Document:

exhibit10_4.htm

Exhibit 10.4

Term Fuel Supply Agreement

General Terms and Conditions

By and Between

The Pantry, Inc.

and

BP Products North America Inc.

June 1, 2011

_________________

[***]  Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

  

  

  

TABLE OF CONTENTS

 

 

	  	  	  
	
ARTICLE 1. DEFINITIONS....................................................................................................................................................................................................................

	  	
2

	
ARTICLE 2. PRODUCTS AND SERVICES.................................................................................................................................................................................................

	  	
3

	
ARTICLE 3. SALE AND DELIVERY.........................................................................................................................................................................................................

	  	
3

	
ARTICLE 4. CONTRACT PRICE..............................................................................................................................................................................................................

	  	
3

	
ARTICLE 5. BILLING, PAYMENT AND CREDIT........................................................................................................................................................................................

	  	
3

	
ARTICLE 6. QUALITY..........................................................................................................................................................................................................................

	  	
4

	
ARTICLE 7. POSSESSION AND TITLE.....................................................................................................................................................................................................

	  	
5

	
ARTICLE 8. NOTICES...........................................................................................................................................................................................................................

	  	
5

	
ARTICLE 9. ASSIGNMENT, RESALE, and SELLER’S TRADE IDENTITIES.....................................................................................................................................................

	  	
5

	
ARTICLE 10. ALLOCATIONS.................................................................................................................................................................................................................

	  	
6

	
ARTICLE 11. FORCE MAJEURE..............................................................................................................................................................................................................

	  	
6

	
ARTICLE 12. TAXES............................................................................................................................................................................................................................

	  	
7

	
ARTICLE 13. CLAIMS AND DISPUTES...................................................................................................................................................................................................

	  	
7

	
ARTICLE 14. MISCELLANEOUS............................................................................................................................................................................................................

	  	
7

	  	  	  

 

 

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TERM FUEL SUPPLY AGREEMENT

This TERM FUEL SUPPLY AGREEMENT (this “Agreement”) is made and entered into as of 1 June , 2011 by and between The Pantry, Inc. with principal offices at 1801 Douglas Rd., Sanford, NC, 27330, (“Buyer’), and BP Products North America Inc. with principal offices at 30 S. Wacker Drive, Chicago, IL 60606 (“Seller” and collectively with Buyer, the “Parties”).

WHEREAS, the Parties desire to enter into this Agreement under which Seller agrees to sell and Buyer agrees to purchase certain petroleum products identified in Exhibit A - Specific Terms and Conditions (“Exhibit A”).

NOW, THEREFORE, in consideration of the mutual agreement, covenants, and conditions herein contained, Seller and Buyer agree as follows:

ARTICLE 1. DEFINITIONS

Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Fuel Supply Agreement. As used in this Agreement, the following terms shall have the meanings specified below.

1.1           “Affected Party” means a party who due to force majeure (as defined in Article 10) is rendered unable, in whole or in part, from performing any or all of its obligations under this Agreement.

1.2           “Agreement” means this Term Fuel Supply Agreement including all amendments, modifications or supplements hereto.

1.3           “Buyer” means the purchaser of products as identified in the introductory paragraph of this Agreement.

1.4           “Contract Price” means the price at which Product will be transferred from Seller to Buyer as defined in Exhibit A.

1.5           “Delivery Point” means the location where Product is transferred from Seller to Buyer.

1.6           “Force Majeure” means acts of God, strikes, lockouts, or other industrial disturbances, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, arrests and restraints of rulers and people, arrests and restraints of government, either federal or state, inability of any Party to obtain necessary materials, supplies (other than Product), or permits due to existing or future rules, orders, laws of governmental authorities (both federal and state),civil disturbances, explosions, sabotage, breakage or accident to machinery or lines of pipe, freezing of lines of pipe, and any other causes, whether of the kind herein enumerated or otherwise do.

1.7           “NYMEX close” means the daily close of the nearby futures contract on the New York Mercantile Exchange.

1.8           “OPIS Index” means the daily products rack price published by the Oil Price Information Service (“OPIS”).

1.9           “Platts Index” means the daily mean close of Platt’s Oilgram Price Report U.S.

1.10           “Product” means refined petroleum products including the various grades of gasolines and distillates identified in Exhibit A.

1.11           “Seller” means BP Products North America, Inc.

1.12           “Seller’s Trade Identities” means Seller’s trademarks, service marks, trade names, brand names, trade dress, logos, color patterns, color schemes, design schemes, insignia, image standards and the like.

1.13           “Service” means delivery, handling, or other service related to the sale of Product, as defined in Exhibit A.

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1.14           “Specific Terms and Conditions” means Exhibit A which contains deal terms (product, quantity, dates, locations).

 

 

ARTICLE 2. PRODUCTS AND SERVICES

2.1           Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Products as specified in Exhibit A.

2.2           Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the services specified in Exhibit A.

ARTICLE 3. SALE AND DELIVERY

3.1           Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller the quantities of Products as defined in Exhibit A.

3.2           All quantities of Products sold hereunder are net volume and use a basis of the temperature hereof at 60 degrees Fahrenheit in accordance with API specifications listed in the Manual of Petroleum Measurement standards unless specified otherwise in Exhibit A.

3.3           Seller agrees to sell to Buyer, and Buyer agrees to take delivery/lift from Seller, Product at the locations specified in Exhibit A.

ARTICLE 4. CONTRACT PRICE

4.1           The Contract Price for all Product sold and purchased under this Agreement at the Delivery Point(s) shall be as defined in Exhibit A.

4.2           The pricing index will be designated in Exhibit A. For Platts and OPIS priced deals the following pricing days will be used: (i) for Saturday and Sundays the price effective dates is the Friday immediately prior to the delivery date; (ii) for Holiday deliveries and/or days index is not quoted, the price effective dates is the first day immediately prior to the delivery date that the index was quoted, and (iii) for all other deliveries, the price effective for the delivery date is the delivery date.

4.3           If the index used for pricing ceases to be published, then a new basis for calculation shall be negotiated in good faith between the Parties. If no agreement on a substitute index can be reached, this Agreement shall automatically terminate on the earlier of 60 days after the cessation of the publishing of such index, or 30 days after one party notifies the other.

