Document:

Exhibit
10.1

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

September 15, 2006

among

AVENTINE RENEWABLE ENERGY, INC.

as Borrower,

AVENTINE RENEWABLE ENERGY, LLC

as Parent,

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and

FINANCIAL INSTITUTIONS

NOW OR HEREAFTER PARTIES HERETO,

as Lenders

$30,000,000
Revolving Credit Facility

 

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS; CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
  2

  
	
  Section 1.2

  	
  Accounting
  Terms and Determinations

  	
  14

  
	
  Section 1.3

  	
  Other
  Definitional Terms

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  AMOUNT AND TERMS OF LOANS

  	
   

  
	
   

  	
   

  
	
  Section 2.1

  	
  Loans and
  Commitments

  	
  15

  
	
  Section 2.2

  	
  Borrowing
  Requests

  	
  16

  
	
  Section 2.3

  	
  Letters of Credit

  	
  16

  
	
  Section 2.4

  	
  Disbursement
  of Funds

  	
  21

  
	
  Section 2.5

  	
  Evidence of
  Debt

  	
  22

  
	
  Section 2.6

  	
  Interest

  	
  23

  
	
  Section 2.7

  	
  Interest
  Periods

  	
  24

  
	
  Section
  2.8

  	
  Records

  	
  24

  
	
  Section 2.9

  	
  Voluntary
  Termination or Reduction of Revolving Credit Commitments

  	
  25

  
	
  Section
  2.10

  	
  Repayment
  at Maturity; Prepayments

  	
  25

  
	
  Section
  2.11

  	
  Continuation
  and Conversion Options

  	
  26

  
	
  Section
  2.12

  	
  Fees

  	
  27

  
	
  Section
  2.13

  	
  Payments,
  Credit Availability, etc.

  	
  28

  
	
  Section
  2.14

  	
  Interest
  Rate Not Ascertainable, etc.

  	
  28

  
	
  Section 2.15

  	
  Illegality

  	
  29

  
	
  Section 2.16

  	
  Increased Costs

  	
  29

  
	
  Section
  2.17

  	
  Change of
  Lending Office

  	
  31

  
	
  Section
  2.18

  	
  Funding
  Losses

  	
  31

  
	
  Section
  2.19

  	
  Sharing of
  Payments, etc.

  	
  32

  
	
  Section
  2.20

  	
  Taxes

  	
  32

  
	
  Section
  2.21

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

  	
  35

  
	
  Section
  2.22

  	
  Replacement
  of Lenders

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  CONDITIONS TO BORROWINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Closing

  	
  36

  
	
  Section 3.2

  	
  Conditions
  Precedent to All Loans and Letters of Credit

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  SECURITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Security

  	
  38

  

 

 i
 

 

 

	
  Section 4.2

  	
  Exceptions
  to Security

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Corporate
  Existence

  	
  39

  
	
  Section 5.2

  	
  Corporate
  Power and Authorization

  	
  39

  
	
  Section 5.3

  	
  Binding
  Obligations

  	
  40

  
	
  Section 5.4

  	
  No Legal
  Bar or Resultant Lien

  	
  40

  
	
  Section 5.5

  	
  No Consent

  	
  40

  
	
  Section 5.6

  	
  Financial
  Information

  	
  40

  
	
  Section 5.7

  	
  Investments
  and Guaranties

  	
  41

  
	
  Section 5.8

  	
  Litigation

  	
  41

  
	
  Section 5.9

  	
  Use of
  Proceeds

  	
  41

  
	
  Section 5.10

  	
  Employee
  Benefits

  	
  41

  
	
  Section
  5.11

  	
  Taxes;
  Governmental Charges

  	
  42

  
	
  Section
  5.12

  	
  Titles, etc.

  	
  42

  
	
  Section
  5.13

  	
  Defaults

  	
  42

  
	
  Section
  5.14

  	
  Casualties;
  Taking of Properties

  	
  42

  
	
  Section
  5.15

  	
  Compliance
  with the Law

  	
  42

  
	
  Section
  5.16

  	
  No Material
  Misstatements

  	
  43

  
	
  Section
  5.17

  	
  Investment
  Company Act

  	
  43

  
	
  Section
  5.18

  	
  Capital
  Structure

  	
  43

  
	
  Section
  5.19

  	
  Insurance

  	
  43

  
	
  Section 5.20

  	
  Environmental
  Matters

  	
  44

  
	
  Section
  5.21

  	
  Solvency

  	
  45

  
	
  Section
  5.22

  	
  Employee
  Matters

  	
  45

  
	
  Section
  5.23

  	
  Loan Amount

  	
  45

  
	
  Section
  5.24

  	
  Excluded
  Subsidiaries

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Maintenance
  and Compliance, etc.

  	
  46

  
	
  Section 6.2

  	
  Payment of
  Taxes and Claims, etc.

  	
  46

  
	
  Section 6.3

  	
  Further
  Assurances

  	
  46

  
	
  Section 6.4

  	
  Performance
  of Obligations

  	
  46

  
	
  Section 6.5

  	
  Maintenance
  of Insurance

  	
  46

  
	
  Section 6.6

  	
  Accounts
  and Records

  	
  46

  
	
  Section 6.7

  	
  Right of
  Inspection

  	
  47

  
	
  Section 6.8

  	
  Operation
  and Maintenance of Property

  	
  47

  
	
  Section 6.9

  	
  New
  Subsidiaries; Additional Liens

  	
  47

  
	
  Section
  6.10

  	
  Reporting
  Covenants

  	
  48

  
	
  Section
  6.11

  	
  Pledge of
  Equity of Nebraska Sub

  	
  50

  
	
  Section
  6.12

  	
  Excluded
  Subsidiaries

  	
  50

  

 

 ii
 

 

 

	
  ARTICLE 7

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Financial
  Covenants

  	
  50

  
	
  Section 7.2

  	
  Indebtedness

  	
  50

  
	
  Section 7.3

  	
  Liens

  	
  51

  
	
  Section 7.4

  	
  Mergers,
  Sales, etc.

  	
  52

  
	
  Section 7.5

  	
  Investments,
  Loans, etc.

  	
  52

  
	
  Section 7.6

  	
  Sales and
  Leasebacks

  	
  52

  
	
  Section 7.7

  	
  Nature of
  Business

  	
  52

  
	
  Section 7.8

  	
  ERISA Compliance

  	
  53

  
	
  Section 7.9

  	
  Negative
  Pledge Agreements

  	
  53

  
	
  Section
  7.10

  	
  Transactions
  With Affiliates

  	
  53

  
	
  Section
  7.11

  	
  Equity

  	
  54

  
	
  Section
  7.12

  	
  Intercompany
  Transactions

  	
  54

  
	
  Section
  7.13

  	
  Acquisition
  of Equity in Nebraska Sub

  	
  54

  
	
  Section
  7.14

  	
  Excluded
  Subsidiaries

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Payments

  	
  54

  
	
  Section 8.2

  	
  Covenants
  Without Notice

  	
  54

  
	
  Section 8.3

  	
  Other
  Covenants

  	
  54

  
	
  Section 8.4

  	
  Other
  Financing Document Obligations

  	
  55

  
	
  Section 8.5

  	
  Representations

  	
  55

  
	
  Section 8.6

  	
  Non-Payments
  of Other Indebtedness and Under Hedging Agreements

  	
  55

  
	
  Section 8.7

  	
  Defaults
  Under Hedging and Other Agreements

  	
  55

  
	
  Section 8.8

  	
  Bankruptcy

  	
  55

  
	
  Section 8.9

  	
  Money
  Judgment

  	
  56

  
	
  Section
  8.10

  	
  Discontinuance
  of Business

  	
  56

  
	
  Section
  8.11

  	
  Financing
  Documents

  	
  56

  
	
  Section
  8.12

  	
  Material
  Adverse Change

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
  THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Appointment
  of Administrative Agent

  	
  56

  
	
  Section 9.2

  	
  Limitation
  of Duties of Administrative Agent

  	
  57

  
	
  Section 9.3

  	
  Lack of
  Reliance on the Administrative Agent

  	
  57

  
	
  Section 9.4

  	
  Certain
  Rights of the Administrative Agent

  	
  57

  
	
  Section 9.5

  	
  Reliance by
  Administrative Agent

  	
  58

  
	
  Section 9.6

  	
  Indemnification
  of Administrative Agent

  	
  58

  
	
  Section 9.7

  	
  Administrative
  Agent in its Individual Capacity

  	
  58

  
	
  Section 9.8

  	
  Successor
  Administrative Agent

  	
  58

  

 

 iii
 

 

 

	
  ARTICLE 10

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  10.1

  	
  Notices

  	
  59

  
	
  Section
  10.2

  	
  Amendments
  and Waivers

  	
  59

  
	
  Section
  10.3

  	
  No Waiver;
  Remedies Cumulative

  	
  60

  
	
  Section
  10.4

  	
  Payment of
  Expenses, Indemnities, etc.

  	
  61

  
	
  Section 10.5

  	
  Right of
  Setoff

  	
  64

  
	
  Section
  10.6

  	
  Benefit of
  Agreement

  	
  64

  
	
  Section
  10.7

  	
  Successors
  and Assigns; Participations and Assignments

  	
  64

  
	
  Section
  10.8

  	
  Governing
  Law; Submission to Jurisdiction; etc.

  	
  67

  
	
  Section
  10.9

  	
  Independent
  Nature of Lenders’ Rights

  	
  68

  
	
  Section
  10.10

  	
  Invalidity

  	
  68

  
	
  Section
  10.11

  	
  Renewal,
  Extension or Rearrangement

  	
  68

  
	
  Section
  10.12

  	
  Interest

  	
  68

  
	
  Section
  10.13

  	
  Entire
  Agreement

  	
  69

  
	
  Section
  10.14

  	
  Attachments

  	
  69

  
	
  Section
  10.15

  	
  Counterparts

  	
  69

  
	
  Section
  10.16

  	
  Survival of
  Indemnities

  	
  69

  
	
  Section
  10.17

  	
  Headings
  Descriptive

  	
  69

  
	
  Section
  10.18

  	
  Satisfaction
  Requirement

  	
  69

  
	
  Section
  10.19

  	
  Exculpation
  Provisions

  	
  69

  
	
  Section
  10.20

  	
  Secured
  Affiliate

  	
  70

  

 

 iv
 

 

ANNEXES

	
  Annex I

  	
  Revolving
  Credit Commitments

  	
   

  

 

EXHIBITS

	
  Exhibit A

  	
  -

  	
  Form of
  Borrowing Request

  	
   

  
	
  Exhibit
  B

  	
  -

  	
  Form of
  Request for Letters of Credit

  	
   

  
	
  Exhibit
  C

  	
  -

  	
  Form of
  Assignment and Acceptance

  	
   

  
	
  Exhibit
  D

  	
  -

  	
  Form of
  Guaranty and Security Agreement

  	
   

  

 

SCHEDULES

	
  Schedule 5.7

  	
  -

  	
  Investments
  and Guaranties

  	
   

  
	
  Schedule
  5.22

  	
  -

  	
  Employee
  Matters

  	
   

  
	
  Schedule
  7.2

  	
  -

  	
  Existing
  Indebtedness

  	
   

  
	
  Schedule
  7.3

  	
  -

  	
  Liens

  	
   

  
	
  Schedule
  7.10

  	
  -

  	
  Affiliate
  Documents

  	
   

  

 

 v
 

 

 

LIST
OF DEFINED TERMS

	
  

  	
  Page No.

  
	
   

  	
   

  
	
  $

  	
  5

  
	
  Accounts Receivable

  	
  2

  
	
  Administrative Agent

  	
  2

  
	
  Advance Notice

  	
  2

  
	
  Affiliate

  	
  2

  
	
  Aggregate Revolving Credit Exposure

  	
  3

  
	
  Agreement

  	
  3

  
	
  Applicable Margin

  	
  3

  
	
  Application

  	
  3

  
	
  Assignment and Acceptance

  	
  3

  
	
  Aurora West

  	
  3

  
	
  Availability

  	
  3

  
	
  Bankruptcy Code

  	
  56

  
	
  Base Rate

  	
  24

  
	
  Base Rate Loan

  	
  3

  
	
  Borrower

  	
  1

  
	
  Borrowing

  	
  3

  
	
  Borrowing Request

  	
  3

  
	
  Bring-Down Representations and Warranties

  	
  4

  
	
  Business Day

  	
  4

  
	
  Capital Lease Obligations

  	
  4

  
	
  Cash Management Agreement

  	
  4

  
	
  CERCLA

  	
  5

  
	
  Closing Date

  	
  4

  
	
  Code

  	
  4

  
	
  Collateral

  	
  4

  
	
  control

  	
  2

  
	
  controlled by

  	
  2

  
	
  Cover

  	
  4

  
	
  Credit Parties

  	
  4

  
	
  Credit Party

  	
  4

  
	
  Current Financials

  	
  4

  
	
  Default

  	
  5

  
	
  Disbursement Account

  	
  22

  
	
  disposal

  	
  5

  
	
  disposed

  	
  5

  
	
  Dollar

  	
  5

  
	
  Environmental Laws

  	
  5

  
	
  Equity

  	
  5

  
	
  ERISA

  	
  5

  
	
  ERISA Affiliate

  	
  5

  
	
  ERISA Termination Event

  	
  6

  
	
  Event of Default

  	
  55

  

 

 vi
 

 

 

	
  Excluded Taxes

  	
  6

  
	
  Existing Credit Agreement

  	
  1

  
	
  Existing Loan Documents

  	
  1

  
	
  Federal Funds Effective Rate

  	
  6

  
	
  Financing Documents

  	
  7

  
	
  Financing Parties

  	
  69

  
	
  Fiscal Quarter

  	
  7

  
	
  Fiscal Year

  	
  7

  
	
  Foreign Lender

  	
  7

  
	
  Funded Indebtedness

  	
  7

  
	
  GAAP

  	
  7

  
	
  Governmental Authority

  	
  7

  
	
  Governmental Requirement

  	
  7

  
	
  Guarantor

  	
  7

  
	
  Guarantors

  	
  7

  
	
  Guaranty and Security Agreement

  	
  8

  
	
  hazardous substance

  	
  5

  
	
  Hedging Agreement

  	
  8

  
	
  herein

  	
  16

  
	
  hereof

  	
  16

  
	
  hereunder

  	
  16

  
	
  Highest Lawful Rate

  	
  8

  
	
  Historical Financials

  	
  8

  
	
  Indebtedness

  	
  8

  
	
  Indemnified Taxes

  	
  9

  
	
  Interest Period

  	
  9

  
	
  ISP98

  	
  18

  
	
  Issuing Bank

  	
  1, 9

  
	
  JPMorgan Chase

  	
  1, 9

  
	
  Lender

  	
  1

  
	
  Lender Affiliate

  	
  9

  
	
  Lender Indebtedness

  	
  10

  
	
  Lenders

  	
  1

  
	
  Lending Office

  	
  10

  
	
  Letter of Credit Liabilities

  	
  10

  
	
  Letters of Credit

  	
  17

  
	
  LIBOR Loan

  	
  10

  
	
  LIBOR Rate

  	
  10

  
	
  Lien

  	
  10

  
	
  Make-Whole Amount

  	
  11

  
	
  Margin Stock

  	
  11

  
	
  Marketing Alliance Partner

  	
  11

  
	
  Material Adverse Change

  	
  11

  
	
  Material Adverse Effect

  	
  11

  
	
  Material Provision

  	
  57

  
	
  Maximum Available Amount

  	
  11

  

 

 vii
 

 

 

	
  Mortgage

  	
  11

  
	
  Nebraska Sub

  	
  11

  
	
  New Subsidiary

  	
  48

  
	
  Non-Repeating Representations and Warranties

  	
  12

  
	
  Obligated Party

  	
  12

  
	
  oil

  	
  5

  
	
  OPA

  	
  5

  
	
  Other Taxes

  	
  12

  
	
  Parent

  	
  1

  
	
  Participant

  	
  67

  
	
  Payment Office

  	
  12

  
	
  PBGC

  	
  12

  
	
  Permitted Liens

  	
  52

  
	
  Person

  	
  12

  
	
  Plan

  	
  12

  
	
  Power

  	
  12

  
	
  Prime Rate

  	
  12

  
	
  Property

  	
  13

  
	
  RCRA

  	
  5

  
	
  Real Property

  	
  13

  
	
  Recovery Event

  	
  13

  
	
  Register

  	
  67

  
	
  Regulation D

  	
  13

  
	
  Regulation U

  	
  13

  
	
  Regulation X

  	
  13

  
	
  Reimbursement Obligations

  	
  13

  
	
  release

  	
  5

  
	
  Reported Inventory

  	
  13

  
	
  Request for Letters of Credit

  	
  13

  
	
  Required Lenders

  	
  13

  
	
  Responsible Officer

  	
  13

  
	
  Revolving Credit Commitment

  	
  16

  
	
  Revolving Credit Commitments

  	
  16

  
	
  Revolving Credit Exposure

  	
  14

  
	
  Revolving Credit Loan

  	
  16

  
	
  Revolving Credit Maturity Date

  	
  14

  
	
  Revolving Credit Percentage

  	
  14

  
	
  Schedules

  	
  14

  
	
  Secured Affiliate

  	
  14

  
	
  Security Instruments

  	
  14

  
	
  solid waste

  	
  5

  
	
  Solvent

  	
  14

  
	
  Standby Letter of Credit

  	
  14

  
	
  Statutory Reserves

  	
  15

  
	
  Subsidiary

  	
  15

  
	
  Taxes

  	
  15

  

 

 viii
 

 

 

	
  threatened release

  	
  5

  
	
  Transferee

  	
  68

  
	
  Type

  	
  15

  
	
  UCC

  	
  15

  
	
  under common control with

  	
  2

  
	
  Voting Equity

  	
  15

  

 

 ix

 

AMENDED AND
RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is made and entered into as
of September 15, 2006, among AVENTINE RENEWABLE ENERGY,
INC., a Delaware corporation (“Borrower”),
AVENTINE RENEWABLE ENERGY, LLC, a
Delaware limited liability company (“Parent”),
JPMORGAN CHASE BANK, N.A.,
individually as a Lender (in such individual capacity, “JPMorgan Chase”), as the Issuing Bank
(in such capacity the “Issuing Bank”)
and as the Administrative Agent (in such capacity, the “Administrative Agent”), and each of the
lenders that is a signatory hereto or which hereafter becomes a party hereto as
provided in Section 10.7 (individually, a “Lender” and, collectively, the “Lenders”).

