otherwise affect the obligation of Borrower hereunder to repay the
Obligations, including, without limitation, the principal amount thereof and
interest accrued thereon.

 

3.10         Eurodollar Deposits
Unavailable or Interest Rate Unascertainable.  In
the event that, prior to any Interest Period of a Eurodollar Loan, Agent shall
have determined (which determination shall be conclusive and binding on the
parties hereto) that deposits of the necessary amount for the relevant Interest
Period are not available to Lenders in the interbank Eurodollar market or that,
by reason of circumstances affecting such market, adequate and reasonable means
do 

 

10

 

not
exist for ascertaining LIBOR applicable to such Interest Period, Agent shall
promptly give notice of such determination to Borrower, and Lenders shall not
be obligated to make, or extend, a Eurodollar Loan to Borrower.  In such event, other than as specified below,
all Loans shall be made as, or converted to, Base Rate Loans.  Notwithstanding the foregoing, if any portion
of a Loan is subject to a swap agreement (as defined in 11 U.S.C. § 101)
with any Lender or any affiliate of any Lender pursuant to which the Borrower
is to make its payments based on a fixed rate and such Lender (or such
affiliate of such Lender) is to make its payments based on a rate determined by
reference to LIBOR, as applicable, then that portion of the Loan shall be made
as, or converted to, a rate equal to the sum of (i) the fallback floating
rate payable by such Lender that is in effect under the applicable swap
agreement for that day (without regard to any interest rate spread added
thereto under the terms of such swap agreement) plus (ii) the Applicable
Percentage for Eurodollar Loans set forth in Section 10.4(a),
as applicable.

 

3.11         Changes in Law Rendering
Eurodollar Loans Unlawful.  If at any time due to any new law, treaty or
regulation, or any interpretation thereof by any governmental or other
regulatory authority charged with the administration thereof, or for any other
reason arising subsequent to the date hereof, it shall become unlawful for
Lenders to fund a Eurodollar Loan, the obligation of Lenders to provide a
Eurodollar Loan shall, upon the happening of such event, forthwith be suspended
for the duration of such illegality.  In
the event of such a change occurring, Agent shall notify Borrower thereof in
writing stating the reasons therefor, and Borrower shall, on the earlier of (a) the
last day of the then current Interest Period with respect to Eurodollar Loans
or (b) if required by such law, regulation or interpretation, on such date
as shall be specified in such notice, repay or prepay (as applicable) any
outstanding Eurodollar Loan to Agent in full or convert such Eurodollar Loan to
a Base Rate Loan.

 

3.12         Funding Indemnity;
Prepayment Fee.

 

(a)           Borrower promises to indemnify Agent and
Lenders and to hold Agent and Lenders harmless from any loss or expense which
Agent or any Lender may sustain or incur (other than through Agent’s or Lenders’
gross negligence or willful misconduct) as a consequence of (i) default by
Borrower in making a borrowing of, conversion into or extension of Eurodollar
Loans after Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (ii) default by Borrower in making any
prepayment of a Eurodollar Loan after Borrower has given a notice thereof in
accordance with the provisions of this Agreement, and (iii) the making of
a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. 
With respect to Eurodollar Loans, such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to
borrow, convert or extend to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or extend, the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for herein over (ii) the
amount of interest (as reasonably determined by Agent) which would have accrued
to Lenders on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market.  This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.

 

(b)           Upon the making of any prepayment of all or
any portion of any Fixed Rate Loan, Borrower shall pay to Agent, for the
benefit of Cap Ex Line Lenders, together with any such prepayment, the positive
amount, if any, equal to the difference between (i) the total interest 

 

11

 

payments
Cap Ex Line Lenders would have received pursuant to the terms and conditions
hereof on such prepaid amount if such prepayment had not occurred, minus (ii) the
amount Cap Ex Line Lenders could receive on the applicable Alternative
Investment.

 

As
used herein, the following terms shall have the following meanings:

 

“Alternative Investment” shall mean, for each prepayment of all or
any portion of a Fixed Rate Loan, a hypothetical investment of the principal
amount being prepaid, bearing interest at a rate per annum which is equal to
the Treasury Rate, with a term equal to the period commencing on the date of
such prepayment and ending on the date the Fixed Rate Loan in respect of which
such prepayment was made would have matured pursuant to the terms and
conditions of this Agreement (without giving effect to any acceleration
resulting from an Event of Default).

 

“Treasury Rate” shall mean the average coupon-equivalent yield that Lenders could
obtain by purchasing United States Treasury securities on or about the date of
the applicable principal prepayment, in an amount approximately equal to the
principal amount being prepaid, and maturing on or about the date on which the
Fixed Rate Loan in respect of which such prepayment was made would have would
have matured pursuant to the terms and conditions of this Agreement (without
giving effect to any acceleration resulting from an Event of Default).  Agent shall use standard yield interpretation
methods if no such securities mature on or about such date.

 

3.13         Extensions and Conversions. 
Subject to the terms and conditions contained herein, Borrower shall
have the option, on any Business Day, to extend existing Eurodollar Loans into
a subsequent permissible Interest Period, to convert Base Rate Loans into
Eurodollar Loans, or to convert Eurodollar Loans into Base Rate Loans; provided,
however, that (a) except as provided in Section 3.10 or 3.11, Eurodollar Loans may be
converted into Base Loans only on the last day of the Interest Period
applicable thereto, (b) Eurodollar Loans may be extended, and Base Loans
may be converted into Eurodollar Loans, only if no Event of Default or any
event which constitutes or would, with the giving of notice or lapse of time or
both, constitute an Event of Default, is in existence on the date of extension
or conversion, and (c) Loans extended as, or converted into, Eurodollar
Loans shall be subject to the terms of the definition of “Interest Period” and
shall be in such minimum amounts as provided in Section 2.6. 
Each such extension or conversion shall be effected by Borrower by
giving a written notice (or telephone notice promptly confirmed in writing) to
Agent prior to 10:00 a.m., Eastern time, on the Business Day of, in the
case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the
second Business Day prior to, in the case of the extension of a Eurodollar Loan
as, or conversion of a Base Rate Loan, into a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans
into which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. 
Each request for extension or conversion shall constitute a
representation and warranty by Borrower of the matters specified in Section 6 hereof.  In the event Borrower fails to request
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such conversion or extension is not permitted or required by this
Section, then such Loan shall be automatically converted into a Base Rate Loan
at the end of the Interest Period applicable thereto.

 

12

 

SECTION 4.         GRANT
OF SECURITY INTEREST

 

4.1           Grant of Security Interest.  To
secure the payment and performance in full of all Obligations, Borrower grants
to Agent, for the benefit of Lenders, as provided for herein, a continuing
security interest in and lien upon and a right of setoff against, and Borrower
hereby assigns and pledges to Agent, for the benefit of Lenders, as provided
for herein, all of the Collateral, including any Collateral not deemed eligible
for lending purposes.

 

4.2           Obligations.  “Obligations” shall mean any and all Loans, reimbursement
and other payment obligations under or in connection with the Letters of Credit
and all other indebtedness, liabilities and obligations of every kind, nature
and description owing by Borrower to Agent any Lender or Issuing Bank and/or
any of their affiliates, including principal, interest, charges, fees, expenses,
and other L/C Obligations, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether arising under this Agreement or
otherwise whether now existing or hereafter arising, whether arising before,
during or after the Working Capital Line Contract Period, the Cap Ex Line
Contract Period or after the commencement of any case with respect to Borrower
under the United States Bankruptcy Code or any similar statute, whether direct
or indirect, absolute or contingent, joint or several, due or not due, primary
or secondary, liquidated or unliquidated, secured or unsecured, contractual,
tortious, original, renewed or extended and whether arising directly or
howsoever acquired by Agent, any Lender or Issuing Bank including from any other
entity outright, conditionally or as collateral security, by assignment, merger
with any other entity, participations or interests of Agent, any Lender or
Issuing Bank in the obligations of Borrower to others, assumption, operation of
law, subrogation or otherwise and shall also include any existing and future
obligations under or in connection with any Hedging Agreements with Agent, any
Lender or Issuing Bank, any affiliate of Agent, any Lender or Issuing Bank or
any financial institution participating with Agent any Lender or Issuing Bank
in respect of this Agreement, and all amounts chargeable to Borrower under this
Agreement or in connection with any of the foregoing.  Notwithstanding anything in this Section 4.2 to the contrary, an
Obligation of Borrower which was acquired by Agent, any Lender or Issuing Bank
or an affiliate of Agent, any Lender or Issuing Bank from a third party and
which was unsecured at the time of such acquisition shall not be secured by the
Collateral unless otherwise expressly agreed to by Borrower.

 

4.3           Collateral.  “Collateral” shall mean all now owned or
hereafter acquired personal property of Borrower described in this Section 4.3, together with the
items described in Section 4.4
and any other property hereafter pledged as security for any of the
Obligations.

 

(a)           All now owned and hereafter acquired right,
title and interest of Borrower in, to and in respect of all: accounts
(including health care insurance receivables), interest in goods represented by
accounts, returned, reclaimed or repossessed goods with respect thereto and
rights as an unpaid vendor; contract rights; chattel paper; general intangibles
(including, but not limited to payment intangibles, tax and duty refunds,
registered and unregistered patents, trademarks, service marks, copyrights,
trade names, applications for the foregoing, trade secrets, goodwill,
processes, drawings, blueprints, customer lists, licenses, whether as licensor
or licensee, choses in action and other claims, existing and future leasehold interests
in equipment and fixtures and goodwill); stock and other ownership interests in
subsidiaries and other entities; documents (including bills of lading,
warehouse receipts and other documents of title); instruments; investment
property and financial assets of every kind; insurance policies (including,
without limitation, the cash surrender value of all life insurance policies);
letters of credit, bankers’ acceptances, guaranties and letter of credit
rights, and all supporting obligations and rights to receive payment
thereunder; cash monies, deposits,

 

13

 

securities,
bank accounts, deposit accounts, reserves and credits; all property now or
hereafter held in any capacity by Agent or Lenders, any of their affiliates or
any entity which, at any time, participates in Agent’s or any Lender’s
financing of Borrower or at any other depository or other institution;
agreements or property securing or relating to any of the items referred to
above; all commercial tort claims of Borrower based on or arising in connection
with any of the matters described on Schedule
4.3(a), and all judgments, orders and awards issued in
connection therewith;

 

(b)           All now owned and hereafter acquired right,
title and interest of Borrower in, to and in respect of all goods of Borrower
including, without limitation, all (i) inventory, wherever located,
whether now owned or hereafter acquired, of whatever kind, nature or
description, including, without limitation, all raw materials, work-in-process,
finished goods, and materials to be used or consumed in Borrower’s business;
all returned or repossessed goods and all names or marks affixed to or to be
affixed thereto for purposes of selling same by the seller, manufacturer,
lessor or licensor thereof and (ii) equipment and fixtures wherever
located, whether now owned or hereafter acquired, including, without
limitation, all machinery, motor vehicles, and furniture and any and all
additions, substitutions, replacements (including spare parts) and accessions
thereof and thereto;

 

(c)           Without in any way limiting the generality of
any of the foregoing, all now owned or hereafter acquired right, title and
interest of Borrower in, to and in respect of all (i) margin deposits and
accounts maintained by Borrower with any party (including, without limitation,
all Approved Margin Deposits); (ii) Futures Contracts; (iii) delivery
contracts with Borrower’s customers; and (iv) Borrower’s customer list;

 

(d)           All now owned and hereafter acquired right,
title and interests of Borrower in, to and in respect of any personal property
in or upon which Agent or any Lender has or may hereafter have a security
interest, lien or right of setoff;

 

(e)           All present and future books and records
relating to any of the above including, without limitation, all computer
programs, printed output and computer readable data in the possession or
control of Borrower, any computer service bureau or other third party; and

 

(f)            All products and proceeds of the foregoing in
whatever form and wherever located, including, without limitation, all
insurance proceeds and all claims against third parties for loss or destruction
of or damage to any of the foregoing.

 

Without
in any way limiting the generality of the foregoing, (a) in no event will
any existing or future Hedging Agreements with Agent or any Lender, any
affiliate of Agent or any Lender or any participant with Agent or any Lender in
respect of this Agreement be deemed Collateral; and (b) notwithstanding
the foregoing grant of a security interest, (i) no account, instrument,
chattel paper or other obligation or property of any kind due from, owed by, or
belonging to, a Sanctioned Person or (ii) any lease in which the lessee is
a Sanctioned Person shall be Collateral.

 

Lender
may reject or refuse to accept any Collateral for credit toward payment of the
Obligations that is an account, instrument, chattel paper, lease, or other
obligation or property of any kind due from, owed by, or belonging to, a
Sanctioned Person.

 

14

 

SECTION 5.         COLLECTION AND ADMINISTRATION

 

5.1           Collections.  At
Agent’s request after the occurrence of an Event of Default, Borrower shall, at
Borrower’s expense and in the manner requested by Agent from time to time,
direct that remittances and all other proceeds of accounts and other Collateral
shall be sent to a lock box designated by and maintained with Agent, and
deposited into a bank account now or hereafter selected by Agent and maintained
in the name of Agent under arrangements with the depository bank under which
all funds deposited to such bank account are required to be transferred solely
to Agent.  Borrower shall bear all risk
of loss of any funds deposited into such account.  In connection therewith, Borrower shall
execute such lock box and bank account agreements as Agent shall specify.  Any collections or other proceeds received by
Borrower at any time shall be held in trust for Agent and Lenders and
immediately remitted to Agent in kind.

 

5.2           Payments.  All
Obligations shall be payable by 2:00 p.m., Eastern Standard time, on the
date such Obligations are due, at Agent’s office set forth in Section 10.3(a) below or at
such other place as Agent may expressly designate from time to time for
purposes of this Section.  Agent shall
apply all proceeds of accounts or other Collateral received by Agent and all
other payments in respect of the Obligations to the Loans in whatever order or
manner Required Lenders shall determine.

 

5.3           Loan Account Statements.  Agent
shall render to Borrower monthly a loan account statement.  Each such statement shall be considered
correct and binding upon Borrower, except to the extent that Agent receives,
within sixty (60) days after the mailing of such statement, written notice from
Borrower of any specific exceptions by Borrower to that statement.

 

5.4           Direct Collection.  Agent
may, at any time, without notice to or assent of Borrower, (a) after the
occurrence of an Event of Default, notify any account debtor that the accounts
and other Collateral which includes a monetary obligation have been assigned to
Agent by Borrower and that payment thereof is to be made to the order of and
directly to Agent, (b) send, or cause to be sent by its designee, requests
(which may identify the sender by a pseudonym) for verification of accounts and
other Collateral directly to any account debtor or any other obligor or any
bailee with respect thereto, and (c) after the occurrence of an Event of
Default, demand, collect or enforce payment of any accounts or such other
Collateral, but without any duty to do so, and Agent shall not be liable for
any failure to collect or enforce payment thereof.  After the occurrence of an Event of Default,
at Agent’s request, all invoices and statements sent to any account debtor,
other obligor or bailee, shall state that the accounts and such other
Collateral have been assigned to Agent, for the benefit of Lenders as provided
herein, and are payable directly and only to Agent.

 

5.5           Attorney-in-Fact. 
Borrower hereby appoints Agent and any designee of Agent as Borrower’s
attorney-in-fact and authorizes Agent or such designee, at Borrower’s sole
expense, to exercise at any time in Agent’s or such designee’s discretion all
or any of the following powers, which powers of attorney, being coupled with an
interest, shall be irrevocable until all Obligations have been paid in
full:  (a) after the occurrence of
an Event of Default, receive, take, endorse, assign, deliver, accept and
deposit, in the name of Agent for the benefit of the Lenders or Borrower, any
and all cash, checks, commercial paper, drafts, remittances and other
instruments and documents relating to the Collateral or the proceeds thereof, (b) after
the occurrence of an Event of Default, transmit to account debtors, other
obligors or any bailees notice of the interest of Agent for the benefit of
Lenders and Lenders in the Collateral or request from account debtors or such
other obligors or bailees at any time, in the name of Borrower or Agent or any
designee of Agent, information

 

15

 

concerning
the Collateral and any amounts owing with respect thereto, (c) after the
occurrence of an Event of Default, notify account debtors or other obligors to
make payment directly to Agent for the benefit of Lenders, or notify bailees as
to the disposition of Collateral, (d) after the occurrence of an Event of
Default, take or bring, in the name of Agent or Borrower, all steps, actions,
suits or proceedings deemed by Agent necessary or desirable to effect
collection of or other realization upon the accounts and other Collateral, (e) after
an Event of Default, change the address for delivery of mail to Borrower and
receive and open mail addressed to Borrower, (f) after an Event of
Default, extend the time of payment of, compromise or settle for cash, credit,
return of merchandise, and upon any terms or conditions, any and all accounts
or other Collateral which includes a monetary obligation and discharge or
release the account debtor or other obligor, without affecting any of the
Obligations, and (g) at all times execute in the name of Borrower and file
against Borrower in favor of Agent for the benefit of Lenders financing
statements or amendments with respect to the Collateral.

 

5.6           Liability. 
Borrower hereby releases and exculpates Agent, Lenders and Issuing Bank,
each of their, its officers, employees and designees, from any liability
arising from any acts under this Agreement or in furtherance thereof, whether
as attorney-in-fact or otherwise, whether of omission or commission, and
whether based upon any error of judgment or mistake of law or fact, except for
willful misconduct or gross negligence. 
In no event will Agent, Lenders or Issuing Bank have any liability to
Borrower for lost profits or other special or consequential damages.

 

5.7           Administration of Accounts.  From
and after the occurrence of an Event of Default, Borrower shall not, without
the prior written consent of Agent in each instance, (a) grant any
extension of time of payment of any of the accounts or any other Collateral
which includes a monetary obligation, (b) compromise or settle any of the
accounts or any such other Collateral for less than the full amount thereof, (c) release
in whole or in part any account debtor or other person liable for the payment
of any of the accounts or any such other Collateral, or (d) grant any
credits, discounts, allowances, deductions, return authorizations or the like
with respect to any of the accounts or any such other Collateral, other than
customary items in the ordinary course of business.

 

5.8           Documents.  At
such times as Agent may request after the occurrence of an Event of Default and
in the manner specified by Agent, Borrower shall deliver to Agent or Agent’s
representative, as Agent shall designate, or to any Lender copies or original
invoices, agreements, proofs of rendition of services and delivery of goods and
other documents evidencing or relating to the transactions which gave rise to
accounts or other Collateral, together with customer statements, schedules describing
the accounts or other Collateral and/or statements of account and confirmatory
assignments to Agent of the accounts or other Collateral, in form and substance
satisfactory to Agent and duly executed by Borrower.  Borrower’s granting of (a) material
credits, discounts, allowances, deductions, return authorizations or the like,
if no Event of Default should have occurred, and (b) any credits,
discounts, allowances, deductions, return authorizations or the like, if an
Event of Default shall have occurred, will be promptly reported to Agent in
writing.  In no event shall any such
schedule or confirmatory assignment (or the absence thereof or omission of any
of the accounts or other Collateral therefrom) limit or in any way be construed
as a waiver, limitation or modification of the security interests or rights of
Agent and Lenders or the warranties, representations and covenants of Borrower
under this Agreement.  To the extent
permitted by law, any documents, schedules, invoices or other paper delivered
to Agent or Lenders by Borrower may be destroyed or otherwise disposed of by
Agent and Lenders six months after receipt by Agent or Lenders, unless Borrower
requests their return in writing in advance and makes prior arrangements for
their return at Borrower’s expense.

 

16

 

5.9           Access.  From
time to time after the occurrence of an Event of Default and otherwise as
reasonably requested by Agent or any Lender, at the sole expense of Borrower,
Agent or its designee or any Lender shall have access, prior to an Event of
Default during reasonable business hours and on or after an Event of Default at
any time, to all of the premises where Collateral is located for the purposes
of conducting audits, inspecting the Collateral and all Borrower’s books and
records, and Borrower shall permit Agent or its designee to make such copies of
such books and records or extracts therefrom as Agent may request.  Without expense to Agent, Agent may use such
of Borrower’s personnel, equipment, including computer equipment, programs,
printed output and computer readable media, supplies and premises for the
collection of accounts and realization on other Collateral as Agent, in its
sole discretion, deems appropriate. 
Borrower hereby irrevocably authorizes all accountants and third parties
to disclose and deliver to Agent and Lenders at Borrower’s expense all
financial information, books and records, work papers, management reports and
other information in their possession regarding Borrower.

 

5.10         Environmental Audits.  From
time to time, as requested by Agent, at the sole expense of Borrower, after the
occurrence of an Event of Default or if Agent has a good faith belief that
Borrower has failed to comply with any applicable Environmental Requirements,
Borrower shall provide Agent, or its designee, complete access to all of
Borrower’s facilities for the purpose of conducting an environmental audit of
such facilities as Agent or its designees may deem necessary.  Borrower agrees to cooperate with Agent with
respect to any environmental audit conducted by Agent or its designee pursuant
to this Section 5.10.

 

SECTION 6.         ADDITIONAL
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Borrower
hereby represents, warrants and covenants the following, the truth and accuracy
of which (with such amendments to schedules hereto as appropriate), and
compliance with which, shall be continuing conditions of the making of any
Loans by Lenders or issuance by Issuing Bank of any Letters of Credit to
Borrower:

 

6.1           Incorporation, Good
Standing, and Due Qualification.  Borrower is a corporation duly incorporated,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its assets and
transact the business in which it is now engaged or proposed to be engaged, and
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which the failure to be so qualified could
reasonably be expected to have a material adverse effect on the business,
operations or financial condition of Borrower, on the Collateral or on the
enforceability or availability of rights and remedies of Agent or Lenders
hereunder.

 

6.2           Ownership; Power and
Authority.

 

(a)           The ownership of all stock, debentures,
options, warrants, bonds and other securities (debt and equity) of Borrower and
all pledges, proxies, voting trusts, powers of attorney and other agreements
affecting the ownership or voting rights of said interests is as set forth on Schedule 6.2  attached hereto.

 

(b)           The execution, delivery, and performance by
Borrower of this Agreement have been duly authorized by all necessary corporate
or other action and do not and will not (a) require any consent or
approval of any stockholders; (b) contravene such corporation’s charter or
bylaws; (c) violate any provision of any law, rule, regulation (including,
without limitation,

 

17

 

Regulations
T, U and X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination, or award presently in effect
having applicability to Borrower; (d) result in a breach of or constitute
a default under any indenture, loan, or credit agreement, or any other
agreement, lease, or instrument to which Borrower is a party or by which
Borrower or its properties may be bound or affected; (e) result in, or
require, the creation or imposition of any lien upon or with respect to any of
the properties now owned or hereafter acquired by Borrower; or (f) cause
Borrower to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award or any such indenture,
agreement, lease, or instrument.

 

6.3           Legally Enforceable
Agreement.  This Agreement constitutes the legal, valid,
and binding obligations of Borrower, and is enforceable in accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditors’ rights
generally.

 

6.4           Closing Financial Statements.  The
financial statements of Borrower as of June 30, 2004, as of and for such
fiscal period, copies of which have been furnished to Agent and Lenders, are
complete and correct and fairly present the financial condition of Borrower and
its subsidiaries as at such date and the results of the operations of Borrower
and its subsidiaries for the period covered by such statements all in
accordance with GAAP consistently applied, and since the date of these
statements, there has been no material adverse change in the condition
(financial or otherwise), business, properties, operations or prospects of
Borrower or any of its subsidiaries, respectively.  There are no liabilities of Borrower or any
of its subsidiaries, fixed or contingent, which are material but are not
reflected in the financial statements or in the notes thereto, other than
liabilities arising in the ordinary course of business since the date of these
statements.  No written information,
exhibit, or report furnished, or written 
statement made, by Borrower or any of its subsidiaries to Agent or any
Lender in connection with the negotiation of this Agreement contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained herein or therein not materially
misleading.  No Event of Default or event
which constitutes, or would, with the giving of notice or lapse of time or
both, constitute an Event of Default has occurred and is continuing.

 

6.5           Labor Disputes and Acts of
God. 
Neither the business nor the properties of Borrower or any of its
subsidiaries are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy, or other casualty (whether or not covered by insurance)
materially and adversely affecting such business or properties or the operation
of Borrower or any of its subsidiaries.

 

6.6           Other Agreements.  Neither Borrower nor any of its subsidiaries
is a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction which could have a material adverse effect on the condition
(financial or otherwise), business, properties, operations or prospects of
Borrower or any of its subsidiaries, or the ability of Borrower to perform its
obligations under this Agreement. 
Neither Borrower nor any of its subsidiaries is in default in any
respect of the performance, observance, or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.

 

6.7           Litigation. 
Except as described on Schedule 6.7
hereto, there is no pending or threatened action or proceeding against or
affecting Borrower or any subsidiaries of Borrower before

 

18

 

any
court, governmental agency, or arbitrator, which may, in any one case or in the
aggregate, materially and adversely affect the condition (financial or
otherwise), business, properties, operations or prospects of Borrower or any of
its subsidiaries or the ability of Borrower to perform its obligations under
this Agreement.

 

6.8           No Defaults on Outstanding
Judgments or Orders.  Borrower and its subsidiaries have satisfied
all judgments and none of them is in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board,
bureau, agency, or instrumentality, domestic or foreign.

 

6.9           Margin Stock. 
Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of the Loans will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.

 

6.10         Financial and Other Reports.  Each
of Borrower and its subsidiaries shall keep and maintain its books and records
in accordance with generally accepted accounting principles (“GAAP”), consistently applied and
maintained; provided that, interim financial statements delivered by Borrower
to Agent in accordance with Section 6(b) below
shall be prepared in accordance with GAAP, except for the effects of Financial
Accounting Standard No. 133.

 

(a)           Annually, Borrower shall deliver to Agent and
Lenders (i) as soon as available, but in no event later than one hundred
twenty (120) days after the end of Borrower’s fiscal year, audited consolidated
financial statements of Borrower, including balance sheets, statements of
operations and retained earnings and statements of cash flows for such year
setting forth in comparative form the corresponding figures for the preceding
year, accompanied by the report and unqualified opinion thereon of independent
certified public accountants acceptable to Agent (the “Accountants”), and (ii) no later than
thirty (30) days prior to the beginning of each fiscal year, operating and
capital expenditure budgets for the next fiscal year.  All of the foregoing shall be in such form,
and shall be accompanied by such information with respect to the business of
Borrower or its subsidiaries, as Agent may request from time to time.