4.4           If regulatory changes require or allow the sale of a different formulation of Product, then Seller may offer for sale to Buyer the new product. The Parties acknowledge that the uncertainty regarding such regulatory changes make it impossible to predict the availability and cost of a different formulation. Seller shall provide Buyer with a minimum 30 day written notice of any change in Product formulation and price. If Product availability or price for the new product at any location differs materially from the Product sold by this contract (or Agreement, if that’s the language), then the Parties shall negotiate in good faith to reach a new agreement regarding supply and price for product at that location. If no agreement can be reached within 45 days of Seller’s written notice of a required change, then Buyer shall have the right to re-bid the specific location(s) for which the different product formulation applies.

ARTICLE 5. BILLING, PAYMENT AND CREDIT

5.1           Billing will be based on the quantities identified on the Bill of Lading at the time of delivery/lift. All payments will be due under the terms set forth in Exhibit A.

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5.2           Buyer shall remit any amounts due by the date specified in Exhibit A, or if such day is not a Business Day, the next Business Day. If presentation by Seller of the Bill of Lading is delayed, the due date for Buyer’s payment shall be extended for a like period, unless Buyer is primarily responsible for such delay.

5.3           If Buyer or Seller should fail to remit any amounts in full when due as required hereunder, or if any adjustments are made under this Agreement, including but not limited to, adjustments as a result of the conclusion of any audits or as a result of the resolution of a billing dispute, interest on the unpaid portion shall accrue at a rate equal to the prevailing LIBOR interest rates plus 1%.

5.4           If Buyer fails to make timely payment under Section 5.2 and such failure is not remedied within five business days after Seller gives Buyer written notice of such failure, Seller, in addition to any other remedy it may have, may suspend further sale and delivery of Product until such amount, including interest, is paid; provided, if Buyer, in good faith, shall dispute the amount of any such billing or part thereof and shall pay to Seller such amounts as Buyer concedes to be correct, Seller shall continue to sell and deliver Product as provided hereunder. Seller shall promptly investigate the matter and submit an adjusted bill, if necessary, to Buyer. If Buyer has underpaid the amount actually due, Buyer shall remit any amount due plus interest within ten (10) days after Buyer’s receipt of an adjusted billing statement from Seller. If Buyer has overpaid amounts actually due, Seller shall remit to Buyer any necessary refund plus interest (LIBOR plus 1%) within thirty (30) days after determination of such overpayment.

5.5           Any dispute not resolved pursuant to the terms of this Article 5 shall be without recourse, unless litigation has been commenced within twenty-four (24) months after the event causing the dispute is discovered or reasonably should have been discovered.

5.6           Nothing in this Agreement will be construed as obligating Seller to extend credit to Buyer. Seller reserves the right to change its credit terms at any time including, but not limited to, require that Buyer pay for all Produces and Services purchased pursuant to this Agreement in advance or at the time of delivery, in cash, in certified fund or via wire transfer. Seller may also require that Buyer provide Seller with a letter of credit, deposit or other forms of security or interim financial statements, upon Seller’s request. Failure by Buyer to timely and fully pay monies owed to Seller in accordance with established credit terms will be grounds for termination of this Agreement.

ARTICLE 6. QUALITY

6.1           Product shall conform to the requirements of all applicable environmental laws, regulations, and ASTM industry standards for petroleum products. In the event Products Seller seeks to deliver to Buyer or its designee under this Agreement shall fail to conform to such quality standards and specifications, Buyer may, at its option and in addition to all other available remedies, either (1) refuse to accept delivery of such nonconforming product, or (2) accept such product and cure the nonconformity, provided such cure shall be at Seller’s expense through a payment reduction or otherwise, at Buyers option.

6.2           Rejection of product must occur within 48 hours of receipt, after 48 hours product will be regarded as accepted by Buyer. If products are rejected notice must be giving to Seller fully specifying all claimed shortages, defects, and/or nonconformities. The failure to specify shall constitute a waiver of that shortage, defect, or nonconformity.

6.3           If regulatory changes require or allow the sale of a different formulation of Product then Seller may offer for sale to Buyer the new product. Seller shall provide Buyer a minimum 30 day written notice of the change and the applicable pricing. Buyer in turn has the right to re-bid the specific location(s) for which the different product formulation applies.

6.4           Except as expressly stated above, seller makes no other warranties, express or implied, with respect to the products, and warranties of the merchantability for any particular purpose or use are expressly disclaimed.

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ARTICLE 7. POSSESSION AND TITLE

7.1           As between the Parties, Seller shall be deemed to be in exclusive control and possession of all Product to be delivered under this Agreement prior to its delivery to Buyer, and Seller shall bear the risk of loss and be responsible for any damage or injury caused by such Product prior to its delivery to Buyer. Seller shall indemnify Buyer and hold Buyer harmless from all liability and expense on account of any and all damages, claims or actions, including injury to and death of persons, arising with respect to such Product prior to its delivery to Buyer.

7.2           As between the Parties, Buyer shall be deemed to be in exclusive control and possession of all Product to be delivered under this Agreement after its delivery, and Buyer shall bear the risk of loss and be responsible for any damage or injury caused by such Product after its delivery to Buyer. Buyer shall indemnify Seller and hold Seller harmless from all liability and expense on account of any and all damages, claims or actions, including injury to and death of persons, arising with respect to such Product after its delivery to Seller.

7.3           Title to all Product sold and purchased hereunder shall pass from Seller to Buyer at the Delivery Point applicable to the sale and purchase of such Product. Delivery occurs when product exits the transport vehicle provided by Seller or when Buyer picks up product with its vehicle. Specific delivery points are as follows:

	
  

	
a.

	
if via rack: coupler, at the loading rack;

	
  

	
b.

	
If via pipeline, at the pipeline meter into Buyer’s terminal facility;

	
  

	
c.

	
If from barge: at the outlet flange of hose if hose provided by barge, otherwise permanent discharge pipe flange; or

	
  

	
d.

	
If to barge, at the inlet flange of hose if hose provided by barge, otherwise permanent loading pipe.

7.4           Seller warrants title to all Product sold and all Product delivered under this Agreement, free and clear of all liens, encumbrances, production burdens and other adverse claims whatsoever.

 

 

7.5           Prior to taking possession of Product Buyer will acknowledge receipt of Seller’s Material Safety Data Sheet (MSDS) and is aware of its contents and of the hazards in handling, storage, use and transportation of Product. Buyer will inform its employees or agents of any Product hazards or risks, and will provide a copy of each product MSDS to its handlers of the Product.

ARTICLE 8. NOTICES

8.1           All communications required or permitted under the terms of this Agreement shall be in writing delivered (i) personally, (ii) registered overnight courier, or (iii) electronic messaging system with delivery confirmation. The notice date will be the delivery date. Parties will communicate any address changes by written notice in accordance with this provision as defined in Exhibit A.