RECITALS:

WHEREAS, Borrower, Parent, the Administrative Agent,
the Issuing Bank and the Lenders are parties to that certain Credit Agreement
dated as of May 30, 2003 (as heretofore amended, the “Existing
Credit Agreement”), pursuant to which Lenders extended certain
financing to Borrower in accordance with the terms and conditions set forth
therein; and

WHEREAS, Borrower has requested that the Existing
Credit Agreement be amended and restated in its entirety.

AGREEMENT:

In consideration of the mutual covenants and
agreements herein contained, Parent, Borrower, the Administrative Agent, the
Issuing Bank and the Lenders agree that, subject to the satisfaction of each
condition precedent contained in Section 3.2 hereof, the Existing Credit
Agreement shall be amended and restated as of the Closing Date (as herein
defined) in its entirety in the form of this Agreement.  It is the intention of Borrower, Parent, the
Lenders, the Issuing Bank and the Administrative Agent that this Agreement
supersede and replace the Existing Credit Agreement in its entirety; provided,
that, (a) such amendment and restatement shall operate to renew, amend
and modify the rights and obligations of the parties under the Existing Credit
Agreement, as provided herein, but shall not effect a novation thereof, (b)
unless otherwise provided for herein and evidenced by a separate written
agreement, amendment or release, no other Loan Document, as defined in, and
executed and/or delivered pursuant to the terms of, the Existing Credit
Agreement (collectively, the “Existing Loan Documents”)
shall be amended, terminated or released in any respect and all of such other
Existing Loan Documents shall remain in full force and effect except that
Borrower and the Lenders agree that by executing this Agreement the definition of
“Credit Agreement” contained in such Existing Loan Documents shall be amended
to refer to this Agreement as it may hereafter be amended, modified, renewed or
extended in accordance with the terms hereof in place of the Existing Credit
Agreement, and (c) the Liens securing the Secured Obligations under and as
defined in the Existing Credit Agreement and granted pursuant to the Existing
Loan Documents and the liabilities and obligations of Borrower shall not be
extinguished, but shall be carried forward, and such Liens shall secure such
Secured Obligations, in each case, as renewed, amended, restated and modified
hereby.

 1
 

 

The parties hereto further agree as follows:

ARTICLE 1

DEFINITIONS; CONSTRUCTION

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

“Accounts
Receivable” shall mean the invoice amount owing on each account
of Borrower that, in conformity with GAAP, is included in “accounts receivable”
in the financial statements of Borrower.

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

“Advance Notice” shall mean written or
telecopy notice (with telephonic confirmation in the case of telecopy notice),
which in each case shall be irrevocable, from Borrower to be received by the
Administrative Agent before 11:00 a.m. (Chicago, Illinois time), by the number
of Business Days in advance of any Borrowing, conversion, continuation or
prepayment of any Revolving Credit Loan or Revolving Credit Loans pursuant to
this Agreement as respectively indicated below:

(a)           LIBOR Loans - 3 Business Days; and

(b)           Base Rate Loans - same Business Day.

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

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

 2
 

 

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

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

“Applicable Margin” shall mean (a)
0.750% for LIBOR Loans, and (b) 0.000% for Base Rate Loans.

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

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

“Aurora
West” means Aventine Renewable Energy – Aurora West, LLC, a
Delaware limited liability company.

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

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

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

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

“Borrower” shall mean Aventine Renewable
Energy, Inc., a Delaware corporation.

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

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

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

“Business Day” shall mean any day
excluding Saturday, Sunday and any other day on which banks are required or
authorized to close in Chicago, Illinois and, if the applicable 

 3
 

 

Business Day relates to LIBOR Loans, on which trading
is carried on by and between banks in Dollar deposits in the London interbank
market.

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

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

“Closing Date” shall mean September 15,
2006.

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

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

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

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

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

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

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

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

 4
 

 

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

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

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

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

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

 5
 

 

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

“Excluded
Subsidiary” shall mean, at any time, any Subsidiary of Parent
whose Property has a value (valued at the higher of cost (determined on a
weighted average cost basis) or market value as determined in accordance with
GAAP consistently applied at such time) in an aggregate amount less than
$5,000,000 and who has not become a Guarantor pursuant to Section 6.9
hereof.  As of the Closing Date, Aurora
West, Mt. Vernon and Power are Excluded Subsidiaries.

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

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

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

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

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

 6
 

 

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

“Funded
Indebtedness” shall mean, as to any Person, without duplication,
indebtedness of the type described in clause (a) of the definition of “Indebtedness”.

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

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

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

“Guarantors” shall mean Parent and each
current or future Subsidiary of Parent, other than Borrower, collectively, and “Guarantor” shall mean each such Person
individually; provided, that, Nebraska Sub shall not be a
Guarantor hereunder unless and until Parent becomes the direct or indirect
beneficial owner of 100% of the Equity of Nebraska Sub; provided, further,
that, no Excluded Subsidiary shall be a Guarantor unless and until it satisfies
the requirements of Section 6.9 hereof (at which time it shall no longer
be an Excluded Subsidiary).

“Guaranty and Security Agreement” shall
mean the Amended and Restated Guaranty and Security Agreement executed by
Borrower and each Guarantor dated as of September 15, 2006, as
amended, modified, renewed, supplemented or restated from time to time.

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

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

 7
 

 

“Historical Financials” shall mean (a)
the audited consolidated balance sheet and statement of income (loss) of Holdco
prepared as of December 31, 2005 and (b) the unaudited consolidated balance
sheet and consolidating statement of income (loss) for Holdco and its
consolidated Subsidiaries prepared as of June 30, 2006.

“Holdco” shall mean Aventine Renewable
Energy Holdings, Inc., a Delaware corporation.

“Indebtedness” of any Person shall mean:

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

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

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

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

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

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

(g)           all obligations or undertakings of
such Person to maintain or cause to be maintained the financial position or
financial covenants of other Persons (excluding, in the case of the Credit
Parties, commitments of any Credit Party to invest in Marketing Alliance
Partners);

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

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

 8
 

 

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

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

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

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

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

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

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

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

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

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

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

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

 9
 

 

“LIBOR Rate” shall mean, with respect to
any Borrowing of LIBOR Loans for any Interest Period, the product of (a) (i)
the interest rate per annum shown on page 3750 of the Dow Jones & Company
Telerate screen or any successor page as the composite offered rate for London
interbank deposits with a period comparable to the Interest Period for such
LIBOR Loan, as shown under the heading “USD” at 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period or (ii) if the
rate in clause (a) of this definition is not shown for any particular day, the
average interest rate per annum (rounded upwards, if necessary, to the next
1/16th of 1%) offered to the Administrative Agent in the London interbank
market for Dollar deposits of amounts in funds comparable to the principal
amount of the LIBOR Loan to which such LIBOR Rate is to be applicable with
maturities comparable to the Interest Period for which such LIBOR Rate will
apply as of approximately 9:00 a.m. (Chicago, Illinois time) two Business Days
prior to the commencement of such Interest Period, times (b) Statutory
Reserves.

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

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

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

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

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

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

 10
 

 

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

“Maximum Available Amount” shall mean,
at any date, an amount equal to the lesser of (a) the aggregate Revolving
Credit Commitments as of such date, and (b) the sum of (i) 75% of Accounts
Receivable and (ii) 50% of Reported Inventory, in the case of both (i) and (ii)
as reflected on the Current Financials.

“Mortgage” shall mean the Mortgage,
Assignment, Security Agreement and Financing Statement dated May 30, 2003,
executed by Borrower in favor of the Administrative Agent.

“Mt.
Vernon” shall mean Aventine Renewable Energy – Mt. Vernon, LLC,
a Delaware limited liability company.

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

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

“Non-Repeating Representations and Warranties”
shall mean the representations and warranties set forth in Section 5.7,
the first sentence of Section 5.18, and the last sentence of Section
5.22.

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

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

“Parent” shall mean Aventine Renewable
Energy, LLC, a Delaware limited liability company.

“Payment Office” shall mean the
Administrative Agent’s office located at 10 South Dearborn, Chicago, Illinois
60670 (or such other office or individual as the Administrative Agent may
hereafter designate in writing to the other parties hereto).

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

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

 11
 

 

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

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

“Power”
means Aventine Power, LLC, a Delaware limited liability company.

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

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

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

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

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

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

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

“Reported
Inventory” shall mean all “inventory” of Borrower that, in
conformity with GAAP, is included in “inventory” in the financial statements of
Borrower.

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

 12
 

 

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

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

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

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

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

“Revolving Credit Maturity Date” shall
mean September 14, 2007.

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

“Schedules” shall mean the Schedules to
this Agreement.

“Secured Affiliate” shall mean any
Affiliate of any Lender at the time that such Affiliate has entered into a
Hedging Agreement or Cash Management Agreement with any of the Credit Parties
with the obligations of such Credit Parties thereunder being secured by one or
more Security Instruments

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

“Solvent” shall mean with respect to any
Person on a particular date, the condition that, on such date, (a) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liabilities of
such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such 

 13
 

 

Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small amount of capital.

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

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

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

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

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

“UCC” shall mean the Uniform Commercial
Code as from time to time in effect in the State of New York or, where
applicable as to specific Collateral, any other relevant state.

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

Section 1.2                     Accounting
Terms and Determinations. 
Unless otherwise defined or specified herein, all accounting terms shall be
construed herein, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared,
in accordance with GAAP as in effect from time to time; provided, that,
if the Borrower notifies the Administrative Agent that the Borrower requests an
amendment of Section 7.1 hereof or the definitions related thereto to
eliminate the effect of any change occurring after 

 14
 

 

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

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

ARTICLE 2

AMOUNT AND TERMS OF LOANS

 

Section
2.1                     Loans and Commitments.

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

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

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

 15
 

 

(d)           Amounts
of Borrowings, etc.  The
aggregate principal amount of each Borrowing (i) of LIBOR Loans shall be (A) in
an amount not less than $500,000 and (B) in an integral multiple of $100,000
and (ii) of Base Rate Loans shall be (A) in an amount not less than $100,000
and (B) in an integral multiple of $10,000. 
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that Borrower shall not be entitled to request any Borrowing
that, if made, would result in an aggregate of more than five separate
Borrowings of LIBOR Loans being outstanding at any one time.  For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

Section
2.2                     Borrowing Requests.

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

(b)           Notice
by Administrative Agent. 
The Administrative Agent shall promptly (and, if any Borrowing Request
is received prior to 11:00 a.m., Chicago, Illinois time, on the same Business
Day received) give each Lender telecopy or telephonic notice (and, in the case
of telephonic notices, confirmed by telecopy or otherwise in writing) of the
proposed Borrowing, of such Lender’s Revolving Credit Percentage thereof and of
the other matters covered by the Advance Notice.  Borrower hereby waives the right to dispute
the Administrative Agent’s record of the terms of such telephonic notice,
absent manifest error.

Section
2.3                     Letters of Credit.

(a)           Issuance
of Letters of Credit. 
Subject to the terms and conditions hereof, Borrower shall have the
right, in addition to Revolving Credit Loans provided for in Section 2.1,
to utilize the Revolving Credit Commitments from time to time prior to the date
which is thirty (30) days prior to the Revolving Credit Maturity Date by
obtaining the issuance of Standby Letters of Credit for the account of Borrower
by the Issuing Bank if Borrower shall so request in the notice referred to in Section
2.3(b)(i) (such letters of credit and any outstanding letters of credit
issued under and pursuant to the Existing Credit Agreement being collectively
referred to as the “Letters of Credit”);
provided, however, that Borrower shall not be permitted to obtain
the issuance of Letters of Credit hereunder at anytime in excess of the
Availability at such time (calculated immediately prior to giving effect to the
issuance of such Letters of Credit) and the aggregate of all Letter of Credit
Liabilities at any one time outstanding shall not exceed $30,000,000.  The Letters of Credit shall be denominated in
Dollars and may be issued to support obligations of Borrower permitted pursuant
to this Agreement.  Upon the date of the
issuance of a Letter of Credit, the Issuing Bank shall be deemed, without further

 16
 

 

action by any party hereto, to have sold to each
Lender, and each Lender shall be deemed, without further action by any party
hereto, to have purchased from such Issuing Bank, a participation, to the
extent of such Lender’s Revolving Credit Percentage, in the Letter of Credit
and the related Letter of Credit Liabilities. 
No Letter of Credit issued pursuant to this Agreement shall have an
expiry date of one year after the date of issuance.

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

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

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

(iii)          Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment thereunder, the Issuing Bank
shall promptly notify Borrower 

 17
 

 

and the Administrative Agent of such demand (provided,
that, the failure of the Issuing Bank to give such notice shall not
affect the Reimbursement Obligations of Borrower hereunder) and Borrower shall
immediately, and in any event no later than 9:00 a.m. (Chicago, Illinois time)
on the date of such drawing, reimburse the Administrative Agent for the account
of the Issuing Bank for any amount paid by the Issuing Bank upon any drawing
under any Letter of Credit, without presentment, demand, protest or other
formalities of any kind in an amount, in same day funds, equal to the amount of
such drawing.  Unless prior to 9:00 a.m.
(Chicago, Illinois time) on the date of such drawing, Borrower shall have
either notified the Issuing Bank and the Administrative Agent that Borrower
intends to reimburse the Administrative Agent for the account of the Issuing
Bank for the amount of such drawing with funds other than the proceeds of
Revolving Credit Loans or delivered to the Administrative Agent a Borrowing
Request for Revolving Credit Loans in an amount equal to such drawing, Borrower
will be deemed to have given a Borrowing Request to the Administrative Agent
requesting that the Lenders make Revolving Credit Loans which shall be Base
Rate Loans on the date on which such drawing is honored in an amount equal to
the amount of such drawing; provided, that, such Revolving Credit
Loans shall be subject to (A) the satisfaction of the conditions in Article
3 and (B) the existence of Revolving Credit Loan availability pursuant to Section
2.1(c) hereof (after giving effect to repayment of the applicable
Reimbursement Obligations with the proceeds of the proposed Revolving Credit
Loans).  Subject to the preceding
sentence, if so requested by the Administrative Agent, each of the Lenders
shall, on the date of such drawing, make such Revolving Credit Loans in an
amount equal to such Lender’s Revolving Credit Percentage of such drawing or
the full amount of the unused Revolving Credit Loan available pursuant to Section
2.1(c), as applicable, the proceeds of which shall be applied directly by
the Administrative Agent to reimburse the Issuing Bank to the extent of such
proceeds.

(iv)          Thirty (30) days prior to the
Revolving Credit Maturity Date (the “Cover Date”), Borrower shall
immediately, and in any event no later than 9:00 a.m. (Chicago, Illinois time)
on the Cover Date, deliver Cover for any Letters of Credit then
outstanding.  Unless prior to 9:00 a.m.
(Chicago, Illinois time) on the Cover Date, Borrower shall have delivered such
Cover, Borrower will be deemed to have given a Borrowing Request to the
Administrative Agent requesting that the Lenders make Revolving Credit Loans
which shall be Base Rate Loans on the Cover Date in an amount equal to the
Cover for all Letters of Credit then outstanding (or the full amount of the
unused Revolving Credit Loans then available, if such amount is less than the
aggregate Cover required).

(v)           If Borrower fails to reimburse the
Issuing Bank as provided in clause (iii) or (iv) above for any reason,
including, but not limited to, failure to satisfy the conditions in Article
3 or insufficient unused Revolving Credit Loan availability pursuant to Section
2.1(c), the Issuing Bank shall promptly notify the Administrative Agent and
the Administrative Agent shall notify each Lender of the unreimbursed amount of
such drawing and of such Lender’s respective 

 18
 

 

participation therein based on such Lender’s Revolving
Credit Percentage.  Each Lender will pay
to the Administrative Agent for the account of the Issuing Bank on the date of
such notice an amount equal to such Lender’s Revolving Credit Percentage of
such unreimbursed drawing (or, if such notice is made after 12:00 noon
(Chicago, Illinois time) on such date, on the next succeeding Business
Day).  If any Lender fails to make available
to the Issuing Bank the amount of such Lender’s participation in such Letter of
Credit as provided in this clause (v), the Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest at the
Federal Funds Effective Rate for one Business Day and thereafter at the Base
Rate.  Nothing in this clause (v) shall
be deemed to prejudice the right of any Lender to recover from the Issuing Bank
any amounts made available by such Lender to the Issuing Bank pursuant to this
clause (v) if it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuing Bank was wrongful and
such wrongful payment was the result of gross negligence or willful misconduct
on the part of the Issuing Bank.  The
Issuing Bank shall pay to the Administrative Agent, and the Administrative
Agent to each Lender, such Lender’s Revolving Credit Percentage of all amounts
received from Borrower for payment, in whole or in part, of the Reimbursement
Obligations in respect of any Letter of Credit, but only to the extent such
Lender has made payment to the Issuing Bank in respect of such Letter of Credit
pursuant to this clause (v).