 

(b)           Borrower shall, at its expense and within
forty-five (45) days following the end of each fiscal quarter, deliver to Agent
and Lenders internally prepared interim financial statements, including a
balance sheet and income statement and statements of operations and of cash
flows for such fiscal quarter, all in form acceptable to Agent and in each case
setting forth (i) in comparative form figures for the corresponding
calendar month and year-to-date period of the preceding fiscal year and (ii) year-to-date
figures, in each case together with a Compliance Certificate in the form of Schedule 6.10(b) hereto.

 

(c)           Borrower shall, at its expense and within
thirty (30) days following the end of each calendar month, deliver to Agent and
Lenders internally prepared interim financial statements, as generated by
Borrower’s internal accounting system, for such calendar month.

 

(d)           During each Seasonal Period, Borrower shall,
at its expense, on or before the thirtieth (30th) day of each month (or more
frequently if required by Agent), deliver to Agent and Lenders, in form
acceptable to Agent,  true and complete
monthly agings of its accounts receivable and accounts payable.

 

19

 

(e)           Borrower shall, on a monthly basis, promptly
upon receipt thereof, deliver to Agent and Lenders a copy of the last page of
the Calyon Futures report, a copy of the last page of the Citigroup report
and a copy of the internal New York Mercantile Exchange (or any other exchange
as may be applicable) position report, and such similar information as may be
delivered to Borrower from time to time in connection with any other Derivatives
Contract.

 

(f)            During each Seasonal Period, Borrower shall
deliver to Agent and Lenders within ten (10) days after the end of each
calendar month (or more frequently if required by Agent) a borrowing base
certificate in substantially the form of Schedule
C hereto duly completed and certified by Borrower’s chief
financial officer or chief executive officer, detailing Borrower’s Eligible
Receivables and Eligible Inventory.

 

(g)           Borrower shall furnish to Agent or any Lender
any such other information respecting the condition or operations, financial or
otherwise, of Borrower or any of Borrower’s subsidiaries as Agent or any Lender
may from time to time reasonably request.

 

6.11         Trade Names. 
Borrower or any of its subsidiaries may from time to time render invoices
to account debtors under its trade names set forth in Section 10.3(d) after Agent
has received prior written notice from Borrower of the use of such trade names
and as to which, Borrower agrees that: (a) each trade name does not refer
to another corporation or other legal entity, (b) all accounts and
proceeds thereof (including any returned merchandise) invoiced under any such
trade names are owned exclusively by Borrower or one of its subsidiaries and
are subject to the security interest of Agent, for the benefit of the Lenders,
and the other terms of this Agreement, and (c) all schedules of accounts
and confirmatory assignments including any sales made or services rendered
using the trade name shall show Borrower’s or one of its subsidiaries’ name as
assignor and Agent is authorized, after the occurrence of an Event of Default,
to receive, endorse and deposit to any loan account of Borrower maintained by
Agent all checks or other remittances made payable to any trade name of
Borrower or any of its subsidiaries representing payment with respect to such
sales or services.

 

6.12         Notices. 
Borrower shall promptly notify Agent in writing of (a) any loss,
damage, investigation, action, suit, proceeding or claim relating to a material
portion of the Collateral or which may result in any material adverse change in
Borrower’s or any of its subsidiaries’ business, assets, liabilities or
condition, financial or otherwise; (b) the occurrence of any Default or
Event of Default; (c) any action or proceeding brought against Borrower
wherein such action or proceeding would, if determined adversely to Borrower
result in liability of Borrower in excess of Five Hundred Thousand Dollars
($500,000.00) for any individual action or proceeding or One Million Dollars
($1,000,000.00) in the aggregate for any two (2) or more actions or
proceedings; (d) the failure of Borrower to observe any of its
undertakings under the Loan Documents; or (e) any material adverse change
in the assets, business, operations or financial condition of Borrower.

 

6.13         Books and Records.  The
books and records of Borrower and its subsidiaries concerning accounts and its
chief executive office are and shall be maintained only at the address set
forth in Section 10.3(b).  The only other places of business and the
only other locations of Collateral, if any, of the Borrower and its
subsidiaries are and shall be the addresses set forth in Section 10.3 hereof, except Borrower
or any of its subsidiaries may change such location or open a new place of
business after thirty (30) days’ prior written notice from Borrower to
Agent.  Prior to any change in location
or opening of any new place of business, Borrower (or any of its subsidiaries,
as applicable) shall execute and deliver or cause to be executed and delivered
to Agent such financing statements,

 

20

 

Landlord
Waivers, financing documents and security and other agreements as Agent may
reasonably require.

 

6.14         Title; Lien Restrictions. 
Borrower and its subsidiaries (or such other persons, as applicable)
have and at all times will continue to have good and marketable title to all of
its and their respective properties, real and personal, including without
limitation, the Collateral, free and clear of all liens, security interests,
claims or encumbrances of any kind except in favor of Agent, for the benefit of
Lenders as provided for herein, and except, if any, those set forth on Schedule 6.14 hereto (collectively, “Permitted Liens”).  Neither Borrower nor any of its subsidiaries
shall mortgage, assign, pledge, transfer or otherwise permit any lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of their
respective assets or goods, whether real, personal or mixed, whether now owned
or hereafter acquired, except for Permitted Liens.  Nether Borrower nor any of its subsidiaries
shall enter into any agreement which shall: (i) prohibit Borrower or any
of its subsidiaries from granting, 
creating or suffering to exist, or otherwise restricting in any way
(whether by covenant, by identifying such event as a default under such
agreement or otherwise) the ability of Borrower or any of its subsidiaries to
grant, create or suffer to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of its assets in favor of Agent, for
the benefit of Lenders as provided for herein; or (ii) restrict or inhibit
Agent’s rights or ability to sell or otherwise dispose of any of the Collateral
or any part thereof after the occurrence of an Event of Default.

 

6.15         No Corporate Changes.  Each
of Borrower and its subsidiaries shall maintain its corporate existence and
shall maintain in full force and effect all material licenses, bonds,
franchises, leases, trademarks and qualifications to do business in the
jurisdictions in which it is required to do so by the nature and extent of its
activities in such jurisdictions. 
Neither Borrower nor any of its subsidiaries shall directly or
indirectly:  (a) except for a
Permitted Transaction, consolidate with or merge with or into any other entity,
or permit any other entity to consolidate with or merge with or into Borrower
or any of its subsidiaries, (b) except for a Permitted Transaction, form
or acquire any interest in any firm, corporation or other entity or (c) alter
or modify any of Borrower’s or any of its subsidiaries’ articles or certificate
of incorporation or any operating agreement, names, mailing addresses,
principal places of business, structure, status or existence or enter into or
engage in any business, operation or activity materially different from that
presently being conducted by Borrower and its subsidiaries.  With respect to any Permitted Transaction,
Borrower shall give Agent prior written notice of such Permitted Transaction,
together with such documents and information in connection therewith as Agent
shall reasonably require.

 

6.16         Insurance. 
Borrower and its subsidiaries shall at all times maintain, with financially
sound and reputable insurers, insurance (including, without limitation, at the
option of Agent in its reasonable discretion, earthquake and flood insurance)
with respect to the Collateral and other assets for the benefit of Agent and
Lenders.  All such insurance policies
shall be in such form, substance, amounts and coverage as may be satisfactory
to Agent and shall provide for thirty (30) days’ prior written notice to Agent
of cancellation or reduction of coverage. 
Borrower hereby irrevocably appoints Agent and any designee of Agent as
attorney-in-fact for Borrower and its subsidiaries to obtain at Borrower’s
expense, any such insurance should Borrower or any of its subsidiaries fail to
do so and, after an Event of Default, to adjust or settle any claim or other
matter under or arising pursuant to such insurance or to amend or cancel such
insurance.  Borrower shall deliver to
Agent evidence of all such insurance and a lender’s loss payable endorsement in
favor of the Agent, for the benefit of the Lenders, in form and substance
satisfactory to Agent as to all existing and future insurance policies with
respect to the Collateral.  Borrower
shall, and shall cause its subsidiaries to,

 

21

 

deliver
to Agent, for the benefit of the Lenders, in kind, all instruments representing
proceeds of insurance received by Borrower or any of its subsidiaries.  Agent may apply any insurance proceeds
received at any time to the cost of repairs to or replacement of any portion of
the Collateral and/or, at Agent’s option, to payment of or as security for any
of the Obligations, whether or not due, in any order or manner as the Required
Lenders determine.

 

Notwithstanding
the foregoing, in the event that Borrower suffers a casualty loss in an amount
not greater than One Million Dollars ($1,000,000.00) and desires to use the
proceeds of such casualty loss insurance to repair or replace damaged equipment
or inventory which was Collateral hereunder, Agent and Lenders will permit Borrower
to utilize the proceeds of such insurance solely to purchase such replacement
equipment and inventory or to repair such equipment, provided that no Default
or Event of Default has occurred.

 

6.17         Compliance With Laws.  Each
of Borrower and its subsidiaries is and at all times will continue to be in
compliance in all material respects with the requirements of all laws, rules,
regulations and orders of any governmental authority relating to its business
(including laws, rules, regulations and orders relating to taxes, payment and
withholding of payroll taxes, employer and employee contributions and similar
items, securities, employee retirement and welfare benefits, employee health
and safety, or environmental matters) and all material agreements or other
instruments binding on Borrower or any of its subsidiaries or their respective
property.  All of Borrower’s and its
subsidiaries’ inventory shall be produced in accordance with the requirements
of the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto. 
Each of Borrower and its subsidiaries has paid and discharged and shall
pay and discharge all taxes, assessments and governmental charges against it or
any Collateral prior to the date on which penalties are imposed or liens attach
with respect thereto, unless the same are being contested in good faith and, at
Agent’s option exercised in its reasonable discretion, reserves are established
for the amount contested and penalties which may accrue thereon.

 

6.18         Equipment.  With
respect to equipment of Borrower or any of its subsidiaries, Borrower (or such
subsidiary, as applicable) shall keep the equipment in good order and repair,
and in running and marketable condition, ordinary wear and tear excepted.

 

6.19         Affiliated and Other
Transactions.  Except as provided in Section 6.25 below, without the
prior written consent of Required Lenders, which consent shall not be
unreasonably withheld, neither Borrower nor any of its subsidiaries will,
directly or indirectly: (a) except in connection with a Permitted Loan,
lend or advance money or property to, guarantee or assume indebtedness of, or
invest (by capital contribution or otherwise) in any person, firm, corporation
or other entity; (b) declare, pay or make any redemption of, or purchase,
any shares of any class of stock of Borrower now or hereafter outstanding; (c) make
any payment of the principal amount of or interest on any indebtedness owing to
any officer, director, shareholder, or affiliate of Borrower, provided that
Borrower’s subsidiaries may make any payment of the principal amount of or
interest on any indebtedness owing to Borrower; or (d) enter into any
sale, lease or other transaction with any officer, director, employee,
shareholder or affiliate of Borrower or any of its subsidiaries on terms that
are less favorable to Borrower or any of its subsidiaries than those which
might be obtained at the time from persons who are not an officer, director,
employee, shareholder or affiliate of Borrower.

 

6.20         Fees and Expenses. 
Borrower shall pay, on Agent’s demand, all costs, expenses, filing fees
and taxes payable in connection with the preparation, execution, delivery,
recording,

 

22

 

administration,
collection, liquidation, enforcement and defense of the Obligations, Agent’s,
Lenders’ and Issuing Bank’s rights in the Collateral, this Agreement and all
other existing and future agreements or documents contemplated herein or
related hereto, including any amendments, waivers, supplements or consents
which may hereafter be made or entered into in respect hereof, or in any way
involving claims or defense asserted by Agent, any Lender or Issuing Bank or
claims or defense against Agent, any Lender or Issuing Bank asserted by
Borrower, any of its subsidiaries or any third party directly or indirectly
arising out of or related to the relationship between Borrower and Agent or any
Lender, including, but not limited to the following, whether incurred before,
during or after the expiration of the Working Capital Line Contract Period or
after the commencement of any case with respect to Borrower or any of its
subsidiaries or under the United States Bankruptcy Code or any similar
statute:  (a) all costs and expenses
of filing or recording (including Uniform Commercial Code financing statement
filing taxes and fees, documentary taxes, intangibles taxes and mortgage
recording taxes and fees, if applicable); (b) all title insurance and
other insurance premiums, appraisal fees, fees incurred in connection with any
environmental report, audit or survey and search fees; (c) all fees as
then in effect relating to the wire transfer of loan proceeds and other funds
and fees then in effect for returned checks and credit reports; (d) all
expenses and costs heretofore and from time to time hereafter incurred by
Agent, any Lender or Issuing Bank during the course of periodic field
examinations of the Collateral and Borrower’s and its subsidiaries’ operations
provided that prior to the occurrence of an Event of Default, such costs shall
be in an amount equal to the Field Examination Fee set forth in Section 10.4(c), plus such fees
and disbursements incurred as a result of litigation between the parties
hereto, any third party and in any appeals arising therefrom for Agent’s
examiners in the field and office; (e) all costs, fees, penalties or other
liabilities arising or incurred in connection with any litigation, claims,
judgments or suits (including, without limitation, environmental liabilities);
and (f) the costs, fees and disbursements of outside counsel to Agent
and/or any Lenders.

 

6.21         Further Assurances.  At
the request of Agent or any Lender, at any time and from time to time, at
Borrower’s sole expense, Borrower (and such other persons, as applicable) shall
execute and deliver or cause to be executed and delivered to Agent, such
agreements, documents and instruments, including, without limitation, waivers,
consents and subordination agreements from mortgagees or other holders of security
interests or liens, landlords or bailees and stock certificates and other
securities, instruments and chattel paper, endorsed as Agent may direct, with,
as appropriate, stock or other powers executed in blank, and do or cause to be
done such further acts as Agent, in its discretion, deems necessary or
desirable to create, preserve, perfect or validate any security interest of
Agent and Lenders or the priority thereof in the Collateral and otherwise to
effectuate the provisions and purposes of this Agreement.  Borrower hereby authorizes Agent to file
financing statements or amendments against Borrower or any of its subsidiaries
in favor of Agent, for the benefit of the Lenders, with respect to the
Collateral, without Borrower’s or any of its subsidiaries’ signatures and to
file as financing statements any carbon, photographic or other reproductions of
this Agreement or any financing statements signed by Borrower or any of its
subsidiaries.  Borrower shall promptly notify
Agent in writing of any trademarks, copyrights, patents, licenses or other
intellectual property that it or any of its subsidiaries acquires following the
date hereof.

 

6.22         Environmental Matters.

 

(a)           Except as described on Schedule 6.22(a) hereto, (i) none
of Borrower’s or any of its subsidiaries’ properties or assets has ever been
designated or identified in any manner pursuant to any Environmental
Requirement as a hazardous waste or hazardous substance disposal

 

23

 

site,
or a candidate for closure pursuant to any Environmental Requirement; (ii) no
lien arising under any Environmental Requirement has attached to any revenues
or to any real or personal property owned by Borrower or any of its
subsidiaries; (iii) neither Borrower nor any of its subsidiaries has
received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal or state governmental agency relating to
any action or omission by Borrower or any of its subsidiaries resulting in the
releasing, or otherwise exposing of hazardous waste or hazardous substances
into the environment; and (iv) each of Borrower and its subsidiaries is in
compliance (in all material respects) with all Environmental Requirements.

 

(b)           In the event Borrower becomes aware of any
past, present or future facts or circumstances which have given rise or could
give rise to a claim against Borrower related to a failure to comply with any
Environmental Requirements, Borrower will (i) promptly give Agent notice
thereof, together with a written statement of the chief financial officer of
Borrower setting forth the details thereof and the action with respect thereto
taken or proposed to be taken by Borrower and (ii) deliver to Agent
monthly reports (or more frequent reports if requested by Agent or any Lender)
regarding the status of the situation in respect of which such notice was sent,
which reports shall be in form and content satisfactory to Agent.

 

(c)           Borrower agrees to indemnify, defend and hold
harmless Agent, Lenders, their parents, subsidiaries, successors and assigns,
and any officer, director, shareholder, employee, affiliate or agent of Agent
or any Lender, for all loss, liability, damage, cost and expenses, including
without limitation, attorney’s fees and disbursements arising from or related
to (i) the release of any Special Materials at any facility at any time
owned, leased or operated by Borrower, (ii) the release of any Special
Materials treated, stored, transported, handled, generated or disposed of by or
on behalf of Borrower at any third party owned site, (iii) any claim
against Borrower that it has failed to comply with any Environmental
Requirement, and (iv) the breach by Borrower of any representation or
covenant in this Section 6.22.

 

(d)           The representations and covenants of Borrower
contained in this Section 6.22,
including without limitation the indemnification obligation of Borrower, shall
survive the occurrence of any event whatsoever, including the payment of the
Obligations or any investigation by or knowledge of Agent or any Lender.

 

(e)           For purposes of the foregoing:

 

(i)            “Environmental Requirements” means any and all applicable federal, state
or local laws, statutes, ordinances, regulations or standards, administrative
or court orders or decrees, common law doctrines or private agreements,
relating to (i) pollution or protection of the environment and natural
resources, (ii) exposure of employees or other persons to Special
Materials, (iii) protection of the public health and welfare from the
effects of Special Materials and their products, by-products, wastes,
emissions, discharges or releases, and (iv) regulation, licensing,
approval or authorization of the manufacture, generation, use, formulation,
packaging, labeling, transporting, distributing, handling, storing or disposing
of any Special Materials.

 

(ii)           “Special Materials” means any and all materials which, under
Environmental Requirements, require special handling in use, generation,
collection, storage, treatment or disposal, or payment of costs associated with
responding to the lawful directives of any court or agency of competent
jurisdiction.  Special Materials shall
include, without limitation:  (i) any
flammable substance, explosive, radioactive material, hazardous material,
hazardous waste, toxic

 

24

 

substance,
solid waste, pollutant, contaminant or any related material, raw material,
substance, product or by-product of any substance specified in or regulated or
otherwise affected by any Environmental Requirements (including but not limited
to any “hazardous substance” as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended or any similar state or local law), (ii) any toxic
chemical or other substance from or related to industrial, commercial or
institutional activities, and (iii) asbestos, gasoline, diesel fuel, motor
oil, waste and used oil, heating oil and other petroleum products or compounds,
polychlorinated biphenyls, radon, urea formaldehyde and lead-containing
materials.

 

6.23         Restrictions on Additional
Indebtedness.  Borrower shall not, nor shall it permit its
subsidiaries to, incur or create any liability or indebtedness whether direct
or indirect, absolute or contingent, by way of a guaranty or otherwise,
including capitalized leases, other than: (i) under this Agreement, (ii) under
any existing or future obligations under or in connection with any swap
agreements (as defined in 11 U.S.C. § 101) with Agent, any Lender, any
affiliate of Agent or any Lender or any participant with Agent in respect of
this Agreement, (iii) indebtedness in an aggregate amount not to exceed at
any time One Million Dollars ($1,000,000.00), (iv) indebtedness to Univest
and/or WBNA incurred by Borrower solely in connection with Borrower’s project
to construct a propane rail terminal on the grounds of its facilities located
at Macungie, Pennsylvania in an original principal amount not to exceed Five
Million Dollars ($5,000,000.00), (v) indebtedness set forth on Schedule 6.23 hereto and (vi) current
accounts payable incurred in the ordinary course of Borrower’s business,
accrued expenses and other current items arising out of transactions (other
than borrowings) in the ordinary course of Borrower’s business  (collectively, “Permitted Indebtedness”).

 

6.24         Issuance of Stock.  Borrower shall not, nor shall it permit its
subsidiaries or shareholders to, issue, distribute, transfer or redeem any
capital stock or other securities for consideration or otherwise, except, in
the case of any such subsidiary, to Borrower.

 

6.25         Limitations. 
Borrower shall not create, nor will it permit any of its subsidiaries
to, directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such person to (a) pay dividends or make
any other distribution on any of such person’s capital stock, (b) pay any
indebtedness owed to Borrower, (c) make loans or advances to Borrower or (d) transfer
any of its property to Borrower, except for encumbrances or restrictions
existing under or by reason of (i) customary non-assignment provisions in
any lease governing a leasehold interest, (ii) any agreement or other
instrument of a person existing at the time it becomes a subsidiary of
Borrower; provided, that such encumbrance or restriction was not entered into
in contemplation of such person becoming a subsidiary of Borrower and (iii) this
Agreement.

 

6.26         Restricted Payments. 
Borrower will not make any payment to redeem, retire, purchase or obtain
the surrender of any outstanding warrants, options or other rights to acquire
any interest in Borrower or any payment to any affiliate of Borrower.  Borrower may make dividends or other
distributions on account of its stock, provided that no Event of Default shall
have occurred and be continuing and no such dividend or distribution would
cause an Event of Default.

 

6.27         Tax Returns. 
Borrower has filed all tax returns which they are required to file and
have paid, or made provision for the payment of, all taxes which have or may
have become due pursuant to such returns or pursuant to any assessment received
by them, except such taxes (other than real estate taxes which must be paid
regardless of challenge), if any, as are being contested in

 

25

 

good
faith and as to which adequate reserves have been provided.  Such tax returns are complete and accurate in
all respects.  Borrower does not know of
any proposed additional assessment or basis for any assessment of additional
taxes.

 

6.28         Current Compliance. 
Borrower is currently in compliance with all of the terms and conditions
of the this Agreement and the Loan Documents.

 

6.29         Pension Plan Representations. 
Except as disclosed on Schedule
6.29 hereto, (a) Borrower has no obligations with respect
to any employee pension benefit plan (“Plan”)
(as such term is defined in the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)), (b) no
events, including, without limitation, any “Reportable
Event” or “Prohibited Transaction”
(as those terms are defined under ERISA), have occurred in connection with any
Plan of Borrower which might constitute grounds for the termination of any such
Plan by the Pension Benefit Guaranty Corporation (“PBGC”) or for the appointment by any United States District
Court of a trustee to administer any such Plan, (c) all of the Borrower’s
Plans meet with the minimum funding standards of Section 302 of ERISA, and
(d) Borrower has no existing liability to the PBGC.  Borrower is not subject to or bound to make
contributions to any “multi-employer plan”
as such term is defined in Section 4001(a)(3) of ERISA.

 

6.30         Intellectual Property. 
Borrower owns or possesses the irrevocable right to use all of the
patents, trademarks, service marks, trade names, copyrights, licenses,
franchises and permits and rights with respect to the foregoing necessary to
own and operate the Borrower’s properties and to carry on their business as
presently conducted and presently planned to be conducted without conflict with
the rights of others.  Schedule 6.30 sets forth an accurate
list and description of each such patent, trademark, service mark, trade name,
copyright, license, franchise and permit and right with respect to the
foregoing, together with all registration or application numbers or information
with respect thereto.

 

6.31         Payment of Principal,
Interest and Other Amounts Due.  Borrower will pay when due all Obligations
and all other amounts payable by it hereunder and under the Loan Documents.

 

6.32         Disposition of Assets. 
Borrower will not sell, lease, transfer, abandon or otherwise dispose of
any portion of its property or assets, except for sales of inventory in the
ordinary course for fair consideration and the sale of assets during any fiscal
year having a fair market value not exceeding One Million Dollars
($1,000,000.00).

 

6.33         Taxes; Claims for Labor and
Materials.  Borrower will pay or cause to be paid when
due all taxes, assessments, governmental charges or levies imposed upon it or
its income, profits, payroll or any property belonging to it, including without
limitation all withholding taxes, and all claims for labor, materials and
supplies which, if unpaid, might become a lien or charge upon any of its
properties or assets; provided that it shall not be required to pay any such
tax (other than real estate taxes which must be paid regardless of challenge),
assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted by it, and neither execution nor foreclosure sale or
similar proceedings shall have been commenced in respect thereof (or such
proceedings shall have been stayed pending the disposition of such contest of
validity), and it shall have set aside on its books, or at the request of Agent
deposited with Agent adequate reserves with respect thereto.  Borrower will not file or consent to the
filing of, any consolidated income tax return with any person or entity other
than a subsidiary.

 

26

 

6.34         Pension Plan Covenants. 
Borrower will (a) keep in full force and effect any and all Plans
which are presently in existence or may, from time to time, come into existence
under ERISA, unless such Plans can be terminated without material liability to
Borrower in connection with such termination (as distinguished from any
continuing funding obligation); (b) make contributions to all of Borrower’s
Plans in a timely manner and in a sufficient amount to comply with the
requirements of ERISA; (c) comply with all material requirements of ERISA
which relate to such Plans so as to preclude the occurrence of any Reportable
Event, Prohibited Transaction or material “accumulated
funding deficiency” as such term is defined in ERISA; and (d) notify
Agent immediately upon receipt by Borrower of any notice of the institution of
any proceeding or other action which may result in the termination of any Plan
and deliver to Agent, promptly after the filing or receipt thereof, copies of
all reports or notices which Borrower files or receives under ERISA with or
from the Internal Revenue Service, the PBGC, or the U.S. Department of Labor.

 

6.35         Bank of Account. 
Borrower will maintain Univest as major bank of account.  Borrower will notify Agent in writing and on
a continuing basis, of all deposit accounts and certificates of deposit
(including the numbers thereof) maintained with or purchased by Borrower from
any other financial institutions.

 

6.36         Maintenance of Management. 
Borrower will cause its business to be continuously managed by at least
two (2) of the following individuals: 
Richard Longacre, Daryl Hackman, Kenneth Longacre, Sr. and/or James
M. Boyd or, in lieu thereof, such other persons (serving in such senior
management positions) as may be reasonably satisfactory to Required
Lenders.  Borrower will notify Agent
promptly in writing of any change in Borrower’s board of directors or executive
officers and will provide Agent with a copy of any proposed amendments to its
Articles of Incorporation or By-Laws, prior to adoption.