ARTICLE 9. ASSIGNMENT, RESALE, and SELLER’S TRADE IDENTITIES

9.1           This Agreement shall extend to and be binding upon both parties hereto, their respective heirs, executors, administrators, successors and assigns. Neither Party shall assign this Agreement in whole or part without the prior written approval of the other Party, which approval may be withheld or given at the sole discretion of such Party. Any Party’s purported transfer or assignment n violation of this Article 9 shall be void.

9.2           Buyer’s resale of Product under this Agreement is limited to Buyer’s normal sale or resale of Product.

9.3           This Agreement does not include a license or any other type of right to use or display Seller’s Trade Identities. Buyer agrees that it has no right and will not advertise, distribute or resell the Products purchased under this program as BP-branded motor fuels

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ARTICLE 10. ALLOCATIONS

10.1           Buyer expressly agrees and accepts that in the case of a reduction in the total supply of Product available to Seller due to (a) Force Majeure, (b) an actual shortage of Product, however caused, (c) a partial or total interruption, loss, or shortage of transportation facilities or supplies, then in any such case, Seller may enforce a terminal specific, regional, or system wide allocation program. Seller may allocate its available supplies of Product on any basis which in Seller’s sole judgment is fair and reasonable, including, but not limited to, an allocation based on ratable, historical, or planned deliveries and Seller’s own requirements for Product Seller shall not be obligated to make up any shortage resulting from a fair and reasonable allocation.

10.2           Allocations: Seller has the right to restrict the maximum amount Buyer may lift or take delivery of during any given month to Buyer’s allocation amount, determined as follows: Seller will use a [***] ([***]) to establish customer allocations. [***] is based on [***]. In the event a [***] does not exist for Buyer, Seller will utilize the monthly contract volume set forth in Schedule A to establish allocations [***]. Seller may agree to adjust allocations upon receipt of a written request from Buyer, but is not committed to providing additional allocation unless Buyer has lifted contract volume as outlined in Schedule A.

ARTICLE 11. FORCE MAJEURE

11.1           Except with regard to Buyer’s or Seller’s obligations to make payments due under this Agreement, in the event either Party (the “Affected Party”) is rendered unable, wholly or in part, by Force Majeure to perform any or all of its obligations under this Agreement, upon the Affected Party’s giving notice and full particulars of such Force Majeure to the other Party as soon as reasonably possible (such notice may be telephonic provided it is confirmed in writing as soon as possible), the obligations the Affected Party is unable to perform due to the Force Majeure shall be suspended during the continuance of such inability. The cause of the Force Majeure shall as far as possible be remedied with all reasonable diligence and dispatch, including endeavoring to utilize alternative supply sources, transportation routes and/or Delivery Point(s); provided, no provision of this Agreement shall be interpreted to require Seller to deliver, or Buyer to receive, quantities of Product at points other than the Delivery Point(s).

11.2           “Force Majeure” is defined in Section 1.6. Force Majeure are conditions which were not anticipated at the time of Agreement, which are not within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to overcome. It is expressly agreed by the Parties that neither (i) Buyer’s loss of markets or inability economically to use or resell Product purchased under this Agreement, nor (ii) Seller’s loss of supply or ability to sell Product to a market at a more advantageous price constitutes Force Majeure.

 

 

11.3           The term “Force Majeure” also shall include any event of Force Majeure, as defined in Section 1.6, occurring with respect to the facilities or service of a Party’s third party transporters delivering or receiving Product at a Delivery Point, but shall not include curtailment or interruption of either firm or interruptible service by such third-party transporter, unless such curtailment or interruption was a result of an event of Force Majeure described in Section 1.6.

11.4           It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty, and that the above requirement of the use of diligence and dispatch in restoring normal operation conditions shall not require the settlement of strikes or lockouts when such course is inadvisable in the discretion of the Party having the difficulty.

_________________

[***]  Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

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ARTICLE 12. TAXES

12.1           The Contract Price does not include reimbursement for, and Buyer is liable for and shall pay, cause to be paid, or reimburse Seller if Seller has paid, all taxes applicable to the Product sold hereunder, specifically excluding, however, any taxes related to the gross receipts of Seller. Buyer shall indemnify, defend and hold Seller harmless from any liability for such taxes.

12.2           Both Parties shall use reasonable efforts to administer this Agreement and implement the provisions in accordance with their intent to minimize taxes. Upon request, a Party shall provide a certificate of exemption or other reasonably satisfactory evidence of exemption from any Tax and each Party agrees to cooperate with the other Party in obtaining any such exemption.

ARTICLE 13. CLAIMS AND DISPUTES

13.1           Effect of Waiver or Consent. Failure by a Party to complain of any act of the other Party or to declare the other Party in default with respect to this Agreement, irrespective of how long that failure continues, does not constitute a waiver by that Party of its rights with respect to that default until the applicable statute of limitations period has run.

13.2           Indemnification. Buyer agrees to indemnify, protect, defend, and hold harmless Seller from and against any and all claims, actions, losses, costs and expenses, including reasonable attorney’s fees, for property damage, personal injury or death, fines or penalties to the extent related to or arising out of Buyer’s negligence or willful misconduct relative to Buyer’s performance hereunder, or relative to Buyer or its agents, employees, or contractors entering, leaving or being on Seller’s premises, or involving any spills or discharges of Products purchased hereunder or any other conduct that is, or is alleged to be, in violation of any law, regulation, or ordinance.

Seller shall indemnify, defend and hold Buyer harmless from any and all suits, actions, debts, accounts, damages, costs, losses, and expenses arising from or out of liens, encumbrances, production burdens and other adverse claims whatsoever of any or all persons to said Product or to royalties, license fees or charges thereon, which are applicable to said Product at or prior to its delivery to Buyer at the Delivery Point(s) or to any other conduct that is, or is alleged, to be, in violation of any law, regulation or ordinance. Buyer, in addition to all other available remedies, may refuse to accept all Product failing to meet the foregoing title requirements.

13.3           Limitation of Damages. Buyer’s exclusive remedy for any and all losses or damages relating to the purchase and sale of product under this Agreement, including, but not limited to, any allegations of breach of warranty, breach of contract (including failure to deliver product hereunder), negligence or strict liability, shall be limited, at Seller’s option, to either the return of the purchase price or the replacement of the particular product for which a claim is made and proved. In no event shall Seller or Buyer be liable to the other of any special, consequential, incidental or indirect losses or damages.