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

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

 19
 

 

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

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

The obligation of Borrower to reimburse the Issuing
Bank for Reimbursement Obligations with regard to the Letters of Credit issued
by it, and the obligations of the Lenders under clause (v), shall be
unconditional and irrevocable and shall be paid strictly in accordance 

 20
 

 

with the terms of this
Agreement and under all circumstances including, without limitation, the
following circumstances:

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

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

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

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

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

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

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

Section
2.4                     Disbursement of Funds.

(a)           Availability.  No later than 11:00 a.m. (or, in the case of
Base Rate Loans, 12:00 noon) (Chicago, Illinois time) on the date of each
Borrowing, each Lender will make available to the Administrative Agent such
Lender’s Revolving Credit Percentage of the principal amount of the Borrowing
requested to be made on such date reduced by the principal amount of Revolving
Credit Loans (if any) of such Lender maturing on such date, in Dollars and in
immediately available funds at the Payment Office.  The Administrative Agent will make available
to Borrower at the Payment Office the aggregate of the amounts (if any) so made
available by the Lenders by depositing such 

 21
 

 

amounts, in immediately available funds, to the
accounts of Borrower, maintained with the Administrative Agent, designated by
Borrower for such purpose (collectively, the “Disbursement Account”) (on the date hereof, such accounts
being account numbers 601 867 419 (styled “Accounts Payable Controlled
Disbursement Account”) and 323 366 619 (styled “Operating Account”)), not later
than 2:00 p.m. (Chicago, Illinois time) on the date of each Borrowing.  To the extent that any Lender Indebtedness is
due and owing on the date of a requested Borrowing of Revolving Credit Loans,
the Lenders shall apply the proceeds of the Revolving Credit Loans then being
made, to the extent thereof, to the repayment of such Lender Indebtedness, such
Revolving Credit Loans or Reimbursement Obligations and repayments intended to
be a contemporaneous exchange.

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

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

Section 2.5                     Evidence of Debt.  Any Lender may request that the Revolving
Credit Loans made by it be evidenced
by a promissory note.  In such event,
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Administrative
Agent.  Thereafter, the Revolving Credit
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.7) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).

 22

 

Section
2.6                     Interest.  In all cases subject to Section 10.12:

(a)           Base
Rate Loans.  Subject to Section
2.6(c), Borrower agrees to pay interest in respect of the unpaid principal
amount of each Base Rate Loan from the date thereof until payment in full thereof
at a rate per annum which shall be, for any day, equal to the sum of the
relevant Applicable Margin plus the Base Rate in effect on such day, but
in no event to exceed the Highest Lawful Rate. 
The term “Base Rate”
shall mean, for any day, the highest of (i) the Prime Rate in effect on such
day, and (ii) one-half of one percent (1⁄2%) plus the Federal Funds
Effective Rate in effect for such day (rounded upwards, if necessary, to the
nearest 1/16th of 1%), but in no event to exceed the Highest Lawful Rate.  For purposes of this Agreement, any change in
the Base Rate due to a change in the Federal Funds Effective Rate or the Prime
Rate shall be effective as of the opening of business on the effective date of
such change in the Federal Funds Effective Rate or the Prime Rate, as the case
may be.  If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive and binding, absent manifest error) that it is unable to ascertain
the Federal Funds Effective Rate for any reason, including, but not limited to,
the inability of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Base Rate shall be the
Prime Rate until the circumstances giving rise to such inability no longer
exist.

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

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

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

 23
 

 

maturity (whether by acceleration or otherwise).  Interest which accrues pursuant to Section
2.6(c) shall be payable on demand.

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

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

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

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

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

Section
2.8                     Records.

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

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

 24
 

 

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

Section 2.9                     Voluntary
Termination or Reduction of Revolving Credit Commitments.  Borrower may, upon at least five Business
Days’ written notice to the Administrative Agent, terminate entirely at any
time, or partially reduce from time to time by an aggregate amount of
$1,000,000 or any larger multiple of $100,000, the unused portions of the
Revolving Credit Commitments; provided, that any such reduction
shall apply proportionately to the Revolving Credit Commitment of each
Lender.  Borrower shall not be permitted
to reduce the Revolving Credit Commitments to an aggregate amount less than
$10,000,000 unless Borrower terminates the Revolving Credit Commitments in
their entirety.

Section
2.10                   Repayment at Maturity; Prepayments.

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

(b)           Mandatory Prepayments.

(i)            If at any time the Aggregate
Revolving Credit Exposure is in excess of the Maximum Available Amount,
Borrower shall immediately pay to the Administrative Agent, for the account of
the Lenders, the amount of such excess to be applied (A) as a prepayment of the
Revolving Credit Loans and Reimbursement Obligations outstanding and (B) after
payment in full of the Revolving Credit Loans and Reimbursement Obligations
outstanding, as Cover for the Letter of Credit Liabilities in an amount of such
remaining excess.  Any prepayment or
Cover required as a result of any reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.9 shall be payable or provided in full
on the date on which the reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.9 becomes effective.

(c)           Voluntary
Prepayments.  Borrower
may, at its option, at any time and from time to time, prepay the Revolving
Credit Loans and the Reimbursement Obligations, in whole or in part, upon
giving, in the case of any LIBOR Loan, three Business Days’ prior written
notice to the Administrative Agent, and, in the case of any Base Rate Loan,
prior written notice on the same Business Day to the Administrative Agent.  Such notice shall specify (i) in the case of
any prepayment of Revolving Credit Loans, the date and amount of prepayment and
whether the prepayment is of LIBOR Loans, Base Rate Loans or a combination
thereof, and, in each case if a combination 

 25
 

 

thereof, the principal amount allocable to each; and
(ii) in the case of any prepayment of Reimbursement Obligations, the date and
amount of prepayment, the identity of the applicable Letter of Credit or
Letters of Credit and the amount allocable to each of such Reimbursement
Obligations.  Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender of the
contents thereof and of such Lender’s Revolving Credit Percentage of such
prepayment.  If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with (if a LIBOR Loan is prepaid other than at the
end of the Interest Period applicable thereto) any amounts payable pursuant to Section
2.18.  Prepayments of the Revolving
Credit Loans and the Reimbursement Obligations pursuant to this Section
2.10(c) shall be applied, first, to payment of the Revolving Credit
Loans then outstanding, second, to payment of any Reimbursement
Obligations then outstanding, and third, to Cover any outstanding Letter
of Credit Liability. Each prepayment of Base Rate Loans shall be in the minimum
principal amount of $100,000 and in integral multiples of $10,000 and each
prepayment of LIBOR Loans shall be in the minimum principal amount of $500,000
and in integral multiples of $100,000 or, in the case of either Base Rate Loans
or LIBOR Loans, the aggregate principal balance outstanding on the Revolving
Credit Loans and the Reimbursement Obligations, as applicable.  No prepayment of a LIBOR Loan shall be made
which would result in the remaining outstanding balance of such LIBOR Loan
being an amount less than $500,000, and any payment of LIBOR Loans made on any
day other than the last day of the applicable Interest Period shall be subject
to the payment of the amounts specified in Section 2.18.

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

Section
2.11                   Continuation and Conversion Options.

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

(b)           Amount
of Continuations.  All or
part of any LIBOR Loans may be continued as provided herein, provided, that,
any continuation of such LIBOR Loans shall not be (as to each Borrowing of such
LIBOR Loans as continued for an applicable Interest Period) less than $500,000
and shall be in an integral multiple of $100,000.

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

 26
 

 

Section 2.11(a)
or to convert Base Rate Loans to LIBOR Loans pursuant to Section 2.11(e).

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

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

(f)            Amounts
of Conversions.  All or
any part of the outstanding Revolving Credit Loans may be converted as provided
herein, provided  that any conversion of such Revolving Credit
Loans shall not result in a Borrowing of LIBOR Loans in an amount less than
$500,000 and in integral multiples of $100,000.

Section
2.12                   Fees.

(a)           Revolving
Credit Commitments. 
Borrower shall pay to the Administrative Agent, for the account of and
distribution to each Lender in accordance with its Revolving Credit Percentage,
a commitment fee for the period commencing on the Closing Date, to and
including the Revolving Credit Maturity Date (or such earlier date as the
Revolving Credit Commitments shall have been terminated entirely), computed at
a rate per annum equal to 0.15% on the amount by which the Revolving Credit
Commitments exceeds the daily Aggregate Revolving Credit Exposure.  The commitment fees payable pursuant to this Section
2.12(a) shall be payable quarterly in arrears on the first Business Day of
each calendar quarter, commencing on December 1, 2006.

(b)           Letters of Credit.

(i)            As consideration for acting as the
Issuing Bank with respect to any Letter of Credit issued at any time that
JPMorgan Chase is not the sole Lender under this Agreement, Borrower will pay
to the Issuing Bank, at the time of issuance, renewal or material amendment of
any Letter of Credit, a non-refundable fee equal to 0.25% of the face amount of
such Letter of Credit.  Borrower shall
also pay to the Issuing Bank, with respect to any issuance, amendment, transfer,
or cancellation prior to expiration of any Letter of Credit and for each
drawing made thereunder, documentary and processing charges in accordance with
the Issuing Bank’s standard schedule for such charges in effect at the time of,
and payable at the time of, such issuance, amendment, transfer, cancellation or
drawing, as the case may be.  All fees
payable pursuant to this clause shall be retained by the Issuing Bank for its
own account.

(ii)           Borrower will pay to the
Administrative Agent, for the account of and pro-rata distribution to each Lender,
a fee on the daily average amount available for drawings under each Letter of
Credit, in each case for the period 

 27
 

 

from and including the date of issuance of such Letter
of Credit to and excluding the date of expiration or termination thereof, computed
at a per annum rate for each day equal to the Applicable Margin for Revolving
Credit Loans that are LIBOR Loans in effect on such day.  Such fees shall be payable monthly in arrears
on the first Business Day of each calendar month.

Section
2.13                   Payments, Credit Availability, etc.

(a)           Without
Setoff, etc.  Except as
otherwise specifically provided herein, all payments under this Agreement shall
be made to the Administrative Agent for the account of the Lenders without
defense, set-off or counterclaim to the Administrative Agent not later than
11:00 a.m. (Chicago, Illinois time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office.  The Administrative Agent will promptly
thereafter distribute funds in the form received relating to the payment of
principal or interest or commitment fees ratably to the Lenders for the account
of their respective Lending Offices, and funds in the form received relating to
the payment of any other amount payable to any Lender to such Lender for the
account of its applicable Lending Office.

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

(c)           Computations.  All computations of interest shall be made on
the basis of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a
year of 365 or 366 days, as the case may be) for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or fees are payable. 
Each determination by the Administrative Agent of an interest rate or
fee hereunder shall, except for manifest error, be final, conclusive and
binding for all purposes, provided, that, such determination
shall be made in good faith in a manner generally consistent with the
Administrative Agent’s standard practice. 
If the Administrative Agent and Borrower determine that manifest error
exists, said parties shall correct such error by way of an adjustment to the
next payment due hereunder.

Section 2.14                   Interest
Rate Not Ascertainable, etc. 
In the event that the Administrative Agent shall have determined (which
determination shall be reasonably exercised and shall, absent manifest error,
be final, conclusive and binding upon all parties) that on any date for
determining the LIBOR Rate for any Interest Period, by reason of any changes
arising after the date of this Agreement affecting the London interbank market,
or any Lender’s position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR Rate, then, and in any such event, the Administrative Agent
shall forthwith give notice (by telephone confirmed in writing) to Borrower and
to the Lenders of such determination. 
Until the Administrative Agent notifies Borrower that the circumstances
giving rise to the suspension described herein no longer exist, 

 28
 

 

(a) the obligations of the Lenders to make LIBOR Loans shall be
immediately suspended, (b) any Borrowing of LIBOR Loans that is requested (by
continuation, conversion or otherwise) shall instead be made as a Borrowing of
Base Rate Loans, and (c) any outstanding LIBOR Loan shall be converted, on the
last day of the then current Interest Period applicable thereto, to a Base Rate
Loan.

Section
2.15                   Illegality.

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

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

Section
2.16                   Increased Costs.

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

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

 29
 

 

jurisdiction in which such Lender’s principal
executive office or applicable Lending Office is located); or

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

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

(b)           Costs.  If any Lender shall advise the Administrative
Agent that at any time, because of the circumstances described in clauses (x)
or (y) in Section 2.16(a) or any other circumstances affecting such
Lender or the London interbank market or such Lender’s position in such market,
the LIBOR Rate, as determined in good faith by the Administrative Agent, will
not adequately and fairly reflect the cost to such Lender of funding its LIBOR
Loans, then, and in any such event:

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

(ii)           Borrower’s right to request a
Borrowing of LIBOR Loans from such Lender and such Lender’s obligation to make
LIBOR Loans shall be immediately suspended, any such Borrowing of LIBOR Loans
that is requested (by continuation, conversion or otherwise) shall, as to such
Lender only, be deemed to be a request for a Base Rate Loan, and any such
outstanding LIBOR 

 30
 

 

Loan from such Lender shall be converted, on the last
day of the then current Interest Period applicable thereto, to a Base Rate
Loan.

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

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

Section 2.17                   Change of
Lending Office.  Each
Lender agrees that it will use reasonable efforts to designate an alternate
Lending Office with respect to any of its LIBOR Loans affected by the matters
or circumstances described in Section 2.14, Section 2.15 or Section
2.16 to reduce the liability of Borrower or avoid the results provided
thereunder, so long as such designation is not disadvantageous to such Lender
as determined by such Lender in its sole discretion; provided, that,
the mere existence of fees, charges, costs or expenses that such Borrower has
offered and agreed to pay on behalf of such Lender shall not be deemed to be
materially disadvantageous to the Lender; and provided, further, that,
such Lender shall have no obligation to so designate an alternate Lending
Office located in the United States.

Section 2.18                   Funding
Losses.  Borrower shall
compensate each Lender, upon its written request (which request shall set forth the
basis for requesting such amounts and shall, absent manifest error, be final,
conclusive and binding upon all of the parties hereto), for all 

 31
 

 

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

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

Section 2.20                   Taxes.

(a)           Payments
Free and Clear.  Any and
all payments by or on account of any obligation of a Credit Party hereunder or
any other Financing Document shall be made free and clear of, and without
deduction for, any Indemnified Taxes or Other Taxes; provided, that,
if any Credit Party shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20) each
Payee receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Credit Parties shall make such deductions, and
(iii) the Credit Parties shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

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

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

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

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

(f)            Lender
Representations and Agreements. 
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which Borrower is located,
or any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such 

 33
 

 

properly completed and executed documentation
prescribed by applicable law or reasonably requested by Borrower as will permit
such payments to be made without withholding or at a reduced rate.

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

(h)           Refunds.

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

(ii)           If as a result of the claim for
refund or credit described in clause (i) above or otherwise, Payee receives a
refund or secures the application of a credit in respect of any Indemnified
Taxes, Other Taxes or any other amounts as to which it has been indemnified by
Borrower pursuant to this Section, or with respect to which any Credit Party
has paid additional amounts pursuant to this Section, such Payee shall promptly
notify Borrower of such refund or credit and shall, within thirty (30) days
from the date of receipt of such refund or the application of such credit, pay
over to Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrower or any Credit Party under this Section
with respect to the Indemnified Taxes, Other Taxes or any other amounts giving
rise to such refund or credit) the excess, if any, of (A) the amount of such
refund or credit (including any interest paid by the 

 34
 

 

Governmental Authority with respect to such refund or
credit), over (B) the sum of (1) all out-of-pocket expenses of such
Payee in excess of any advances theretofore made by Borrower, plus (2)
any Taxes levied on or attributable to the receipt by Payee of such refund or
credit, such that, after making any payment to Borrower required by this Section
2.20(h), Payee shall have received and retained an amount equal to the
Make-Whole Amount;  provided, that,
Borrower, upon the request of such Payee agrees to repay any amount paid over
to Borrower (plus penalties, interest or other charges due to the
Governmental Authority in connection therewith) to such Payee in the event such
Payee is required to repay such refund to such Governmental Authority or is
disallowed the benefit of the claimed credit.

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

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

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

 35
 

 

 

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

ARTICLE 3

CONDITIONS TO BORROWINGS

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

(a)           Resolutions and Incumbency
Certificates.