 

6.37         Accounts Receivable. 
Borrower will, if requested by Agent (a) upon the occurrence of an
Event of Default, give Agent assignments, for the benefit of the Lenders, in
form acceptable to Agent, of specific accounts or groups of accounts and monies
due and to become due under specific contracts and specific general
intangibles; (b) upon the occurrence of an Event of Default, furnish to
Agent a copy, with such duplicate copies as Agent may request, of the invoice
applicable to each account specifically assigned to Agent or arising out of a
contract right, bearing a statement that such account has been assigned to
Agent and such additional statements as Agent may require; (c) upon the
occurrence of an Event of Default, mark its records evidencing its accounts in
a manner satisfactory to Agent so as to show which accounts have been assigned
to Agent for the benefit of Lenders; (d) furnish to Agent satisfactory
evidence of the shipment and receipt of any goods specified by Agent and the
performance of any services or obligations covered by accounts or contracts in
which Agent, for the benefit of Lenders, has a security interest; (e) join
with Agent in executing a financing statement, notice, affidavit or similar
instrument, in form satisfactory to Agent, for the benefit of Lenders, and such
continuation statements and other instruments as Agent may from time to time
request and pay the cost of filing the same in any public office deemed
advisable by Agent; (f) give Agent such financial statements, reports,
certificates, lists of purchasers (showing names, addresses, and amounts owing)
and other data concerning its accounts, contracts, collections, inventory,
general intangibles and other matters as Agent may from time to time specify; (g) upon
the occurrence of an Event of Default, segregate cash proceeds of Collateral so
that they may be identified readily, and deliver the same to the Agent, for the
benefit of Lenders, at such time or times and in such manner and form as the
Agent may direct; (h) upon the occurrence of an Event of Default, furnish
such witnesses as may be necessary to establish legal proof of the Collateral
or records relating to the Collateral; and (i) obtain from any owner,
encumbrancer or other person

 

27

 

having
an interest in the property where any Collateral is located, written consent to
Agent’s removal of the Collateral therefrom, without liability on the part of
Agent to such owner, encumbrancer or other person, or from any such owner,
encumbrancer or other person such waivers of any interest in the Collateral as
the Agent may require.

 

6.38         Derivatives Contracts.

 

(a)           Borrower has delivered to Agent true and
complete copies of all of its contracts and other agreements with each Approved
Broker.  Borrower shall promptly deliver
to Agent copies of any amendments or modifications to, or replacements of, any
such agreements.

 

(b)           Borrower is and shall at all times remain in
compliance with all of its obligations under all contracts and other agreements
with each Approved Broker.

 

(c)           Borrower shall not enter into any contracts
or similar arrangements with brokers of Derivatives Contracts without prior
notice to Agent and delivery to Agent of agreements satisfactory to Required
Lenders regarding Agent’s security interest, for the benefit of Lenders, in and
to any margin deposits with respect thereto and Borrower’s rights in connection
therewith.

 

6.39         Through-put Agreements. Borrower has
delivered to Agent true and complete copies of all of Borrower’s agreements in
connection with any “through-put” or similar arrangements.  Borrower shall not enter into any new “through-put”
or similar arrangements without prior written notice to Agent and delivery to
Agent of all documents as Agent may reasonably request in connection with Agent’s
security interest in Borrower’s inventory subject to such agreements.  Borrower shall deliver to Agent, within
thirty (30) days of execution thereof, copies of any agreements entered into by
Borrower after the date hereof with respect to any “through-put” or similar
arrangements.  Nothing in this Agreement
shall be deemed to require Agent’s consent to any such agreements, provided
such agreements do not violate any of the representations, warranties or
covenants set forth in this Agreement.

 

6.40         Financial Covenants.

 

(a)           Borrower shall maintain a ratio of (i) Funded
Debt to (ii) Tangible Net Worth of not greater than 2.00 to 1.0 as of June 30th
of each year, commencing with Borrower’s fiscal year ending June 30, 2004.

 

(b)           Borrower shall maintain a Debt Service
Coverage Ratio of not less than 1.25 to 1.0 as of September 30, 2004 and
as of the end of each fiscal quarter thereafter, in each case as measured on a
trailing four quarter basis.

 

(c)           Borrower shall maintain a Tangible Net Worth
of not less than (i) $20,500,000.00 for the period commencing the date
hereof through and including June 29, 2005, and (ii) $21,750,000.00
commencing June 30, 2005 and at all times thereafter.

 

(d)           Borrower shall not cause, suffer or permit
its aggregate capital expenditures to exceed $3,500,000.00 in any fiscal year
of Borrower all as determined in accordance with GAAP; provided that, capital
expenditures made solely in connection with the Borrower’s project to construct
a propane rail terminal on the grounds of its facilities located at Macungie,
Pennsylvania in an aggregate amount up to $5,000,000.00 shall be excluded from
the calculation of Borrower’s capital

 

28

 

expenditures
hereunder.  The foregoing limitations on
Borrower’s capital expenditures shall be non-cumulative as to any unused
portions during any fiscal year of Borrower.

 

6.41         OFAC Compliance.  None
of the Borrower, any Subsidiary of the Borrower or any affiliate of the
Borrower (a) is a Sanctioned Person, (b) has more than 15% of its
assets in Sanctioned Countries, or (c) derives more than 15% of its
operating income from investments in, or transactions with Sanctioned Persons
or Sanctioned Countries.  The proceeds of
the Loans will not be used and have not been used to fund any operations in,
finance any investments or activities in or make any payments to, a Sanctioned
Person or a Sanctioned Country.

 

SECTION 7.         EVENTS
OF DEFAULT AND REMEDIES

 

 7.1             Events of Default. 
Except for Obligations arising under any Hedging Agreement, which shall
be due as provided in such Hedging Agreement, all Obligations shall be
immediately due and payable, without notice or demand, and any provisions of
this Agreement as to future loans and credit accommodations by Agent or any
Lender shall terminate automatically, upon the termination or non-renewal of
this Agreement or upon the occurrence of an event described in Sections 7.1(h) or (i) below,
or at Agent’s option, upon or at any time after the occurrence or existence of
any one or more of the following (each, an “Event
of Default”):

 

(a)           Borrower fails to pay when due any interest,
principal, fees, expenses or any other sums due on the Obligations, whether at
the stated maturity, as a result of acceleration or otherwise.  Notwithstanding the foregoing, Borrower’s
failure to pay any of the foregoing items resulting solely from Agent not
charging Borrower’s loan account therefor shall not be an Event of Default
unless Borrower shall have failed to pay such item within two (2) days of
receipt by Borrower of written notice of such failure; provided, that (i) no
bill or other notice of payment was received by Borrower in respect of such
item, and (ii) sufficient funds to pay such item on the day first due were
available in an account maintained by Borrower with Agent or as a loan advance
under the Working Capital Line.

 

(b)           Borrower fails to perform, comply with or
observe any of the terms, covenants or agreements applicable to Borrower under
this Agreement or of any of the other Loan Documents or any other existing or
future financing, security or other agreement between Borrower and Agent or any
Lender or any affiliate of Agent or any Lender and such failure is not cured
within thirty (30) days of receipt by Borrower of written notice of such
failure; provided, however, that such notice and opportunity to cure is
expressly inapplicable to (i) any failure constituting an Event of Default
under any other subparagraph of this Section 7.1;
or (ii) any failure which is incapable of cure or was willfully caused or
permitted by Borrower.

 

(c)           Any representation, warranty or statement of
fact made by Borrower to Agent or any Lender in this Agreement or any of the
other Loan Documents or any schedule, confirmatory assignment or otherwise, or
to any affiliate of Agent or any Lender, shall prove inaccurate or misleading
in any adverse material respect.

 

(d)           Borrower revokes, terminates or fails to perform
any of the terms of any guaranty, endorsement or other agreement of such party
in favor of Agent or any Lender or any affiliate of Agent or any Lender;

 

29

 

(e)           Any (i) judgment or attachment in an amount
in excess of One Million Dollars ($1,000,000.00) in respect of any single
judgment or attachment or Two Million Dollars ($2,000,000.00) in respect of any
two or more judgments or attachments, which in any case is not insured or
bonded to the reasonable satisfaction of Agent or (ii) injunction is
obtained against Borrower or any of its subsidiaries which in any case remains
unstayed for a period of ten (10) days or is enforced;

 

(f)            Borrower is dissolved or fails to maintain
its corporate existence, or the usual business of Borrower ceases or is
suspended in any material respect;

 

(g)           Any change occurs in the senior management or
ownership of Borrower not permitted by the terms of this Agreement;

 

(h)           Borrower becomes insolvent, makes an
assignment for the benefit of creditors, makes or sends notice of a bulk
transfer or calls a general meeting of its creditors or principal creditors;

 

(i)            Any petition or application for any relief
under the bankruptcy laws of the United States now or hereafter in effect or
under any insolvency, reorganization, receivership, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or hereafter
in effect (whether at law or in equity) is filed by or (unless dismissed within
forty-five (45) days and provided that Lenders shall have no obligation to make
advances under the Loans during such forty-five (45) day period) against
Borrower or any of its subsidiaries;

 

(j)            The indictment or threatened indictment of
Borrower or any of its subsidiaries under any criminal statute, or commencement
or threatened commencement of criminal or civil proceedings against Borrower or
any of its subsidiaries, pursuant to which statute or proceedings the penalties
or remedies sought or available include forfeiture of any of the property of
Borrower or any of its subsidiaries;

 

(k)           Any default or event of default occurs on the
part of Borrower or any of its subsidiaries under any existing or future swap
agreement (as defined in 11 U.S.C. § 101) with Agent or any Lender, any
affiliate of Agent or any Lender or any participant with Lenders in the
Obligations;

 

(l)            Any default or event of default occurs on the
part of Borrower or any of its subsidiaries under any material (as determined
by Required Lenders in their reasonable judgment) agreement, document or
instrument to which Borrower or any such subsidiary is a party or by which
Borrower, any of its subsidiaries or any of their respective property is bound,
creating or relating to any indebtedness of Borrower or any of its subsidiaries
to any person or entity other than Agent or any Lender, if the effect of such
default is to accelerate, or to permit the acceleration of, the maturity of all
or any part of such indebtedness, or all or any part of any such indebtedness
shall be declared to be due and payable or required to be prepaid for any other
reason, in either event prior to the stated maturity thereof;

 

(m)          any material adverse change occurs in the
business operations or financial condition of Borrower or in the value of any
Collateral; or

 

30

 

(n)           any covenant, agreement or obligation of
Borrower contained herein or in any of the other Loan Documents shall cease to
be enforceable in accordance with its terms, or Borrower denies or disaffirms
any of its obligations hereunder or thereunder or this Agreement or any of the
other Loan Documents shall be canceled, terminated, revoked or rescinded
without the express prior written consent of Required Lenders, or any action or
proceeding shall have been commenced by any person or entity (other than Agent)
seeking to cancel, revoke, rescind or disaffirm the obligations of any party to
any Loan Document, or any court or other governmental authority shall issue a
judgment, order, decree or ruling to the effect that any of the obligations of
any party to this Agreement or any of the other Loan Documents are illegal,
invalid or unenforceable.

 

7.2           Remedies.  Upon
the occurrence of an Event of Default and at any time thereafter, Agent on behalf
of Lenders shall have all rights and remedies provided in this Agreement or any
of the other Loan Documents, any other agreements between Borrower and Agent or
any Lender, the Uniform Commercial Code or other applicable law, all of which
rights and remedies may be exercised without notice to Borrower, all such
notices being hereby waived, except such notice as is expressly provided for
hereunder or is not waivable under applicable law.  All rights and remedies of Agent and Lenders
are cumulative and not exclusive and are enforceable in Agent’s discretion, or
upon request of Required Lenders, alternatively, successively, or concurrently
on any one or more occasions and in any order Agent may determine.  Without limiting the foregoing, Agent may,
and at request of the Required Lenders shall, (a) accelerate the payment
of any or all Obligations and demand immediate payment thereof to Agent,
provided that acceleration of any Obligations shall not automatically cause an
acceleration or termination of any Obligations under any existing or future
swap agreements (as defined in 11 U.S.C. § 101) with Agent or any Lender, any
affiliate of Agent or any Lender or any participant with Agent or any Lender in
the Obligations, which swap Obligations shall be accelerated or terminated at
Agent’s or such Lender’s (or such affiliate of Agent’s or such Lender’s or such
participant’s) sole option, (b) with or without judicial process or the
aid or assistance of others, enter upon any premises on or in which any of the
Collateral may be located and take possession of the Collateral or complete
processing, manufacturing and repair of all or any portion of the Collateral, (c) require
Borrower, at Borrower’s expense, to assemble and make available to Agent any
part or all of the Collateral at any place and time designated by Agent, (d) collect,
foreclose, receive, appropriate, setoff and realize upon any and all
Collateral, (e) extend the time of payment of, compromise or settle for
cash, credit, return of merchandise, and upon any terms or conditions any and
all accounts or other Collateral which includes a monetary obligation and
discharge or release the account debtor or other obligor, without affecting any
of the Obligations, or (f) sell, lease, transfer, assign, deliver or otherwise
dispose of any and all Collateral (including, without limitation, entering into
contracts with respect thereto, by public or private sales at any exchange,
broker’s board, any office of Agent or elsewhere) at such prices or terms as
Agent may deem reasonable, for cash, upon credit or for future delivery, with
Agent having the right to purchase the whole or any part of the Collateral at
any such public sale, all of the foregoing being free from any right or equity
of redemption of Borrower, which right or equity of redemption is hereby
expressly waived and released by Borrower. 
If any of the Collateral is sold or leased by Agent upon credit terms or
for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by Agent.  If notice of disposition of Collateral is
required by law, seven calendar days’ prior notice by Agent to Borrower
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of Collateral is to be made, shall
be deemed to be reasonable notice thereof and Borrower (and any such
subsidiary, if applicable) waives any other notice.  In the event Agent institutes an action to
recover any Collateral or seeks recovery of any Collateral by way of
prejudgment remedy, Borrower waives the posting of any bond which might
otherwise be required. Notwithstanding the foregoing to the contrary, upon the
occurrence of

 

31

 

an
Event of Default described in Sections 7.1(h) or
(i), the obligation of Lenders to make Loans and other
extensions of credit hereunder shall automatically terminate and, except for
obligations under swap agreements (as defined in 11 U.S.C. § 101) which shall
be due at Agent’s or Lenders’ option, the Loans and other Obligations hereunder
shall become due and payable without further act or notice.

 

7.3           Application of Proceeds.  Agent
may apply the cash proceeds of Collateral actually received by Agent or any
Lender from any sale, lease, foreclosure or other disposition of the Collateral
to payment of any of the Obligations, in whole or in part (including reasonable
attorneys’ fees and legal expenses incurred by Agent or any Lender with respect
thereto or otherwise chargeable to Borrower) and in such order as Agent may
elect, whether or not then due (subject to Section 12.4
below). Borrower shall remain liable to Agent and Lenders for the payment of
any deficiency together with interest at the highest rate provided for herein
and all costs and expenses of collection or enforcement, including reasonable
attorneys’ fees and legal expenses.

 

7.4           Agent’s Cure of Third Party
Agreement.  Upon the occurrence of an Event of Default or
at any other time if Borrower fails to take any of the following actions after
written request by Agent, Agent or any Lender may, at its option, cure any
default by Borrower or any of its subsidiaries under any agreement with a third
party or pay or bond on appeal any judgment entered against Borrower or any of
its subsidiaries, discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and pay any amount, incur any expense or perform any act which, in Required
Lenders’ sole judgment, is necessary or appropriate to preserve, protect,
insure, maintain, or realize upon the Collateral.  Agent shall charge Borrower’s loan account
for any amounts so expended, such amounts to be repayable by Borrower on
demand.  Any sums not paid to Agent or any
Lender on demand shall bear interest at the Default Rate until paid in
full.  Neither Agent nor any Lender shall
be under any obligation to effect such cure, payment, bonding or discharge, and
shall not, by doing so, be deemed to have assumed any obligation or liability
of Borrower or any of its subsidiaries.

 

7.5           Set-Off. 
Without limiting the rights of Agent or Lenders or their respective
affiliates under applicable law, Agent, Lenders or their respective affiliates
and any participant with any Lender in respect of this Agreement has and may
exercise a right of set-off, a lien against and a security interest in all
property of Borrower now or at any time in Agent’s, any Lender’s or such
participant’s possession in any capacity whatsoever, including but not limited
to any balance of any deposit, trust or agency account, or any other bank
account with Agent, any Lender or such participant, as security for all
Obligations.  At any time and from time
to time following the occurrence of an Event of Default, or an event which with
the giving of notice or passage of time or both would constitute an Event of
Default, Agent, Lenders and any participant with any Lender in respect of this
Agreement may without notice or demand, set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Agent, any Lender or such participant
to or for the credit of Borrower against any or all of the Obligations.

 

If
any bank account of Borrower with Agent, any Lender or affiliate or any
participant with any Lender in respect of this Agreement is attached or
otherwise liened or levied upon by any third party, Agent, such Lender or such
participant need not await the running of any applicable grace period
hereunder, but Agent, such Lender or such participant shall have and be deemed
to have the immediate right of set-off and may apply the funds or amount thus
set-off against the Obligations.

 

32

 

7.6           Delay or Omission Not Waiver. 
Neither the failure nor any delay on the part of Agent or any Lender to
exercise any right, remedy, power or privilege hereunder or otherwise available
to Agent or any Lender upon the occurrence of any Event of Default or otherwise
shall operate as a waiver thereof or impair any such right, remedy, power or
privilege.  No waiver of any Event of
Default shall affect any later Event of Default or shall impair any rights of
Agent or Lenders.  No single, partial or
full exercise of any rights, remedies, powers and privileges by the Agent or
any Lender shall preclude further or other exercise thereof.  No course of dealing between Agent or any
Lender and Borrower shall operate as or be deemed to constitute a waiver of
Agent’s or Lenders’ rights or affect the duties or obligations of Borrower.

 

7.7           Time is of the Essence.  Time
is of the essence in Borrower’s performance of its obligations hereunder and
under the other Loan Documents.

 

7.8           Waivers.  In
connection with any proceedings hereunder or in connection with any of the
Obligations, including without limitation any action by Agent or any Lender in
replevin, foreclosure or other court process or in connection with any other
action related to the Obligations or the transactions contemplated hereunder,
Borrower waives:

 

(a)           all procedural errors, defects and
imperfections in such proceedings;

 

(b)           all benefits under any present or future laws
exempting any property, real or personal, or any part of any proceeds thereof
from attachment, levy or sale under execution, or providing for any stay of
execution to be issued on any judgment recovered under any of the Loan
Documents or in any replevin or foreclosure proceeding, or otherwise providing
for any valuation, appraisal or exemption;

 

(c)           presentment for payment, demand, notice of
demand, notice of non-payment, protest and notice of protest of any of the Loan
Documents, including the Notes;

 

(d)           any requirement for bonds, security or
sureties required by statute, court rule or otherwise;

 

(e)           any demand for possession of Collateral prior
to commencement of any suit; and

 

(f)            all rights to claim or recover attorney’s
fees and costs in the event that Borrower is successful in any action to
remove, suspend or prevent the enforcement of a judgment entered by confession.

 

7.9           Forbearance. 
Subject to the terms and conditions of this Agreement, Agent and Lenders
may release, compromise, forbear with respect to, waive, suspend, extend or
renew any of the terms of the Loan Documents, without notice to Borrower.

 

7.10         Limitation on Liability. 
Borrower shall be responsible for and Agent and Lenders and their
respective affiliates are hereby released from any claim or liability in
connection with:

 

(a)           Safekeeping any Collateral;

 

(b)           Any loss or damage to any Collateral;

 

33

 

(c)           Any diminution in value of the Collateral; or

 

(d)           Any act or default of another person or
entity.

 

Agent
and Lenders shall only be liable for any act or omission on any of their part
constituting willful misconduct or gross negligence.  In the event that Agent or any Lender or
affiliates breaches its required standard of conduct, Borrower agrees that
Agent’s and Lenders’ and their respective affiliates’ liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages.  In the event Borrower brings
suit against Agent or any Lender or any affiliate thereof in connection with
the transactions contemplated hereunder and Agent or such Lender or any
affiliate thereof is found not to be liable, Borrower will indemnify and hold
Agent or such Lender and/or their respective affiliates harmless from all costs
and expenses, including attorney’s fees, incurred by Agent or such Lender in connection
with such suit.  This Agreement is not
intended to obligate Agent or any Lender or any affiliate thereof to take any
action with respect to the Collateral or to incur expenses or perform any
obligation or duty of Borrower.

 

7.11         Indemnification.  Borrower agrees to indemnify and hold
harmless, Agent and Lenders and their respective affiliates and Agent’s and
each Lender’s and affiliate’s officers, directors, shareholders, employees and
agents, from and against any and all claims, liabilities, losses, damages,
costs and expenses (whether or not such entity or person is a part to any
litigation), including attorney’s fees and costs and costs of investigation,
document production, attendance at depositions or other discovery with respect
to or arising out of this Agreement, the use of any proceeds advanced
hereunder, the transactions contemplated hereunder, or any claim, demand,
action or cause of action being asserted against Borrower or any of its
affiliates, and including without limitation any civil penalty or fine assessed
by the U.S. Department of the Treasury’s Office of Foreign Assets Control
against, and all reasonable costs and expenses (including counsel fees and
disbursements) incurred in connection with defense thereof by the Agent, any
Lender or Issuing Bank as a result of the funding of Loans, the issuance of
Letters of Credit, the acceptance of payments or of Collateral due under the
Credit Departments, except for any of the foregoing resulting from the gross
negligence or willful misconduct of Agent or any Lender.  Borrower’s obligations under this Section shall
survive termination of this Agreement and repayment of the Obligations.

 

SECTION 8.         JURY
TRIAL WAIVER; CERTAIN OTHER WAIVERS AND CONSENTS

 

8.1           Jury Trial Waiver. 
BORROWER, AGENT AND EACH LENDER AND THEIR RESPECTIVE AFFILIATES EACH
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INSTITUTED BY ANY
OF THEM AGAINST THE OTHER WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, THE OBLIGATIONS, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY
BORROWER, AGENT OR ANY LENDER, OR ANY OF THEIR AFFILIATES, OR WHICH IN ANY WAY,
DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN
BORROWER, AGENT OR ANY LENDER.  IN NO
EVENT WILL AGENT OR ANY LENDER BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR
CONSEQUENTIAL DAMAGES.

 

8.2           Counterclaims. 
Borrower waives all rights to interpose any claims, deductions, setoff
or counterclaims of any kind, nature or description in any action or proceeding
instituted by Agent or any Lender or their respective affiliates with respect
to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating thereto, except compulsory counterclaims.

 

34

 

8.3           Jurisdiction.  Borrower, Agent and Lenders hereby
irrevocably submit and consent to the nonexclusive jurisdiction of the State
and Federal Courts located in the Commonwealth of Pennsylvania and any other
State where any Collateral is located with respect to any action or proceeding
arising out of this Agreement, the Obligations, the Collateral or any matter
arising therefrom or relating thereto. 
In any such action or proceeding, Borrower waives personal service of
the summons and complaint or other process and papers therein and agrees that
the service thereof may be made by mail directed to Borrower at its chief
executive office set forth herein or other address thereof of which Agent has
received notice as provided herein, service to be deemed complete five (5) days
after mailing, or as permitted under the rules of either of said
Courts.  Any such action or proceeding
commenced by Borrower against Agent or any Lender will be litigated only in a
Federal Court located in the district, or a State Court in the State and
County, in which the office of Agent designated in Section 10.3(a) is located
and Borrower waives any objection based on forum
non conveniens and any objection to venue in connection therewith.

 

8.4           [Intentionally Deleted.].

 

8.5           No Waiver by Agent or
Lenders.  Neither Agent nor any Lender shall, by any
act, delay, omission or otherwise be deemed to have expressly or impliedly
waived any of its rights or remedies unless such waiver shall be in writing and
signed by an authorized officer of Agent or such Lender.  A waiver by Agent or any Lender of any right
or remedy on any one occasion shall not be construed as a bar to or waiver of
any such right or remedy which Agent or such Lender would otherwise have on any
future occasion, whether similar in kind or otherwise.

 

SECTION 9.         TERM
OF AGREEMENT; MISCELLANEOUS

 

9.1           Term.  This
Agreement shall only become effective upon execution and delivery by Borrower,
Agent and Lenders and shall continue in full force and effect until terminated
in accordance with the terms and conditions hereof.

 

9.2           Additional Cash Collateral.  Upon
termination of this Agreement by Borrower, as permitted herein, in addition to
payment of all Obligations which are not contingent, Borrower shall deposit
such amount of cash collateral as Agent or Issuing Bank determines is necessary
to secure Agent and Lenders from loss, cost, damage or expense, including
reasonable attorneys’ fees, in connection with any outstanding Letters of
Credit or remittance items or other payments provisionally credited to the
Obligations and/or to which Agent has not yet received final and indefeasible
payment.

 

9.3           Notices. 
Except as otherwise provided, all notices, requests and demands
hereunder shall be (a) made to Agent at its address set forth in Section 10.3(a) and to
Borrower at its chief executive office set forth in Section 10.3(b), or to such other
address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made:
if by hand, immediately upon delivery, if by telex, telegram or telecopy (fax),
immediately upon receipt; if by overnight delivery service, one day after
dispatch; and if by first class or certified mail, three days after mailing.

 

9.4           Severability.  If any
provision of this Agreement is held to be invalid or unenforceable, such
provision shall not affect this Agreement as a whole, but this Agreement shall
be construed as though it did not contain the particular provision held to be
invalid or unenforceable.

 

35

 

9.5           Entire Agreement;
Amendments; Assignments.  This Agreement and the Loan Documents contain
the entire agreement of the parties as to the subject matter hereof, all prior
commitments, proposals and negotiations concerning the subject matter hereof
being merged herein.  Neither this
Agreement nor any provision hereof shall be amended, modified or discharged
orally or by course of conduct, but only by a written agreement signed by an
authorized officer of Agent.  This
Agreement shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns, except that any obligation
of Agent under this Agreement shall not be assignable nor inure to the successors
and assigns of Borrower.

 

9.6           Discharge of Borrower.  No
termination of this Agreement shall relieve or discharge Borrower of its
Obligations, grants of Collateral, duties and covenants hereunder or otherwise
until such time as all Obligations to Agent and Lenders have been indefeasibly
terminated, paid and satisfied in full, including, without limitation, the
continuation and survival in full force and effect of all security interests
and liens of Agent, for the benefit of Lenders, in and upon all then existing
and thereafter arising or acquired Collateral and all warranties and waivers of
Borrower.

 

9.7           Usage.  All
terms used herein which are defined in the Uniform Commercial Code shall have
the meanings given therein unless otherwise defined in this Agreement and all
references to the singular or plural herein shall also mean the plural or
singular, respectively.