13.4           Resolution of Disputes and Governing Law. Dispute or controversy the parties cannot mutually resolve, shall be resolved by binding arbitration. The site of arbitration shall be DuPage County, IL under the auspices of and h accord with the American Arbitration Association. This section shall survive termination or expiration of this Agreement. The law of Illinois, without regard to its conflicts of law rules, shall govern this Agreement.

ARTICLE 14. MISCELLANEOUS

14.1           Entire Agreement. This Agreement and the exhibits hereto and constitute the entire agreement between the Parties relating to the subject matter contemplated by this Agreement. There are no prior or contemporaneous agreements or representations (whether oral or written) affecting the subject matter other than those herein expressed. No amendment, modification or change to this Agreement herein shall be enforceable, except as specifically provided for in this Agreement, unless reduced to writing and executed by both Parties.

 

 

14.2           Severability. If a court of competent jurisdiction declares or adjudges one or more paragraphs of this Agreement, or paragraph portions, invalid or void, the remaining paragraphs or paragraph portions will remain in full force and effect.

 

 

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14.3           Audit Rights. Seller, Buyer or any third party representative of Seller or Buyer shall have the right, upon reasonable notice and at reasonable times, to examine the books and records of the other to the extent reasonably necessary to verify the accuracy of any billing statement, payment demand, charge, payment or computation made under this Agreement.

14.4           Construction and Headings. The section titles and subtitles in this Agreement are for ease of reference only. They do not modify, restrict or expand upon the meaning of any provision.

14.5           Execution. This Agreement will not be binding upon Seller or Buyer unless and until it is signed by Seller’s and Buyer’s authorized representatives.

IN WITNESS WHEREOF, the Parties have entered into this Agreement, effective as of the date first above written.

(Customer Name)

By:           /s/ Terrance Marks

Name:               Terrance Marks                                  

Title:               President & CEO                                  

Date:               6/17/11

BP Products North America Inc.

By:                     /s/ Jeffrey C. Burrell

Name:               Jeffrey C. Burrell                                  

Title:               National Commercial Sale Manager

Date:               6/17/11                                  

  

  

  

Exhibit A — Specific Terms and Conditions

	
Buyer

The Pantry, Inc.

1801 Douglas Rd.

Sanford, NC, 27330

	
Seller

BP Products North America Inc.

30 S. Wacker Drive, Ste. 900

Chicago, IL 60606

 

	
Effective Date of Contract:

July 6, 2011

	
Specific Terms & Conditions

	
1.This Product Sale Contract (“Contract”), consists of these Specific Terms & Conditions, BP Product North America Inc. General Terms & Conditions dated June 1, 2011 and BP Confidentiality Agreement and covers the sale of Product by Seller to Buyer as set forth herein.

	
2.The Term of this Contract will commence on July 6, 2011 and continue until June 27, 2012.

	
3.Contract Details : See Attached Schedule A

	
4.Additional Provisions:

i.Liftings/Delivery: Buyer must lift or take delivery during each month at least [***] of the Annual Contract Volume set forth for each product at each terminal in Schedule A.

ii.Ratable: The Buyer agrees to lift or take delivery of product from BP on a ratable basis during each contract month by [***].

iii.Allocations:  Monthly allocation will be determined by [***]: Seller will use a [***] to establish customer allocations. [***] is based on [***]. In the event a [***] does not exist for Buyer, Seller will utilize the monthly contract volume set forth in Schedule A to establish allocations [***]. Seller may agree to adjust allocations at request of Buyer, but Seller is not committed to providing additional allocation unless Buyer has lifted contract volume as outlined in Schedule A. Under normal operating conditions, Seller will provide Buyer [***] and [***] allocation thresholds based on a 31-day month.

iv.Under Lift:  Except for run-outs by Seller at each Delivery Point, Seller may, at its discretion, execute one of the following courses of action following [***] under lifting. 1) Terminate contractual volume at specifically identified terminal(s) where Buyer has not met minimum lifting requirement of [***], or (2) Terminate contract in its entirety.

v.Run-outs: If Seller determines that a Product runout will prevent Buyer from lifting its entire contract volume at a specific Delivery Point during a specific month, Seller may allow Buyer to: (1) [***]; and/or (2) [***].  These options may apply only to those contract quantities that would have been lifted during the run-out period if the customer had lifted ratably throughout the period.

vi.Tariff, Shipping and Terminating Cost Increase Pass-Through: If applicable, during the course of the contract, costs increase beyond the control of the Seller, Seller will notify Buyer in writing of such increase.  Costs will include increases to common carrier pipeline tariffs, for-hire barge and shipping costs or third party terminating costs.  Price increase will become effective 30 days following notification.

	
5.Payments: BP shall invoice Buyer for all amounts due under this Contract. The invoice shall be accompanied by any necessary supporting documents. All payments shall be due and payable in full within ten (10) from the date of delivery via Electronic Funds Transfer (EFT).

_________________

[***]  Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

  

  

  

	
This Agreement is subject to BP Product North America Inc. General Terms & Conditions in effect on day of lifting. However, if there is any conflict in terms between the Specific Terms and Conditions and BP Product North America Inc. General Terms & Conditions, the Specific Terms & Conditions supersede the BP Product North America, Inc. General Terms & Conditions with respect to the conflicting terms.

 

	
ACCPETED AND AGREED TO:

	  
	
BP Products North America., Inc.

	  	
The Pantry, Inc.

	  
	
By:

	
/s/ Jeffrey C. Burrell

	  	
By:

	
/s/ Terrance Marks

	  
	
Name:

	
Jeffrey C. Burrell

	  	
Name:

	
Terrance Marks

	  
	
Title:

	
National Commercial Sales Manager

	  	
Title:

	
President & CEO

	  
	
Date:

	
6/17/11

	  	
Date:

	  6/17/11
	  	  	  	  	  
	  	  	  	  	  

 

  

  

  

CONFIDENTIAL TREATMENT REQUESTED

	
BP Products North America, Inc.

SCHEDULE A

 

	

	
CUSTOMER:

Contract Start Date:

Contract End Date:

	
The Pantry, Inc.