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

(ii)           a certificate of the Secretary or an
Assistant Secretary of each Obligated Party dated as of the Closing Date and
certifying (A) the name, title and true signature of each officer of such
Person authorized to execute this Agreement, Applications and the other
Financing Documents to which such Obligated Party is a party, (B) the name,
title and true signature of each officer of such Person authorized to provide
the certifications required pursuant to this Agreement including, but not
limited to, certifications required pursuant to Section 6.10, and
Borrowing Requests, and (C) that attached thereto is a true and complete copy
of (1) the certificate or articles of incorporation, certificate or articles of
organization, certificate of limited partnership, or comparable charter
documents, certified by the appropriate Governmental Authority of the
jurisdiction of incorporation or organization of such Obligated Party, (2) the
bylaws, regulations, partnership agreement, or comparable charter documents of 

 36
 

 

such Obligated Party, each as amended to date, (3)
recent good standing certificates and certificates of existence for such
Obligated Party, and (4) certificates of foreign qualification for such
Obligated Party in such jurisdictions as the Administrative Agent shall
require.

(b)           Opinions of Counsel.

(i)            opinion of Davis, Polk &
Wardwell, counsel to each Obligated Party, dated as of the Closing Date and
substantially in the form delivered to the Administrative Agent and the Lenders
in connection with the closing of the Existing Credit Agreement, addressed to
the Administrative Agent, the Issuing Bank and the Lenders and covering such
matters as the Administrative Agent, the Issuing Bank or the Lenders may reasonably
request.

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

(c)           Guaranty and Security
Agreement.  Borrower and
each Guarantor shall have entered into the Guaranty and Security Agreement in
the form of Exhibit D to this Agreement.

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

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

(f)            Certificate
of Responsible Officer. 
Certificate of a Responsible Officer of Borrower acceptable to the
Lenders dated as of the Closing Date certifying that (i) each Credit Party is
Solvent, (ii) no Default or Event of Default exists, (iii) each representation
and warranty contained herein and in the other Financing Documents is true and
correct, and (iv) each condition precedent contained in this Section 3.1
and Section 3.2 has been satisfied (subject only to the funding and
application of the initial Borrowing to be made hereunder).

(g)           Fees
and Expenses.  Payment
and/or reimbursement of the Administrative Agent’s counsel’s fees and expenses
rendered through the Closing Date, to the extent invoiced.

 37
 

 

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

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

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

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

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

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

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

ARTICLE 4

SECURITY

Section 4.1                     Security.  The Lender Indebtedness shall be secured by
perfected, first priority Liens on all Collateral of Borrower and
each Guarantor, whether now owned or hereafter acquired and wherever located
(but subject to Section 4.2).  In
furtherance of the foregoing, Borrower and Parent hereby agree to execute and
deliver (and to (i) cause any other appropriate Obligated Party to execute and
deliver, and (ii) cause any other appropriate Person to execute and deliver) to
the Administrative Agent for the benefit of the Lenders, promptly upon request
by the Administrative Agent, such Security Instruments and other documents,
instruments, 

 38
 

 

agreements and certificates, as the Administrative Agent shall deem
necessary or appropriate in its sole discretion to create, evidence and perfect
the Liens contemplated by this Section 4.1.  Borrower and Parent hereby consent and
authorize (and shall cause any other appropriate Obligated Parties to consent
and authorize) the Administrative Agent and its agents, successors and assigns
to file any and all necessary financing statements under the UCC, amendments, “in
lieu” filings or assignments or continuation statements as necessary from time
to time (in the Administrative Agent’s discretion) to perfect or continue
perfection of the Liens granted (or purported to be granted) pursuant to the
Financing Documents.

Section 4.2                     Exceptions
to Security. 
Notwithstanding anything contained in this Article 4, (a) no Lien
shall be required
hereunder or under any Financing Document with respect to (i) the Equity held
by any Credit Party of any Marketing Alliance Partner which is a Marketing
Alliance Partner on the Closing Date to the extent that the granting of such
Lien is prohibited pursuant to the terms of the organizational documents of
such Marketing Alliance Partner on the date hereof, (ii) the Equity in Nebraska
Sub unless and until Parent and Borrower either (A) obtain the consent of the
requisite holders of Equity in Nebraska Sub pursuant to Section 6.11 and
comply with all other requirements of Section 6.11 with respect thereto,
or (B) acquire 80% of the Equity of Nebraska Sub, and (iii) the Equity held by
any Credit Party in Fluid Technologies PLC and (b) Administrative Agent shall
not be entitled to require the delivery of certificates of title, (or original
applications for new certificates of title and other related documents), with
respect to vehicles and other Property owned by Borrower or any Guarantor and
subject to a certificate of title statute of any applicable jurisdiction unless
and until (i) the aggregate net book value of such vehicles and other Property
(as described in this clause (b)) exceeds $500,000, or (ii) an Event of Default
has occurred and is continuing.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

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

Section 5.1                     Corporate
Existence.  Each Obligated
Party is a corporation, partnership or limited liability company duly organized,
legally existing and in good standing under the laws of the jurisdictions in
which it is incorporated or organized and is duly qualified as foreign
corporation, partnership or limited liability company in all jurisdictions
wherein the Property owned or the business transacted by it makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect.

Section 5.2                     Corporate
Power and Authorization. 
Each Obligated Party is duly authorized and empowered to execute,
deliver and perform the Financing Documents, including this Agreement, to which
it is a party; and all corporate, partnership, limited liability company or
other action on any Obligated Party’s part requisite for the due execution,
delivery and 

 39
 

 

performance of the Financing Documents, including this Agreement, to
which such Obligated Party is a party has been duly and effectively taken.

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

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

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

Section
5.6                     Financial Information.

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

(b)           Audited and Unaudited
Historical Financials. 
The Historical Financials were prepared in accordance with GAAP and
fairly present the consolidated financial condition of Holdco and its
consolidated Subsidiaries as of the dates reflected thereon.

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

 40
 

 

(d)           No
Material Adverse Change. 
No Material Adverse Change has occurred subsequent to December 31, 2005.

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

Section 5.8                     Litigation.  There is no action, suit or proceeding, or
any governmental investigation or any arbitration, in each case
pending or, to the knowledge of Borrower or Parent, threatened against any Credit
Party or any Property of any Credit Party before any court or arbitrator or any
Governmental Authority (a) which challenges the validity of this Agreement, any
Security Instrument or any of the other Financing Documents, or (b) as to which
there is a reasonable possibility of an adverse determination that could
reasonably be expected to have a Material Adverse Effect.

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

Section
5.10                   Employee Benefits.

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

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

(c)           The actuarial present value of the
benefit liabilities (computed on an accumulated benefit obligation basis based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) under all Plans in the aggregate 

 41
 

 

that are subject to Title IV of ERISA does not, as of
the end of the most recently ended fiscal year of such Plans, exceed the
current value of the assets of all Plans in the aggregate that are allocable to
such benefit liabilities. The term “actuarial present value of the benefit
liabilities” shall have the meaning specified in Section 4041 of ERISA.

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

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

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

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

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

Section
5.15                   Compliance with the Law.  No Credit Party:

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

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

 42
 

 

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

Section 5.16                   No
Material Misstatements. 
No material written information, exhibit, schedule or report (for this purpose, all
schedules and exhibits to the Financing Documents shall be construed to be
material) prepared by or on behalf of any Credit Party and furnished to the
Administrative Agent or the Lenders by or at the direction of any Credit Party
in connection with this Agreement or any of the transactions contemplated
hereby (other than the Projections, budgets, analysis or other forward looking
statements which were prepared or made in good faith in accordance with sound
financial planning practices on the basis of reasonable assumptions at the time
made) contained any material misstatement of fact or, omitted to state a
material fact or any fact necessary to make the statement contained therein not
misleading on the date as of which such information is dated; provided, that,
to the extent information provided to the Administrative Agent or the Lenders
or at the direction of any Credit Party prior to the Closing Date was superceded
by other information provided to the Administrative Agent or the Lenders or at
the direction of any Credit Party prior to the Closing Date, this Section
5.16 shall apply to the most recent (and not superceded) information; provided,
further, that, any limitations or qualifications of the
representations and warranties contained in this Section 5.16 shall not
otherwise limit or qualify any other representation or warranty contained
elsewhere in this Agreement or in any other Financing Document.

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

Section 5.18                   Capital
Structure.  Holdco is a
direct or indirect holder of 100% of the Equity of Parent and Parent is a direct or
indirect holder of 100% of the Equity of each of Borrower, Aurora West, and
Power.

Section 5.19                   Insurance.  All policies of fire, liability, workmen’s
compensation, casualty, flood, business interruption and other
forms of insurance owned or held by each Credit Party (a) satisfy all
requirements of Section 6.5, (b) are valid, outstanding and enforceable
policies, and (c) will not in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated by this Agreement. All such policies
are in full force and effect, all premiums with respect thereto have been paid
in accordance with their respective terms, and no notice of cancellation or
termination has been received with respect to any such policy.  No Credit Party maintains any formalized
self-insurance program with respect to its assets or operations or risks with
respect thereto.  The certificate of
insurance delivered to the Administrative Agent pursuant to Section 3.1(e)
contains an accurate and complete description of all policies of insurance
owned or held by each Credit Party on the Closing Date.

 43
 

 

 

Section 5.20                   Environmental
Matters.

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

(b)           No
Litigation.  No Property
of any Credit Party nor the operations currently conducted thereon or by any
prior owner or operator of such real Property or operation, are in violation of
or subject to any pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws, which violation, action, suit,
investigation, inquiry or proceeding could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.

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

(d)           Hazardous
Substances Carriers.  All
hazardous waste or solid waste generated at any and all real Property of any
Credit Party have in the past been transported, treated and disposed of while
under the ownership, direction or control of any Credit Party only by carriers
maintaining valid permits under RCRA and any other Environmental Law, except to
the extent the failure to have such substances or waste transported, treated or
disposed by such carriers could not reasonably be expected to have a Material
Adverse Effect, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities have been and are operating in compliance with such
permits, except to the extent the failure to have such substances or waste
treated, stored or disposed at such facilities, or the failure of such carriers
or facilities to so operate, could not reasonably be expected to have a
Material Adverse Effect or which could not reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming disclosure to 

 44
 

 

the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the relevant
Property.

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

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

Section 5.21                   Solvency.  The Credit Parties taken as a whole are, and
each Credit Party individually is, Solvent.

Section 5.22                   Employee
Matters.  Except as
specified on Schedule 5.22 hereto, no Credit Party, nor any of their respective employees,
is subject to any collective bargaining agreement.  There are no strikes, slowdowns, work
stoppages or controversies pending or threatened against any Credit Party, or
their respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

Section 5.23                   Loan
Amount.  The Aggregate
Revolving Credit Exposure will not, at any time, exceed the Maximum Available Amount.

Section 5.24                   Excluded
Subsidiaries.  The value
of the Property (valued at the higher of cost (determined on a weighted average cost
basis) or market value as determined in accordance with GAAP consistently
applied at such time) of all Excluded Subsidiaries will not, at any time,
exceed $15,000,000 in the aggregate.

ARTICLE 6

AFFIRMATIVE COVENANTS

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

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

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

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

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

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

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

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

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

Section
6.9                     New Subsidiaries; Additional Liens.

(a)           If
at any time after the Closing Date, (x) Borrower is required to cause an
Excluded Subsidiary to become a Guarantor hereunder or (y) Borrower or any
Guarantor creates or acquires any one or more Subsidiaries (other than an
Excluded Subsidiary) (each such Subsidiary referred to in clauses (x) and (y)
above being referred to herein as, a “New
Subsidiary”), Borrower and Parent shall cause such New
Subsidiary to execute and deliver to the Administrative Agent for the benefit
of the Lenders and the Issuing Bank, at the time of such New Subsidiary’s
creation or acquisition, (i) a Guaranty and Security Agreement, and (ii) other
appropriate Security Instruments covering such New Subsidiary’s Property as
security for the Lender Indebtedness, in form and substance acceptable to the
Administrative Agent.

(b)           If
at any time after the Closing Date, (i) Parent becomes the direct or indirect
beneficial owner of 80% of the Equity of Nebraska Sub (other than Equity held
by management of Nebraska Sub issued pursuant to a properly authorized
management equity plan), Borrower and Parent shall comply with all requirements
of Section 6.11 hereto, and (ii) Parent becomes the direct or indirect
beneficial owner of 100% of the Equity of Nebraska Sub (other than Equity held
by management of Nebraska Sub issued pursuant to a properly authorized
management equity plan), Borrower and Parent shall cause Nebraska Sub to
execute and deliver to the Administrative Agent for the benefit of the Lenders
and the Issuing Bank (A) a Guaranty and Security Agreement, and (B) other
appropriate Security Instruments covering Nebraska Sub’s Property as security
for the Lender Indebtedness, in form and substance acceptable to the
Administrative Agent.

(c)           In
connection with the execution and delivery of any Security Instrument pursuant
to this Section 6.9, Borrower and Parent shall, or shall cause the
relevant New Subsidiary or Nebraska Sub (as applicable) to, deliver to the
Administrative Agent for the

 47
 

 

benefit of the Lenders, resolutions, member or partner
consents, certificates, legal opinions and such other related documents as
shall be reasonably requested by the Required Lenders and consistent with the
relevant forms and types thereof delivered on the Closing Date or as shall be
otherwise reasonably acceptable to the Required Lenders.  Each Guaranty and Security Agreement and the
like delivered pursuant to this Section 6.9 shall be deemed to be a
Security Instrument from and after the date of execution thereof.

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

(a)           Annual Financial Statements.  As soon as available and in any event within
90 days after the end of each Fiscal Year commencing with the Fiscal Year
ending on December 31, 2006, a consolidated balance sheet of Holdco and its
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income, retained earnings and cash flows of Holdco
and its consolidated Subsidiaries for such Fiscal Year, setting forth in each
case, in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and, in the case of such consolidated statements, accompanied
by a report thereon (without qualification) of independent public accountants
of recognized national standing, which report shall state that such
consolidated financial statements present fairly the consolidated financial
condition as at the end of such Fiscal Year, and the consolidated results of
operations and cash flows for such Fiscal Year, of Holdco and its consolidated
Subsidiaries in accordance with GAAP, applied on a consistent basis.

(b)           Quarterly Financial Statements.  As soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of each Fiscal
Year, a consolidated balance sheet of each of Holdco and its consolidated
Subsidiaries as at the end of such month and the related consolidated
statements of income (loss), retained earnings and cash flows of Holdco and its
consolidated Subsidiaries for such calendar month and for the portion of Holdco’s
Fiscal Year ended at the end of such month, setting forth in each case, in
comparative form the figures for the corresponding month and the corresponding
portion of the previous Fiscal Year, all in reasonable detail and certified by
a Responsible Officer that such financial statements are complete and correct
and fairly present the consolidated financial condition as at the end of such
calendar month, and the consolidated results of operations and cash flows for
such calendar month and such portion of the Fiscal Year of Holdco and its
consolidated Subsidiaries in accordance with GAAP (subject to year-end adjustments
which shall not, individually or in the aggregate, be material and adverse).

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

 48
 

 

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

(e)           Notice of Certain Events.  Promptly after either Borrower or Parent
learns of the receipt or occurrence of any of the following, a certificate of
the Credit Party learning of such event, signed by a Responsible Officer,
specifying (i) any official notice of any violation, possible violation, non-compliance
or possible non-compliance, or claim made by any Governmental Authority
pertaining to all or any part of the Properties of any Credit Party which could
reasonably be expected to have a Material Adverse Effect; (ii) any event which
constitutes a Default or Event of Default, together with a detailed statement
specifying the nature thereof and the steps being taken to cure such Default or
Event of Default; (iii) the receipt of any notice from, or the taking of any
other action by, the holder of any Indebtedness in excess of $5,000,000 of any
Credit Party with respect to a claimed default, together with a detailed
statement specifying the notice given or other action taken by such holder and
the nature of the claimed default and what action the Credit Parties are taking
or propose to take with respect thereto; (iv) any notice of proceedings or
actions which could reasonably be expected to adversely affect any of the
Financing Documents; (v) the creation, dissolution, merger or acquisition of
any Credit Party; (vi) any event or condition not previously disclosed to the
Administrative Agent which violates any Environmental Law and which could
reasonably be expected to have a Material Adverse Effect; or (vii)  any other event or condition which could reasonably
be expected to have a Material Adverse Effect.

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

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

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

 49
 

 

notice of the PBGC’s intention to terminate or to have
a trustee appointed to administer any Plan.

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

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

Section 6.12                   Excluded Subsidiaries.  If, at any time, the value of the Property
(valued at the higher of cost (determined
on a weighted average cost basis) or market value as determined in accordance
with GAAP consistently applied at such time) of all Excluded Subsidiaries
exceeds $15,000,000 in the aggregate, Borrower and Parent shall cause one or
more Excluded Subsidiaries to become Guarantors pursuant to Section 6.9
hereof such that the value of the Property (valued at the higher of cost
(determined on a weighted average cost basis) or market value as determined in
accordance with GAAP consistently applied at such time) of all Excluded
Subsidiaries shall no longer exceed $15,000,000.

ARTICLE 7

NEGATIVE COVENANTS

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

Section 7.1                     Financial Covenants.  Permit the aggregate principal amount of the
Revolving Credit Loans to
exceed the Maximum Available Amount at any time.

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

(a)           the
Lender Indebtedness;

(b)           Indebtedness
outstanding on the date hereof which is set forth on Schedule 7.2 and
any refinancings, refundings, renewals or extensions thereof (without any (i)
increase in the principal amount thereof (other than to finance accrued
interest, fees and other amounts outstanding in respect thereof and fees and
expenses incurred in

 50
 

 

connection with such refinancing, refunding, renewal
or extension), or (ii) acceleration of the date of, or increase in the amount
of, any payment of principal thereon);

(c)           Indebtedness
in respect of Capital Lease Obligations and purchase money Indebtedness in an
aggregate amount not in excess of $10,000,000 outstanding at any time;

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

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

(f)            other
unsecured Indebtedness; provided, that, the aggregate amount of
such other unsecured Indebtedness shall not exceed $10,000,000 outstanding at
any time.