 

9.8           Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania. References herein to the “Uniform Commercial Code” shall, unless
otherwise provided herein, refer to the Uniform Commercial Code in effect in
such Commonwealth.

 

9.9           Holidays.  If
the day provided herein for the payment of any amount or the taking of any
action falls on a Saturday, Sunday or public holiday at the place for payment
or action, then the due date for such payment or action will be the next
succeeding Business Day.

 

9.10         Integration.  This
Agreement and the Loan Documents shall be construed as integrated and
complementary of each other, and as augmenting and not restricting Agent’s and
Lenders’ rights, powers, remedies and security. 
In the event of any inconsistency between the terms of this Agreement
and the terms of the other Loan Documents, the terms of this Agreement shall
prevail.

 

9.11         Exhibits and Schedules.  All
exhibits and schedules attached hereto are hereby made a part of this
Agreement.

 

9.12         Headings.  The
headings of the Articles, Sections, paragraphs and clauses of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part
of this Agreement.

 

9.13         Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

 

9.14         Joint and Several Liability.  If
there is more than one Borrower, all agreements, conditions, covenants and
provisions of the Loan Documents shall be the joint and several obligation of
Borrower.

 

36

 

9.15         Patriot Act Notice.  To
help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account.  For purpose of this section, account shall be
understood to include loan accounts.

 

SECTION 10.       ADDITIONAL
DEFINITIONS AND TERMS

 

10.1         Certain Definitions.

 

(a)           “Approved Broker” shall mean a broker in the business of
dealing in Derivatives Contracts which (i) is satisfactory to Agent in its
reasonable discretion; and (ii) has entered into agreements reasonably
satisfactory to Agent in connection with Agent’s security interest in the
margin deposits held by such broker for Borrower’s account and Borrower’s
rights under the Derivatives Contracts purchased from such broker.

 

(b)           “Acceleration Date” shall mean the first date after the
occurrence of an Event of Default on which demand has been made by Agent for
payment in full of all Obligations.

 

(c)           “Approved Margin Deposits” shall mean deposits made by Borrower to an
Approved Broker in connection with the purchase by Borrower from such Approved
Broker of a Derivatives Contract.

 

(d)           “Borrowing Base Amount” shall mean the sum of up to (i) seventy-five
(75%) of the book value of Eligible Receivables, plus (ii) seventy-five
percent (75%) of the Value of Eligible Inventory.

 

(e)           “Business Day” shall mean (i) except with respect to
matters in connection with LIBOR, any day except Saturday, Sunday or other day
on which banks in Philadelphia, Pennsylvania or Charlotte, North Carolina are
authorized by law to close, and (ii) with respect to matters in connection
with LIBOR, any such day on which commercial banks in London, England also are
not required or permitted to be closed.

 

(f)            “Cap Ex Line Lenders” shall mean, collectively, Univest and WBNA.

 

(g)           “Credit Facility” shall mean, each of, the Working Capital
Line, the Cap Ex Line, the Macungie Term Loan, the Pottstown Term Loan and the
WC Term Loan.

 

(h)           “Credit Facility Order of
Priority” shall mean (i) first,
to accrued and unpaid interest on the applicable Credit Facility, (ii) second,
to the principal balance of the applicable Credit Facility and (iii) third,
to accrued and unpaid fees payable in connection with the applicable Credit
Facility.

 

(i)            “Credit Facility’s
Proportionate Share” shall
mean, as to each Credit Facility, the quotient obtained (expressed as a
percentage) by dividing (i) the total sums due under such Credit Facility
(including interest, principal and fees) on any Determination Date by (ii) the
total Obligations outstanding on such Determination Date.

 

(j)            “Debt Service Coverage Ratio” shall mean, with respect to Borrower, for
any period, the ratio of (i) the sum of pre-tax income (excluding any
extraordinary gains and/or losses), minus cash dividends and distributions
declared during such period, plus all interest expense,

 

37

 

plus
depreciation, plus amortization, to (ii) the sum of interest expense, plus
the current maturities of long-term indebtedness as of the most recent date as
of which such ratio is required to be calculated (including, without
limitation, all capitalized lease obligations), all as determined in accordance
with GAAP.

 

(k)           “Default” shall mean any event, occurrence or
circumstance which, with the giving of notice, the lapse of time, or both,
would constitute an Event of Default.

 

(l)            “Derivatives Contract” shall mean a futures or options contract for
those petroleum products sold by Borrower in the ordinary course of business,
entered into by Borrower on a nationally recognized organized exchange
(including, without limitation, the New York Mercantile Exchange), pursuant to
the rules of such exchange.  For
purposes of clarification, the term Derivatives Contracts shall not include
swap agreements, as defined in 11 U.S.C. § 101 and shall include Borrower’s
agreements with Fimat Alternative Strategies, Inc.

 

(m)          “Determination Date” shall mean each date after an Acceleration
Date on which payments on account of any Obligations or proceeds from the sale
or other disposition of Collateral are received.

 

(n)           “Eligible Inventory” shall mean inventory in the possession of Borrower
consisting of petroleum products in which Agent, for the benefit of Lenders,
has a prior, perfected, first priority lien and meets all specifications
established by Required Lenders, in its reasonable credit judgment, from time
to time.  Eligible Inventory shall not
include (i) inventory not consisting of petroleum products; (ii) inventory
located at any location other than the addresses set forth in Section 10.3(c);
(iii) obsolete, slow-moving or unmerchantable inventory or inventory which
is not in good condition or not currently usable or salable in the ordinary
course of Borrower’s business as determined by Agent in its reasonable credit
judgment; (iv) inventory consisting of finished goods which do not meet
the specifications of the purchase order for which such inventory was produced;
(v) inventory consisting of packaging, shipping materials or supplies; (vi) inventory
produced in violation of the Fair Labor Standards Act and subject to the
so-called “hot goods” provision contained in Title 29 U.S.C. Section 215(a)(1);
(vii) inventory consisting of a controlled substance or substances for
which Agent would need a license or permit to sell or dispose of; (viii) inventory
located at a leased location or at a warehouse location unless Agent has received
an agreement in form and content satisfactory to Agent in its sole discretion
executed by a landlord of a leased location of Borrower or a warehouseman of a
warehouse location of Borrower pursuant to which, inter alia, such landlord or warehouseman waives any and all
rights against any Collateral at such location and permits Agent access to such
location for the purpose of selling and taking possession of any Collateral at
such location.;  and (ix) consigned
inventory.  Borrower shall immediately
notify Agent if any inventory previously scheduled, listed or referred to, in
any statement or report by or on behalf of Borrower and upon which Borrower is
basing availability under the Working Capital Line ceases to be Eligible
Inventory.

 

(o)           “Eligible Receivables” shall mean those accounts receivable of
Borrower which have a net debit balance in which Agent, for the benefit of
Lenders, has a prior, perfected first priority lien, which have been
outstanding no more than sixty (60) days from the original invoice date (or
ninety (90) days from the original invoice date if such accounts receivable
arise from HVAC installations), are not subject to offset, deduction,
counterclaim, discount, credit, charge back, freight claim, allowance or
adjustment and meet all specifications established by Required Lenders in their
reasonable credit judgment from time to time. 
Eligible Receivables shall not include: (i) non-trade

 

38

 

receivables;
(ii) foreign accounts receivable other than those fully secured by a
letter of credit issued by a financial institution acceptable to Required
Lenders in its reasonable credit judgment or covered by credit insurance
acceptable to Required Lenders in their reasonable credit judgment in each case
assigned to Agent, for the benefit of Lenders, or with respect to which Agent,
for the benefit of Lenders, has been named loss payee, as applicable; (iii) contra-accounts;
(iv) intercompany accounts or accounts from other affiliated corporations,
organizations or individuals; (v) any account receivable in excess of One
Hundred Thousand Dollars ($100,000.00) from the United States government or any
of its agencies which have not been assigned to Agent, for the benefit of
Lenders, under the Assignment of Claims Act; (vi) finance charges if all
finance charges owed to Borrower are more than Fifty Thousand Dollars
($50,000.00) in the aggregate; (vii) lease receivables if all lease
receivables owed to Borrower are more than Fifty Thousand Dollars ($50,000.00)
in the aggregate; (viii) pre-billed accounts if all pre-billed accounts
owed to Borrower are more than Fifty Thousand Dollars ($50,000.00), (ix) accounts
receivable owed by a Person if fifty percent (50%) or more of such Person’s
accounts receivable owed to Borrower have been outstanding more than sixty (60)
days from the original invoice date (or ninety (90) days from the original
invoice date if such accounts receivable arise from HVAC installations); (x) accounts
receivable of poor credit quality as determined by Required Lenders in their
sole discretion; (xi) that portion of accounts receivable concentrated in
individual account debtors in excess of twenty percent (20%) (or in such other
amounts or percentages as may be established by Required Lenders from time to
time) of all Eligible Receivables; (xii) any account with respect to which the
account debtor is located in a state which requires Borrower, as a precondition
to commencing or maintaining an action in the courts of that state, either to (A) receive
a certificate of authority to do business and be in good standing in such
state; or (B) file a notice of business activities report or similar
report with such state’s taxing authority, unless (I) Borrower has taken
one of the actions described in clauses (A) or (B), (II) the failure
to take one of the actions described in either clause (A) or (B) may
be cured retroactively by Borrower at its election, or (III) Borrower has
proven, to Required Lenders’ satisfaction, that it is exempt from any such requirements
under any such state’s laws.  Borrower
shall immediately notify Agent if any account receivable previously scheduled,
listed or referred to in any certificate, statement or report by Borrower and
upon which Borrower is basing availability under the Working Capital Line
ceases to be an Eligible Receivable; and (xiii) any account where the account
debtor is a Sanctioned Person.

 

(p)           “Funded Debt” shall mean, with respect to Borrower, at any
time, the sum of all indebtedness of Borrower for borrowed money (including,
without limitation, all capitalized lease obligations and the face amount of
all outstanding Letters of Credit), all as determined in accordance with GAAP.

 

(q)           “Hedging Agreement” means any agreement with respect to an
interest rate swap, collar, cap, floor or a forward rate agreement or other
agreement regarding the hedging of interest rate risk exposure executed in
connection with hedging the interest rate exposure of the Borrower, and any
confirming letter executed pursuant to such hedging agreement, all as amended,
restated or otherwise modified.

 

(r)            “Invoice Value” shall mean, with respect to equipment to be
purchased with an advance under the Cap Ex Line, the actual hard cost of such
item of equipment, excluding, without limitation, any sums expended or to be
expended in connection therewith for delivery, installation, maintenance,
service, warranty, training or otherwise, in each case as determined by Agent
based on invoices and such other documentation as shall be requested by and
reasonably satisfactory to Agent.

 

39

 

(s)           “Issuing Bank” shall mean WBNA or any successor institution
issuing a Letter of Credit under this Agreement.

 

(t)            “Knowledge” as to the Agent shall mean (i) receipt
by Agent of written notice in accordance with the terms of this Agreement from
any Lender or Borrower of a Default or an Event of Default or (ii) actual
knowledge by an employee of Agent who is actively involved in the day to day
administration of the Loans that a Default or an Event of Default has occurred.

 

(u)           “Loan Documents” shall mean this Agreement, the Notes, and
all security agreements, pledges, assignments and other documents at any time
executed or delivered by Borrower pursuant to or in connection with this
Agreement, as any of them may be amended, modified, restated or replaced from
time to time.  Without in any way
limiting the generality of the foregoing, in no event will any existing and/or
future obligations under or in connection with any swap agreements (as defined
in 11 U.S.C. § 101) with Agent or any Lender, any affiliate of Agent or any
Lender or any participant of Agent or any Lender in respect of this Agreement
be deemed a Loan Document.

 

(v)           “Macungie Term Loan” shall mean that certain term loan extended
by Univest and WBNA to Borrower as evidenced by that certain Mortgage Note
dated June 26, 1996 in the face amount of One Million Dollars
($1,000,000.00).

 

(w)          “Maximum Cap Ex Line Amount”  shall
mean Five Million Dollars ($5,000,000.00).

 

(x)            “Maximum Non-Seasonal
Working Capital Line Amount”
shall mean Forty Million Dollars ($40,000,000.00).

 

(y)           “Maximum Seasonal Working
Capital Line Amount” shall
mean Seventy Million Dollars ($70,000,000.00).

 

(z)            “Non-Seasonal Period” shall mean all periods during the term of
this Agreement other than a Seasonal Period.

 

(aa)         “Non Specific Default” shall mean any Event of Default other than a
Specific Event of Default.

 

(bb)         “OFAC” shall mean the U.S. Department of the
Treasury’s Office of Foreign Assets Control.

 

(cc)         “Out-Of-Formula Advance” shall mean, during the Seasonal Period, the
amount by which (i) the then outstanding advances under the Working
Capital Line, plus the then outstanding L/C Obligations exceeds (ii) lesser
of (A) the Maximum Seasonal Working Capital Line Amount and (B) the
Borrowing Base Amount or any other applicable formulas or sublimits, as
applicable.

 

(dd)         “Permitted Loan” shall mean a loan or advance by Borrower to,
or an investment by Borrower in, another entity in an aggregate amount not to
exceed One Million Dollars ($1,000,000.00) during any fiscal year of Borrower.

 

40

 

(ee)         “Permitted Transaction” shall mean one or more acquisitions by
Borrower of the stock or assets of another entity where the total aggregate
cost to Borrower for such assets or stock in any fiscal year is equal to or
less than Two Million Five Hundred Thousand Dollars ($2,500,000.00).

 

(ff)           “Pottstown Term Loan” shall mean that certain term loan extended by
Univest and WBNA to Borrower as evidence by that certain Mortgage Note dated July 17,
1996 in the face amount of Four Hundred Thousand Dollars ($400,000.00).

 

(gg)         “Pro Rata Cap Ex Percentage” shall mean, as to each Cap Ex Line Lender,
the percentage set forth next to such Cap Ex Line Lender’s name on Schedule A
hereto with respect to the Cap Ex Line.

 

(hh)         “Pro Rata Cap Ex Share” shall mean, as to each Cap Ex Line Lender,
the amount set forth next to such Cap Ex Line Lender’s name on Schedule A
hereto with respect to the Cap Ex Line.

 

(ii)           “Pro Rata Line Percentage” shall mean, as to each Lender, the
percentage set forth next to such Lender’s name on Schedule A hereto with
respect to the Working Capital Line.

 

(jj)           “Pro Rate Line Share” shall mean, as to each Lender, the amount
set forth next to such Lender’s name on Schedule A hereto with respect to the
Working Capital Line.

 

(kk)         “Protective Advances” shall mean any sums expended by Agent or any
Lender in its reasonable discretion in connection with the protection or
preservation of the Collateral, or any of Agent’s, Issuing Bank’s or Lenders’
rights, remedies, powers or priorities under the Loan Documents.

 

(ll)           “Required Lenders” shall mean all Lenders.

 

(mm)       “Sanctioned Country” shall mean a country subject to a sanctions program identified on the
list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time.

 

(nn)         “Sanctioned Person” shall mean (i) a person named on the
list of Specially Designated Nationals or Blocked Persons maintained by OFAC
available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as
otherwise published from time to time, or (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country, to
the extent subject to a sanctions program administered by OFAC.

 

(oo)         “Seasonal Period” shall mean each of the following
periods:  (i) the period from the
date hereof through and including April 30, 2005 and (ii) the period
from September 1, 2005 through and including April 30, 2006;
provided, however, Borrower may, by written request to Agent at least seven (7) days
prior to any such date, delay the start date of a Seasonal Period or accelerate
the termination date of a Seasonal Period. 
If Borrower accelerates the termination date of a Seasonal Period, a new
Seasonal Period shall not commence until the scheduled commencement date for
the next Seasonal Period, if any.

 

41

 

(pp)         “Specific Default” shall mean (i) the occurrence of an
Event of Default under any of Sections
7.1(a), (d), (f), (g), (h), (i), (j), (m) and (n) hereof,
(ii) Borrower’s failure to comply with any of the financial covenants set
forth in Section 6.40
hereof or (iii) the occurrence of an Out-of-Formula Advance, in each case
to the extent not waived or consented to by the Required Lenders.

 

(qq)         “Tangible Net Worth” shall mean, at anytime, the aggregate amount
by which all assets of Borrower excluding intangible assets and accumulated
other comprehensive income or loss, as those terms would be defined under GAAP,
exceed the 

 

aggregate
amount of liabilities of Borrower, as would be shown on a balance sheet of
Borrower prepared as of such date in accordance with GAAP.

 

(rr)           “Value” shall mean, with respect to Eligible
Inventory, the lower of cost or market value thereof, determined on an average
cost basis.

 

(ss)         “WC Term Loan” shall mean that certain term loan extended
by Univest and WBNA to Borrower as evidence by that certain Term-Out Note I
dated December 31, 2002 in the face amount of Three Million Dollars
($3,000,000.00).

 

(tt)                   In addition, the capitalized terms identified
in the left column below have the meanings ascribed thereto in the Sections set
forth in the right column:

 

	
  TERM

  	
   

  	
  SECTION

  
	
  Adjusted
  Base Rate

  	
   

  	
  Section 3.1(b)

  
	
  Adjusted
  LIBOR Rate

  	
   

  	
  Section 3.1(c)

  
	
  Accountants

  	
   

  	
  Section 6.10(a)

  
	
  Agent

  	
   

  	
  Preamble

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Alternative
  Investment

  	
   

  	
  Section 3.12(b)

  
	
  Base
  Rate Loan

  	
   

  	
  Section 2.6(a)

  
	
  Borrower

  	
   

  	
  Preamble

  
	
  Cap
  Ex Contract Period

  	
   

  	
  Section 2.2(a)

  
	
  Cap
  Ex Line

  	
   

  	
  Section 2.2(a)

  
	
  Cap
  Ex Notes

  	
   

  	
  Section 2.6(g)

  
	
  Collateral

  	
   

  	
  Section 4.3

  
	
  Default
  Rate

  	
   

  	
  Section 3.1(a)

  
	
  Eurodollar
  Loan

  	
   

  	
  Section 2.6(a)

  
	
  Environmental
  Requirements

  	
   

  	
  Section 6.22(e)(i)

  
	
  ERISA

  	
   

  	
  Section 6.29

  
	
  Event
  of Default

  	
   

  	
  Section 7.1

  
	
  Excess
  Funds

  	
   

  	
  Section 2.6(i)

  
	
  Existing
  Loan Documents

  	
   

  	
  Section 1.1

  
	
  Fixed
  Rate

  	
   

  	
  Section 2.6(d)

  
	
  Fixed
  Rate Loan

  	
   

  	
  Section 2.6(a)

  
	
  GAAP

  	
   

  	
  Section 6.10

  
	
  Interest
  Period

  	
   

  	
  Section 3.1(d)

  
	
  Issuing
  Bank

  	
   

  	
  Preamble

  
	
  L/C
  Obligations

  	
   

  	
  Section 2.4(d)

  

 

42

 

	
  LIBOR

  	
   

  	
  Section 3.1(c)

  
	
  Lender

  	
   

  	
  Preamble

  
	
  Letter
  of Credit Charges

  	
   

  	
  Section 2.4(b)

  
	
  Letters
  of Credit

  	
   

  	
  Section 2.4(a)

  
	
  Loan

  	
   

  	
  Section 2.6(a)

  
	
  Obligations

  	
   

  	
  Section 4.2

  
	
  Notes

  	
   

  	
  Section 2.6(g)

  
	
  Participants

  	
   

  	
  Section 21.21(a)

  
	
  Participations

  	
   

  	
  Section 12.21(a)

  
	
  PBGC

  	
   

  	
  Section 6.29

  
	
  Plan

  	
   

  	
  Section 6.29

  
	
  Prime
  Rate

  	
   

  	
  Section 3.1(b)

  
	
  Prohibited
  Transaction

  	
   

  	
  Section 6.29

  
	
  Reportable
  Event

  	
   

  	
  Section 6.29

  
	
  Special
  Materials

  	
   

  	
  Section 6.22(e)(ii)

  
	
  Taxes

  	
   

  	
  Section 3.8

  
	
  Treasury
  Rate

  	
   

  	
  Section 3.12(b)

  
	
  Uniform
  Commercial Code

  	
   

  	
  Section 9.8

  
	
  Univest

  	
   

  	
  Preamble

  
	
  WBNA

  	
   

  	
  Preamble

  
	
  Working
  Capital Line

  	
   

  	
  Section 2.1

  
	
  Working
  Capital Line Contract Period

  	
   

  	
  Section 2.1

  
	
  Working
  Capital Line Notes

  	
   

  	
  Section 2.6(g)

  

 

10.2         Letters of Credit:

 

	
  (a)

  	
   

  	
  Standby Letter of Credit
  Charge:

  	
   

  	
  1% of outstanding

  
	
   

  	
   

  	
   

  	
   

  	
  Letters
  of Credit

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Commercial Letters of
  Credit Charge:

  	
   

  	
  As determined by Agent

  
	
   

  	
   

  	
   

  	
   

  	
  or
  Issuing Bank from time

  
	
   

  	
   

  	
   

  	
   

  	
  to
  time

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Sublimit for Letters of
  Credit:

  	
   

  	
  $3,500,000.00

  

 

10.3         Addresses.

 

	
  (a)

  	
   

  	
  Agent’s Office:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Univest
  National Bank and Trust Co.

  
	
   

  	
   

  	
  Univest
  Plaza

  
	
   

  	
   

  	
  14
  N. Main Street

  
	
   

  	
   

  	
  Souderton,
  PA    18964

  
	
   

  	
   

  	
  Attention:
  John T. Landes, Senior Vice President

  
	
   

  	
   

  	
  Fax
  No. (215) 721-2433

  

 

43

 

	
  (b)

  	
   

  	
  Borrower’s Chief Executive
  Office:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Farm &
  Home Oil Company

  
	
   

  	
   

  	
  315
  State Road

  
	
   

  	
   

  	
  Telford,
  PA  18969

  
	
   

  	
   

  	
  Attention:
  James M. Boyd, CFO

  
	
   

  	
   

  	
  Fax
  No.  (215) 257-2088

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Locations of Collateral:
  See Schedule 10.3(c)

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Borrower’s Trade Names for
  Invoicing: See Schedule 10.3(d)

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Borrower’s Operating
  Account: 0711-16351-9

  

 

10.4         Interest/Fees:

 

(a)           The Applicable Percentage for purposes of
calculating the applicable interest rate for any day for any Loan is:

 

	
   

  	
   

  	
  Eurodollar Loan

  	
   

  	
  Base Rate Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i) Working Capital Line 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (A) with
  respect to that

  portion of the

  outstanding principal

  balance of the Working 

  Capital Line less than or

  equal to $40,000,000.00

  	
   

  	
  1.35

  	
  %

  	
  -.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (B) with
  respect to that

  portion of the

  outstanding principal

  balance of the Working

  Capital Line in excess of

  $40,000,000.00

  	
   

  	
  1.65

  	
  %

  	
  -.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)  Cap Ex Line

  	
   

  	
  1.50

  	
  %

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Unused Line Fee:

  	
   

  	
  25

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Field Examination Fee:

  	
   

  	
  such fees are customarily
  charged by Agent

  	
   

  
								

 

44

 

SECTION 11.       SETTLEMENT
AMONG LENDERS.

 

11.1         Between Settlement Dates.

 

(a)                   Subject to Section 11.1(b) below, between each Settlement
Date (as defined below), Agent shall have the discretion to request that
Issuing Bank issue all Letters of Credit and that Univest make all cash
advances under Base Rate Loans or Fixed Rate Loans, for the account and on
behalf of the Lenders, and Univest or Issuing Bank may, in their sole
discretion, cause such issuance and/or make such advances.  Subject to Section 11.1(b) below, unless Agent receives
written notice from a Lender prior to the date on which any advance is to be
made under this Agreement that such Lender will not make available to Agent
such Lender’s Pro Rata Line Share or Pro Rata Cap Ex Share, as applicable, of
any such advance, Agent may assume that each Lender will make such amounts
available to Agent in immediately available funds in accordance with the terms
of this Agreement and, in reliance thereon, Agent may cause such advance to be
made to Borrower.

 

(b)                   Notwithstanding anything in this Agreement to
the contrary, except with respect to Protective Advances and draws under
Letters of Credit, no Lender shall be deemed to have consented to, and no
Lender shall be obligated to fund its share of, any advance under this
Agreement after (i) Agent has Knowledge of a continuing Specific Default
or (ii) the five (5) Business Day period following the date Agent has
Knowledge of a continuing Non Specific Default, unless in each case such Lender
shall have consented to such advance in writing to Agent.

 

(c)                   Borrower acknowledges and agrees that the
provisions of this Section 11
are solely for the benefit of Agent, Lenders and Issuing Bank and nothing in
this Section 11 shall
be deemed an obligation, agreement or commitment by Agent, Issuing Bank or any
Lender to make any advances or extensions of credit to Borrower after the
occurrence and during the continuance of any Default or Event of Default.

 

11.2         Settlement Date.  Agent shall make a determination
of each Lender’s Pro Rata Line Share or Pro Rata Cap Ex Share of the Loans (by
applying each Lender’s Pro Rata Line Percentage or Pro Rata Cap Ex Percentage,
as applicable, to the total outstanding advances thereunder) periodically but
not less frequently than once every week on the same day of each week, unless
such day is not a Business Day, in which event such determination shall be made
the next Business Day (each a “Settlement
Date”), which outstanding amount shall be calculated as of the close
of the Business Day immediately preceding each respective Settlement Date.  A Settlement Date shall occur notwithstanding
any intervening Event of Default or other occurrence, event or circumstance,
including without limitation the commencement of a bankruptcy or reorganization
proceeding.  Amounts of principal paid to
Agent by Borrower from time to time shall, between Settlement Dates, be applied
first to Univest’s Pro Rata Line Share of advances under the Working Capital
Line, except for any advances made that are subject to Section 11.1(b) hereof, each
as of the close of the Business Day preceding such Settlement Date.  Each settlement schedule shall show the
amount, if any, due from each Lender to Agent (for its own account or on behalf
of Univest) or from Agent to each Lender, which amount shall be paid by federal
funds, via wire transfer to the party entitled thereto to be received on or
before (a) 3:00 P.M. Philadelphia time on the Settlement Date,
provided such settlement schedule has been delivered prior to 2:00 P.M.
Philadelphia time on the Settlement Date, or (b) 11:00 A.M. on the
next Business Day, if such settlement schedule has been delivered after 2:00 P.M.
Philadelphia time on the Settlement Date. 
The obligations of Lenders under this Section 11.2 are
unconditional, not subject to setoff, and irrevocable and may not be terminated
at any time.