July 6, 2011

June 27, 2012

	
Terminal

	
Product (1)

	
Annual Contract Volume,

Gals/Year (2,3)

	
Octanes

	
Pricing Mechanisms

	
[***]

	
Prices firm

	
Pricing Formula (4, 5)

	
Billing Net or Gross Gallons (6)

	
Mode(7)

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
153885-87 590 RE+ E10

	
[***]

	
87

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
319765-93 R9+ PREM E10

	
[***]

	
93

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
153885-87 R9+ REG El0

	
[***]

	
87

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
319765-93 R9+ PREM El0

	
[***]

	
93

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
153885-87 R9+ REG E10

	
[***]

	
87

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
319765-9 3 R9+ PREM EIO

	
[***]

	
93

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
153885-87 R9+ REG E10

	
[***]

	
87

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
319765-93 R9+ PREM E10

	
[***]

	
93

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
153885-87 R9+ REG E10

	
[***]

	
87

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	  	  	  	  	  	  	  	  	  
	
[***]

	
319765-93 R9+ PREM E10

	
[***]

	
93

	
[***]

	
[***]

	
[***]

	
[***]

	
Net

	
FOB Rack

	  	
Total, gals/year

	
[***]

	  	  	  	  	  	  
	  	
Total, gals/mo

	
[***]

	  	  	  	  	  	  
	  	
Total, bb/day

	
[***]

	  	  	  	  	  	  

Notes:

1.  Offer is for ratable supply of finished, ethanol blended gasoline at listed primary terminal locations. Proposed supply contract will be effective December 1, 2010 to November 29, 2011. BP will consider all or part of this volume in establishing a supply agreement.

2.  Volume to be lifted on a weekly ratable basis with monthly tolerances each month [***] of contracted volume.  Initial allocations based on the following formulas: ([***]) = [***]; (([***]) *[***]) = [***].  After an applicable [***] is established, actual [***] allocations will be based on [***] using the [***] ([***]) with a [***] for BP and customer review. If [***] BP may, at its discretion, reduce contract volumes or cancel contract in part or in its entirety.

3.  Where appropriate, gasoline RVP will switch from R9+ to R7+ product during RVP season.

4.  [***] is before all applicable federal, state and local taxes and fees. Pricing at back-up terminal will be based on primary terminal rack using agreed pricing formula as noted above.

5.  If, during the course of the contract, costs increase beyond the control of the Seller, Seller will notify Buyer in writing of such increase. Costs will include increases to common carrier pipeline tariffs, for-hire barge and shipping costs or third party terminating costs. Price increase will become effective 30 days following notification.

6.  Volume sold NET gallons (temperature adjusted to 60 degrees F).

7.  Product is sold FOB terminal rack.  The Pantry, Inc will take ownership at rack and is responsible for delivery of product to distribution location. BP is not responsible for delivery.

 

 

_________________

[***]  Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.

 

  

  

  

	
For BP Products North America Inc.

 

	  	
For The Pantry, Inc.

	
/s/ Jeffrey C. Burrell

	  	
/s/ Terrance Marks

	
Signature

	  	
Signature

	  	  	  
	
Jeffrey C. Burrell

	  	
Terrance Marks

	
Name

	  	
Name

	  	  	  
	
National Commercial Sales Manager

	  	
President & CEO

	
Title

	  	
Title

	  	  	  
	
6/17/11

	  	  6/17/11
	
Date

	  	
DateExhibit 10.1

EXECUTION VERSION 

FIRST AMENDMENT TO CREDIT AGREEMENT

                    THIS
FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), entered into as
of November 15, 2010 (the “Effective Date”), by and among INDUSTRIAL
SERVICES OF AMERICA, INC., a Florida corporation (“ISA”), ISA INDIANA,
INC., an Indiana corporation (“ISA Indiana”), the Lenders party hereto,
and FIFTH THIRD BANK, an Ohio banking corporation (“Fifth Third”), in
its capacity as Agent for Lenders and LC Issuer under this Agreement (“Agent”)
and as LC Issuer, is as follows:

Preliminary Statements

	
  

 	
  

 
	
 A.

 	
 ISA
 and ISA Indiana (each a “Borrower” and, collectively, “Borrowers”),
 Agent, LC Issuer and the Lenders entered into that certain Credit Agreement
 dated as of July 30, 2010 (as modified, extended, amended or restated from
 time to time, the “Credit Agreement”). Capitalized terms used, but not
 defined, in this Amendment will have the meanings given to them in the Credit
 Agreement. 

 
	
  

 	
  

 
	
 B.

 	
 Borrowers
 have requested that Agent, LC Issuer and the Lenders: (i) temporarily
 increase the Maximum Revolving Commitment and the maximum amount of Eligible
 Inventory advances’ in the calculation of the Borrowing Base as specifically
 set forth herein, (ii) increase the Receivables Advance Rate from 80% to 85%
 as specifically set forth herein, and (iii) amend certain other provisions of
 the Credit Agreement and certain of the other Loan Documents. 

 
	
  

 	
  

 
	
 C.

 	
 Agent,
 LC Issuer and the Lenders are willing to so amend the Credit Agreement and
 certain of the other Loan Documents, all on the terms, and subject to the
 conditions, of this Amendment. 

 

Statement of Amendment

                    In
consideration of the mutual covenants and agreements set forth in this
Amendment, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Agent, LC Issuer and the Lenders
and Borrowers hereby agree as follows:

	
  

 	
  

 
	
 1.

 	
 Amendments
 to Credit Agreement.
 Subject to the satisfaction of the conditions of this Amendment, the Credit
 Agreement is hereby amended as follows: 

 

	
  

 	
  

 	
  

 
	
  

 	
 1.1

 	
 The following definitions are hereby added to Section
 1.2 of the Credit Agreement in their proper alphabetical order: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “First
 Amendment” means the First Amendment to Credit Agreement among Agent, LC
 Issuer, the Lenders and Borrowers dated to be effective as of November 15,
 2010.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “First
 Amendment Effective Date” means November 15, 2010.

 
	
  

 	
  

 	
  

 
	
  

 	
 1.2

 	
 The second and third sentences of the definition
 of “Advance Rate” in Section 1.2 of the Credit Agreement are hereby
 amended in their entirety by substituting the following in their stead:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The
 initial advance rates are as follows: the Receivables Advance Rate is 85%,
 and the Inventory Advance Rate is 60%. The Receivables Advance Rate will
 never exceed 85%, and the Inventory Advance Rate will never exceed 60%.