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

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

(b)           Liens
securing the Lender Indebtedness;

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

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

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

 51
 

 

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

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

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

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

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

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

Section 7.4                     Mergers, Sales, etc.  Merge into or with or consolidate with, or
permit any other Credit Party to
merge into or with or consolidate with, any other Person, or sell, lease or
otherwise dispose of, or permit any other Credit Party to sell, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or any substantial portion of its Property to any other
Person.

Section 7.5                     Investments, Loans, etc.  Make any loans to or investments in an
Excluded Subsidiary unless after
giving effect thereto Section 6.12 is complied with.

Section 7.6                     Sales and Leasebacks.  Enter into any arrangement, directly or
indirectly, with any Person whereby
any Credit Party shall sell or transfer any Property, whether now owned or
hereafter acquired, and whereby any Credit Party shall then or thereafter rent
or lease as lessee such Property or any part thereof or other Property which a
Credit Party intends to use for substantially the same purpose or purposes as
the Property sold or transferred.

Section 7.7                     Nature of Business.  Engage in, or permit any other Credit Party
to engage in, any business materially
or substantially different than the businesses in which the Credit Parties are
engaged in as of the Closing Date, which is the production, marketing,
purchasing, selling, reselling and distributing of ethanol and ethanol
co-products and related bio-products.

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Section
7.8                     ERISA Compliance.

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

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

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

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

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

Section 7.9                     Negative Pledge Agreements.  Create, incur, assume or suffer to exist, or
permit any other Credit
Party to create, incur, assume or suffer to exist, any contract, agreement or
understanding, other than (a) this Agreement and the other Financing Documents
and (b) any agreements governing any purchase money Liens or Capital Lease
Obligations or dispositions of assets otherwise permitted hereby provided
that any such prohibition or limitation is only effective against the
Property financed thereby, which in any way prohibits or restricts the
granting, conveying, creation or imposition of any Lien on any Property of any
Credit Party, or which requires the consent of or notice to other Persons in
connection therewith.

Section 7.10                   Transactions With Affiliates.  Except as set forth on Schedule 7.10,
enter into, or permit any other
Credit Party to enter into, any transaction or series of transactions with
Affiliates of any Credit Party which involve an outflow of money or other
Property from any Credit Party to an Affiliate of any Credit Party other than
Borrower, including, but not limited to, repayment of Indebtedness, management
fees, compensation, salaries, asset purchase payments or any other type of fees
or payments similar in nature except for those which are in the ordinary course
of business of the Credit Parties and are on fair and reasonable terms no less
favorable than would be obtained in a comparable arm’s length transaction with
a Person not an Affiliate.

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Section 7.11                   Equity.  Authorize or issue, or permit any other
Credit Party to authorize or issue any preferred stock or other
Equity having a mandatory redemption right existing with regard thereto.

Section 7.12                   Intercompany Transactions.  Create or otherwise cause or permit to exist
or become effective,
except as may be expressly permitted or required by the Financing Documents,
any consensual encumbrance or restriction of any kind on the ability of any
Credit Party to (a) pay any indebtedness owed to any Credit Party, (b) make any
loan or advance to any Credit Party or any investment in any Credit Party, or
(c) sell, lease or transfer any of its Property to any Credit Party except, in
each case, for restrictions (i) contained in the Operating Agreement of
Nebraska Sub as in effect on the Closing Date or set forth in resolutions of
the membership committee
of Nebraska Sub adopted on June 21, 2001, and March 10, 2003, copies of which
were provided to Administrative Agent prior to the Closing Date, (ii) arising
under any Governmental Requirement, (iii) set forth in a lease or license
permitted pursuant to the terms of the Financing Documents and entered into in
the ordinary course of business that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to
such lease or license, or (iv) set forth in the terms of any document or
instrument evidencing any Permitted Liens (or the Indebtedness secured thereby)
that restrict in a customary manner the subletting, assignment or transfer of
any property or asset that is subject to such Permitted Lien.

Section 7.13                   Acquisition of Equity in Nebraska Sub.  Permit any Affiliate of any Credit Party other
than Parent, Borrower or
any Guarantor to acquire Equity of Nebraska Sub.

Section 7.14                   Excluded Subsidiaries.  Permit, at any time, the value of the
Property (valued at the higher of cost (determined on a
weighted average cost basis) or market value as determined in accordance with
GAAP consistently applied at such time) of all Excluded Subsidiaries to exceed
$15,000,000 in the aggregate.

ARTICLE 8

EVENTS OF DEFAULT

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

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

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

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

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notice thereof shall have been given to Borrower or any Guarantor by
any Lender, the Issuing Bank or the Administrative Agent;

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

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

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

Section 8.7                     Defaults Under Hedging and Other Agreements.  Any Credit Party shall fail to observe or perform any covenant or
agreement contained in any Hedging Agreement or in agreement(s) or
instrument(s) relating to Indebtedness (other than Lender Indebtedness) of any
Credit Party of $1,000,000 or more in the aggregate within any applicable
grace, notice or cure period, or any other event shall occur, if the effect of
such failure or other event is to accelerate, or, with respect to any Credit
Party, to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of $1,000,000 or more in the aggregate of such
Indebtedness; or $1,000,000 or more in the aggregate of any such Indebtedness
shall be, or if as a result of such failure or other event may be, required to
be prepaid (other than prepayments resulting from excess cash flow) in whole or
in part prior to its stated maturity;

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

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writing that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or any Obligated Party shall by any act or
failure to act indicate its consent to, approval of or acquiescence in any of
the foregoing; or any corporate or other organizational action is taken by any
Obligated Party for the purpose of effecting any of the foregoing;

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

Section 8.10                   Discontinuance of Business.  Any Credit Party shall cease to be
principally engaged in the businesses
and operations in which such Credit Party was principally engaged on the
Closing Date;

Section 8.11                   Financing Documents.  Any Material Provision of any of the
Financing Documents after delivery
thereof shall for any reason, except to the extent permitted by the terms
thereof, cease to be in full force and effect and valid, binding and
enforceable (except as enforceability may be limited as stated in Section
5.3) in accordance with its terms, or, in the case of any of the Security
Instruments, cease to create a valid and perfected Lien of the priority contemplated
thereby on any of the collateral purported to be covered thereby, or any
Obligated Party shall so state in writing. 
As used in this Section 8.11, “Material Provision” shall mean (a) with respect to this
Agreement, any material term, covenant, or agreement set forth therein, and (b)
with respect to any other Financing Document, any provision if the validity and
enforceability thereof is necessary for such Financing Document to accomplish
its stated, or clearly intended, purpose or otherwise necessary in order for
Administrative Agent or any Lender to enforce any material right or remedy
under any Financing Document; or

Section 8.12                   Material Adverse Change.  A Material Adverse Change shall occur.

ARTICLE 9

THE ADMINISTRATIVE AGENT

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

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

Section
9.3                     Lack of Reliance on the Administrative Agent.

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

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

Section 9.4                     Certain Rights of the Administrative Agent.  If the Administrative Agent shall request instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement and the other Financing Documents, the
Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until the Administrative Agent shall have received
instructions from the Required Lenders; and the Administrative Agent shall not
incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting under this
Agreement and the other Financing Documents in accordance with the instructions
of the Required Lenders, or, to the extent required by Section 10.2, all
of the Lenders.

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

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

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

Section
9.8                     Successor Administrative Agent.

(a)           Administrative Agent Resignation.  The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders, the Issuing Bank and
Borrower and may be removed at any time with or without cause by the Required
Lenders.  Upon any such resignation or
removal, the Required Lenders shall have the right, upon five days’ notice to
Borrower, to appoint a successor Administrative Agent (to act in the same
capacity as the resigning or removed Administrative Agent), subject to the
approval of Borrower, such approval not to be unreasonably withheld.  If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within thirty (30) days after the retiring Administrative Agent’s
giving of notice of resignation or the Required Lenders’ removal of the
retiring Administrative Agent, then, upon five days’ notice to Borrower, the

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retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent (subject to approval of
Borrower, such approval not to be unreasonably withheld), which shall be a bank
which maintains an office in the United States, or a commercial bank organized
under the laws of the United States of America or of any State thereof, or any
Affiliate of such bank, having a combined capital and surplus of at least
$250,000,000.

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

ARTICLE
10

MISCELLANEOUS

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

Section 10.2                   Amendments and Waivers.  Neither this Agreement nor any other
Financing Document, nor any
terms hereof or thereof, may be amended, supplemented or modified except in
accordance with the provisions of this Section 10.2.  The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent shall, from
time to time, (x) enter into with the Credit Parties, written amendments,
supplements or modifications hereto and to the other Financing Documents to
which they are a party for the purpose of adding any provisions to this
Agreement or to the other Financing Documents or changing in any manner the
rights or obligations of the Lenders or the Credit Parties hereunder or
thereunder or (y) waive at a Credit Party’s request, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Financing Documents to which such Credit Party is a party or any
Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall:

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

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

(c)           release
any substantial part of the Collateral, without the written consent of all of
the Lenders, except as expressly permitted hereby;

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

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

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

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

Section 10.3                   No Waiver; Remedies Cumulative.  No failure or delay on the part of any Credit
Party or the
Administrative Agent or any Lender in exercising any right or remedy under this
Agreement or any other Financing Document to which it is a party and no course
of dealing between any Credit Party and the Administrative Agent or any Lender
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right or remedy under this Agreement or any other Financing Document
preclude any other or further exercise thereof or the exercise of any other
right or remedy under this Agreement or any other Financing

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Document.  The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any Credit Party, the Administrative Agent or any
Lender would otherwise have.  No notice
to or demand on any Credit Party not required under this Agreement or any other
Financing Document in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.

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

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

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

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ACTION, SUIT, PROCEEDING
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM, AND INCLUDING
ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR
INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES ARISING BY
REASON OF ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND
EACH LENDER, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE
PROVISIONS OF THIS Section 10.4(b) SHALL NOT APPLY TO ANY ACTION, SUITS,
PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS,
COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT, BUT ONLY TO THE
EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY
SEEKING INDEMNIFICATION; AND

(c)           ENVIRONMENTAL INDEMNIFICATION.  INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME
THE ADMINISTRATIVE AGENT, THE ISSUING BANK, EACH LENDER, AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE REVOLVING CREDIT
LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES
(WHICH IN EACH CASE ARISE AS A RESULT OF OR IN CONNECTION WITH THE REVOLVING
CREDIT LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING BY
REASON OF THE ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THE LENDERS, AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES,
AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING (i) UNDER
ANY ENVIRONMENTAL LAW APPLICABLE TO ANY CREDIT PARTY OR ANY OF THEIR RESPECTIVE
PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON ANY OF THEIR RESPECTIVE PROPERTIES, (ii) AS A RESULT OF
THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES
WITH ANY ENVIRONMENTAL LAW APPLICABLE TO SUCH CREDIT PARTY, (iii) DUE TO PAST
OWNERSHIP BY ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES OF ANY OF THEIR
RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES
WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (iv) ARISING FROM, DUE TO, OR AS A RESULT OF, THE PRESENCE, USE,
RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS 

 62
 

 

SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY, OR (v) ARISING FROM, DUE TO,
OR AS A RESULT OF, ANY OTHER ENVIRONMENTAL CONDITION OR ANY ENVIRONMENTAL LAW
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT; PROVIDED,
HOWEVER, NO INDEMNITY OR HOLD HARMLESS SHALL BE AFFORDED UNDER THIS Section
10.4(c) (A) IN RESPECT OF ANY PROPERTY FOR ANY LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES
ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER OR THEIR SUCCESSORS OR ASSIGNS DURING THE PERIOD AFTER WHICH SUCH
PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED ACTUAL PHYSICAL
POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE) AND (B) FOR ANY LOSSES,
CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES
AND LIABILITIES RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PARTY SEEKING INDEMNIFICATION; AND

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

 63
 

 

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

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

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

Section
10.7                   Successors and Assigns; Participations and
Assignments.

(a)           The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that no Credit Party a party hereto may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by any such Credit Party
without such consent shall be null and void). 
Except as otherwise expressly provided herein, nothing in this Agreement
shall be construed to confer upon any Person (other than the parties hereto,
and their respective successors and assigns permitted hereby) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b)           Any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolving
Credit Commitments and the Revolving Credit Loans at the time owing to it); provided,
that, (i) except in the case of an assignment to a Lender or a Lender
Affiliate or an assignment by a Lender in connection with the sale of all or
substantially all of the assets of such Lender, Borrower and the Administrative
Agent (and, in the case of an assignment of all or a portion of a Revolving
Credit Commitment or any Lender’s obligations in respect of its Revolving
Credit Exposure, the Issuing Bank which has outstanding a Letter of Credit)
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld), (ii) except in the case of an

 64
 

 

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

(c)           The
Administrative Agent, acting for this purpose as an agent of Borrower, shall
maintain at one of its offices in Chicago, Illinois a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Revolving Credit Commitment of, and principal
amount of the Revolving Credit Loans and Reimbursement Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register
shall be available for inspection by Borrower, the Issuing Bank and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

(d)           Upon
its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed

 65
 

 

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

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

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

(g)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section 10.7 shall not apply to any such pledge
or assignment of a security interest; provided, that, no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 66
 

 

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

Section
10.8                   Governing Law; Submission to Jurisdiction; etc.

(a)           Governing Law.  This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and be governed
by the laws of the State of New York and, to the extent controlling, laws of
the United States of America.

(b)           Submission to Jurisdiction.  Any legal action or proceeding with respect
to this Agreement or the other Financing Documents may be brought in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party a party hereto hereby accepts for itself and in respect of its
Property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts.  Each Credit Party a
party hereto hereby irrevocably waives any objection, including, but not
limited to, any objection to the laying of venue or based on the grounds of Forum
Non Conveniens, which it may now or hereafter have to the bringing of any such
action or proceeding in such respective jurisdictions.

(c)           Waiver of Jury Trial.  To the maximum extent allowed by applicable
law, each Credit Party a party hereto, the Administrative Agent, the Issuing
Bank and the Lenders (i) irrevocably and unconditionally waive trial by jury in
any legal action or proceeding relating to any Financing Document and for any
counterclaim therein; (ii) irrevocably waive any right it may have to claim or
recover in any such litigation any special, exemplary, punitive or
consequential damages, or damages other than, or in addition to, actual
damages; (iii) certify that no party hereto nor any representative or counsel
for any party hereto has represented, expressly or otherwise, or implied that
such party would not, in the event of litigation, seek to enforce the foregoing
waivers; and (iv) acknowledge that it has been induced to enter into this
Agreement, the other Financing Documents and the transactions contemplated
hereby and thereby based upon, among other things, the mutual waivers and
certifications contained in this Section 10.8.

 67
 

 

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

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

Section 10.10                 Invalidity.  In the event that any one or more of the
provisions contained in this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in
any respect, (a) each Credit Party a party hereto agrees that such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other Financing Document and (b) each Credit Party a party
hereto and the Administrative Agent (acting on behalf and at the direction of
the Lenders) will negotiate in good faith to amend such provision so as to be
legal, valid, and enforceable.

Section 10.11                 Renewal, Extension or Rearrangement.  All provisions of this Agreement and of any
other Financing
Documents relating to Lender Indebtedness shall apply with equal force and
effect to each and all promissory notes hereafter executed which in whole or in
part represent a renewal, extension for any period, increase or rearrangement
of any part of the Lender Indebtedness.

Section 10.12                 Interest.  It is the intention of the parties hereto to
conform strictly to usury laws applicable to the Administrative Agent,
the Issuing Bank and the Lenders (collectively, the “Financing Parties”).  Accordingly, if the transactions contemplated
hereby would be usurious as to any Financing Party under laws applicable to it,
then, notwithstanding anything to the contrary in this Agreement or in any
other Financing Document or agreement entered into in connection with the
transactions contemplated hereunder or as security for any Revolving Credit
Loan, it is agreed as follows:  (a) the
aggregate of all consideration which constitutes interest under law applicable
to any Financing Party that is contracted for, taken, reserved, charged or received
by such Financing Party under this Agreement or under any of such other
Financing Documents or agreements or otherwise in connection with the
transactions contemplated hereunder shall under no circumstances exceed the
maximum amount allowed by such applicable law, (b) in the event that the
maturity of any Revolving Credit Loans is accelerated for any reason, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the transactions contemplated hereunder shall be canceled
automatically by such Financing Party and, if theretofore paid, shall be
credited by such Financing Party on the principal amount of Borrower’s
Indebtedness to such Financing Party (or, to the extent that the principal
amount of Borrower’s Indebtedness to such Financing Party shall have been or
would thereby be paid in full, refunded by such Financing Party to
Borrower).  The right to accelerate the
maturity of any Revolving Credit Loans does not include the right to accelerate
any interest which has not

 68
 

 

otherwise accrued on the date of such acceleration, and the Financing
Parties do not intend to collect any unearned interest in the event of
acceleration.  All sums paid or agreed to
be paid to the Financing Parties for the use, forbearance or detention of sums
included in the Lender Indebtedness shall, to the extent permitted by law
applicable to such Financing Party, be amortized, prorated, allocated and
spread throughout the full term of any Revolving Credit Loans until payment in
full so that the rate or amount of interest on account of the Lender Indebtedness
does not exceed the applicable usury ceiling, if any.  As used in this Section 10.12, the
terms “applicable law” or “laws applicable to any Financing Party” shall mean
the law of any jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement, or law of the United States
of America applicable to any Financing Party and the transactions contemplated
hereunder which would permit such Financing Party to contract for, charge,
take, reserve or receive a greater amount of interest than under such
jurisdiction’s law.