 

11.3         Remittance to Agent.  Except as specifically set forth
in Section 11.1(b) hereof,
each Lender is absolutely and unconditionally obligated, without setoff or
deduction of any kind, to remit to Agent on each Settlement Date any amount
showing to be owing to Agent by such Lender on the settlement schedule for such
date.  Agent shall also be entitled to
recover any and all actual 

 

45

 

losses
and damages either may incur (including without limitation, reasonable
attorneys’ fees) from any Lender failing to remit payment on the Settlement
Date in accordance with this Agreement. 
Agent may set off the obligations of any Lender under this paragraph
against any distributions or payments of the Obligations to which such Lender
would otherwise be entitled at any time, or Agent may withhold such
distributions or payments of such Obligations to which such Lender would
otherwise be entitled and make such distributions or payments to Univest in an
amount equal to, and as a repayment of, such Lender’s Pro Rata Line Percentage
or Pro Rata Cap Ex Percentage, as applicable, of the advance made by Univest on
such Lender’s behalf.

 

11.4         Alternate Procedures.  With respect to all Eurodollars
Loans, Agent shall and, in lieu of the procedure set forth in Section 11.1 above with Base Rate
Loans and Fixed Rate Loans Agent may, provide the Lenders with notice that
Borrower has requested a cash advance under the Loans (whether Based Rate
Loans, Fixed Rate Loans or Eurodollar Loans), on the same Business Day as such
request, and request each Lender to provide Agent with such Lender’s Pro Rata
Line Percentage, or Pro Rata Cap Ex Percentage, as applicable, of such
requested cash advance prior to Agent’s making such cash advance.  Upon receipt of such notice from Agent prior
to 2:00 P.M., Philadelphia time, on the date the cash advance is
requested, each Lender shall remit to Agent such Lender’s respective Pro Rata
Line Percentage, or Pro Rata Cap Ex Percentage, as applicable, of such
requested cash advance, prior to 3:00 P.M. Philadelphia time on the
Business Day Agent is scheduled to make such cash advance.  Except as expressly provided herein, neither
Agent nor any other Lender shall be obligated, for any reason whatsoever, to
remit the share of any other Lender. 
Agent shall not be required to make the full amount of the requested
cash advance unless and until it receives funds representing each other Lender’s
Pro Rata Line Percentage, or Pro Rata Cap Ex Percentage, as applicable, of such
requested cash advance, but Agent shall remit to Borrower that portion of the
requested cash advance equal to the Pro Rata Line Percentage, or Pro Rata Cap
Ex Percentage, as applicable, of such requested cash advance which it has
received from the Lenders.

 

11.5         Failure to Advance.  Except as specifically set forth
in Section 11.1(b) hereof,
if Agent does not receive each other Lender’s Pro Rata Line Percentage, or Pro
Rata Cap Ex Percentage, as applicable, of such requested cash advance, and (a) Borrower
requests that Agent fund such Lender’s Pro Rata Line Percentage, or Pro Rata
Cap Ex Percentage, as applicable, of such cash advance or (b) Agent
otherwise elects, in its sole discretion, without any obligation at any time to
any Lender to do so, to make the requested cash advance on behalf of such
Lenders or any of them, Agent shall be entitled to receive each Lender’s Pro
Rata Line Percentage or Pro Rata Cap Ex Percentage, as applicable, of each cash
advance, together with interest at a per annum rate equal to the applicable
interest rate set forth herein for the applicable Loan for such advance, during
the period commencing on the date such cash advance is made and ending on (but
excluding) the date Agent recovers such amount. 
Except as specifically set forth in Section 11.1(b) hereof,
each Lender is absolutely and unconditionally obligated, without deduction or
setoff of any kind, to forward to Agent its Pro Rata Line Percentage, or Pro
Rata Cap Ex Percentage, as applicable, of each cash advance made pursuant to
the terms of this Agreement.  Agent shall
also be entitled to recover any and all actual losses and damages (including,
without limitation, reasonable attorneys’ fees) from any Lender failing to
remit upon demand of Agent.  Agent may
set off the obligations of a Lender under this paragraph against any
distributions or payments of the Obligations which Agent would otherwise make available
to such Lender at any time.  Notwithstanding
the foregoing, Agent shall have no duty or obligation at any time for any
reason to make any advance on behalf of any Lender.

 

11.6         Defaulting Lender.  To the extent and during the
time period in which any Lender fails to provide or delays providing its
respective payment to Agent pursuant to the terms of this 

 

46

 

Agreement
(any such Lender being referred to, during such period, as a “Defaulting Lender”),
such Lender’s percentage of all payments of the Obligations (but not its Pro
Rata Line Percentage, or Pro Rata Cap Ex Percentage, as applicable, of future
advances required to be funded by such Lender) shall decrease to reflect the
actual percentage which its actual outstanding advances under the Loans bears
to the total outstanding advances under the Loans of all Lenders.  In addition, notwithstanding any definition
or other provision of this Agreement to the contrary, during any period in
which a Lender is a Defaulting Lender, all calculations for voting purposes
among the Lenders shall be made as if the Defaulting Lender were not a Lender
or a Required Lender and not a party to this Agreement.

 

SECTION 12.       AGENT.

 

12.1         Appointment of Agent.  Each Lender hereby designates
Agent to act as Agent for such Lender under this Agreement and the Loan
Documents.  Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, Agent to take such action on its
behalf under the provisions of this Agreement, the Loan Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto.  Except as expressly set forth in this
Agreement to the contrary, Borrower is authorized by Lenders to deal solely
with Agent in all matters which affect Lenders under this Agreement and the
other Loan Documents.

 

12.2         Holding of Collateral and
Collections.  Except
as otherwise permitted under the Loan Agreement, Agent shall hold all
Collateral, payments of principal and interest, fees, costs, expenses and
collections received pursuant to this Agreement or the other Loan Documents,
for the ratable benefit of the Lenders in accordance the terms of this
Agreement.  To the extent any other
Lender from time to time holds any Collateral, it shall hold such Collateral
for the benefit of all Lenders in accordance with the terms of this Agreement.

 

12.3         Fees.  Except as expressly provided to
the contrary herein, all fees payable under this Agreement and the Loan
Documents shall be for the pro rata benefit of the Lenders in accordance with
their respective Pro Rata Line Percentages, except for (a) all
confirmation and negotiation fees and other charges (including issuance and
renewal fees) payable by Borrower in connection with Letters of Credit, which
shall be retained in full by the Issuing Bank and (b) the fee set forth in
Section 3.4 above,
which shall be for the pro rata benefit of the Cap Ex Line Lenders in
accordance with their respective Pro Rata Cap Ex Percentages.

 

12.4         Collections and Disbursements

 

(a)           The Agent will have the right to collect and receive all payments of
the Obligations, and to collect and receive all reimbursements for draws made
under the Letters of Credit issued under this Agreement together with all fees,
charges or other amounts due to Agent and/or Lenders under the Loan Agreement
and the other Loan Documents.  If Agent
should for any reason receive less than the full amount of the interest or
other compensation due under the Loan Documents, the amount received by Agent
shall be distributed pursuant to Section 12.4(d) hereof.

 

(b)           If any such payment received by the Agent is rescinded, determined to
be unenforceable or invalid or is otherwise required to be returned for any
reason at any time, whether 

 

47

 

before
or after termination of this Agreement and the other Loan Documents, each
Lender will, upon written notice from the Agent, promptly pay over to the Agent
its Pro Rata Line Percentage or Pro Rata Cap Ex Percentage, as applicable of
the amount rescinded, held unenforceable or invalid or required to be returned,
together with interest and other fees thereon if also required to be rescinded
or returned. If Agent does not receive such sums from any Lender within one (1) Business
Day after receipt by such Lender of the written notice from Agent referred to
above, Agent shall also be entitled to receive from such Lender interest on
such amount at a per annum rate equal to the Prime Rate during the period
commencing on the date of receipt by such Lender of such written notice from
Agent and ending on (but excluding) the date Agent recovers such amount.

 

(c)           All payments by the Agent and the Lenders to each other hereunder or
under the Loan Documents shall be in immediately available funds.  The Agent will at all times maintain proper
books of account and records reflecting the interest of each Lender in the
Obligations, in a manner customary to the Agent’s keeping of such records,
which books and records shall be available for inspection by each Lender at reasonable
times during normal business hours, at such Lender’s sole expense.

 

(d)           From and after an Acceleration Date, the proceeds from the sale or
other disposition of any Collateral and all other payments received on account
of the Obligations shall be applied in the following order of priority (in each
case without duplication):

 

(i)            First, to reimburse Agent, any Lender or
Issuing Bank, for out-of-pocket costs, expenses and disbursements (including,
without limitation, reasonable attorney’s fees and expenses) incurred by Agent,
any Lender or Issuing Bank in connection with the collection of the Obligations
or the exercise of any such party’s rights and remedies under the Loan
Documents;

 

(ii)           Second, to Issuing Bank as cash collateral to the extent of the
outstanding L/C Obligations;

 

(iii)          Third, to each Credit Facility in an amount equal to each Credit
Facility’s Proportionate Share (which sums shall then be distributed to each
Lender participating in such Credit Facility in the Credit Facility Order of
Priority in accordance with each such participating Lender’s pro rata share of
such Credit Facility as set forth on Schedule
A hereto);

 

(iv)          Fourth, to advances made in violation of Section 11.1;

 

(v)           Fifth, to any other indebtedness then due to any Lender from Borrower
(ratably according to the respective amount of such other indebtedness then
outstanding); and

 

(vi)          Sixth, the balance, if any, as required by law.

 

(e)           To the extent necessary for each Lender’s actual percentage of all
outstanding advances under the Working Capital Line to equal its applicable Pro
Rata Line Percentage, the Lender which obtains a greater share of any payments
(by set off or otherwise) than its applicable Pro Rata Line Percentage shall
acquire a participation in the applicable outstanding balances of the Pro Rata
Line Shares of the Lenders as determined by Agent in order that such Lender’s
percentage of outstanding advances is equal to its Pro Rata Line Percentage.

 

48

 

(f)            To the extent necessary for each Cap Ex Line
Lender’s actual percentage of all outstanding advances under the Cap Ex Line to
equal its applicable Pro Rata Cap Ex Percentage, the Cap Ex Line Lender which
obtains a greater share of any payments (by set off or otherwise) than its
applicable Pro Rata Cap Ex Percentage shall acquire a participation in the
applicable outstanding balances of the Pro Rata Cap Ex Shares of the Cap Ex
Line Lenders as determined by Agent in order that such Cap Ex Line Lender’s
percentage of outstanding advances is equal to its Pro Rata Cap Ex Percentage.

 

12.5         Delegation of Duties;
Discretion; Instructions.  Agent
may perform any of its duties hereunder or under the Loan Documents by or
through its agents or employees.  As to
any matters not expressly provided for by the Loan Documents or this Agreement,
the Agent may exercise its discretion to take or refrain from taking any
action.  If Agent is required to act or
to refrain from acting under the terms of this Agreement upon the instructions
of all Lenders or Required Lenders, as applicable, it shall be fully protected
in so acting or refraining from acting upon the required instructions.  Notwithstanding the foregoing, Agent shall
not be required to take any action which exposes Agent to liability or which is
contrary to any of the Loan Documents or applicable law.  Agent may require that it be furnished with
an indemnification from each Lender for such Lender’s Pro Rata Line Percentage
of such liability, in form reasonably satisfactory to Agent as a condition of
Agent acting or refraining from acting upon the instructions of all Lenders or
Required Lenders.  If Agent is one of the
Lenders, an indemnification from Agent to itself will not be required.

 

12.6         Nature of Duties.  Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Loan Documents.  Neither Agent nor any of
its officers, directors, employees or agents shall be (a) liable for any
action taken or omitted by them as such hereunder or in connection herewith,
unless caused by their gross negligence or willful misconduct, or (b) responsible
in any manner to any Lender for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in any of the
Loan Documents or in any certificate, report, statement or other documents
referred to or provided for in, or received by Agent or any Lender under or in
connection with, this Agreement or any of the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Collateral or any of the Loan Documents or for any failure of
the Borrower to perform their obligations under the Loan Documents or for the
financial condition of Borrower.  Any liability
of the Agent to the Lenders hereunder or under any of the Loan Documents shall
be limited only to direct loss or liability suffered by such Lender and shall
not be for indirect, consequential or incidental liability.  Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any of
the Loan Documents, or to inspect the properties, books or records of the
Borrower.  Except as expressly provided
herein and in the Loan Documents, the duties of the Agent shall be mechanical
and administrative in nature.  Agent
shall not have, by reason of this Agreement, a fiduciary relationship in respect
of any Lender.  Nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligation in respect of this Agreement, except as expressly set
forth herein and in the Loan Documents.

 

12.7         Lack of Reliance on the
Agent.  Independently
and without reliance upon Agent or any other Lender, each Lender has made and
shall continue to make (a) its own independent investigation of the
financial condition and affairs of the Borrower in connection with the
extension of credit to the Borrower and the continuance of such credit
facilities and the taking or not taking of any action in connection herewith,
and (b) its own appraisal of the credit worthiness of Borrower.  Agent shall have no duty or responsibility
either initially or on a continuing basis, to provide Lenders 

 

49

 

with
any credit or other information with respect thereto, coming into its
possession.  Lenders acknowledge and
agree that Agent has not made any representations or warranties to any Lender
regarding the financial conditions, affairs or creditworthiness of Borrower.

 

12.8         Resignation and Removal of
Agent.  Agent
may resign on thirty (30) days’ prior written notice to each of the
Lenders.  In addition, upon thirty (30)
days’ prior written notice to Agent from all Lenders other than Agent, such
Lenders may remove Agent in its capacity as Agent (but not as Lender) if such
Lenders have determined that Agent has acted (or failed to act when requested
to do so) in a grossly negligent manner or such action or inaction constitutes
willful misconduct or, following the occurrence of a Default or an Event of
Default, has failed to act in a manner reasonably requested by such
Lenders.  Upon resignation or removal,
the Required Lenders shall have the right to appoint a successor Agent.  Upon the acceptance of the appointment as a
successor Agent, such successor Agent shall succeed to and become vested with
all rights, powers, obligations and duties of the resigning or removed Agent
and the resigning or removed Agent shall be discharged from all of its
obligations hereunder, provided that such resigning or removed Agent shall
execute such UCC assignment statements and other documents and take such other
actions as are reasonable requested by Lenders in connection with the
appointment of a successor Agent.

 

12.9         Certain Rights of Agent.  If Agent shall request
instructions from the Lenders with respect to any act or action (including
failure to act) in connection with the Loan Documents, Agent shall be entitled
to refrain from such act or taking such action unless and until Agent shall
have received instructions from all Lenders or the Required Lenders, as
applicable.  Agent shall not incur
liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting in accordance with the written instructions of all Lenders or the
Required Lenders, as applicable.  All
requests for instructions by Agent and all responses by the Lenders to such
requests must be in writing, which writing may include a telecopied
transmission.

 

12.10       Reliance.  Agent shall be entitled to rely,
and shall be fully protected in relying, upon any notice, writing, resolution, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement, the Loan Documents and its duties hereunder and
thereunder, upon the advice of counsel selected by it.  Agent may employ and reply upon agents and
attorneys-in-fact and shall not be liable for the default or misconduct of any
such agents or attorneys-in-fact selected by Agent with reasonable care.

 

12.11       Notice of Default.  Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default under the
Loan Documents unless Agent has received written notice from a Lender or
Borrower referring to the Loan Documents, describing such Event of Default and
stating that such notice is a “notice of default”.  In the event that any Lender shall have “actual
knowledge” of the occurrence of any Event of Default, such Lender shall
promptly notify Agent in writing.  Upon
such notice of the occurrence of an Event of Default, Agent shall promptly give
notice thereof to the Lenders.  For
purposes hereof, a Lender shall be deemed to have “actual knowledge” if any
such information is known to an officer of such Lender responsible for the
credit facilities contemplated hereunder.

 

12.12       The Agent and Issuing Bank
in its Capacity as Lender.  With
respect to the advances and credit accommodations made by Univest or WBNA to
Borrower under the Loan 

 

50

 

Documents,
each of Univest and WBNA shall have the same rights and powers hereunder as any
other Lender as if it were not performing the duties as Agent or Issuing Bank,
respectively specified herein; and the term “Lender” or any similar terms
shall, unless the context clearly otherwise indicates, include Univest and
WBNA, in their individual capacity as a Lender.

 

12.13       Other Loans.  Agent and Issuing Bank may
engage in other business with Borrower as if it were not performing the duties
specified herein, and may accept fees and other consideration from Borrower for
services in connection therewith without having to account for the same to the
Lenders.  In the event that any Lender
obtains collateral (other than the Collateral described in this Agreement) to
secure any other loan or credit accommodation extended by such Lender to
Borrower and such other collateral also secures any of the Obligations, such
Lender may apply the proceeds of such other collateral towards payment of all
other obligations of Borrower to such Lender before applying any proceeds
thereof to any Obligations for the benefit of the Lenders as provided
herein.  Notwithstanding the foregoing,
any items or funds against which a Lender any affiliate of any Lender exercises
a right of set-off or turnover pursuant to this Agreement shall be applied
toward the Obligations.  In the event
that any Lender extends credit accommodations to Borrower other than in
connection with the transactions contemplated in this Agreement, and such
credit accommodations are secured by the Collateral, such Lender agrees that
all proceeds of the Collateral shall be used first to pay all Obligations
incurred in connection with the transaction contemplated in this Agreement.

 

12.14       Disclosure of Information;
Audits.  Each
Lender, at the request of another Lender, will share with such other Lender
such financial and other information in the possession of the Lender regarding
the Borrower as may be reasonably requested by another Lender.  Borrower consents to the disclosure of all of
such information.  To the extent any
Lender performs an audit of the financial condition and operations of Borrower
or the Collateral, such Lender shall make the results of such audit available
to the other Lenders.  Notwithstanding
the foregoing, no Lender shall have any liability to the other Lenders related
to the audit performed by such Lender except for errors in connection with such
audit which constitute gross negligence or willful misconduct by the Lender or
Lender’s agent performing such audit.

 

12.15       Actions by Agent; Amendments; Waivers.

 

(a)           Subject to the other provisions of Section 12
of this Agreement and except as expressly set forth herein, Agent shall have
the sole and exclusive right and obligation to service and administer the
Obligations, the Collateral and the Loan Documents, including, without
limitation, the right to exercise all rights, remedies, privileges and options
under the Loan Documents, including, without limitation, the right to determine
whether advances are to be made hereunder and whether any Letters of Credit
should be issued, amended, extended or reinstated.  Issuing Bank shall have the sole and exclusive
right and obligation to determine whether draws should be honored under any
Letter of Credit.

 

(b)           Notwithstanding the provisions of Section 12.15(a) above,
Agent shall not enter into any waiver, amendment, supplement, replacement or
extension of this Agreement, any of the other Loan Documents or any of the
terms or conditions thereof without the prior written consent of Required
Lenders.

 

(c)           Any action taken in accordance with the terms of this Section 12.15, including any
amendment, supplement, waiver, consent or election, shall apply equally to each
of the Lenders and shall be binding upon the Lenders, the Agent and all
participants.  In the case of any 

 

51

 

waiver
of any Event of Default, the Event of Default waived shall be deemed to be cured
and not continuing, but no waiver of a specific Event of Default shall extend
to any subsequent Event of Default (whether or not the subsequent Event of
Default is the same as the Event of Default which was waived), or impair any
right consequent thereon.

 

(d)           After the occurrence of an Event of Default, Agent shall take such
action as may be directed by the Required Lenders, provided that until it
receives such direction, Agent shall have the sole and exclusive right, with
communication (to the extent reasonably practicable under the circumstances)
with all Lenders, to exercise or refrain from exercising any and all rights,
remedies, privileges and options under the Loan Documents and available at law
or in equity as Agent shall deem advisable in the best interest of the Lenders
to protect and enforce the rights of the Agent and the Lenders and collect the
Obligations, including, without limitation, instituting and pursuing all legal
actions against Borrower, or defending any and all actions brought by any
Lender or other Person, or incurring expenses or otherwise making expenditures
to protect the Obligations, the Collateral or the Agent’s and the Lenders’
rights and remedies.

 

(e)           To the extent Agent is required to obtain or otherwise elects to seek
the consent of Lenders to an action Agent desires to take, if any Lender fails
to notify Agent, in writing, of its consent or dissent to any request of Agent
hereunder within five (5) Business Days of such Lender’s receipt of such
written request (which may include a telecopied transmission), such Lender
shall be deemed to have given its consent thereto, unless such Lender has given
the Agent written notice (which may include a telecopied transmission) within
such five (5) Business Day period requesting an additional five (5) Business
Days to respond.  If such Lender then
fails to consent or dissent within the additional five (5) Business Day
period, such Lender shall be deemed to have given its consent thereto.

 

12.16       Sharing of Risk; Indemnification; Expenses.

 

(a)           To the extent Agent or Issuing Bank is not reimbursed by Borrower, the
Lenders will reimburse and indemnify the Agent and Issuing Bank in proportion
to their respective Pro Rata Line Percentages and Pro Rata Cap Ex Percentages,
as applicable, for and against any and all liabilities, obligations, losses
(except the failure of the Agent or Issuing Bank to receive the fees which are
to be retained by Agent or Issuing Bank in full), damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including, without limitation, attorneys’ fees, which may be
imposed on, incurred by or asserted against Agent or Issuing Bank in performing
its duties hereunder or under the Loan Documents, or in any way relating to or
arising out of this Agreement or the Loan Documents.

 

(b)           All reasonable out-of-pocket costs and expenses incurred by Agent or
Issuing Bank and not reimbursed on demand by Borrower, in connection with the
creation, amendment, administration, termination and enforcement of the
Obligations and/or the exercise of the Agent’s or Issuing Bank’s rights and
duties hereunder or under the Loan Documents (including, without limitation,
audit expenses, counsel fees and expenditures to protect, preserve and defend
Agent’s, Issuing Bank’s and each Lender’s rights and interest under the Loan
Documents) shall be shared and paid on demand by Lenders, pro rata based on
their respective Pro Rata Line Percentages and Pro Rata Cap Ex Percentages, as
applicable.  Any such sums not paid on
demand shall accrue interest at the Prime Rate until paid.

 

52

 

(c)           Agent and Issuing Bank may deduct from payments or distributions to be
made to Lenders such funds as may be necessary to pay or reimburse Agent or
Issuing Bank, as applicable, for the reimbursement, indemnification and expense
obligations of the Lenders described in this Section 12.16.

 

(d)           In connection with reimbursement, indemnification and expense
obligations set forth in this Section 12.16,
Agent shall provide a reasonable accounting to Lenders describing such expenses
or indemnification obligations.

 

12.17       Consultation with Counsel.  The Agent and the Issuing Bank
may consult with legal counsel and any other profession advisors or consultants
deemed necessary or appropriate and selected by Agent and shall not be liable
for any action taken or suffered in good faith by it in accordance with the
advice of such counsel.

 

12.18       Documents.  Neither Agent nor the Issuing
Bank shall be under a duty to examine or pass upon the effectiveness,
genuineness or validity of this Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or in connection
therewith, and the Agent shall be entitled to assume that the same are valid,
effective and genuine and what they purport to be.  In addition the Agent and the Issuing Bank
shall not be liable for failing to make any inquiry concerning the accuracy,
performance or observance of any of the terms, provisions or conditions of such
instrument or document.

 

12.19       Several Obligations.  The obligation of each Lender is
several, and neither the Agent nor any other Lender, nor the Issuing Bank shall
be responsible for any obligation or commitment hereunder of any other Lender.

 

12.20       No Third Party Beneficiary.  The provisions of Article 12 of this Agreement are
intended solely for the benefit of Agent, Lenders and the Issuing Bank and not
for the benefit of any third party, including without limitation, Borrower and
any amendment to Article 12
of this Agreement shall not require Borrower’s consent.

 

12.21       Participations and Assignments.

 

(a)           Each Lender may at any time grant participations of its Pro Rata Line
Share or Pro Rata Cap Ex Share, as applicable, in and to its interests under
this Agreement (collectively, “Participations”)
to any other lending office of such Lender or to any other bank, lending
institution or other entity which the granting Lender reasonably determines has
the requisite sophistication to evaluate the merits and risks of investments in
Participations (“Participants”);
provided however that: (i) all amounts payable by the Borrower to each
Lender hereunder and voting rights of each Lender hereunder shall be determined
as if such Lender had not granted such Participation; (ii) any agreement
pursuant to which any Lender may grant a Participation (A) shall provide
that such Lender is not delegating and therefore shall retain the sole right
and responsibility to exercise all of its rights and privileges under this
Agreement, including, without limitation, the right to approve any amendment,
modification or waiver of any provisions of this Agreement and (B) shall
not release or discharge such Lender from its duties and obligations, which shall
remain absolute, hereunder, including its obligation to make advances
hereunder; and (iii) upon entering into any such Participation, the Lender
granting such participation shall give thirty (30) days prior written notice
thereof to Agent.

 

53

 

(b)           Each Lender may at any time assign all or any portion of its Pro Rata
Line Share or Pro Rata Cap Ex Share, as applicable, (together with its rights
and obligations with respect thereto) and its right, title and interest therein
and in and to this Agreement and the other Loan Documents to a Lender or any
Affiliate of a Lender, or to any other bank or financial institution, in each
case with thirty (30) days prior written notice to Agent and Borrower and
subject to the prior written consent of the Agent and, provided that no Default
or Event of Default shall have occurred and be continuing, the prior written
consent of Borrower, which consent of Borrower shall not be unreasonably
withheld or delayed; provided however that (i) any assignment to another
Lender (which is then a party to this Agreement) or to any other bank or
financial institution shall be in the minimum amount of Five Million Dollars
($5,000,000.00); (ii) the parties to such assignment shall execute an
Assignment and Acceptance in the form of Schedule
D hereto and such other documents reasonably requested by Agent,
and Borrower shall execute such replacement Notes, amendments and other items
as may be requested by Agent; and (iii) the parties to the assignment
shall pay Agent a processing fee of Three Thousand Five Hundred Dollars
($3,500.00)  at the time of
providing such assignment to Agent.