 

	
  

 	
  

 	
  

 
	
  

 	
 1.3

 	
 The following definitions in Section 1.2 of
 the Credit Agreement are hereby amended in their entirety by substituting the
 following in their respective steads: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “Borrowing
 Base” means, as of any time, an amount in Dollars equal to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                  (a)
 the Receivables Advance Rate applied to the then Net Amount of Eligible
 Receivables then outstanding;

 
	
  

 	
  

 	
 plus          (b) the least of (i) (A) from the First
 Amendment Effective Date through, and including,. December 16, 2010,
 $18,000,000 and (B) at all times on and after December 17, 2010, $17,000,000
 (in each case, subject to adjustment as provided in Section 2.13),
 (ii) the applicable Inventory Advance Rate applied, with respect to the
 applicable categories of Eligible Inventory, to the then Eligible Inventory
 and (iii) 80% of the Net Orderly Liquidation Value Percentage (such product
 expressed as a percentage) applied, with respect to the applicable categories
 of Eligible Inventory, to the then Eligible Inventory; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 less          (c) the then Reserve Amount.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “Maximum Revolving
 Commitment” means: (a) from the First Amendment Effective Date through,
 and including, December 16, 2010, Forty-Four Million Five Hundred Thousand
 Dollars ($44,500,000); and (b) at all other times, Forty Million Dollars
 ($40,000,000).

 
	
  

 	
  

 	
  

 
	
  

 	
 1.4

 	
 Section 2.1 of the Credit Agreement is hereby amended
 in its entirety by substituting the following in its stead: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Section
 2.1 Commitments.
 Subject to the terms and conditions of this Agreement, Lenders and LC Issuer
 will make total credit available to, or for the benefit of, Borrowers under
 this Agreement in the form of the following credit extensions advanced or to
 be made under the following facilities: (a) revolving loans, (b) a term loan
 and (c) a letter of credit subfacility, all as more particularly described
 below.

 
	
  

 	
  

 	
  

 
	
  

 	
 1.5

 	
 The second sentence of Section 2.2(a) of
 the Credit Agreement is hereby amended in its entirety by substituting the following
 in its stead: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The
 aggregate amount of all of the Revolving Loan Commitments is $44,500,000 from
 the First Amendment Effective Date through, and including, December 16,2010
 and $40,000,000 at all times on and after December 17, 2010.

 
	
  

 	
  

 	
  

 
	
  

 	
 1.6

 	
 The first sentence of Section 11.l (m) of
 the Credit Agreement is hereby amended in its entirety by substituting the
 following in its stead: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The
 maximum aggregate liability of the Credit Parties under this Cross-Guaranty
 is $48,800,000; provided, however, such
 maximum liability shall be $52,985,000 from the First Amendment Effective
 Date through, and including, December 16, 2010.

 
	
  

 	
  

 	
  

 
	
 2.
 Amendment and Restatement of Revolving Loan Note. On the Effective
 Date, Borrowers will duly execute and deliver to Agent an Amended and
 Restated Revolving Loan Note in the form attached hereto as Exhibit A
 (the “Amended and Restated Revolving Loan Note”). 

 

3.
Reaffirmation of Cross-Guaranties. Each of the Borrowers (collectively,
the “Cross-Guarantors”) hereby (i) confirms, ratifies and reaffirms its
respective Cross-Guaranty and (ii) acknowledges and agrees that no
Cross-Guarantor is released from its obligations under its respective
Cross-Guaranty by reason of this Amendment and that the obligations of each Cross
Guarantor under its respective Cross-Guaranty extend to the Credit Agreement,
the Amendment Documents and the other Loan Documents as amended by, or in
connection with, this Amendment. This reaffirmation of each Cross-Guarantor’s
Cross-Guaranty shall not be construed, by implication or otherwise, as
imposing any requirement that Agent notify or seek the consent of any
Cross-Guarantor relative to any past or future extension of credit, amendment
or modification, extension or other action with respect thereto, in order for
any such extension of credit, amendment or modification, extension or other
action with respect thereto to be subject to a Cross-Guarantor’s
Cross-Guaranty, it being expressly acknowledged and reaffirmed that each
Cross-Guarantor has under its respective Cross-Guaranty consented, among others
things, to modifications, amendments, extensions and other actions with respect
thereto without any notice thereof or any further consent thereto. 

4.
Reaffirmation and Amendment of Guaranty-and Reaffirmation of Security.
As a condition of this Amendment, on the Effective Date, Borrowers will cause
each Guarantor to execute and deliver to Agent the Reaffirmation and Amendment
of Guaranty and Reaffirmation of Security provided after the signatures below
and incorporated by reference herein. 

5.
Additional Conditions: Other Documents. As a condition of this
Amendment, Borrowers will deliver to Agent, on or before the execution of this
Amendment, (i) the Amended and Restated Revolving Loan Note duly executed by
Borrowers; (ii) a copy, certified by the Secretary of each Borrower, of
resolutions of the Board of Directors of Borrowers, authorizing the execution
of this Amendment and all other documents executed in connection herewith,
which certificate and resolutions will be in form and substance acceptable to
Agent; (iii) a copy, certified by the Secretary of each Guarantor of
resolutions of the sole member of each Guarantor authorizing the execution of
the Reaffirmation and Amendment of Guaranty and Reaffirmation of Security and
all other documents executed in connection therewith, which certificate and
resolutions will be in form and substance acceptable to Agent; and (iv) such
other documents, instruments, and agreements deemed necessary or desirable by
Agent to effect the amendments to Borrowers’ credit facilities with Agent, LC
Issuer and the Lenders contemplated by this Amendment. 

6.
Reaffirmation of Security. Borrowers and Agent, LC Issuer and the
Lenders hereby expressly intend that this Amendment shall not in any manner:
(a) constitute the refinancing, refunding, payment or extinguishment of the
existing Obligations as of the Effective Date; (b) be deemed to evidence a
novation of the outstanding balance of the Obligations; or (c) affect, replace,
impair, or extinguish the creation, attachment, perfection or priority of the
Liens on the Loan Collateral granted pursuant to any of the Security Documents.
Borrowers ratify and reaffirm any and all grants of Liens to Agent’ in the Loan
Collateral as security for the Obligations, and Borrowers acknowledge and
confirm that the grant of the Liens to Agent in the Loan Collateral: (i)
represent continuing Liens on all of the Loan Collateral, (ii) secure all of
the Obligations, “and (iii) represent valid, first and best Liens on all of the
Loan Collateral except to the extent, if any, of the Permitted Liens. 

7.
Representations. To induce Agent, LC Issuer and the Lenders to accept
this Amendment, each Borrower hereby represents and warrants to Agent, LC
Issuer and the Lenders as follows: 

                    7.1
Each Borrower has full power and authority to enter into, and to perform its
obligations under, this Amendment, the Amended and Restated Revolving Loan Note
and the other documents executed in connection therewith (collectively, the “Amendment
Documents”), and the execution and delivery of, and the performance of its
obligations under and arising out of, the Amendment Documents have been duly
authorized by all necessary corporate action.

                    7.2
The Amendment Documents constitute the legal, valid and binding obligations of
each Borrower, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally.