Section 10.13                 Entire Agreement.  This Agreement and the other Financing
Documents embody the entire agreement
and understanding between or among the Administrative Agent, the Issuing Bank
or the Lenders and the other respective parties hereto and thereto and
supersede all prior agreements and understandings between or among such parties
relating to the subject matter hereof and thereof and may not be contradicted
by evidence of prior, contemporaneous agreements of the parties.  There are no unwritten oral agreements
between or among the parties.

Section 10.14                 Attachments.  The exhibits, schedules and annexes attached
to this Agreement are incorporated
herein and shall be considered a part of this Agreement for the purposes stated
herein, except that in the event of any conflict between any of the provisions
of such exhibits and the provisions of this Agreement, the provisions of this
Agreement shall prevail.

Section 10.15                 Counterparts.  This Agreement may be executed in any number
of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original but all of which shall together constitute one
and the same instrument.

Section 10.16                 Survival of Indemnities.  The obligations of each Credit Party a party
hereto under Section 2.16,
Section 2.18, Section 2.20 and Section 10.4 shall survive
the payment in full of the Revolving Credit Loans and the Letter of Credit
Liabilities.

Section 10.17                 Headings Descriptive.  The headings of the several sections and
subsections of this Agreement,
and the table of contents, are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

Section 10.18                 Satisfaction Requirement.  If any agreement, certificate, instrument or
other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be
satisfactory to any party, the determination of such satisfaction shall be made
by such party in its sole and exclusive judgment exercised reasonably and in
good faith.

Section 10.19                 Exculpation Provisions.  Each of the parties hereto specifically
agrees that it has a duty to read
this Agreement and the other Financing Documents and agrees that it is

 69
 

 

charged with notice and knowledge of the terms of this Agreement and
the other Financing Documents; that it has in fact read this Agreement and is
fully informed and has full notice and knowledge of the terms, conditions and
effects of this Agreement; that it has been represented by legal counsel of its
choice throughout the negotiations preceding its execution of this Agreement
and the other Financing Documents; and has received the advice of its attorneys
in entering into this Agreement and the other Financing Documents; and that it
recognizes that certain of the terms of this Agreement and the other Financing
Documents result in one party assuming the liability inherent in some aspects
of the transactions contemplated hereunder and relieving the other party of its
responsibility for such liability.  Each
party hereto agrees and covenants that it will not contest the validity or
enforceability of any exculpatory provision of this Agreement and the other
Financing Documents on the basis that the party had no notice or knowledge of
such provision or that the provision is not “conspicuous.”

Section 10.20                 Secured Affiliate.  For purposes of this Agreement and all other
Financing Documents (other than
applicable Hedging Agreements or Cash Management Agreements), if a Secured
Affiliate of a Lender has entered into one or more Hedging Agreements or Cash
Management Agreements with any Credit Party, then to the extent that such
Secured Affiliate has rights against or is owed obligations by (or if the
affiliated Lender, rather than the Secured Affiliate, were the counter-party to
the applicable Hedging Agreement or Cash Management Agreement, such rights or
obligations that such Lender has) the Credit Parties hereunder or under any
other Financing Document (other than applicable Hedging Agreements or Cash
Management Agreements), such affiliated Lender shall be the agent and
attorney-in-fact for such Secured Affiliate with regard to any such rights and
obligations, or deemed rights and obligations, as if such Lender were the
counter-party to the applicable Hedging Agreement or Cash Management Agreement
including, but not limited to, the following: 
(a) all distributions or payments in respect of Collateral owing to such
Secured Affiliate shall be distributed or paid to such Lender, (b) all
representations, statements or disclaimers made herein or in any Financing
Document by or to such Lender shall be deemed to have been made by or to such
Secured Affiliate, and (c) all obligations incurred by such Lender that would
have been incurred by the Secured Affiliate if it were a party hereto
(including, but not limited to, obligations under Section 9.6) shall be
the obligations of such Lender, and such Lender, as the agent and
attorney-in-fact of its Secured Affiliate, will make any and all payments owing
to the Administrative Agent with respect to such obligations or deemed
obligations of its Secured Affiliate. 
Each such Lender represents, warrants and covenants to and with the
Administrative Agent that such Lender has, or at all applicable times will
have, full power and authority to act as agent and attorney-in-fact for its
Secured Affiliate.  Under no circumstance
shall any Secured Affiliate have any voting rights hereunder and the voting
rights of any affiliated Lender shall not be increased by virtue of the
obligations owing to any such Secured Affiliate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 70

 

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

	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Riber

  	
   

  
	
   

  	
  Name:

  	
  David Riber

  	
   

  
	
   

  	
  Title:

  	
  Director of Finance

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1300 South Second Street

  
	
   

  	
   

  	
  Pekin, Illinois 61554

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  309-347-9385

  	
   

  
	
   

  	
   

  	
  Telecopy:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PARENT:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Riber

  	
   

  
	
   

  	
  Name:

  	
  David Riber

  	
   

  
	
   

  	
  Title:

  	
  Director of Finance

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1300 South Second Street

  
	
   

  	
   

  	
  Pekin, Illinois 61554

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  309-347-9385

  	
   

  
	
   

  	
   

  	
  Telecopy:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT, ISSUING

  	
   

  
	
  BANK AND THE LENDERS:

  	
  JPMORGAN CHASE BANK, N.A., individually
  as a Lender, as the Issuing Bank and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nathan L. Bloch

  	
   

  
	
   

  	
  Name:

  	
  Nathan L. Bloch

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  10 South Dearborn, Suite IL1-0173

  
	
   

  	
   

  	
  Chicago, Illinois 60670

  
	
   

  	
   

  	
  Attention: Nathan Bloch

  
	
   

  	
   

  	
  Telephone: (312) 325-3094

  
	
   

  	
   

  	
  Telecopy: (312) 325-3077

  
																

 

[Signature Page]

 

ANNEX I

	
  Lender

  	
   

  	
  Revolving Credit

  Commitment

  	
   

  	
  Revolving Credit Percentage

  	
   

  
	
  JPMorgan Chase Bank,
  N.A.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  100

  	
  %

  

 

 I-1

 

 

EXHIBIT A

FORM OF BORROWING REQUEST

 

 A-1

 

 

EXHIBIT B

FORM OF REQUEST FOR LETTERS OF CREDIT

 

 B-1

 

 

EXHIBIT C

FORM OF ASSIGNMENT AND ACCEPTANCE

 

 C-1

 

 

EXHIBIT D

FORM OF
GUARANTY AND SECURITY AGREEMENT

 

 D-1

 

 

SCHEDULE 5.7

INVESTMENTS
AND GUARANTIES

Investments as of the Closing Date

Money Market Funds

	
  JP Morgan Chase Prime Money
  Market Fund

  	
   

  	
  $

  	
  61,016,589

  	
   

  
	
  JP Morgan Chase Tax
  Free Money Market Fund

  	
   

  	
  $

  	
  4,547,056

  	
   

  
	
  Total Book Value of
  Money Market Investments

  	
   

  	
  $

  	
  65,563,645

  	
   

  

 

Municipal Bonds

	
  Jefferson County, Alabama

  	
   

  	
  $

  	
  8,825,000

  	
   

  
	
  Arizona Student Loan
  Assn

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Ohio Air Quality
  Development Assn

  	
   

  	
  $

  	
  1,775,000

  	
   

  
	
  Jefferson County,
  Alabama Sewer Bonds

  	
   

  	
  $

  	
  4,650,000

  	
   

  
	
  All Student Loan Corp

  	
   

  	
  $

  	
  14,200,000

  	
   

  
	
  Arizona Student Loan
  Assn

  	
   

  	
  $

  	
  6,700,000

  	
   

  
	
  Pennsylvania Higher
  Education

  	
   

  	
  $

  	
  12,100,000

  	
   

  
	
  Louisville Gas &
  Electric Bonds

  	
   

  	
  $

  	
  6,800,000

  	
   

  
	
  Educational Funding of
  the South

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  Educational Funding of
  the South

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  New York Consolidated
  Edison

  	
   

  	
  $

  	
  7,000,000

  	
   

  
	
  Florida Power Corp.

  	
   

  	
  $

  	
  7,000,000

  	
   

  
	
  Methodist Healthcare
  Bonds

  	
   

  	
  $

  	
  7,000,000

  	
   

  
	
  Total Book Value of
  Municipal Bond Investments

  	
   

  	
  $

  	
  97,050,000

  	
   

  

 

Investments in Ethanol Marketing Alliance Partners

	
  Heartland Grain Fuels

  	
   

  	
  $

  	
  0

  	
   

  
	
  Ace Ethanol, LLC

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Granite Falls Ethanol

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Total Book Value of
  Investments in Alliance Partners

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

Other Investments

	
  Fluid Technologies 

  	
  This investment has
  been written down to $0.

  

 

Guaranties of Indebtedness of
other Persons

Both Aventine Renewable Energy, Inc. and Aventine
Renewable Energy, LLC are guarantors of the outstanding Senior Secured Floating
Rate Notes due 2011 issued by Aventine Renewable Energy Holdings, Inc.  The outstanding balance of these notes
totaled $5,000,000 as of the Closing Date.

 1

 

 

SCHEDULE 5.22

EMPLOYEE
MATTERS

Aventine Renewable Energy, Inc. is party to a
collective bargaining agreement with its ethanol plant employees in Pekin,
Illinois who are represented by the Paper Allied/Industrial Chemical and Energy
Workers International Union Local 6-662. 
The current bargaining agreement expires in June 2009.

 1

 

 

SCHEDULE 7.2

EXISTING
INDEBTEDNESS

Guaranties

Both Aventine Renewable Energy, Inc. and Aventine
Renewable Energy, LLC are guarantors of the outstanding Senior Secured Floating
Rate Notes due 2011 issued by Aventine Renewable Energy Holdings, Inc.  The outstanding balance of these notes
totaled $5,000,000 as of the Closing Date.

 1

 

 

SCHEDULE 7.3

LIENS

None.

 1

 

 

SCHEDULE 7.10

AFFILIATE
DOCUMENTS

None.

 1Exhibit 10.2

AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED
GUARANTY AND SECURITY AGREEMENT, dated as of September 15, 2006, is made by AVENTINE RENEWABLE ENERGY, a Delaware corporation (the “Borrower”), AVENTINE
RENEWABLE ENERGY, LLC, a Delaware limited liability company (“Parent” and, together with any
other entity that may become a party hereto or a Guarantor as provided herein,
the “Guarantors” and, each individually,
a “Guarantor,” and the Guarantors,
together with the Borrower, the “Grantors”
and, each individually, a “Grantor”),
in favor of JPMORGAN CHASE BANK, N.A., (f.k.a.
JPMorgan Chase Bank) as the Administrative Agent (in such capacity, the “Administrative Agent”) for the
ratable benefit of (a) the financial institutions (the “Lenders”)
now or hereafter parties to the Amended and Restated Credit Agreement dated as
of September 15, 2006 (as amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among the
Borrower, the Administrative Agent, the Issuing Bank (as defined in the Credit
Agreement) and the Lenders, (b) the Issuing Bank, and (c) the Secured
Affiliates (as defined in the Credit Agreement) (collectively, the “Secured Parties”).

W I T N E S S E T H:

WHEREAS, Borrower, the
Administrative Agent and the financial institutions party thereto as lenders
(the “Existing Lenders”) are parties to
that certain Credit Agreement dated as of May 30, 2003, pursuant to which the
Existing Lenders made certain extensions of credit to Borrower (the “Existing Credit Agreement”); and

WHEREAS, to guaranty and
secure, among other things, the obligations of Borrower under the Existing
Credit Agreement, Borrower and Parent entered into that certain Guaranty and
Security Agreement dated as of May 30, 2003 (as amended to date, the “Existing Guaranty and Security Agreement”),
pursuant to which Borrower and Parent granted to the Administrative Agent for
the benefit of the Existing Lenders a security interest in substantially all of
their assets; and

WHEREAS, Borrower, the
Lenders and the Administrative Agent have entered into the Credit Agreement
pursuant to which, among other things, the Existing Credit Agreement is being
amended and restated in its entirety; and

WHEREAS, in connection
with the amendment and restatement of the Existing Credit Agreement, the
Administrative Agent and the Grantors desire to amend and restate the Existing
Guaranty and Security Agreement in the form of this Agreement.

NOW, THEREFORE, the
Existing Guaranty and Security Agreement is hereby amended and restated in its
entirety as follows:

 1
 

 

Article 1

DEFINED TERMS

Section 1.1            Definitions.

(a)           Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms which are
defined in the UCC are used herein as so defined: Accounts, Chattel Paper,
Certificated Securities, Commercial Tort Claims, Commodity Accounts, Commodity
Contracts, Commodity Intermediary, Deposit Accounts, Documents, Electronic
Chattel Paper, Equipment, Farm Products, Financial Assets, Fixtures, Goods,
Health Care Insurance Receivable, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Money, Payment Intangibles, Proceeds, Promissory
Notes, Records, Security, Securities Accounts, Security Certificate, Security
Entitlements, Securities Intermediary, Software, Supporting Obligations,
Uncertificated Securities and Tangible Chattel Paper.

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

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

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

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

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

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

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

 2
 

 

Grantor to receive moneys
due and to become due to it thereunder or in connection therewith, (ii) all
rights of such Grantor to damages arising thereunder, (iii) all equity that
constitutes “general intangibles” and (iv) all rights of such Grantor to
perform and to exercise all remedies thereunder. The exclusion of any general
intangible from this definition as a result of any restrictions on the grant of
a security interest in such general intangible does not restrict the grant of
the security interest contemplated hereby in any Account, Payment Intangible,
Chattel Paper or other right to payment arising under or pursuant to such
general intangible.

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

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

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

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

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

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

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

“Receivable” shall mean any right to
payment for goods sold or leased or for services rendered, whether or not such
right is evidenced by an Instrument or Chattel Paper and whether or not it has
been earned by performance (including, without limitation, any Account).

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

“Trade Secret Licenses” shall mean
any and all agreements, whether written or oral, providing for the grant by or
to any Grantor of any right in or to Trade Secrets, to the extent 

 3
 

 

that a grant of a
security interest in such Trade Secret License is not prohibited by applicable
law or the applicable Trade Secret License.

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

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

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

“Trademarks” shall mean (i) all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, and (ii) the right to
obtain all renewals thereof.

“Vehicles” shall mean all cars,
railcars, trucks, trailers, construction and earth moving equipment and other
vehicles covered by a certificate of title law of any state and all tires and
other appurtenances to any of the foregoing.

Section 1.2            Other
Definitional Provisions.

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

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

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

 4
 

 

Article 2

GUARANTY

Section 2.1            Guaranty.

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

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

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

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

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

 5
 

 

Section
2.3            Amendments, etc. with
respect to the Lender Indebtedness. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against such Guarantor and without notice to or further assent by such
Guarantor, any demand for payment of any of the Lender Indebtedness made by the
Administrative Agent, any Lender, or any Secured Affiliate may be rescinded by
the Administrative Agent or such Lender and any of the Lender Indebtedness
continued, and the Lender Indebtedness, or the liability of any other Person
upon or for any part thereof, or any collateral security or guaranty therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Administrative Agent, any Lender, or any
Secured Affiliate, and the Credit Agreement and the other Financing Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent, the Required Lenders or all Lenders, as the case may be,
may deem advisable from time to time, and any collateral security, guaranty or
right of offset at any time held by the Administrative Agent, any Lender, or any
Secured Affiliate for the payment of the Lender Indebtedness may be sold,
exchanged, waived, surrendered or released. No Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Lender Indebtedness or for the guaranty contained in this
Article 2 or any property subject thereto.

Section
2.4            Guaranty Absolute and
Unconditional. Each Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Lender Indebtedness
and notice of or proof of reliance by the Administrative Agent or any other
Lender upon the guaranty contained in this Article 2 or acceptance of the
guaranty contained in this Article 2; the Lender Indebtedness, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guaranty contained
in this Article 2; and all dealings between the Borrower and such Guarantor, on
the one hand, and any of the Lenders, or any Secured Affiliate, on the other
hand, likewise shall be conclusively presumed to have been had or consummated
in reliance upon the guaranty contained in this Article 2. Each Guarantor
waives diligence, presentment, protest, demand for payment, notice of intent to
accelerate, notice of acceleration and notice of default or nonpayment to or
upon the Borrower or such Guarantor with respect to the Lender Indebtedness.
Each Guarantor understands and agrees that the guaranty contained in this
Article 2 shall be construed as a continuing, absolute and unconditional
guaranty of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Financing Document, any of the Lender
Indebtedness or any other collateral security therefor or guaranty or right of
offset with respect thereto at any time or from time to time held by the
Administrative Agent or any other Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by Borrower, any other Guarantor, any other
Obligated Party or any other Person against the Administrative Agent, any
Lender, or any Secured Affiliate, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower, any other Guarantor or
Obligated Party or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Guarantor under the
guaranty contained in this Article 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent, any Lender, or any
Secured Affiliate may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies 

 6
 

 

as it may have against
any other Grantor, any other Guarantor or Obligated Party, or any other Person,
or against any collateral security or guaranty for the Lender Indebtedness or
any right of offset with respect thereto, and any failure by the Administrative
Agent, any Lender, or any Secured Affiliate to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
Guarantor, any other Obligated Party, or any other Person, or to realize upon
any such collateral security or guaranty or to exercise any such right of
offset, or any release of the Borrower, any Guarantor, any other Obligated
Party, or any other Person, or any such collateral security, guaranty or right
of offset, shall not relieve such Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent,
any Lender, or any Secured Affiliate against such Guarantor. For the purposes
hereof, “demand” shall include the commencement and continuance of any legal
proceedings.