 

(c)           Notwithstanding anything to the contrary contained herein, each Lender
may at any time, pledge or assign all or any portion of its rights under this
Agreement and/or its interest in the Loans, the Notes, Letter of Credit, L/C
Obligations or any interest in any participation, including collateral
therefore, to any Federal Reserve Bank in accordance with applicable law,
provided that no such assignment shall release the assigning Lender from its
obligations hereunder.

 

(SIGNATURES ON FOLLOWING PAGE)

 

54

 

IN WITNESS WHEREOF, Borrower and Agent have duly executed this Agreement as of the 16th
day of December, 2004.

 

	
  AGENT:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
  UNIVEST NATIONAL BANK AND TRUST 

  	
   

  	
  FARM & HOME OIL COMPANY

  
	
  CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  John T. Landes  

  	
   

  	
   

  	
  By:

  	
    /s/
  Daryl Hackman  

  	
   

  
	
   

  	
  John
  Landes, Senior Vice President

  	
   

  	
   

  	
  Daryl
  Hackman, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDERS:

  	
   

  	
   

  
	
  UNIVEST NATIONAL BANK AND TRUST

  	
   

  	
   

  
	
  CO.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  John T. Landes  

  	
   

  	
   

  	
   

  
	
   

  	
  John
  Landes, Senior Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL

  	
   

  	
   

  
	
  ASSOCIATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Bruce Morgan  

  	
   

  	
   

  	
   

  
	
  Name/Title:
  Bruce Morgan, Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FULTON BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  Christopher M. Markley

  	
   

  	
   

  	
   

  
	
  Name/Title:
  Christopher M. Markley, Vice  

  	
   

  	
   

  
	
   

  	
   

  	
   President

  	
   

  	
   

  
								

 

55

 

SCHEDULE A

 

Pro Rata
Line Percentages and Pro Rata Cap Ex Percentages/Financial Institutions Pro
Rata Percentages

 

	
  Financial

  Institution

  	
   

  	
  Working 

  Capital Line 

  (“Pro Rata 

  Line 

  Percentage”)

  	
   

  	
  Pro Rata Line

  Share

  	
   

  	
  Cap Ex Line 

  (“Pro Rata 

  Cap Ex 

  Percentage”)

  	
   

  	
  Pro Rata Cap 

  Ex Share

  	
   

  	
  Macungie

  Term

  Loan

  	
   

  	
  Pottstown 

  Term 

  Loan

  	
   

  	
  WC Term 

  Loan

  	
   

  
	
  Univest National Bank and Trust Co.

  	
   

  	
  10

  	
  %

  	
  $

  	
  7,000,000.00

  	
   

  	
  70

  	
  %

  	
  $

  	
  3,500,000.00

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  60

  	
  %

  	
  $

  	
  42,000,000.00

  	
   

  	
  30

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  	
  80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fulton Bank

  	
   

  	
  30

  	
  %

  	
  $

  	
  21,000,000.00

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  

 

 

SCHEDULE B

 

Closing
Conditions

 

The
obligation of Lenders to make Loans and/or extend Letters of Credit shall be
subject to the satisfaction, on or prior to the date of the Amended and
Restated Loan and Security Agreement, of the following conditions precedent:

 

1.             Loan Documents.

 

(a)           Receipt by Agent of duly
executed counterparts of the following:

 

(i)            Amended and Restated Loan
and Security Agreement

 

(ii)           Amended and Restated Notes

 

(iii)          Amended and Restated
Intellectual Property Agreement

 

(iv)          Amended and Restated
Security Agreement of Hedging Account

 

(v)           Amended and Restated
Collateral Assignment of Rights.

 

(b)           Receipt by Agent of all
documents it may reasonably request relating to the existence of Borrower, the
corporate authority for and the validity of the Amended and Restated Loan and
Security Agreement and the other related documents, and any other matters
relevant thereto, all in form and substance satisfactory to Agent in its sole
good faith discretion.

 

2.             Personal Property Collateral.  Receipt by Agent of the
following:

 

(a)           Searches of Uniform
Commercial Code (“UCC”) filings in
the jurisdiction of the chief executive office of Borrower, the jurisdiction of
Borrower’s organization and such other jurisdictions where Collateral is
located, copies of the financing statements on file in such jurisdictions and
evidence that there are no liens, security interests or judgments in favor of
third parties with respect to Borrower or any Collateral.

 

(b)           UCC financing statements for
each appropriate jurisdiction as is necessary, in Agent’s sole discretion, to
perfect Agent’s security interest in the Collateral.

 

(c)           Duly executed consents as
are necessary, in Agent’s sole discretion, to perfect Agent’s security interest
in the Collateral.

 

(d)           Delivery to Agent of
personal property Collateral to the extent necessary or appropriate to perfect
Agent’s security interest therein.

 

3.             Insurance Requirements. 
Receipt by Agent of copies of insurance policies or ACORD Form 27
and ACORD Form 25 evidence of insurance of Borrower evidencing liability
and casualty insurance meeting the requirements of the Amended and Restated
Loan and Security Agreement and bearing endorsements satisfactory to Agent.

 

 

4.             Consents. 
Receipt by Agent of evidence that all governmental, shareholder and
material third party consents and approvals necessary or desirable in
connection with the execution, delivery and performance of the Amended and
Restated Loan and Security Agreement and the extension of Loans and issuance of
Letters of Credit thereunder have been obtained.

 

5.             Opinions. 
Receipt by Agent of an opinion, or opinions (which shall cover, among
other things, authority, legality, validity, binding effect, enforceability and
attachment and perfection of liens), satisfactory to Agent, addressed to Agent
and dated as of the date of the Amended and Restated Loan and Security
Agreement, from legal counsel to Borrower.

 

6.             Corporate Documents. 
Delivery of certified copies of all charter and operating documents of
Borrower, good-standing/subsistence certificates from each jurisdiction in
which Borrower conducts business, an incumbency certificate and certified
resolutions of Borrower’s board of directors authorizing the execution,
delivery and performance of the loan documents.

 

7.             Borrower Certificates.

 

(a)           Receipt by Agent of a
certificate or certificates executed by the chief financial officer or
treasurer of Borrower as of the date of the Amended and Restated Loan and
Security Agreement stating that:

 

(i)            immediately after giving
effect to the Amended and Restated Loan and Security Agreement and all the
transactions contemplated therein to occur on such date, (A) Borrower
shall be in compliance with the covenants contained in the Amended and Restated
Loan and Security Agreement and (b) no Default or Event of Default shall
have occurred and be continuing;

 

(ii)           the representations and
warranties of Borrower made in or pursuant to the Amended and Restated Loan and
Security Agreement are true and correct;

 

(iii)          there are no judgments
outstanding or actions, suits or proceedings pending or, to the best of
Borrower’s knowledge, threatened against Borrower at law or in equity before
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which involves
the possibility of any judgment or liability in excess of One Hundred Thousand
Dollars ($100,000.00) individually or One Million Dollars ($1,000,000.00) in
the aggregate;

 

(iv)          no material adverse change
in the business, operations, profits or prospects of Borrower or in the
condition of the assets of Borrower shall have occurred since June 30,
2004; and

 

(v)           no material adverse change
in the financial markets shall have occurred since June 30, 2004.

 

(b)           Receipt by Agent of a
Solvency Certificate executed by the chief financial officer of Borrower and in
form acceptable to Agent.

 

8.             Fees.  Receipt by Agent of all fees and
expenses due under the Amended and Restated Loan and Security Agreement.

 

2

 

9.             Liabilities. 
Agent shall be satisfied as to the amount and nature of all tax, ERISA,
employee retirement benefits and other contingent liabilities to which Borrower
may be subject.

 

10.           Other. 
Receipt by Agent of such other documents, instruments, agreements or
information as reasonably requested by Agent, including, but not limited to,
information regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material contracts,
debt agreements, property ownership and contingent liabilities of Borrower.

 

The
documents referred to in this Schedule A
shall be delivered to Agent no later than the date of the Amended and Restated
Loan and Security Agreement and shall be satisfactory in form and substance to
Agent.  The certificates and opinions
referred to in this Schedule A
shall be dated the date of the Amended and Restated Loan and Security
Agreement.

 

3

 

SCHEDULE C

 

Form of
Borrowing Base Certificate

 

See Attached.

 

 

SCHEDULE D

 

Form of
Assignment and Acceptance Agreement

 

See Attached.

 

 

Schedule 1.1

 

Existing Loan Documents

 

1.             Amended and Restated Loan and Security
Agreement dated June 27, 2002 (as amended)

 

2.             Amended and Restated Working Capital Line
Note dated June 27, 2002

 

3.             Amended and Restated Cap Ex Note dated June 27,
2002 (as amended)

 

4.             Term-Out Note I dated December 31, 2002

 

5.             Explanation and Waiver of Rights Regarding
Confession of Judgment dated June 27, 2002

 

6.             Explanation and Waiver of Rights Regarding
Confession of Judgment dated December 24, 2002;

 

7.             Security Agreement Assignment of Hedging
Agreement (Solomon Smith Barney Inc.) dated June 27, 2002

 

8.             Security Agreement Assignment of Hedging
Agreement (Carr Futures Inc.) dated June 27, 2002

 

9.             Collateral Assignment of Rights (Fixed Price
Contracts) dated June 27, 2002

 

10.           Intellectual Property Security Agreement dated June 27, 2002

 

11.           Mortgage Note dated June 26, 1996 (as amended)

 

12.           Mortgage Note dated July 17, 1996 (as amended)

 

 

Schedule 2.6(g-1)

 

Form of Working Capital Line Notes

 

See Attached.

 

 

Schedule 2.6(g-2)

 

Form of Cap Ex Notes and Allonges

 

See Attached.

 

 

FIRST AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
(the “Amendment”) is made
effective as of the 10th day of January, 2005, by and among FARM & HOME OIL COMPANY (“Borrower”) and UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”).

 

BACKGROUND

 

A.            Borrower, Agent and
the Lenders named therein are parties to that certain Amended and Restated Loan
and Security Agreement dated as of December 16, 2004 (as the same may be
amended, modified, supplemented or restated from time to time, the “Loan Agreement”).

 

B.            Borrower, Agent and
Lenders desire to amend the Loan Agreement as set forth herein.

 

C.            Capitalized terms
used herein and not otherwise defined shall have the meanings provided for such
terms in the Loan Agreement.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             Cap Ex Line Extension.  The reference to “October 31, 2006” in Section 2.2(a) of the Loan
Agreement is hereby deleted in its entirety and replaced with “November 30,
2005”.

 

2.             Further Agreements and Representations.  Borrower does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to
constitute a novation of the Loan Agreement or any of the other Loan Documents,
and do not constitute a release, termination or waiver of any of the rights or
remedies granted to Agent or any Lender therein, which rights and remedies are
hereby ratified,

 

 

confirmed, extended and
continued as security for the obligations of Borrower to Agent and Lenders
under the Loan Agreement and the other Loan Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

3.             Additional Documents; Further Assurances.  Borrower covenants and agrees to execute and
deliver to Agent, or to cause to be executed and delivered to Agent
contemporaneously herewith, at the sole cost and expense of Borrower, this
Amendment and any and all other documents, agreements, statements, resolutions,
certificates, consents and information as Agent or any Lender may require in
connection with the matters or actions described herein.  Borrower further covenants and agrees to
execute and deliver to Agent or to cause to be executed and delivered at the
sole cost and expense of Borrower, from time to time, any and all other
documents, agreements, statements, certificates and information as Agent or any
Lender shall reasonably request to evidence or effect the terms hereof, the
Loan Agreement, as amended, or any of the other Loan Documents, or to enforce
or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

4.             Fees, Cost, Expenses and Expenditures.  Borrower will pay all of Agent’s and each
Lender’s expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment and the consummation of the
transactions contemplated hereunder, including without limitation, fees,
reasonable attorney’s fees, disbursements, expenses and disbursements of
counsel retained by Agent or any Lender and all fees related to title
insurance, filings, recording of documents and searches, whether or not the
transactions contemplated hereunder are consummated.

 

5.             Inconsistencies.  To the extent of any inconsistency
between the terms, conditions and provisions of this Amendment and the terms,
conditions and provisions of the Loan Agreement or the other Loan Documents,
the terms, conditions and provisions of this Amendment shall prevail.  All terms, conditions and provisions of the
Loan Agreement and the other Loan Documents not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Borrower.

 

6.             Construction.  All references to the Loan Agreement
therein or in any other Loan Documents shall be deemed to be a reference to the
Loan Agreement as amended hereby.

 

7.             No Waiver. 
Nothing contained herein and no actions taken pursuant to the terms
hereof are intended to nor shall they constitute a waiver by Agent or any
Lender of any rights or remedies available to Agent or any Lender at law or in
equity or as provided in the Loan Agreement or the other Loan Documents.

 

8.             Binding Effect.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

 

9.             Severability.  The provisions of this Amendment and all
other Loan Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.

 

10.           Modifications.  No modification of this Amendment or any of
the Loan Documents shall be binding or enforceable unless in writing and signed
by or on behalf of the party against whom enforcement is sought.

 

11.           Governing Law.  This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

12.           Headings.  The headings of the sections of this
Amendment are inserted for convenience only and shall not be deemed to
constitute a part of this Amendment.

 

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the
date first above written.

 

	
   

  	
  FARM & HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Daryl
  Hackman

  	
   

  
	
   

  	
  Name/Title:

  	
    Daryl Hackman,
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST NATIONAL BANK AND

  TRUST CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/John T.
  Landes

  	
   

  
	
   

  	
  Name/Title:

  	
    John T.
  Landes, SVP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Daniel J. Astolf

  	
   

  
	
   

  	
  Name/Title:

  	
    Daniel J.
  Astolf, SVP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Christopher M. Markley

  	
   

  
	
   

  	
  Name/Title:

  	
    Christopher M.
  Markley, VP

  	
   

  
							

 

 

SECOND AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
(the “Amendment”) is made
effective as of the 13th day of July, 2005, by and among FARM & HOME OIL COMPANY (“Borrower”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”), WACHOVIA
BANK, NATIONAL ASSOCIATION, as Issuing Bank (“Issuing Bank”) and the Lenders identified
on the signature pages hereto.

 

BACKGROUND

 

A.            Borrower, Agent,
Issuing Bank and the Lenders named therein are parties to that certain Amended
and Restated Loan and Security Agreement dated as of December 16, 2004 (as
amended by that certain First Amendment to Amended and Restated Loan and
Security Agreement dated January 10, 2005 and as the same may be further
amended, modified, supplemented or restated from time to time, the “Loan Agreement”).

 

B.            Borrower, Agent,
Issuing Bank and Lenders desire to further amend the Loan Agreement as set
forth herein.

 

C.            Capitalized terms
used herein and not otherwise defined shall have the meanings provided for such
terms in the Loan Agreement.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             Seasonal Period.  The
definition of “Seasonal Period”
set forth in Section 10.1(oo)
of the Loan Agreement is hereby amended by replacing the reference therein to “September 1, 2005” with “July 1, 2005”.

 

2.             Further Agreements and
Representations.  Borrower does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to
constitute a novation of the Loan Agreement or any of the other Loan Documents,
and do not constitute a release, termination or waiver of any of the rights or
remedies granted to Agent or any Lender therein, which rights and remedies are
hereby ratified, confirmed, extended and continued as security for the
obligations of Borrower to Agent and Lenders under the Loan Agreement and the
other Loan Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

3.             Additional Documents;
Further Assurances.  Borrower covenants and agrees to execute and
deliver to Agent, or to cause to be executed and delivered to Agent
contemporaneously herewith, at the sole cost and expense of Borrower, this
Amendment and any and all other documents, agreements, statements, resolutions,
certificates, consents and information as Agent or any Lender may require in
connection with the matters or actions described herein.  Borrower further covenants and agrees to
execute and deliver to Agent or to cause to be executed and delivered at the
sole cost and expense of Borrower, from time to time, any and all other
documents, agreements, statements, certificates and information as Agent or any
Lender shall reasonably request to evidence or effect the terms hereof, the
Loan Agreement, as amended, or any of the other Loan Documents, or to enforce
or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

4.             Fees, Cost, Expenses and
Expenditures.  Borrower will pay all of Agent’s and each
Lender’s expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment and the consummation of the
transactions contemplated hereunder, including without limitation, fees,
reasonable attorney’s fees, disbursements, expenses and disbursements of
counsel retained by Agent or any Lender and all fees related to title
insurance, filings, recording of documents and searches, whether or not the
transactions contemplated hereunder are consummated.

 

5.             Inconsistencies.  To the extent of any inconsistency between the terms, conditions and
provisions of this Amendment and the terms, conditions and provisions of the
Loan Agreement or the other Loan Documents, the terms, conditions and
provisions of this Amendment shall prevail. 
All terms, conditions and provisions of the Loan Agreement and the other
Loan Documents not inconsistent herewith shall remain in full force and effect
and are hereby ratified and confirmed by Borrower.

 

6.             Construction.  All references to the Loan Agreement therein or in any other Loan
Documents shall be deemed to be a reference to the Loan Agreement as amended
hereby.

 

7.             No Waiver.  Nothing contained herein and no actions taken pursuant to the terms
hereof are intended to nor shall they constitute a waiver by Agent or any
Lender of any rights or remedies available to Agent or any Lender at law or in
equity or as provided in the Loan Agreement or the other Loan Documents.

 

 

8.             Binding Effect.  This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

 

9.             Severability.  The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.

 

10.           Modifications.  No
modification of this Amendment or any of the Loan Documents shall be binding or
enforceable unless in writing and signed by or on behalf of the party against
whom enforcement is sought.

 

11.           Governing Law.  This Amendment shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.

 

12.           Headings.  The
headings of the sections of this Amendment are inserted for convenience only
and shall not be deemed to constitute a part of this Amendment.

 

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the
date first above written.

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  FARM & HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
      /s/
  Daryl Hackman

  	
   

  
	
   

  	
  Name/Title:

  	
    Daryl Hackman,
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT AND
  LENDER:

  
	
   

  	
   

  
	
   

  	
  UNIVEST     NATIONAL     BANK     AND

  TRUST CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Philip C.
  Jackson

  	
   

  
	
   

  	
  Name/Title: Philip C.
  Jackson, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER AND ISSUING BANK:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA       BANK,       NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
      /s/
  Thomas C. Woodward

  	
   

  
	
   

  	
  Name/Title: Thomas C.
  Woodward

  
	
   

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  FULTON BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Christopher M. Markley 

  	
   

  
	
   

  	
  Name/Title:

  	
    Christopher M.
  Markley

  	
   

  
	
   

  	
   

  	
  Vice President

  
					

 

 

THIRD
AMENDMENT TO AMENDED AND RESTATED

LOAN AND
SECURITY AGREEMENT

 

THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
(the “Amendment”) is made
effective as of the 19th day of August, 2005, by and among FARM & HOME OIL COMPANY (“Borrower”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”), WACHOVIA
BANK, NATIONAL ASSOCIATION, as Issuing Bank
and the Lenders identified on the signature pages hereto (collectively,
the “Lenders”).

 

BACKGROUND

 

A.            Borrower, Agent,
Issuing Bank, Univest National Bank and Trust Co., Wachovia Bank, National
Association and Fulton Bank are parties to that certain Amended and Restated
Loan and Security Agreement dated as of December 16, 2004 (as amended by
that certain First Amendment to Amended and Restated Loan and Security
Agreement dated January 10, 2005, that certain Second Amendment to Amended
and Restated Loan and Security Agreement dated July 13, 2005 and as the
same may hereafter be amended, modified, supplemented or restated from time to
time, the “Loan Agreement”).

 

B.            Borrower, Agent,
Issuing Bank and Lenders desire to amend the Loan Agreement as set forth
herein.

 

C.            Capitalized terms
used herein and not otherwise defined shall have the meanings provided for such
terms in the Loan Agreement.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             New Lender.  By its execution of this Amendment where
indicated below, Citizens Bank of Pennsylvania (“Citizens”) joins in the Loan Agreement and each of the other
Loan Documents as a Lender thereunder. 
From and after the date hereof, Citizens shall be a Lender under the
Loan Agreement and each of the other Loan Documents, with all of the rights,
remedies, powers, privileges and obligations of all other Lenders
thereunder.  Contemporaneously with the
execution hereof, Borrower shall execute and deliver to Citizens a Working
Capital Line Note evidencing Borrower’s obligation to repay Citizens its Pro
Rata Line Share.

 

2.             Increase to
Maximum Seasonal Working Capital Line Amount.  Section 10.1(y) of
the Loan Agreement is hereby amended by deleting the reference therein to “Seventy Million Dollars ($70,000,000.00)” and replacing it
with “Ninety Million Dollars ($90,000,000.00)”.

 

3.             Revised Schedule “A”.  Schedule
“A” to the Loan Agreement is hereby deleted in its entirety and
replaced with Schedule “A”
attached hereto.

 

4.             Further Agreements
and Representations.  Borrower
does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to
constitute a novation of the Loan Agreement or any of the other Loan Documents,
and do not constitute a release, termination or waiver of any of the rights or
remedies granted to Agent or any Lender therein, which rights and remedies are
hereby ratified, confirmed, extended and continued as security for the
obligations of Borrower to Agent and Lenders under the Loan Agreement and the
other Loan Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

5.             Additional
Documents; Further Assurances. 
Borrower covenants and agrees to execute and deliver to Agent, or to
cause to be executed and delivered to Agent contemporaneously herewith, at the
sole cost and expense of Borrower, this Amendment and any and all other
documents, agreements, statements, resolutions, certificates, consents and
information as Agent or any Lender may require in connection with the matters
or actions described herein.  Borrower
further covenants and agrees to execute and deliver to Agent or to cause to be
executed and delivered at the sole cost and expense of Borrower, from time to
time, any and all other documents, agreements, statements, certificates and
information as Agent or any Lender shall reasonably request to evidence or
effect the terms hereof, the Loan Agreement, as amended, or any of the other
Loan Documents, or to enforce or to protect Agent’s and each Lender’s interest
in the Collateral.  All such documents,
agreements, statements, etc., shall be in form and content acceptable to Agent
in its reasonable sole discretion.

 

6.             Fees, Cost,
Expenses and Expenditures. 
Borrower will pay all of Agent’s and each Lender’s expenses in
connection with the review, preparation, negotiation, documentation and closing
of this Amendment and the consummation of the transactions contemplated
hereunder, including without limitation, fees, reasonable attorney’s fees,
disbursements, expenses and disbursements of counsel retained by Agent or any
Lender and all fees related to title insurance, filings, recording of documents
and searches, whether or not the transactions contemplated hereunder are
consummated.

 

7.             Inconsistencies.  To the extent of any inconsistency between
the terms, conditions and provisions of this Amendment and the terms,
conditions and provisions of the Loan Agreement

 

 

or the other Loan Documents, the terms, conditions and provisions of
this Amendment shall prevail.  All terms,
conditions and provisions of the Loan Agreement and the other Loan Documents
not inconsistent herewith shall remain in full force and effect and are hereby
ratified and confirmed by Borrower.

 

8.             Construction.  All references to the Loan Agreement therein
or in any other Loan Documents shall be deemed to be a reference to the Loan
Agreement as amended hereby.

 

9.             No Waiver.  Nothing contained herein and no actions taken
pursuant to the terms hereof are intended to nor shall they constitute a waiver
by Agent or any Lender of any rights or remedies available to Agent or any
Lender at law or in equity or as provided in the Loan Agreement or the other
Loan Documents.

 

10.          Binding Effect.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

11.          Severability.  The provisions of this Amendment and all
other Loan Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.

 

12.          Modifications.  No modification of this Amendment or any of
the Loan Documents shall be binding or enforceable unless in writing and signed
by or on behalf of the party against whom enforcement is sought.

 

13.          Governing Law.  This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

14.          Headings.  The headings of the sections of this
Amendment are inserted for convenience only and shall not be deemed to
constitute a part of this Amendment.

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the
date first above written.

 

 

	
   

  	
  FARM & HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ James M. Boyd

  
	
   

  	
  Name/Title: James M.
  Boyd/CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST NATIONAL BANK AND

  TRUST CO., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Philip C. Jackson

  
	
   

  	
  Name/Title: Philip C.
  Jackson

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as Issuing Bank and a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Thomas C. Woodward

  
	
   

  	
  Name/Title: Thomas C.
  Woodward

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Christopher
  Markley

  
	
   

  	
  Name/Title: Christopher
  Markley, VP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIZENS BANK OF PENNSYLVANIA, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Daniel J. Astolf

  
	
   

  	
  Name/Title: Daniel J.
  Astolf, SVP

  
					

 

 

SCHEDULE “A”

 

Pro Rata
Line Percentages and Pro Rata Cap Ex Percentages/Lenders Pro Rata Percentages

 

	
  Lender 

  	
   

  	
  Working

  Capital Line (“Pro Rata

  Line

  Percentage”) 

  	
   

  	
  Pro Rata Line

  Share 

  	
   

  	
  Cap Ex Line

  (“Pro Rata

  Cap Ex

  Percentage”) 

  	
   

  	
  Pro Rata Cap

  Ex Share 

  	
   

  	
  Macungie

  Term

  Loan 

  	
   

  	
  Pottstown

  Term

  Loan 

  	
   

  	
  WC

  Term

  Loan 

  	
   

  
	
  Univest

  National Bank and Trust Co.

  	
   

  	
  .0777778

  	
  %

  	
  $

  	
  7,000,000.00

  	
   

  	
  70

  	
  %

  	
  $

  	
  3,500,000.00

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  	
  20

  	
  %

  
	
  Wachovia

  Bank, National Association

  	
   

  	
  .4666667

  	
  %

  	
  $

  	
  42,000,000.00

  	
   

  	
  30

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  50

  	
  %

  	
  80

  	
  %

  
	
  Fulton Bank

  	
   

  	
  .2333333

  	
  %

  	
  $

  	
  21,000,000.00

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  
	
  Citizens Bank

  of Pennsylvania

  	
   

  	
  .2222222

  	
  %

  	
  $

  	
  20,000,000.00

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  

 

 

FOURTH AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
(the “Amendment”) is made
effective as of the 7th day of December, 2005, by and among FARM & HOME OIL COMPANY (“Borrower”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”) and UNIVEST NATIONAL BANK AND TRUST CO., as Lender, WACHOVIA BANK, NATIONAL
ASSOCIATION, as Lender, FULTON BANK, as Lender and CITIZENS BANK OF
PENNSYLVANIA, as a Lender (collectively, the “Lenders” and each a “Lender”).