                    7.3
Each Borrower’s representations and warranties contained in the Credit
Agreement are complete and correct as of the Effective Date with the same
effect as though these representations and warranties had been made again on
and as of the Effective Date, subject to those ‘changes as are not prohibited
by, or do not constitute Events of Default under, the Credit Agreement. 

                    7.4
No Event of Default has occurred and is continuing under the Credit Agreement. 

8.
Costs and Expenses; Amendment Fee. As a condition of this Amendment, (i)
Borrowers will pay to Agent a fee of $11,250, payable in full on the Effective
Date; such fee, when paid, will be fully earned and non-refundable under’ all circumstances,
and (ii) Borrowers will promptly on demand pay or reimburse Agent for the costs
and expenses incurred by Agent in connection with this Amendment, including,
without limitation, attorneys’ fees. 

9.
Release. Borrowers hereby release Agent, LC Issuer and the Lenders from
any and all liabilities, damages and claims arising from or in any way related
to the Obligations or the Loan Documents, other than such liabilities, damages
and claims which arise after the execution of this Amendment. The foregoing
release does not release or discharge, or operate to waive performance by,
Agent, LC Issuer and the Lenders of its express agreements and obligations
stated in the Loan Documents on and after the Effective Date. 

10.
Default. Any default by Borrowers in the performance of Borrowers’
obligations under this Amendment shall constitute an Event of Default under the
Credit Agreement. 

11.
Continuing Effect of the Credit Agreement. Except as expressly amended
hereby, all of the provisions of the Credit Agreement are ratified and
confirmed and remain in full force and effect. 

12.
One Agreement; References; Fax Signature. The Credit Agreement, as
amended by this Amendment, will be construed as one agreement. All references
in any of the Loan Documents to the, (i) Credit Agreement will be deemed to be
references to the Credit Agreement as amended by this Amendment and (ii)
Revolving Loan Note will be deemed to be references to the Amended and
“Restated Revolving Loan Note. This Amendment may be signed by facsimile
signatures or other electronic delivery of an image file reflecting the
execution hereof, and if so signed, (a) may be relied on by each party as if
the document were a manually signed original and (b) will be binding on each
party for all purposes. 

13.
Captions. The headings to the Sections of this Amendment have been
inserted for convenience of reference only and shall in no way modify or
restrict any provisions hereof or be used to construe any such provisions. 

14.
Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall be an original but all of which together shall constitute
one and the same instrument. 

15.
Entire Agreement. This Amendment, together with the other Loan
Documents, sets forth the “entire agreement of” the parties with respect to the
subject” matter of this Amendment and supersedes all previous understandings,
written or oral, in respect of this Amendment. 

                    IN
WITNESS WHEREOF, Borrowers have executed this Amendment to be effective as of
the Effective Date. 

	
  

 	
  

 	
  

 
	
  

 	
 INDUSTRlAL SERVICES OF
 AMERICA, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan Schroering

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Alan Schroering, Chief
 Financial Officer

 
	
  

 	
  

 	
  

 
	
  

 	
 ISA INDIANA, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan Schroering

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Alan Schroering, Chief
 Financial Officer

 

Accepted as of the Effective
Date. 

FIFTH THIRD BANK, as Agent 

	
  

 	
  

 	
  

 
	
 By: 

 	
 /s/ Anne B. Kelly

 	
  

 
	
  

 	

 

 	
  

 
	
 Anne B. Kelly, Vice
 President 

 	
  

 
	
  

 	
  

 	
  

 
	
 FIFTH THIRD BANK, as
 Lender

 
	
  

 	
  

 	
  

 
	
 By: 

 	
 /s/ Anne B. Kelly

 	
  

 
	
  

 	

 

 	
  

 
	
 Anne B. Kelly, Vice
 President

 
	
  

 	
  

 	
  

 
	
 FIFTH’THIRD BANK, as LC
 Issuer 

 
	
  

 	
  

 	
  

 
	
 By: 

 	
 /s/ Anne B. Kelly

 	
  

 
	
  

 	

 

 	
  

 
	
 Anne B. Kelly, Vice
 President 

 

SIGNATURE PAGE TO 

FIRST AMENDMENT TO CREDIT AGREEMENT 

(Industrial Services of America, Inc.)

REAFFIRMATION AND AMENDMENT OF GUARANTY AND

REAFFIRMATION OF SECURITY

          In
satisfaction of the condition set forth in the First Amendment to Credit
Agreement between Agent, LC Issuer, the Lenders and Borrowers (the
“Amendment”), the undersigned (“Guarantors”) hereby: (i) consent to the
Amendment and to the transactions contemplated therein, (ii) ratify and
reaffirm their Guaranty dated as of July 30, 2010 (the “Guaranty”), (iii)
acknowledge and agree that Guarantors are not released from their obligations
under the Guaranty by reason of the Amendment, the Amended and Restated Revolving
Loan Note or the transactions contemplated thereby and that the obligations of
Guarantors under the Guaranty extend to the Credit Agreement and the other Loan
Documents, as amended, or as amended and restated, in connection with the
Amendment, and (iv) confirm that the Amendment shall not in any manner (A)
constitute the refinancing, refunding, payment or extinguishment of the
indebtedness evidenced by the existing Loan Documents and secured by their
Security Agreement dated as of July 30,2010 (the “Security Agreement”); (B) be
deemed to evidence a novation of the outstanding balance of the indebtedness
secured by the Security Agreement; or (C) affect, replace, impair, or
extinguish the creation, attachment, perfection or priority of the Liens on the
Loan Collateral granted pursuant to the Security Agreement or any other
Security Document evidencing, governing or creating a Lien on the Loan
Collateral. Guarantors further ratify and reaffirm any and all grants of Liens
to Agent on the Loan Collateral to secure Guarantors’ obligations owing under
the Guaranty, and Guarantors acknowledge and confirm that the grants of the
Liens to Agent on Guarantors’ Loan Collateral: (1) represent continuing Liens
on all such Loan Collateral, (2) secure all of the Guaranteed Obligations (as
defined in the Guaranty), and (3) represent valid, first and best Liens on all
such Loan Collateral, subject to the Permitted Liens. 

          The
undersigned agree that the first sentence of Section 16.9 of the Guaranty is
hereby amended in it~ entirety by substituting the following in its stead: 

	
  

 	
  

 	
  

 
	
  

 	
 The
 maximum aggregate liability of Guarantors under this Guaranty is $48,800,000;
 provided, however, such maximum
 liability shall be $52,985,000 from the First Amendment Effective Date
 through, and including, December 16, 2010. 