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

Section
2.6            Acceleration.
Without limiting the rights of the Administrative Agent, the Lenders, or any
Secured Affiliate and the obligations of each Grantor hereunder, if an Event of
Default occurs under the Credit Agreement which would permit acceleration of
the Lender Indebtedness but for any limitation on acceleration imposed on
account of any bankruptcy, insolvency or other legal proceedings relating to
any Grantor, then upon written notice from the Administrative Agent upon the
request of the Required Lenders pursuant to Article 8 of the Credit Agreement
on account of such Event of Default, the full amount of the Lender Indebtedness
which would then be payable pursuant to Article 8 of the Credit Agreement shall
be and become due and payable from the Guarantors whether or not the Lender
Indebtedness has been declared to become due and payable from the Borrower.

Section
2.7            Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent without set-off or counterclaim and in immediately
available funds and in Dollars at the Payment Office, not later than 11:00
a.m., Chicago, Illinois time. Without limiting the above, any and all payments
by or on account of any of the Guarantors hereunder shall be made free and
clear of and without deduction for any Taxes other than Excluded Taxes;
provided that if any of the Guarantors shall be required to deduct any Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.7) the Administrative Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the applicable Guarantors shall make such
deductions, and (iii) such Guarantors shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 7

 

Article 3

GRANT OF SECURITY INTEREST

Each Grantor
hereby assigns and transfers to the Administrative Agent, and hereby grants to
the Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest in, all of the following assets and Property, tangible and
intangible now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Lender Indebtedness:

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

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

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

(d)           all Commercial Tort Claims described
on Schedule 6;

(e)           all Commodity Accounts;

(f)            all Commodity Contracts;

(g)           all Deposit Accounts;

(h)           all Documents;

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

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

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

(l)            all Insurance;

(m)          all Intellectual Property;

(n)           all Investment Property;

(o)           all Letter of Credit Rights;

(p)           all Money;

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

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

 8
 

 

(s)           all Securities;

(t)            all Securities Accounts;

(u)           all Securities Entitlements;

(v)           all Supporting Obligations;

(w)          all Vehicles; and

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

Article 4

REPRESENTATIONS AND WARRANTIES

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

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

Section
4.2            Title; No Other Liens.
Except for the security interest granted to the Administrative Agent for the
ratable benefit of the Secured Parties pursuant to this Agreement and the
Permitted Liens, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or
of record in any public office, except (a) such as have been filed in favor of
the Administrative Agent, for the ratable benefit of the Secured Parties
pursuant 

 9
 

 

to this Agreement, (b)
such as are expressly permitted by the Credit Agreement, and (c) those which
will be released simultaneously with the initial Borrowing under the Credit
Agreement.

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

Section
4.4            Organization.
Such Grantor’s jurisdiction of incorporation, formation or organization (as
applicable), organizational identification number and federal tax
identification number are specified on Schedule 2 hereto (as such
Schedule may be updated from time to time in accordance with Section 5.5).

Section 4.5            Inventory
and Equipment. No Inventory or Equipment of any Grantor
is or at any time evidenced by a negotiable Document.

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

Section 4.7            Intellectual
Property.

(a)           All Intellectual Property owned or
licensed by each Grantor or in which any Grantor holds an interest are
accurately listed and described in Schedule 4 hereto (as such Schedule
may be updated from time to time in accordance with Section 5.9 hereof).

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

 10
 

 

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

(d)           Except as set forth in Schedule 4
hereto (as such Schedule may be updated from time to time in accordance with
Section 5.9 hereof), none of the Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.

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

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

Section 4.8            Instruments
and Chattel Paper.

(a)           All Instruments and Chattel Paper in
which a Grantor holds any beneficial or record interest are accurately listed
and described in Schedule 5 hereto (as such Schedule may be updated from
time to time in accordance with Section 5.2 hereof).

(b)           The applicable Grantor has delivered
to the Administrative Agent all Instruments and tangible Chattel Paper
comprising a part of the Collateral, and each such instrument has been duly
endorsed in blank.

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

Section
4.9            Commercial Tort Claims.
All Commercial Tort Claims of each Grantor or in which any Grantor holds an
interest are accurately listed and described in Schedule 6 hereto (as
such Schedule may be updated from time to time in accordance with Section 5.10
hereof).

Article 5

COVENANTS

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

 11
 

 

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

Section
5.2            Delivery of Instruments
and Chattel Paper. Immediately upon the creation or
acquisition of any Instrument or Chattel Paper, deliver written notice thereof,
to the Administrative Agent which notice shall include a description in
reasonable detail of the Instruments or Chattel Paper which is the subject of
such notice, and deliver the same duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement. At
the Administrative Agent’s option, the Administrative Agent may permit such
Grantor to retain physical possession of any Chattel Paper in the event such
Grantor shall cause the original of any such Instrument or Chattel Paper to be
conspicuously marked in a form and manner acceptable to the Administrative
Agent with the following legend referring to Chattel Paper: “This Chattel Paper
is subject to the security interest of JPMorgan Chase Bank, N.A., as the
Administrative Agent, and any sale, transfer, assignment or encumbrance of this
Chattel Paper violates the rights of such secured party.” Upon receipt of the
notice required by this Section 5.2 with respect to any Instrument or Chattel
Paper hereafter acquired by any Grantor, Schedule 5 shall be deemed to
be updated to include such Instrument or Chattel Paper (and the Administrative
Agent may, but shall not be required to, physically replace the existing Schedule
5 with a new Schedule reflecting such additional Instrument or Chattel
Paper).

In the event that such
Grantor shall at any time hold or acquire an interest in any electronic chattel
paper or any “transferable record” (as such term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction), such Grantor shall promptly notify the Administrative Agent
thereof in writing, and such Grantor shall take, or cause to be taken, such
actions as the Administrative Agent may request to give the Administrative
Agent control of such Electronic Chattel Paper under Section 9-314 of the UCC
and control of such transferable record under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such
jurisdiction.

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

Section 5.4            Maintenance
of Perfected Security Interest; Further Documentation.

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

 12
 

 

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

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

(d)           This Section 5.4 and the obligations
imposed on each Grantor by this Section 5.4 shall be interpreted as broadly as
possible in favor of the Administrative Agent and the Secured Parties in order
to effectuate the purpose and intent of this Agreement.

Section
5.5            Changes in Locations,
Name, etc. Not, except upon five (5) Business Days’ prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of all additional financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for herein:

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

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

Each notice delivered
pursuant to this Section 5.5 shall specify in reasonable detail any change in
the jurisdiction of incorporation, organization, formation, name, identity or
corporate structure as applicable. Upon receipt of such notice, Schedule 2
shall be deemed to be updated to include such new or modified information (and
the Administrative Agent may, but shall not be required to, physically replace
the existing Schedule 2, with a new Schedule reflecting such additional
or modified information).

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

Section 5.7            Pledged
Securities.

(a)           Notify the Administrative Agent
promptly in writing upon the acquisition by any Grantor of any Pledged
Securities, which notice shall (i) set forth all information with respect to
such Pledged Securities as is set forth on Schedule 3 hereto with
respect to the Pledged Securities owned by the Grantors on the date hereof, and
(ii) be accompanied by an Acknowledgment and Consent to Pledge duly executed by
the Issuer of such Securities (unless such Issuer is also a Grantor). Upon receipt
of such notice, Schedule 3 shall be deemed to be 

 13
 

 

updated to include such
Pledged Securities (and the Administrative Agent may, but shall not be required
to, replace the existing Schedule 3 with a new Schedule reflecting such
Pledged Securities). Nothing contained in this Section 5.7 shall permit any
Grantor to invest in or hold any Security to the extent such investment is
prohibited pursuant to the Credit Agreement.

(b)           If any Grantor shall become entitled
to receive or shall receive any Security Certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Securities of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any Pledged
Securities, or otherwise in respect thereof, such Grantor shall accept the same
as the agent of the Administrative Agent and the other Lenders, hold the same
in trust for the Administrative Agent and the other Lenders and deliver the
same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor in blank or accompanied by an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional Pledged Securities.

(c)           In case any distribution of property
upon or with respect to the Pledged Securities pursuant to the recapitalization
or reclassification of the capital of any Issuer or pursuant to the
reorganization thereof, such non-cash Proceeds so distributed shall, unless
otherwise subject to a perfected security interest in favor of the
Administrative Agent for the ratable benefit of the Secured Parties, be
delivered to the Administrative Agent to be held by it hereunder as additional
collateral security for the Lender Indebtedness.

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

(e)           If such Grantor is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.7(a) hereof with respect to the Pledged Securities issued by it, and
(iii) the terms of Section 6.1 hereof shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.1
hereof with respect to the Pledged Securities issued by it.

 14

 

Section 5.8            Receivables.

(a)           Other than in the ordinary course of
business, not (i) grant any extension of the time of payment of any Receivable,
(ii) compromise or settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that could
adversely affect in any material respect the value thereof.

(b)           If at any time the aggregate amount
owing to such Grantor on all Accounts as to which a Governmental Authority is
an obligor exceeds 5% of the aggregate amount owing to the Grantor on all
Accounts, such Grantor shall so notify the Administrative Agent and, if
requested by the Administrative Agent, at such Grantor’s sole cost and expense,
from and after the date on which such aggregate amount first exceeds such
percentage, deliver to the Administrative Agent such assignments, notices of
assignment and other documents or information as shall be necessary or
otherwise requested by the Administrative Agent to permit the assignment
hereunder of all Accounts as to which a Governmental Authority is an obligor
pursuant to all applicable Governmental Requirements (including, without
limitation, the Assignment of Claims Act of 1940, as amended).

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

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

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

 15
 

 

any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

Section 5.9            Intellectual
Property.

(a)           Notify the Administrative Agent
promptly, in writing upon the acquisition by Grantor of any Intellectual
Property which notice shall set forth (i) all information with respect to such
Intellectual Property as is set forth on Schedule 4 hereto with respect
to Intellectual Property owned by the Grantors on the date hereof, and (ii)
shall be accompanied by a Copyright Security Agreement, Patent Security
Agreement and/or Trademark Security Agreement, as applicable, duly executed and
completed by the applicable Grantor. Upon receipt of such notice, Schedule 4
shall be deemed to be updated to include such Intellectual Property (and the
Administrative Agent may, but shall not be required to, replace the existing Schedule
4 with a new Schedule reflecting such Intellectual Property).

(b)           Grantor (either itself or through
licensees) will, with respect to each Trademark which is material to the
operation of its business, (i) continue to use such Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
then-current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain the quality of products and services offered under such Trademark,
(iii) use such Trademark with all notices and legends required by applicable
law or regulations, and (iv) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby such Trademark may
become invalidated or impaired in any way.

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

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

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

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

 16
 

 

(g)           To the extent any Grantor, either by
itself or through an authorized agent, employee, licensee or designee, shall
file an application for any Patent or Trademark with the United States Patent
and Trademark Office or any Copyright in the U.S. Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, such Grantor shall report such filing to the Administrative Agent
within five Business Days after the last day of the fiscal quarter in which
such filing occurs. Upon request of the Administrative Agent, such Grantor
shall execute and deliver, and have recorded, a Copyright Security Agreement, a
Patent Security Agreement, a Trademark Security Agreement and any and all other
agreements, instruments, documents, and papers as the Administrative Agent may
request to evidence the Administrative Agent’s security interest in any
Copyright, Patent or Trademark and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby.

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

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

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

Section
5.10         Commercial Tort Claims.
Notify the Administrative Agent promptly, in writing in the event that any
Grantor shall at any time after the date hereof hold any Commercial Tort Claims
which notice shall set forth (a) all information with respect to such
Commercial Tort Claims as is set forth on Schedule 6 hereto with respect
to Commercial Tort Claims held by the Grantors on the date hereof, and (b)
shall include the express grant by such Grantor to the Administrative Agent of
a security interest in such Commercial Tort Claim (and the proceeds thereof).
Upon receipt of such notice, Schedule 6 shall be deemed to be updated to
include such Commercial Tort Claims (and the Administrative Agent may, but
shall not be required to, replace the existing Schedule 6 with a new
Schedule reflecting such Commercial Tort Claims). In the event that such notice
does not include such grant of a security interest, the sending thereof by such
Grantor to the Administrative Agent shall be deemed to constitute such grant to
the Administrative Agent. Upon the sending of such notice, any Commercial Tort
Claim described therein shall constitute part of the Collateral and shall be
deemed included therein. Without limiting the authorization of the
Administrative Agent provided in the Credit Agreement or otherwise arising by
such Grantor’s execution of this Agreement or any of the other Financing
Documents, the Administrative Agent is hereby irrevocably authorized from time
to time and at 

 17
 

 

any time to file such
financing statements naming the Administrative Agent or its designee as secured
party and such Grantor as debtor, or any amendments to any financing
statements, covering any such Commercial Tort Claim as Collateral. In addition,
such Grantor shall promptly upon the Administrative Agent’s request, execute
and deliver, or cause to be executed and delivered, to the Administrative Agent
such other agreements, documents and instruments as the Administrative Agent
may require in connection with such Commercial Tort Claim.

Section
5.11         Negotiable Documents.
No Grantor shall permit any Inventory or other Property of such Grantor to be
evidenced by a negotiable Document. If, notwithstanding the foregoing, any such
Inventory or other Property is or becomes evidenced by a negotiable Document,
the Grantor shall cause such negotiable Document to be duly negotiated to the
Administrative Agent.

Section 5.12         Inventory
and Equipment.

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

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

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

Article 6

REMEDIAL PROVISIONS

Section 6.1            Pledged
Securities.

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

(b)           If an Event of Default shall occur
and be continuing and upon the written request of the Administrative Agent, any
or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders or members
of the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner 

 18
 

 

thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the applicable Grantor or the Administrative
Agent of any right, privilege or option pertaining to such Pledged Securities,
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Securities with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account
for property actually received by it, but the Administrative Agent and the
other Secured Parties shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.

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

Section
6.2            Application of Proceeds.
At any time after the occurrence and during the continuance of an Event of
Default, at the Administrative Agent’s election, the Administrative Agent may
apply all or any part of Proceeds, in payment of the Lender Indebtedness in the
manner required by Section 2.21 of the Credit Agreement. Any balance of such
Proceeds remaining after the Lender Indebtedness shall have been paid in full,
no Letters of Credit shall be outstanding and the Revolving Credit Commitments
shall have terminated shall be paid over to the Grantors or to whomsoever may
be lawfully entitled to receive the same.

Section
6.3            UCC and Other Remedies.
If an Event of Default shall occur and be continuing, the Administrative Agent,
on behalf of the Secured Parties, may exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Lender Indebtedness, all
rights and remedies of a secured party under the UCC or any other applicable
law. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind, including, without limitation, notice of
intent to accelerate or notice of acceleration, (except any notice required by
law as referred to below) to or upon the Grantor or any other Person (all and
each of which demands, defenses, advertisements and notices are hereby waived),
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in any Grantor, which right or equity is hereby
waived and released. Each Grantor further agrees, at the Administrative 

 19
 

 

Agent’s request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.3 after deducting
all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of the Administrative Agent
hereunder, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Lender Indebtedness
and to any other Person legally entitled thereto in accordance with Section
2.21 of the Credit Agreement. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any other Secured Party arising out of the exercise by
them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten days before such sale or other
disposition.

Section 6.4            Registration
Rights.

(a)           If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Securities
pursuant to Section 6.3 hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Securities, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the relevant Grantor will cause any Issuer thereof to: (i) execute and
deliver, and cause the directors, members, managers and officers of such Issuer
to execute and deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the opinion of the Administrative
Agent, necessary or advisable to register the Pledged Securities, or that
portion thereof to be sold, under the provisions of the Securities Act, (ii)
cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Securities, or that portion thereof to be sold, and
(iii) make all amendments thereto and/or to the related prospectus which, in
the opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause any Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.

(b)           Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Securities, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Securities for the period of time necessary to permit the
Issuer thereof to register such securities 

 20
 

 

for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.

(c)           Each Grantor agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Securities
pursuant to this Section 6.4 valid and binding and in compliance with any and
all other applicable Governmental Requirements. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 6.4 will cause
irreparable injury to the Administrative Agent and the other Secured Parties,
that the Administrative Agent and the other Secured Parties have no adequate
remedy at law in respect of such breach and as a consequence, that each and
every covenant contained in this Section 6.4 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.