 

BACKGROUND

 

A.            Borrower, Agent and
the Lenders named therein are parties to that certain Amended and Restated Loan
and Security Agreement dated as of December 16, 2004 (as amended by that
certain First Amendment to Amended and Restated Loan and Security Agreement
dated January 10, 2005, that certain Second Amendment to Amended and
Restated Loan and Security Agreement dated July 13, 2005, that certain
Third Amendment to Amended and Restated Loan and Security Agreement dated August 19,
2005 and as the same may be further amended, modified, supplemented or restated
from time to time, the “Loan Agreement”).

 

B.            Borrower, Agent and
Lenders desire to amend the Loan Agreement as set forth herein.

 

C.            Capitalized terms
used herein and not otherwise defined shall have the meanings provided for such
terms in the Loan Agreement.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             Cap Ex Line
Termination.  The Cap Ex Line is
hereby terminated as of the date hereof and the proceeds of the Cap Ex Line are
no longer be available to Borrower. 
Terms and provisions set forth in the Loan Agreement and the other Loan
Documents which are applicable to the Cap Ex Line shall have no further force
or effect.

 

2.             Term Loan.

 

(a)           Term Loan.  Contemporaneously with the
execution hereof and the satisfaction of all of the terms and conditions set
forth herein, the Obligations of Borrower to Lenders outstanding under the Cap
Ex Line, the Macungie Term Loan, the Pottstown Term Loan and the WC Term Loan
and a portion of the outstanding principal balance of the Working Capital Line
in an amount equal to Fifteen Million Three Hundred Fifty Thousand Four Hundred
Seventy-Nine and 12/100 Dollars ($15,350,479.12) shall be recast as a term loan
from Lenders to Borrower, subject to the terms and conditions of the Loan
Agreement, in an original principal amount of Twenty Million Dollars
($20,000,000.00) (the “Term Loan”).  Borrower’s obligation to repay the Term Loan
shall be evidenced by Borrower’s promissory note to each Lender in the face
amount of such Lender’s Pro Rata Term Loan Share (collectively, the “Term Notes”), which shall be in form and
content acceptable to Agent and Lenders. 
All terms and conditions of the Loan Agreement and the Loan

 

 

Documents
applicable to the Loans shall apply to the Term Loan except as specifically set
forth herein.

 

(b)           Subject to the terms and conditions of the Loan Agreement, each Lender
agrees that such Lender’s respective Pro Rata Term Loan Percentage of the Term
Loan is as set forth on Schedule A
to the Loan Agreement.  The outstanding
amount of the advances by each Lender under the Term Loan shall not exceed such
Lender’s Pro Rata Term Loan Share (as such amount may change from time to time
in accordance with the Loan Agreement).

 

(c)           Interest on the Term Loan.

 

(i)            The Term Loan may be a Eurodollar Loan or,
subject to Section 2(c)(ii) below,
may accrue interest based on the Fixed Rate, as Borrower may request pursuant
to the terms of the Loan Agreement. 
Eurodollar Loans under the Term Loan shall be made in minimum principal
amounts of at least Three Million Dollars ($3,000,000.00) and in increments of
Two Hundred Fifty Thousand Dollars ($250,000.00).  Borrower may not have more than five (5) separate
Eurodollar Loans outstanding at any one time under the Term Loan.

 

(ii)           As used herein “Fixed Rate”
shall mean a fixed rate of interest quoted by Lenders.  Borrower may request a Fixed Rate for all or
any portion of the Term Loan at any time on or before October 31, 2006 by
delivering to Agent a written request therefore.  Agent shall notify Borrower of the fixed rate
quoted by Lenders in writing within three (3) Business Days of Agent’s
receipt of such request.  Borrower will
notify Agent of its acceptance or rejection of such fixed rate in writing
within one (1) Business Day of Borrower’s receipt of such fixed rate
quote.  If an acceptance or rejection is
not received by Agent within such time period, Borrower is deemed to have
rejected such fixed rate quote and the Term Loan shall continue to accrue
interest at its current interest rate. 
If Borrower elects that all or any portion of the Term Loan accrue
interest at the Fixed Rate, (i) such Fixed Rate shall remain in effect
from the effective date thereof through the term of the Term Loan and (ii) that
portion of the Term Loan shall be deemed a Fixed Rate Loan under the Loan
Agreement.

 

(d)           Interest Payments on the Term Loan. 
Notwithstanding anything set forth in the Loan Agreement or any of the
other Loan Documents to the contrary, interest accruing on the Term Loan based
on the Fixed Rate shall be payable by Borrower on the first business day of
each calendar month, calculated upon the closing daily balances in the loan
account of Borrower for each day during the immediately preceding calendar
month.

 

(e)           Principal Payments on the Term Loan. 
Borrower will repay the principal balance of the Term Loan in (i) fifty-nine
(59) equal and consecutive monthly installments of One Hundred Sixty-Six
Thousand Six Hundred Sixty-Seven Dollars ($166,667.00) on the first day of each
calendar month commencing January 1, 2006 and (ii) one (1) final
payment of the remaining balance thereof, plus all accrued and unpaid interest
thereon and all other sums due in connection therewith on December 1,
2011.

 

(f)            Prepayment of Term Loan. 
Without in any way limiting the terms and conditions set forth in Section 3.6 of the Loan Agreement,
Borrower may prepay all or a portion of the Term Loan accruing interest at the
Fixed Rate upon thirty (30) days written notice to Agent and upon payment of
the Cost of Prepayment.  All prepayments
will be applied to the regularly scheduled payments in the inverse order in
which they are due.

 

 

As
used herein “Cost of Prepayment”
means an amount equal to the present value, if positive, of the product of (i) the
difference between (A) the yield, on the date on which the applicable
portion of the Term Loan began accruing interest at the Fixed Rate, of a U.S.
Treasury obligation with a maturity similar to the maturity of the Term Loan, minus
(B) the yield on the prepayment date, of a U.S. Treasury obligation with a
maturity similar to the maturity of the Term Loan and (ii) the principal
amount of the Term Loan accruing interest at the Fixed Rate and (iii) the
number of years, including fractional year, from the prepayment date to the
maturity of the Term Loan.

 

The
yield on any U.S. Treasury obligation shall be determined by reference to
Federal Reserve Statistical Release H.15 (519) “Selected Interest Rates”.  For purposes of making present value
calculations, the yield to maturity of a similar maturity U.S. Treasury
obligation on the prepayment date shall be deemed the discount rate.

 

3.             Working Capital
Line of Credit.  Section 2.1(a) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(a)         Lenders will establish for Borrower for and during the period from the
date hereof until October 31, 2007 (as such period may be extended from
time to time pursuant to Section 2.1(c) below,
the “Working Capital Line Contract Period”),
subject to the terms and conditions hereof; a revolving working capital credit
facility (the “Working Capital Line”),
pursuant to which Lenders will from time to time in accordance with their
respective Pro Rata Line Percentage, severally and not jointly, make advances
to Borrower in an aggregate amount not exceeding (i) during any Non-Seasonal Period, the Maximum
Non-Seasonal Working Capital Line Amount and (ii) during any Seasonal Period, the lesser of
(A) the Maximum Seasonal Working Capital Line Amount or (B) the
Borrowing Base Amount. Within the limitations set forth in this Agreement,
Borrower may borrow, repay and reborrow under the Working Capital Line. The
Working Capital Line shall be subject to all of the terms and conditions set
forth in the Loan Documents, which terms and conditions are incorporated
herein. Subject to the terms and conditions of this Agreement, each Lender
agrees to lend to Borrower the amount equal to such Lender’s respective Pro
Rata Line Percentage of each advance requested by Borrower under the Working
Capital Line. The outstanding amount of the advances (including without
limitation then outstanding L/C Obligations) by each Lender under the Working
Capital Line shall not exceed such Lender’s Pro Rata Line Share (as such amount
may change from time to time in accordance with this Agreement).” 

 

4.             Line Fees.  Section 3.5
of the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“3.5         Line Fees.

 

 

(a)           Unused
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of Borrower’s
receipt of an invoice for such fee from Agent, an Unused Line Fee for each
calendar quarter during the Working Capital Contract Period on a daily basis at
the rate per annum set forth in Section 10.4(b)(i) divided
by 360 days and multiplied by the amount, if any, by which (i) the Maximum
Non-Seasonal Working Capital Line Amount or the Designated Seasonal Amount (as
applicable for each day during such quarter) exceeds (ii) the average
outstanding daily principal balance during the preceding calendar quarter of
all Revolving Loans and any Letters of Credit under the Working Capital Line.

 

(b)           Unavailable
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of Borrower’s
receipt of an invoice for such fee from Agent, an Unavailable Line Fee for each
calendar quarter during the Seasonal Period on a daily basis at the rate per
annum set forth in Section 10.4(b)(ii) divided
by 360 day and multiplied by the amount, if any, by which (i) the Maximum
Seasonal Working Capital Line Amount exceeds (ii) the greater of (A) the
Designated Seasonal Amount or (B) the average outstanding daily principal
balance during the preceding calendar quarter of all Revolving Loans and any
Letters of Credit under the Working Capital Line.

 

(c)           Excess
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of Borrower’s
receipt of an invoice for such fee from Agent, a Excess Line Fee for each
calendar quarter during the Seasonal Period on a daily basis at the rate per
annum set forth in Section 10.4(b)(iii) divided
by 360 days and multiplied by the amount, if any, by which (i) the average
outstanding daily principal balance during the preceding calendar quarter of
all Revolving Loans and any Letters of Credit under the Working Capital Line
exceeds (ii) the Designated Seasonal Amount.”

 

5.             Charges to Loan
Account.  The reference to “the
Unused Line Fee” set forth in the second sentence of Section 3.7 is hereby deleted and
replaced with “the Unused Line Fee, the Unavailable Line Fee, the Excess Line
Fee”.

 

6.             Funded Debt to Tangible
Net Worth Ratio.  Section 6.40(a) of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:

 

“(a)         Borrower shall maintain a ratio of Funded Debt to Tangible Net Worth of
not greater than (i) 2.00 to 1.00 as of June 30, 2004 and June 30,
2005 and (ii) 2.50 to 1.00 as of June 30th of each year, commencing
with Borrower’s fiscal year ended June 30, 2006.”

 

 

7.             Tangible Net Worth.  Section 6.40(c) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(c)         Borrower shall maintain a Tangible Net Worth of not less than (i) $21,750,000.00,
for the period commencing June 30, 2005 through and including June 29,
2006 and (ii) the greater of (A) $24,000,000.00 or (B) the sum
of $21,750,000.00 plus 50% of Borrowers net income for its fiscal year
ending June 30, 2006, as of June 30, 2006 and at all times
thereafter.”

 

8.             Capital
Expenditures.  Section 6.40(d) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(d)         Borrower shall not cause, suffer or permit its aggregate capital
expenditures to exceed $4,000,000.00 in any fiscal year of Borrower all as
determined in accordance with GAAP; provided that, capital expenditures made
solely in connection with the Borrower’s project to construct a propane rail
terminal on the grounds of its facilities located at Macungie, Pennsylvania in
an aggregate amount up to $1,000,000.00 shall be excluded from the calculation
of Borrower’s capital expenditures hereunder. 
The foregoing limitations on Borrower’s capital expenditures shall be
non-cumulative as to any unused portions during any fiscal year of Borrower.”

 

9.             Issuing Bank.  All references to the “Issuing Bank” set
forth in the Loan Agreement and the Loan Documents shall be deemed to include
each Lender issuing a Letter of Credit pursuant to the terms of the Loan
Agreement.

 

10.          Defined Terms.  Section 10.1
of the Loan Agreement is hereby amended as follows:

 

(a)           Section 10.1 of the Loan Agreement is hereby amended by adding
the following as Section 10.1(l)A
thereto:

 

“(l)A       “Designated Seasonal Amount” shall mean (i) for the period
commencing December 7, 2005 through and including December 31, 2005,
Eighty Million Dollars ($80,000,000.00) and (ii) commencing December 1,
2005 and at all times thereafter, the amount designated by Borrower pursuant to
written notice delivered to Agent at least one Business Day prior to the first
Business Day of each calendar month of the Seasonal Period, which amount shall
be less than or equal to the Maximum Seasonal Working Capital Line Amount,
provided, however, that if Borrower shall fail to deliver the notice set forth
above, the Designated Seasonal 

 

Amount
shall be Fifty Million Dollars ($50,000,000.00) for the applicable calendar
month.”

 

(b)           Section 10.1(x) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

 

“(x)          “Maximum Non-Seasonal
Working Capital Line Amount”
shall mean Fifty Million Dollars ($50,000,000.00).”

 

(c)           Section 10.1(y) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(y)         “Maximum Seasonal Working
Capital Line Amount” shall
mean One Hundred Million Dollars ($100,000,000.00).”

 

(d)           Section 10.1 of the Loan Agreement is hereby amended by
adding the following as Sections 10.1(jj)A
and 10.1(jj)B thereto:

 

“(jj)A      “Pro Rata Term Loan Percentage” shall mean, as to each Lender, the
percentage set forth next to such Lender’s name on Schedule A hereto with respect to the
Term Loan.

 

(jj)B         “Pro Rata Term Loan Share” shall mean, as to each Lender, the amount
set forth next to such Lender’s name on Schedule
A hereto with respect to the Term Loan.”

 

(e)           Section 10.1(ll) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(ll)         “Required Lenders” shall mean three of the Lenders.”

 

(f)            Section 10.1(oo) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(oo)       “Seasonal Period” shall mean each of the following periods:  (i) the period from the date hereof
through and including April 30, 2006 and (ii) the period from July 1,
2006 through and including April 30, 2007; provided, however, Borrower
may, by written request to Agent at least seven (7) days prior to any such
date, delay the start date of a Seasonal Period or accelerate the termination
date of a Seasonal Period.  If Borrower
accelerates the termination date of a Seasonal Period, a new Seasonal Period
shall not commence until the scheduled commencement date for the next Seasonal Period,
if any.”

 

11.          Interest/Fees.  Section 10.4
of the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(a)
The Applicable Percentage for purposes of calculating the applicable interest
rate for any date for any Loan is:

 

 

	
   

  	
   

  	
  Eurodollar Loan

  	
   

  	
  Base Rate Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i) Working Capital Line 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (A) with
  respect to that portion of the outstanding principal balance of the Working
  Capital Line less than or equal to $50,000,000.00

  	
   

  	
  1.35

  	
  %

  	
  -.50

  	
  %

  
								

 

 

	
   

  	
  (B) with
  respect to that portion of the outstanding principal balance of the Working
  Capital Line in excess of $50,000,000.00

  	
   

  	
  1.65

  	
  %

  	
  -.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)  Term Loan

  	
   

  	
  1.65

  	
  %

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  (i) Unused Line Fee:

  	
   

  	
  0.25

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii) Unavailable Line Fee

  	
   

  	
  0.10

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii) Excess Line Fee:

  	
   

  	
  0.25

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Field Examination Fee:

  	
   

  	
  such fees
  that are customarily charged by Agent”

  	
   

  
								

 

12.          Pro Rata Term Loan
Percentage and Pro Rata Term Loan Share.  Each reference to “Pro Rata Cap Ex Percentage”
in Section 11 and Section 12 of the Loan Agreement
is hereby deleted and replaced with “Pro Rata Term Loan Percentage”.  Each reference to “Pro Rata Cap Ex Share” in Section 11 and Section 12 of the Loan Agreement
is hereby deleted and replaced with “Pro Rata Term Loan Share”.

 

13.          Collections and
Disbursements.  Section 12.4 of the Loan Agreement
is hereby amended by adding the following as Section 12.4(g) thereto:

 

“(g)         To the extent necessary for each Lender’s actual percentage of all
outstanding advances under the Term Loan to equal its applicable Pro Rata Term
Loan Percentage, the Lender which obtains a greater share of any payments (by
set off or otherwise) than its applicable Pro Term Loan Percentage shall
acquire a participation in the applicable outstanding balances of the Pro Rata
Term Loan Shares of the Lenders as determined by Agent in order that such
Lender’s percentage of outstanding advances is equal to its Pro Rata Term Loan
Percentage.”

 

14.          Pro Rata Percentages;
Pro Rata Shares.  Schedule A
of the Loan Agreement is hereby deleted in its entirety and replaced with Schedule A attached hereto.

 

15.          Actions by Agent;
Amendments; Waivers.  Section 12.15(b) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

 

“(b)         Notwithstanding the provisions of Section 12.15(a) above,
Agent shall not:

 

(i)            without
the prior written consent of all Lenders, (A) increase the Maximum
Seasonal Working Capital Line Amount and/or the Maximum Non-Seasonal Working
Capital Line Amount, (B) extend the Working Capital Line Contract Period
or the maturity date of the Term Loan, (C) waive, forgive, defer, extend
or postpone any payment of principal, interest, premium, fee or any other
amount payable pursuant to the Loan Documents, (D) release all or any
portion of the Collateral other than in connection with a disposition of assets
by Borrower permitted under this Agreement, (E) modify any of the interest
rates, premiums and/or fees set forth herein, (F) increase the amount of
any Lenders Pro Rata Line Percentage or Pro Rata Term Loan Percentage, (G) amend
or waive this Section 12(b) or
the definition of “Required Lenders”; or

 

(ii)           enter
into any waiver, amendment, supplement, replacement or extension (other than a
waiver, amendment, supplement, replacement or extension described in Section 12.15(b)(i) above) of
this Agreement, any of the other Loan Documents or any of the terms or
conditions thereof without the prior written consent of Required Lenders.”

 

16.          Conditions Precedent.  The provisions of this Amendment shall not be
deemed effective unless and until Agent shall have received each of the
following, which shall be in form and content satisfactory to Agent:

 

(a)           A certificate executed by the president or chief executive officer of
Borrower dated of even date herewith stating that:

 

(i)            Borrower is in compliance with the covenants
contained in the Loan Agreement;

 

(ii)           no Default or Event of Default has occurred and is continuing;

 

(iii)          the representations and warranties of Borrower made in or pursuant to
this Amendment are true and correct as of the date thereof;

 

(iv)          there has been no material adverse change in the business, operations,
profits or prospects of Borrower or in the condition of the assets of Borrower
since the date of the last financial statements delivered to Agent; and

 

(v)           there are no judgments outstanding or actions, suits or proceedings
pending or, to the best of Borrower’s knowledge, threatened against Borrower at
law or in equity before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which involves the possibility of any judgment or liability in excess
of One Hundred Thousand Dollars ($100,000.00) except for the action filed on

 

 

November 15, 2000 (and
consolidated for all purposes on June 6, 2001) against Borrower in Bucks
County, Pennsylvania having docket number 200007340 (court no. 00-7340-24-2).

 

(b)           Certified copies of all charter and operating documents of Borrower,
good-standing/subsistence certificates from each jurisdiction in which Borrower
conducts business, an incumbency certificate and certified resolutions of
Borrower’s board of directors authorizing the execution, delivery and
performance of this Amendment.

 

(c)           The duly executed Term Notes.

 

(d)           A line note in the face amount of each Lender’s Pro Rata Line Share of
the Working Capital Line, as increased, which shall be in form and content
satisfactory to Agent (the “Amended Line
Notes”).

 

(e)           An Amended and Restated Open-End Mortgage and Security Agreement
(collectively, the “Mortgages”)
regarding Lender’s mortgage lien on each of the following properties: (i) real
property located in Lower Macungie Twp., Lehigh County, PA (“Macungie Property”) and (ii) real
property located in Borough of Pottstown, Montgomery County, PA (the “Pottstown Property”).

 

(f)            Title insurance policies (collectively, the “Title Policies”), insuring Agent’s and
Lenders’ mortgage liens against the Macungie Property and the Pottstown
Property in the following amounts:  (i) the
Macungie Property, One Million Dollars ($1,000,000.00) and (ii) the
Pottstown Property, Four Hundred Thousand Dollars ($400,000.00); which title
insurance policies, or endorsements, shall otherwise be in form satisfactory to
Bank with no restrictions, liens, encumbrances or exceptions, except as
approved by Agent.

 

(g)           Copies of insurance policies or ACORD Form 27 and ACORD Form 25
evidencing the liability and casualty insurance of Borrower meeting the
requirements of the Loan Agreement and bearing endorsements satisfactory to
Agent.

 

(h)           Receipt by Agent of all fees and expenses due under this Amendment.

 

(i)            Searches of Uniform Commercial Code (“UCC”) filings in the jurisdiction of the
chief executive office of Borrower, the jurisdiction of Borrower’s organization
and such other jurisdictions where Collateral is located, copies of the
financing statements on file in such jurisdictions and evidence that there are
no liens, security interests or judgments in favor of third parties with
respect to Borrower or any Collateral.

 

17.          Post-Closing Items.  Borrower acknowledges and agrees that it has
been unable to deliver certain items to Agent on or before the date hereof
(collectively, the “Outstanding Items”).  At the request of Borrower, Agent and Lenders
have agreed to close the transaction contemplated under this Amendment, subject
to the following:

 

(a)           Title Policies.  On
or before December 21, 2005, Borrower shall deliver to Agent Title
Policies insuring Agent’s and Lenders’ mortgage liens against the Macungie
Property and the Pottstown Property which contain no exceptions for past-due
taxes and are otherwise in form and content satisfactory to Agent.  If the Title Policies are not received by
Agent on or before December 21, 2005, Borrower acknowledges and agrees
that Agent shall establish a reserve against amounts

 

 

otherwise
available to Borrower under the Working Capital Line for past-due taxes in an
amount satisfactory to Agent in its sole discretion.

 

(b)           Calyon Security Agreement.  On
or before January 6, 2006, Borrower shall deliver to Agent a duly executed
Amended and Restated Security Agreement, Assignment of Hedging Agreement
executed by Borrower and Calyon Futures, in form and content satisfactory to
Agent.

 

18.          Amendment/References.  The
Loan Agreement and the Loan Documents are hereby amended to be consistent with
the terms of this Amendment. All references in the Loan Agreement and the Loan
Documents to (a) “Collateral”
shall include, without limitation, the Mortgaged Property (as defined in each
of the Mortgages), (b) “Credit
Facility” shall include, without limitation, the Term Loan, (c) the “Loan Agreement” shall mean the Loan
Agreement as amended hereby, (d) the “Loan Documents” shall include, without limitation, this Amendment,
the Term Notes, the Amended Line Notes, the Mortgages and all other instruments
or agreements executed pursuant to or in connection with the terms hereof, (e) “Loan” or “Loans” shall include, without
limitation, the Term Loan, (f) “Note” or “Notes” shall include, without limitation, the Term Notes and
the Amended Line Notes and (g) “Obligations” shall include, without limitation, all of Borrower’s
obligations to Agent and/or Lenders in connection with the Term Loan.

 

19.          Amendment Fee.  Upon execution of this Amendment, Borrower
shall pay to Agent, for the benefit of Lenders, an amendment fee in the amount
of Fifty Thousand Dollars ($50,000.00) (the “Amendment
Fee”).  The foregoing
Amendment Fee is in addition to the interest and other amounts which Borrower
is required to pay under the Loan Documents, and is fully earned and
nonrefundable.

 

20.          Further Agreements and Representations. 
Borrower does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to
constitute a novation of the Loan Agreement or any of the other Loan Documents,
and do not constitute a release, termination or waiver of any of the rights or
remedies granted to Agent or any Lender therein, which rights and remedies are
hereby ratified,

 

confirmed, extended and
continued as security for the obligations of Borrower to Agent and Lenders
under the Loan Agreement and the other Loan Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

21.          Additional Documents;
Further Assurances.  Borrower
covenants and agrees to execute and deliver to Agent, or to cause to be
executed and delivered to Agent contemporaneously herewith, at the sole cost
and expense of Borrower, this Amendment and any and all other documents,
agreements, statements, resolutions, certificates, consents and information as
Agent or any Lender may require in connection with the matters or actions
described herein.  Borrower further
covenants and agrees to execute and deliver to Agent or to cause to be executed
and delivered at the sole cost and expense of Borrower, from time to time, any
and all other documents, agreements, statements, certificates and information
as Agent or any Lender shall reasonably request to evidence or effect the terms
hereof, the Loan Agreement, as amended, or any of the other Loan Documents, or
to enforce or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

22.          Fees, Cost, Expenses
and Expenditures.  Borrower will
pay all of Agent’s and each Lender’s expenses in connection with the review,
preparation, negotiation, documentation and closing of this Amendment and the
consummation of the transactions contemplated hereunder, including without
limitation, fees, reasonable attorney’s fees, disbursements, expenses and
disbursements of counsel retained by Agent and all fees related to title
insurance, filings, recording of documents and searches, whether or not the
transactions contemplated hereunder are consummated.

 

23.          Inconsistencies.  To the extent of any inconsistency
between the terms, conditions and provisions of this Amendment and the terms,
conditions and provisions of the Loan Agreement or the other Loan Documents,
the terms, conditions and provisions of this Amendment shall prevail.  All terms, conditions and provisions of the
Loan Agreement and the other Loan Documents not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Borrower.

 

24.          Construction.  All references to the Loan Agreement
therein or in any other Loan Documents shall be deemed to be a reference to the
Loan Agreement as amended hereby.

 

25.          No Waiver.  Nothing contained herein and no actions
taken pursuant to the terms hereof are intended to nor shall they constitute a
waiver by Agent or any Lender of any rights or remedies available to Agent or
any Lender at law or in equity or as provided in the Loan Agreement or the other
Loan Documents.

 

26.          Binding Effect.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

27.          Severability.  The provisions of this Amendment and all
other Loan Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.

 

 

28.          Modifications.  No modification of this Amendment or any of
the Loan Documents shall be binding or enforceable unless in writing and signed
by or on behalf of the party against whom enforcement is sought.

 

29.          Governing Law.  This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to conflict of law principles.

 

30.          Headings.  The headings of the sections of this
Amendment are inserted for convenience only and shall not be deemed to
constitute a part of this Amendment.

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the
date first above written.