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

Article 7

THE ADMINISTRATIVE AGENT

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

(a)           Each Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, such Grantor hereby
gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:

(i)            in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect to
any other Collateral whenever payable;

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

 21

 

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

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

(v)           (A) direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (C)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents (including, without limitation, any
negotiable Documents) in connection with any of the Collateral; (D) commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (E) defend
any suit, action or proceeding brought against such Grantor with respect to any
Collateral; (F) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as
the Administrative Agent may deem appropriate; (G) assign any Copyright, Patent
or Trademark (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent
shall in its sole discretion determine; and (H) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts
and things which the Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral and the Administrative Agent’s security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

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

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

 22
 

 

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

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

Section
7.2            Duty of the Administrative
Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its
possession, under the UCC or otherwise, shall be to deal with it in the same
manner as the Administrative Agent deals with similar property for its own
account. None of the Administrative Agent, any other Secured Party, nor any of
their respective officers, directors, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or any other Person or to
take any other action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Administrative Agent hereunder are solely to
protect the Administrative Agent’s interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any other Secured Party to
exercise any such powers. The Administrative Agent shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
shall be responsible to any Grantor or any other Credit Party for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct.

Section
7.3            Financing Statements.
Pursuant to the UCC and any other applicable laws, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral in such form
and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.

Section
7.4            Authority of the
Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the other
Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and such Grantor, the Administrative Agent
shall be conclusively presumed to be acting as Administrative Agent for the Secured
Parties with full and 

 23
 

 

valid authority so to act
or refrain from acting, and such Grantor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.

Article 8

MISCELLANEOUS

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

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

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

Section 8.4            Enforcement
Expenses; Indemnification.

(a)           Each Grantor agrees to pay or
reimburse the Administrative Agent for all of its costs and expenses incurred
in collecting against such Grantor under the guaranty contained in Article 2
hereof or otherwise enforcing or preserving any rights under this Agreement and
the other Financing Documents to which such Grantor is a party, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

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

(c)           Each Grantor agrees to pay, and to
save the Administrative Agent and the Secured Parties harmless from, any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this 

 24
 

 

Agreement, to the same
extent each Grantor would be required to do so pursuant to Section 10.4 of the
Credit Agreement.

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

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

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

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

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

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

 25
 

 

Section 8.10         Governing
Law; Submission to Jurisdiction; etc.

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

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

(c)           WAIVER OF JURY TRIAL &
CONSEQUENTIAL DAMAGES. TO THE MAXIMUM EXTENT ALLOWED BY
APPLICABLE LAW, EACH OF THE GRANTORS, THE ADMINISTRATIVE AGENT, THE ISSUING
BANK, AND THE OTHER LENDERS: (1) IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2) IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (3) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER; AND (4) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.

(d)           Service of Process.
Each Credit Party which is a party hereto irrevocably consents to service of
process by notice delivered in accordance with Section 8.2 hereof. Nothing
herein or in any other Financing Document shall affect the right of the
Administrative 

 26
 

 

Agent or any other Lender
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Grantor in any other jurisdiction.

Section 8.11         Acknowledgments.
Each Grantor hereby acknowledges that:

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

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

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

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

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

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

Section 8.14         Releases.

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

 27
 

 

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

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

Section
8.16         Amendment and Restatement.
This Agreement amends and restates in its entirety the Existing Guaranty and
Security Agreement, and does not in any way constitute a novation of the
Existing Guaranty and Security Agreement.

[signature page to
follow]

 28

 

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

	
  BORROWER:

  	
  AVENTINE RENEWABLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID A.
  RIBER

  
	
   

  	
  Name:

  	
  David A. Riber

  
	
   

  	
  Title:

  	
  Director of Finance

  
	
   

  	
   

  
	
  GUARANTOR:

  	
  AVENTINE RENEWABLE ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID A.
  RIBER

  
	
   

  	
  Name:

  	
  David A. Riber

  
	
   

  	
  Title:

  	
  Director of Finance

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT:

  	
  JPMORGAN CHASE BANK, N.A., as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NATHAN L.
  BLOCH

  
	
   

  	
  Name:

  	
  Nathan L. Bloch

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 [Signature Page to Amended and Restated Guaranty and Security Agreement]

 

Annex I

TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

ASSUMPTION AGREEMENT

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

W I T N E S S E T H:

WHEREAS, the
Borrower, the Guarantor, the Lenders, the Administrative Agent and the Issuing
Bank, have entered into an Amended and Restated Credit Agreement, dated as of                         ,
2006, (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”);

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

WHEREAS, in
connection with the Credit Agreement, the Borrower and the other Grantors
(other than the Additional Grantor) have entered into the Amended and Restated
Guaranty and Security Agreement, dated as of                         ,
2006 (as amended, supplemented or otherwise modified from time to time, the “Guaranty and Security Agreement”)
in favor of the Administrative Agent for the ratable benefit of the Lenders;

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

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

NOW, THEREFORE, IT
IS AGREED:

1.             Guaranty
and Security Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.13 of
the Guaranty and Security Agreement, hereby becomes a party to the Guaranty and
Security Agreement as a Grantor thereunder with the same force and effect as if
originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder and hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit
of the Secured Parties, a security interest in the Collateral now owned or
hereafter acquired by the Additional Grantor. The information set forth in
Annex I-A hereto is hereby added to the information set 

 Annex I-1
 

 

forth in Schedules                           *
to the Guaranty and Security Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guaranty and Security Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.

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

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

	
  

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

ACKNOWLEDGMENT BY [GRANTOR]:

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

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  [RELEVANT
  GRANTOR]

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

*                    Refer
to each Schedule which needs to be supplemented.

 Annex I-2

 

Annex II

TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

ACKNOWLEDGMENT AND CONSENT TO PLEDGE

[date]

[NAME OF ISSUER]

[ADDRESS OF ISSUER]

Attention:

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

Ladies and Gentlemen:

Reference is made
herein to that certain Amended and Restated Guaranty and Security Agreement
dated as of                               ,
2006 (as amended, supplemented or otherwise modified from time to time, the “Security Agreement”), by Aventine
Renewable Energy, Inc., a Delaware corporation (the “Borrower”),
Aventine Renewable Energy, LLC, a Delaware limited liability company (together
with any other entity that may become a party thereto), in favor of JPMorgan
Chase Bank, N.A., as the Administrative Agent (in such capacity, the “Administrative Agent”) for the
ratable benefit of (a) the financial institutions (the “Lenders”)
now or hereafter parties to the Amended and Restated Credit Agreement dated as
of                               ,
2006 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the Administrative Agent, the Issuing Bank (as defined in the Credit
Agreement) and the Lenders, (b) the Issuing Bank, and (c) the Secured
Affiliates (as defined in the Credit Agreement).

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

By executing this
letter (this “Letter Agreement”), the
Company [and each shareholder/member, as may be required under the applicable
organization documents] hereby (a) acknowledges and confirms that the Pledged
Securities represents all of Grantor’s Securities (as defined in the Security
Agreement) in the Company, (b) agrees to enter a notation in the stock transfer
register or other appropriate records of the Company reflecting the pledge of
the Pledged Securities pursuant to the Security Agreement, (c) consents to the
pledge by Grantor of the Pledged Securities to secure the Lender Indebtedness
and consents to the transfer of the Pledged Securities pursuant to the exercise
of the remedies provided for in the Security Agreement (or any transfer in lieu
thereof), (d) waives any breach or violation of the terms or provisions of the 

 Annex II-1
 

 

Company’s organizational
documents caused by such pledge or transfer, (e) agrees that it will be bound
by the terms of the Security Agreement relating to the Pledged Securities
issued by it and will comply with such terms insofar as such terms are
applicable to it, (f) agrees that it will notify the Administrative Agent promptly
in writing upon the acquisition by Grantor of any Securities (as defined in the
Uniform Commercial Code as from time to time in effect in the State of New York
or, where applicable as to specific Collateral, any other relevant state)
issued by the Company, which notice shall set forth in reasonable detail all
information with respect to such Securities, and (g) agrees to comply with any
instruction received from the Administrative Agent in writing that states that
(1) an Event of Default under and as defined in the Credit Agreement has
occurred and is continuing and (2) such instructions are otherwise in
accordance with the terms of the Credit Agreement and Security Agreement,
without any other or further instructions from Grantor.

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

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

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Acknowledged and Agreed as of this                     
  day of                               ,
  20  

  
	
   

  	
   

  
	
   

  	
  [NAME OF COMPANY]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 Annex II-2

 

Annex III

TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT

THIS COPYRIGHT
SECURITY AGREEMENT (this “Agreement”), dated as of                     
      , 2006 is entered into by [NAME OF GRANTOR(S)], a [Delaware]                  
(the “Grantor”) and certain of its affiliates (collectively, the “Grantors”)
and JPMORGAN CHASE BANK, N.A., as the Administrative Agent (the “Administrative
Agent”) for the Lenders. Capitalized terms not otherwise defined herein have
the meanings set forth in the Amended and Restated Guaranty and Security
Agreement dated as of                     
      , 2003 among the Grantors and the
Administrative Agent (the “Security Agreement”).

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

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

1.             Grant of Security Interest.

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

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

2.             Modification of Agreement.

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

 Annex III-1
 

 

3.             Governing Law.

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

4.             Successors and Assigns.

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

5.             Counterparts.

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

 Annex III-2
 

 

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

	
  

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 Annex III-3
 

 

SCHEDULE A

COPYRIGHT SECURITY AGREEMENT

I.              REGISTERED COPYRIGHTS

	
  Copyright

  	
   

  	
   

  	
  Country

  	
   

  	
   

  	
  Reg. No.

  (App. No.)

  	
   

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
   

  	
  Status/

  Comment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

II.            COPYRIGHT APPLICATIONS

 Annex III-4
 

 

 

	
  STATE OF

  	
   

  	
   

  	
  §

  
	
   

  	
  § ss,

  
	
  COUNTY OF

  	
   

  	
   

  	
  §

  
					

 

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

WITNESS MY HAND
AND/OR OFFICIAL SEAL.

	
  (NOTARIAL STAMP OR SEAL)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission
  Expires:

  	
   

  
	
   

  	
   

  

 

 Annex III-5

 

Annex IV

TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

PATENT SECURITY AGREEMENT

THIS PATENT
SECURITY AGREEMENT (this “Agreement”), dated as of dated as of                     
      , 2006 is entered into by [NAME OF GRANTOR(S)], a [Delaware]                      
(the “Grantor”) and certain of its affiliates (collectively, the “Grantors”)
and JPMORGAN CHASE BANK, N.A., as the Administrative Agent (the “Administrative
Agent”) for the Lenders. Capitalized terms not otherwise defined herein
have the meanings set forth in the Amended and Restated Guaranty and Security
Agreement dated as of                     
      , 2006 among the Grantors and the
Administrative Agent (the “Security Agreement”).

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

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

1.             Grant of Security Interest.

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

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

2.             Modification of Agreement.

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

3.             Governing Law.

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

 Annex IV-1
 

 

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

4.             Successors and Assigns.

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

5.             Counterparts.

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

 Annex IV-2
 

 

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

	
  

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 Annex IV-3
 

 

SCHEDULE A

PATENT SECURITY AGREEMENT

I.              REGISTERED PATENTS

	
  Patent

  	
   

  	
   

  	
  Country

  	
   

  	
   

  	
  Reg. No.

  (App. No.)

  	
   

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
   

  	
  Status/

  Comment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

II.            PATENT APPLICATIONS

Aventine Renewable Energy, Inc.
in partnership with Purdue University Research Foundation has jointly applied
for a patent of an invention technology jointly developed between Aventine
Renewable Energy, Inc. and Perdue University Research Foundation which
technology is provisionally entitled “Biomass Pretreatment Heat Recovery System”.

 Annex IV-4
 

 

 

	
  STATE OF

  	
   

  	
   

  	
  §

  
	
   

  	
  § ss,

  
	
  COUNTY OF

  	
   

  	
   

  	
  §

  
					

 

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

WITNESS MY HAND
AND/OR OFFICIAL SEAL.

	
  (NOTARIAL STAMP OR SEAL)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission
  Expires:

  	
   

  
	
   

  	
   

  

 

 Annex IV-5

 

Annex V

TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK
SECURITY AGREEMENT (this “Agreement”), dated as of                               ,
2006 is entered into by [NAME OF GRANTOR(S)],
a [Delaware]                
(the “Grantor”) and certain of its affiliates (collectively, the “Grantors”)
and JPMORGAN CHASE BANK, N.A., as the Administrative Agent (the “Administrative
Agent”) for the Lenders. Capitalized terms not otherwise defined herein
have the meanings set forth in the Amended and Restated Guaranty and Security
Agreement dated as of                     
      , 2006 among the Grantor and the
Administrative Agent (the “Security Agreement”).

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

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

1.             Grant of Security Interest.

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

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

2.             Modification of Agreement.

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

 Annex V-1
 

 

3.             Governing Law.

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

4.             Successors and Assigns.

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

5.             Counterparts.

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

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 Annex V-2
 

 

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

	
  

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 Annex V-3
 

 

SCHEDULE A

TRADEMARK SECURITY AGREEMENT

I.              REGISTERED TRADEMARKS

	
  Trademark

  	
   

  	
   

  	
  Country

  	
   

  	
   

  	
  Reg. No.

  (App. No.)

  	
   

  	
   

  	
  Reg. Date

  (App. Date)

  	
   

  	
   

  	
  Record

  Owner/Liens

  	
   

  	
   

  	
  Status/

  Comment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

II.            TRADEMARK APPLICATIONS

Aventine Renewable Energy, Inc.
has applied to trademark the slogan “Supplying clean, renewable energy for the
World” — application of trademark filed with the Canadian Trademark Office.

Aventine Renewable Energy, Inc.
has applied to trademark the slogan “Supplying clean, renewable energy for the
World” — application of trademark filed with the United States Trademark
Office.

 Annex V-4
 

 

 

	
  STATE OF

  	
   

  	
   

  	
  §

  
	
   

  	
  § ss,

  
	
  COUNTY OF

  	
   

  	
   

  	
  §

  
					

 

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

WITNESS MY HAND
AND/OR OFFICIAL SEAL.

	
  (NOTARIAL STAMP OR SEAL)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My Commission
  Expires:

  	
   

  
	
   

  	
   

  

 

 Annex V-5

 

Schedule 1

PERFECTION INFORMATION

	
  Grantor

  	
   

  	
   

  	
  Filing Office

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Delaware

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Delaware

  

 

 Schedule 1-1

 

Schedule 2

ORGANIZATIONAL INFORMATION

	
  Grantor

  	
   

  	
   

  	
  Jurisdiction

  	
   

  	
   

  	
  Federal Tax

  Identification

  Number

  	
   

  	
   

  	
  Organizational

  Identification

  Number

  	
   

  
	
  Aventine Renewable
  Energy, LLC

  	
   

  	
   

  	
  Delaware

  	
   

  	
   

  	
  47-0920195

  	
   

  	
   

  	
  3334328

  	
   

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Delaware

  	
   

  	
   

  	
  75-3108352

  	
   

  	
   

  	
  2505911

  	
   

  

 

 Schedule 2-1

 

Schedule 3

SECURITIES

	
  Grantor

  	
   

  	
   

  	
  Issuer

  	
   

  	
   

  	
  Ownership
  Interest

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  100%

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Aventine Power, LLC

  	
   

  	
   

  	
  100%

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Aventine Renewable Energy — Mt. Vernon, LLC

  	
   

  	
   

  	
  100%

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Aventine Renewable Energy — Aurora West, LLC

  	
   

  	
   

  	
  100%

  
	
  Aventine Renewable Energy, LLC

  	
   

  	
   

  	
  Nebraska Energy, L.L.C.

  	
   

  	
   

  	
  78.42%

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Ace Ethanol, LLC

  	
   

  	
   

  	
  7.6%

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Granite Falls Ethanol

  	
   

  	
   

  	
  1.6%

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Fluid Technologies

  	
   

  	
   

  	
  1.9%*&

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Heartland Grain Fuels

  	
   

  	
   

  	
  5.0%*

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Adkins Energy, LLC

  	
   

  	
   

  	
  0.1%*

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  Northeast Iowa Ethanol

  	
   

  	
   

  	
  22.8%*&

  
	
  Aventine Renewable Energy, Inc.

  	
   

  	
   

  	
  TriStates Ethanol Company, LLC

  	
   

  	
   

  	
  15.1%*

  

 

*                    This
investment has been written down to $0 in Aventine’s financial records.

**             These
investments are likely to be unrecoverable.

 Schedule 3-1

 

Schedule 4

INTELLECTUAL PROPERTY

Aventine Renewable
Energy, Inc. in partnership with Purdue University Research Foundation has
jointly applied for a patent of an invention technology jointly developed
between Aventine Renewable Energy, Inc. and Perdue University Research
Foundation which technology is provisionally entitled “Biomass Pretreatment
Heat Recovery System”.

Aventine Renewable
Energy, Inc. has applied to trademark the slogan “Supplying clean, renewable
energy for the World” — application of trademark filed with the Canadian
Trademark Office.

Aventine Renewable
Energy, Inc. has applied to trademark the slogan “Supplying clean, renewable
energy for the World” — application of trademark filed with the United States
Patent and Trademark Office.

 Schedule 4-1

 

Schedule 5

INSTRUMENTS AND CHATTEL PAPER

None.

 Schedule 5-1

 

Schedule 6

COMMERCIAL TORT CLAIMS

None.

 Schedule 6-1

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