 

	
   

  	
  FARM &
  HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Daryl Hackman

  
	
   

  	
   

  	
  Daryl Hackman, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST
  NATIONAL BANK AND

  TRUST CO., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Philip C. Jackson

  
	
   

  	
  Name/Title: Philip C.
  Jackson, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Harry E. Ellis

  
	
   

  	
  Name/Title:

  	
     Harry E.
  Ellis

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Christopher Markley

  
	
   

  	
  Name/Title:

  	
     Christopher
  Markley, VP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIZENS
  BANK OF PENNSYLVANIA, 

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/
  Daniel J. Astolf

  
	
   

  	
  Name/Title:

  	
     Daniel
  J. Astolf, SVP

  
							

 

 

Schedule A

 

Pro Rata
Line Percentages, Pro Rata Term Loan Percentages/Financial Institutions Pro
Rata Percentages

 

	
  Financial

  Institution

  	
   

  	
  Working Capital

  Line

  (“Pro Rata

  Line

  Percentage”)

  	
   

  	
  Pro Rata Line

  Share

  	
   

  	
  Term Loan

  (“Pro Rata Term

  Loan Percentage”)

  	
   

  	
  Pro Rata Term Loan

  Share

  	
   

  
	
  Univest National Bank and Trust Co.

  	
   

  	
  13.3333333

  	
  %

  	
  $

  	
  13,333,333.34

  	
   

  	
  13.3333333

  	
  %

  	
  $

  	
  2,666,666.66

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  34,583,333.33

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  6,916,666.67

  	
   

  
	
  Fulton Bank

  	
   

  	
  17.5

  	
  %

  	
  $

  	
  17,500,000.00

  	
   

  	
  17.5

  	
  %

  	
  $

  	
  3,500,000.00

  	
   

  
	
  Citizens Bank of Pennsylvania

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  34,583,333.33

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  6,916,666.67

  	
   

  

 

 

FIFTH AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FIFTH
AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Amendment”)
is made effective as of the 22nd day of December, 2006, by and among FARM & HOME OIL COMPANY (“Borrower”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”) and UNIVEST NATIONAL BANK AND TRUST CO., as Lender, WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender, FULTON BANK, as Lender
and CITIZENS BANK OF PENNSYLVANIA, as a Lender (collectively, the “Lenders” and each a “Lender”).

 

BACKGROUND

 

A.            Borrower, Agent and the Lenders named therein
are parties to that certain Amended and Restated Loan and Security Agreement
dated as of December 16, 2004 (as amended by that certain First Amendment
to Amended and Restated Loan and Security Agreement dated January 10,
2005, that certain Second Amendment to Amended and Restated Loan and Security
Agreement dated July 13, 2005, that certain Third Amendment to Amended and
Restated Loan and Security Agreement dated August 19, 2005, that certain
Fourth Amendment to Amended and Restated Loan and Security Agreement dated December 7,
2005 and as the same may be further amended, modified, supplemented or restated
from time to time, the “Loan Agreement”).

 

B.            Borrower, Agent and Lenders desire to amend
the Loan Agreement as set forth herein.

 

C.            Capitalized terms used herein and not
otherwise defined shall have the meanings provided for such terms in the Loan
Agreement.

 

NOW,
THEREFORE, intending
to be legally bound hereby, the parties hereto agree as follows:

 

1.             Lender Consent.

 

(a)           Borrower has informed Lenders that Borrower intends to acquire all or
substantially all of the assets of Berks Fuel Storage, Inc. and that sums
payable by Borrower in connection with such acquisition shall not exceed Three
Million Five Hundred Thousand Dollars $3,500,000.00 (the “Proposed
Transaction”).

 

(b)           Consent and Waiver. 
Lenders hereby consent to the Proposed Transaction and, solely for the
purpose of avoiding the occurrence of a Default or an Event of Default which
could be caused by the Proposed Transaction, waive Borrower’s compliance with
those provisions of the Loan Agreement and the other Loan Documents which would
prohibit the Proposed Transaction.

 

The foregoing consent and
waiver is given solely in connection with the Proposed Transaction and shall
not be deemed to be an agreement, obligation or commitment by Lenders to
consent to any other transactions which would be prohibited by the terms and
conditions of the Loan Agreement or any of the other Loan Documents.

 

 

2.             Working Capital Line of Credit.  Section 2.1(a) of the
Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(a)         Lenders will establish for Borrower for and during the period from the
date hereof until December 31, 2008 (as such period may be extended from
time to time pursuant to Section 2.1(c) below,
the “Working Capital Line Contract Period”),
subject to the terms and conditions hereof; a revolving working capital credit
facility (the “Working Capital Line”), pursuant
to which Lenders will from time to time in accordance with their respective Pro
Rata Line Percentage, severally and not jointly, make advances to Borrower in
an aggregate amount not exceeding the lesser of (A) the Maximum Working
Capital Line Amount or (B) the Borrowing Base Amount.  Within the limitations set forth in this
Agreement, Borrower may borrow, repay and reborrow under the Working Capital
Line.  The Working Capital Line shall be
subject to all of the terms and conditions set forth in the Loan Documents,
which terms and conditions are incorporated herein.  Subject to the terms and conditions of this
Agreement, each Lender agrees to lend to Borrower the amount equal to such Lender’s
respective Pro Rata Line Percentage of each advance requested by Borrower under
the Working Capital Line.  The
outstanding amount of the advances (including without limitation then
outstanding L/C Obligations) by each Lender under the Working Capital Line
shall not exceed such Lender’s Pro Rata Line Share (as such amount may change
from time to time in accordance with this Agreement).”

 

3.             Letters of Credit.  Section 2.4(c) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(c)         No Letter of Credit will be issued if (i) the sum of (A) the
stated amount of the Letter of Credit requested, plus (B) fees and costs
for issuance, plus (C) all advances under the Working Capital Line and
Letters of Credit then outstanding, would exceed the lesser of (x) the Maximum
Working Capital Line Amount and (z) the Borrowing Base Amount, or (ii) the
aggregate stated amount of all outstanding Letters of Credit would exceed, at
any time, the Letter of Credit sublimit set forth in Section 10.2(b).  For purposes of determining availability for
advances under the Working Capital Line and the issuance of Letters of Credit,
the face amount of all outstanding Letters of Credit and all unreimbursed
Letter of Credit charges and other amounts included in the term “L/C Obligations” defined below shall be deemed advances
under the Working Capital Line.”

 

4.             Loans Generally.

 

(a)           Section 2.6(b) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

 

“(b)         Subject to the provisions of Section 3.10
and 3.11 below, each Loan under the Working Capital Line may be
a Eurodollar Loan or a Base Rate Loan, as Borrower may request pursuant to the
terms hereof.  Eurodollar Loans having
different Interest Periods, regardless of whether they commence on the same date,
shall be considered separate Loans. 
Borrower may not have more than ten (10) separate Eurodollar Loans
outstanding at any one time under the Working Capital Line.  Eurodollar Loans under the Working Capital
Line shall be made in minimum principal amounts of at least Three Million
Dollars ($3,000,000.00) and in increments of Two Hundred Fifty Thousand Dollars
($250,000.00).”

 

(b)           The first sentence of Section 2.6(e) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(e)         Required Lenders may, in their sole discretion, make or permit Loans or
the Issuing Bank may issue or permit the issuance of Letters of Credit in
excess of the Maximum Working Capital Line Amount, or any other applicable
formulas or sublimits.”

 

5.             Line Fees.  Section 3.5 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:

 

“3.5         Line Fees.

 

(a)           Unused
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of Borrower’s
receipt of an invoice for such fee from Agent, an Unused Line Fee computed on a
daily basis at the rate per annum set forth in Section 10.4(b)(i) divided by 360 days and multiplied by the amount, if any, by which
(i) the Designated Amount (as applicable for each day during such quarter)
exceeds (ii) the average outstanding daily principal balance during the
preceding calendar quarter of all Revolving Loans and any Letters of Credit
under the Working Capital Line.

 

(b)           Unavailable
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of Borrower’s
receipt of an invoice for such fee from Agent, an Unavailable Line Fee computed
on a daily basis at the rate per annum set forth in Section 10.4(b)(ii) divided by 360 days and multiplied by the
amount, if any, by which (i) the Maximum Working Capital Line Amount
exceeds (ii) the greater of (A) the Designated Amount or (B) the
average outstanding daily principal balance during the preceding calendar quarter
of all Revolving Loans and any Letters of Credit under the Working Capital
Line.

 

(c)           Excess
Line Fee.  Borrower shall pay Agent, for the benefit of
the Lenders, quarterly in arrears, within five (5) days of 

 

 

Borrower’s
receipt of an invoice for such fee from Agent, a Excess Line Fee computed on a
daily basis at the rate per annum set forth in Section 10.4(b)(iii) divided by 360 days and multiplied by the amount, if any, by which
(i) the average outstanding daily principal balance during the preceding
calendar quarter of all Revolving Loans and any Letters of Credit under the
Working Capital Line exceeds (ii) the Designated Amount.”

 

6.             Financial and Other Reports.

 

(a)           Section 6.10(d) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(d)         Borrower shall, at its expense, on or before the thirtieth (30th) day of
each month (or more frequently if required by Agent), deliver to Agent and
Lenders, in form acceptable to Agent, 
true and complete monthly agings of its accounts receivable and accounts
payable.”

 

(b)           Section 6.10(f) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(f)          Borrower shall deliver to Agent and Lenders within ten (10) days
after the end of each calendar month (or more frequently if required by Agent)
a borrowing base certificate in substantially the form of Schedule
C hereto duly completed and certified by Borrower’s chief
financial officer or chief executive officer, detailing Borrower’s Eligible Receivables
and Eligible Inventory.”

 

7.             Tangible Net Worth.  Section 6.40(c) of the
Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(c)         Borrower
shall maintain a Tangible Net Worth of not less than:

 

(i) for
the period commencing September 30, 2006 through and including June 29,
2007, $26,500,000.00;

 

(ii) for
the period commencing June 30, 2007 through and including June 29,
2008, the greater of (A) $26,500,000.00 or (B) the sum of
$26,500,000.00 plus 50% of Borrower’s net income for its fiscal year
ending June 30, 2007; and

 

(iii) for
the period commencing June 30, 2008 through and including June 29,
2009 and for each period of June 30 through and including June 29
thereafter (each a “Testing Period”),
the greater of (A) the Tangible Net Worth Requirement hereunder for the
prior Testing Period and (B) the sum of the Tangible Net Worth Requirement

 

 

hereunder
for the prior Testing Period, plus 50% of Borrower’s net income for the
fiscal year then ended.”

 

8.             Capital Expenditures.  Section 6.40(d) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(d) 
Borrower shall not cause, suffer or permit its aggregate capital expenditures
to exceed $5,500,000.00 in any fiscal year of Borrower all as determined in
accordance with GAAP; provided that, capital expenditures made solely in
connection with the Borrowers acquisition of all or substantially all of the
assets of Berks Fuel Storage, Inc. in an aggregate amount up to
$3,500,000.00 shall be excluded from the calculation of Borrower’s capital
expenditures hereunder.  The foregoing
limitations on Borrower’s capital expenditures shall be non-cumulative as to
any unused portions during any fiscal year of Borrower.”

 

9.             Defined Terms.  Section 10.1 of the Loan
Agreement is hereby amended as follows:

 

(a)           Section 10.1(l)A of the Loan Agreement is hereby deleted in its entirety and replaced
with the following:

 

“(l)A       “Designated Amount”
shall mean (i) for the period commencing December 1, 2006 through and
including December 31, 2006, Ninety Million Dollars ($90,000,000.00) and (ii) commencing
January 1, 2007 and at all times thereafter, the amount designated by
Borrower pursuant to written notice delivered to Agent at least one Business
Day prior to the first Business Day of each calendar month, which amount shall
be less than or equal to the Maximum Working Capital Line Amount and greater
than or equal to Fifty Million Dollars ($50,000,000.00), provided, however,
that if Borrower shall fail to deliver the notice set forth above, the
Designated Amount shall be Fifty Million Dollars ($50,000,000.00) for the
applicable calendar month.”

 

(b)           Section 10.1(x) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(x)          “Maximum
Working Capital Line Amount”
shall mean One Hundred Million Dollars ($100,000,000.00).”

 

(c)           Section 10.1(y) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(y)         Intentionally
Deleted.”

 

(d)           Section 10.1(z) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(z)          Intentionally
Deleted.”

 

 

 

(e)           Section 10.1(cc) of the Loan Agreement is hereby deleted in its entirety and replaced
with the following:

 

“(cc)       “Out-Of-Formula Advance” shall mean, the amount by which (i) the
then outstanding advances under the Working Capital Line, plus the then
outstanding L/C Obligations exceeds (ii) lesser of (A) the Maximum
Working Capital Line Amount and (B) the Borrowing Base Amount or any other
applicable formulas or sublimits, as applicable.”

 

(f)            Section 10.1(oo) of the Loan Agreement is hereby deleted in its entirety and replaced
with the following:

 

“(oo)       Intentionally
Deleted.”

 

10.           Actions by Agent; Amendments; Waivers. 
Section 12.15(b)(i)(A) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

 

“(A) increase the Maximum Working
Capital Line Amount,

 

11.           Amendment/References.  The
Loan Agreement and the Loan Documents are hereby amended to be consistent with
the terms of this Amendment. All references in the Loan Agreement and the Loan
Documents to (a) the “Loan Agreement”
shall mean the Loan Agreement as amended hereby, and (b) the “Loan Documents” shall include, without limitation, this
Amendment and all other instruments or agreements executed pursuant to or in
connection with the terms hereof.

 

12.           Further Agreements and
Representations.  Borrower does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to constitute
a novation of the Loan Agreement or any of the other Loan Documents, and do not
constitute a release, termination or waiver of any of the rights or remedies
granted to Agent or any Lender therein, which rights and remedies are hereby ratified,

 

 

confirmed, extended and
continued as security for the obligations of Borrower to Agent and Lenders
under the Loan Agreement and the other Loan Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

13.           Additional Documents;
Further Assurances.  Borrower covenants and agrees to execute and
deliver to Agent, or to cause to be executed and delivered to Agent
contemporaneously herewith, at the sole cost and expense of Borrower, this
Amendment and any and all other documents, agreements, statements, resolutions,
certificates, consents and information as Agent or any Lender may require in
connection with the matters or actions described herein.  Borrower further covenants and agrees to
execute and deliver to Agent or to cause to be executed and delivered at the
sole cost and expense of Borrower, from time to time, any and all other
documents, agreements, statements, certificates and information as Agent or any
Lender shall reasonably request to evidence or effect the terms hereof, the
Loan Agreement, as amended, or any of the other Loan Documents, or to enforce
or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

14.           Fees, Cost, Expenses and
Expenditures.  Borrower will pay all of Agent’s and each
Lender’s expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment and the consummation of the transactions
contemplated hereunder, including without limitation, fees, reasonable attorney’s
fees, disbursements, expenses and disbursements of counsel retained by Agent
and all fees related to title insurance, filings, recording of documents and
searches, whether or not the transactions contemplated hereunder are
consummated.

 

15.           Inconsistencies.  To the extent of any inconsistency between the terms, conditions and
provisions of this Amendment and the terms, conditions and provisions of the
Loan Agreement or the other Loan Documents, the terms, conditions and
provisions of this Amendment shall prevail. 

 

All
terms, conditions and provisions of the Loan Agreement and the other Loan
Documents not inconsistent herewith shall remain in full force and effect and
are hereby ratified and confirmed by Borrower.

 

16.           Construction.  All references to the Loan Agreement therein or in any other Loan
Documents shall be deemed to be a reference to the Loan Agreement as amended
hereby.

 

17.           No Waiver.  Except as specifically set forth in  Section 1 hereof, nothing contained herein and no actions taken
pursuant to the terms hereof are intended to nor shall they constitute a waiver
by Agent or any Lender of any rights or remedies available to Agent or any
Lender at law or in equity or as provided in the Loan Agreement or the other
Loan Documents.

 

18.           Binding Effect.  This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

 

19.           Severability.  The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.

 

 

20.           Modifications.  No
modification of this Amendment or any of the Loan Documents shall be binding or
enforceable unless in writing and signed by or on behalf of the party against
whom enforcement is sought.

 

21.           Governing Law.  This Amendment shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania without regard to conflict of law
principles.

 

22.           Headings.  The
headings of the sections of this Amendment are inserted for convenience only
and shall not be deemed to constitute a part of this Amendment.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS
WHEREOF, the parties
hereto have executed this Amendment effective as of the date first above
written.

 

	
   

  	
  FARM &
  HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James M.
  Boyd

  	
   

  
	
   

  	
   

  	
  James M. Boyd, Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST
  NATIONAL BANK AND

  TRUST CO., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Philip C.
  Jackson

  	
   

  
	
   

  	
  Name/Title:  Philip
  C. Jackson

  
	
   

  	
   

  	
  Market President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Harry
  Ellis

  	
   

  
	
   

  	
  Name/Title:

  	
    Senior Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Christopher M. Markley

  	
   

  
	
   

  	
  Name/Title:

  	
    Christopher M.
  Markley, VP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIZENS BANK OF
  PENNSYLVANIA,

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Daniel J. Astolf

  	
   

  
	
   

  	
  Name/Title:

  	
    Daniel J.
  Astolf, SVP

  	
   

  
									

 

 

SIXTH AMENDMENT TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
(the “Amendment”) is made
effective as of the 20th day of November, 2007, by and among FARM & HOME OIL COMPANY (“Borrower”), UNIVEST NATIONAL BANK AND TRUST CO., as Agent (“Agent”) and UNIVEST NATIONAL BANK AND TRUST CO., as Lender, WACHOVIA BANK, NATIONAL
ASSOCIATION, as Lender, FULTON BANK, as Lender and CITIZENS BANK OF
PENNSYLVANIA, as a Lender (collectively, the “Lenders” and each a “Lender”).

 

BACKGROUND

 

A.            Borrower, Agent and
the Lenders named therein are parties to that certain Amended and Restated Loan
and Security Agreement dated as of December 16, 2004 (as amended by that
certain First Amendment to Amended and Restated Loan and Security Agreement
dated January 10, 2005, that certain Second Amendment to Amended and
Restated Loan and Security Agreement dated July 13, 2005, that certain
Third Amendment to Amended and Restated Loan and Security Agreement dated August 19,
2005, that certain Fourth Amendment to Amended and Restated Loan and Security
Agreement dated December 7, 2005, that certain Fifth Amendment to Amended
and Restated Loan and Security Agreement dated December 22, 2006 and as
the same may be further amended, modified, supplemented or restated from time
to time, the “Loan Agreement”).

 

B.            Borrower, Agent and
Lenders desire to further amend the Loan Agreement as set forth herein.

 

C.            Capitalized terms
used herein and not otherwise defined shall have the meanings provided for such
terms in the Loan Agreement.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             Maximum Working Capital Line
Amount.  Section 10.1(x) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(x)          “Maximum Working Capital
Line Amount” shall mean (i) for
the period from November 20, 2007 through and including April 30,
2008, One Hundred Forty Million Dollars ($140,000,000.00) and (ii) from
and after May 1, 2008, One Hundred Million Dollars ($100,000,000.00).”

 

2.             Amendment Fee.   Contemporaneously with the execution of this
Amendment, Borrower shall pay to Agent, for the pro rata benefit of Lenders, a
fee in the amount of $100,000.00.

 

3.             Amended and Restated Revolving Notes. 
Contemporaneously with the execution of this Amendment, Borrower shall
deliver to each Lender an Amended and Restated Working Capital Line Note in the
face amount equal to such Lender’s Pro Rata Line Percentage of the Maximum
Working Capital Line Amount.

 

 

4.             Schedule A.  Schedule A of the Loan Agreement is hereby deleted in its
entirety and replaced with Schedule A
attached hereto.

 

5.             Amendment/References.  The
Loan Agreement and the Loan Documents are hereby amended to be consistent with
the terms of this Amendment.  All
references in the Loan Agreement and the Loan Documents to (a) the “Loan Agreement” shall mean the Loan
Amendment as amended hereby, and (b) the “Loan
Documents” shall include, without limitation, this Amendment and all
other instruments or agreements executed pursuant to or in connection with the
terms hereof.

 

6.             Further Agreements and Representations. 
Borrower does hereby:

 

(a)           ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;

 

(b)           covenant and agree to perform all obligations of Borrower contained
herein, under the Loan Agreement, as amended, and the other Loan Documents;

 

(c)           acknowledge and agree that Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;

 

(d)           acknowledge and agree that all representations and warranties of
Borrower contained in the Loan Agreement and/or the other Loan Documents, as
amended, are true, accurate and correct on and as of the date hereof as if made
on and as of the date hereof;

 

(e)           represent and warrant that no Default or Event of Default exists and
all information described in the foregoing Background is true, accurate and
complete;

 

(f)            acknowledge and agree that nothing contained
herein and no actions taken pursuant to the terms hereof is intended to constitute
a novation of the Loan Agreement or any of the other Loan Documents, and do not
constitute a release, termination or waiver of any of the rights or remedies
granted to Agent or any Lender therein, which rights and remedies are hereby
ratified, confirmed, extended and continued as security for the obligations of
Borrower to Agent and Lenders under the Loan Agreement and the other Loan
Documents, as amended; and

 

(g)           acknowledge and agree that Borrower’s failure to comply with or perform
any of its covenants, agreements or obligations contained in this Amendment
shall constitute an Event of Default under the Loan Agreement and each of the
Loan Documents, subject to any applicable cure periods contained therein.

 

7.             Additional Documents;
Further Assurances.  Borrower covenants and agrees to execute and
deliver to Agent, or to cause to be executed and delivered to Agent
contemporaneously herewith, at the sole cost and expense of Borrower, this
Amendment and any and all other documents, agreements, statements, resolutions,
certificates, consents and information as Agent or any Lender may require in
connection with the matters or actions described herein.  Borrower further covenants and agrees to
execute and deliver to Agent or to cause to be executed and delivered at the
sole cost and expense of Borrower, from time to time, any and all other
documents, agreements, statements, certificates and information as Agent or any
Lender shall reasonably request to evidence or effect the terms hereof, the
Loan Agreement, as amended, or any of the other Loan Documents, or

 

 

to
enforce or to protect Agent’s and each Lender’s interest in the  Collateral.  All such documents, agreements, statements,
etc., shall be in form and content acceptable to Agent in its reasonable sole
discretion.

 

8.             Fees, Cost, Expenses and Expenditures. 
Borrower will pay all of Agent’s and each Lender’s expenses in
connection with the review, preparation, negotiation, documentation and closing
of this Amendment and the consummation of the transactions contemplated
hereunder, including without limitation, fees, reasonable attorney’s fees,
disbursements, expenses and disbursements of counsel retained by Agent and all
fees related to title insurance, filings, recording of documents and searches,
whether or not the transactions contemplated hereunder are consummated.

 

9.             Inconsistencies. 
To the extent of any inconsistency between the terms,
conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail.  All terms, conditions and provisions of the
Loan Agreement and the other Loan Documents not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Borrower.

 

10.          Construction. 
All references to the Loan Agreement therein or in any other
Loan Documents shall be deemed to be a reference to the Loan Agreement as
amended hereby.

 

11.          No Waiver. 
Nothing contained in this Amendment and no actions taken
pursuant to the terms hereof are intended to nor shall they constitute a waiver
by Agent or any Lender of any rights or remedies available to Agent or any
Lender at law or in equity or as provided in the Loan Agreement or the other
Loan Documents.

 

12.          Binding Effect.  This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

13.          Severability.  The provisions of this
Amendment and all other Loan Documents are deemed to be severable, and the
invalidity or unenforceability of any provision shall not affect or impair the
remaining provisions which shall continue in full force and effect.

 

14.          Modifications.  No modification of this
Amendment or any of the Loan Documents shall be binding or enforceable unless
in writing and signed by or on behalf of the party against whom enforcement is
sought.

 

15.          Governing Law.  This
Amendment shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania without regard to conflict of law principles.

 

16.          Headings.  The headings of the sections of this
Amendment are inserted for convenience only and shall not be deemed to
constitute a part of this Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the
date first above written.

 

	
   

  	
  FARM &
  HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Daryl Hackman

  	
   

  
	
   

  	
  Daryl Hackman, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNIVEST
  NATIONAL BANK AND

  
	
   

  	
  TRUST
  CO., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Philip C. Jackson

  	
   

  
	
   

  	
  Name/Title:  Philip C. Jackson, Market President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Matthew Siefer

  	
   

  
	
   

  	
  Name/Title: 

  	
     Matthew
  Siefer, SVP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FULTON
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Christopher Markley

  	
   

  
	
   

  	
  Name/Title:

  	
     Christopher
  Markley, SVP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIZENS
  BANK OF PENNSYLVANIA,

  
	
   

  	
  as a
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Daniel J. Astolfi, Jr.

  	
   

  
	
   

  	
  Name/Title:  Daniel J. Astolfi, Jr., Senior Vice
  President

  
						

 

 

Schedule A

 

Pro Rata
Line Percentages, Pro Rata Term Loan Percentages/Financial Institutions Pro
Rata Percentages

 

	
  Financial

  Institution

  	
   

  	
  Working

  Capital

  Line

  (“Pro Rata

  Line

  Percentage”)

  	
   

  	
  Pro Rata

  Line Share

  	
   

  	
  Term Loan

  (“Pro Rata Term

  Loan

  Percentage”)

  	
   

  	
  Pro Rata Term

  Loan Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Univest National Bank and Trust Co.

  	
   

  	
  13.3333334

  	
  %

  	
  November 20,
  2007 through and including April 30, 2008 - $18,666,668.00 

   

  May 1,
  2008 and at all times thereafter - $13,333,334.00

  	
   

  	
  13.3333334

  	
  %

  	
  $

  	
  2,666,666.66

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  34.5833333

  	
  %

  	
  November 20,
  2007 through and including April 30, 2008 -$48,416,666.00 

   

  May 1,
  2008 and at all times thereafter - $34,583,333.00

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  6,916,666.67

  	
   

  
	
  Fulton Bank

  	
   

  	
  17.5

  	
  %

  	
  November 20,
  2007 

  	
   

  	
  17.5

  	
  %

  	
  $

  	
  3,500,000.00

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  through and
  including April 30, 2008 -$24,500,000.00 

   

  May 1,
  2008 and at all times thereafter - $17,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Citizens Bank of Pennsylvania

  	
   

  	
  34.5833333

  	
  %

  	
  November 20,
  2007 through and including April 30, 2008 - $48,416,666.00 

   

  May 1,
  2008 and at all times thereafter - $34,583,333.00

  	
   

  	
  34.5833333

  	
  %

  	
  $

  	
  6,916,666.67

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]