 	
  

 

Except
as amended hereby, all of the provisions of the Guaranty are ratified and
confirmed and remain in full force and effect. 

          This
Reaffirmation and Amendment of Guaranty and Reaffirmation of Security shall not
be construed, by implication or otherwise, as imposing any requirement that
Agent notify or seek the consent of Guarantors relative to any past or future
extension of credit, or modification, extension or other action with respect
thereto, in order for any such extension of credit or modification, extension
or other action with respect thereto to be subject to the Guaranty or the
Security Agreement, it being expressly acknowledged and reaffirmed that
Guarantors have under the Guaranty and the Security Agreement consented, among
others things, to modifications, extensions and other actions with respect
thereto without any notice thereof or further consent thereto. All references
in any of the Loan Documents to the Guaranty will be deemed to be references to
the Guaranty as amended by this Reaffirmation and Amendment of Guaranty and
Reaffirmation of Security. This Reaffirmation and Amendment of Guaranty and
Reaffirmation of Security may be signed by facsimile signatures or other
electronic delivery of an image file reflecting the execution hereof, and if so
signed, (i) may be relied on by each party and Fifth Third Bank as if this
Reaffirmation and Amendment of Guaranty and Reaffirmation of Security were a
manually signed original and (ii) will be binding on each party for all
purposes. All capitalized terms used in this Reaffirmation and Amendment of
Guaranty and Reaffirmation of Security and not otherwise defined herein shall
have the meanings ascribed thereto in the Amendment. 

 [Signature Page Follows]

          IN WITNESS WHEREOF, the undersigned have executed this Reaffirmation and Amendment of
Guaranty and Reaffirmation of Security as of the Effective Date. 

	
  

 	
  

 
	
  

 	
 ISA Indiana Real Estate,
 LLC 

 
	
  

 	
 ISA Logistics LLC 

 
	
  

 	
 ISA Real Estate, LLC

 
	
  

 	
 7021 Grade Lane LLC

 
	
  

 	
 7124 Grade Lane LLC

 
	
  

 	
 7200 Grade Lane LLC

 
	
  

 	
 Computerized Waste
 Systems, LLC

 
	
  

 	
 ISA Recycling LLC

 
	
  

 	
 Waste Equipment Sales
 & Service Co., LLC 

 

	
  

 	
  

 
	
  

 	
 By: Industrial Services of
 America, Inc., sole member

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan Schroering 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Alan Schroering, Chief
 Financial Officer

 

Accepted as of the Effective
Date. 

FIFTH THIRD BANK, as Agent

	
  

 	
  

 	
  

 
	
 By:

 	
 /s/ Anne B. Kelly 

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Anne B. Kelly, Vice
 President 

 

ACKNOWLEDGMENT PAGE TO

REAFFIRMATION AND AMENDMENT OF GUARANTY AND REAFFIRMATION OF SECURITY

(Industrial Services of America, Inc.)

(First Amendment to Credit Agreement)

EXECUTION VERSION 

AMENDED AND
RESTATED REVOLVING LOAN NOTE

	
  

 	
  

 
	
 $44,500,000

 	
 July
 30, 2010

 
	
  

 	
 First
 Amendment and Restatement November 15, 2010

 
	
  

 	
 (“Effective
 Date”)

 

For
value received, the undersigned, INDUSTRIAL SERVICES OF AMERICA, INC., a
Florida corporation (“ISA”), ISA INDIANA, INC., an Indiana corporation
(“ISA Indiana”), and each of the other Persons that become a Borrower
under the Credit Agreement after the Closing Date (such Persons, together with
ISA and ISA Indiana, are each a “Borrower” and, collectively, “Borrowers”),
hereby jointly and severally promise to pay to the order of FIFTH THIRD BANK,
an Ohio banking corporation (“Lender”), the principal sum of FORTY-FOUR
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($44,500,000), or such lesser
amount as shall equal the aggregate unpaid and outstanding principal amount of
the Revolving Loans made by Lender to Borrowers under the Credit Agreement
dated as of July 30, 2010, as amended by the First Amendment to Credit
Agreement dated of even date herewith (as the same may be hereafter amended,
supplemented or restated from time to time, the “Credit Agreement”) by
and among Borrowers, the Persons party thereto as “Lenders” (including, without
limitation, Lender), and Fifth Third Bank, as Agent and LC Issuer, in lawful
money of the United States of America and in immediately available funds, on
the dates and in the principal amounts provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such Revolving Loan, in
like money and funds, for the period commencing on the date of this Revolving
Loan Note (this “Note”) until such Indebtedness evidenced by this Note
shall be paid in full, at the rates per annum and on the dates and at the
offices provided in the Credit Agreement. The entire unpaid principal balance
of this ‘Note, together with all accrued but unpaid interest, shall, if not
sooner paid or required to be paid pursuant to the Credit Agreement, be due and
payable on July 31, 2013. 

This
Note is one of the Revolving Loan Notes referred to in the Credit Agreement and
is entitled to the benefits and security, and is subject to the terms and
conditions, of the Credit Agreement, including, without limitation,
acceleration upon the terms provided therein and in the other Loan Documents. All capitalized terms
used herein which are defined in the Credit Agreement and not otherwise defined
herein shall have the meanings given in the Credit Agreement. 

The
Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for voluntary and mandatory
prepayments of Loans upon the terms and conditions specified therein. This Note
is subject to voluntary prepayment, in full or in part, in accordance with, and subject to the
terms of, the Credit Agreement. 

If,
at any time, the rate of interest contracted for, and computed in the manner
provided, in the Credit Agreement (“Applicable Rate”), together with all
fees and charges as provided for in the Credit Agreement or in any other Loan
Document (collectively, the “Charges”), which are treated as interest
under applicable law, exceeds the maximum lawful rate (the “Maximum Rate”)
allowed under applicable law, it is agreed that such contracting for, charging
or receiving of such excess amount was an accidental and bona fide error and
the provisions of this paragraph will govern and control. The rate of interest
payable under the Credit Agreement and this Note, together with all Charges,
shall be limited to the Maximum Rate; provided, however, that any subsequent
reduction in the Daily LIBOR-Based Rate or the LIBOR Tranche-Based Rate (or in
the interest rate equal to

the
Prime Rate plus the Applicable Prime Rate Margin in the event LIBOR Rate Loans
are no longer permitted or available under the Credit Agreement) shall not
reduce the Applicable Rate below the Maximum Rate until the total amount of
interest earned under the Credit Agreement and this Note, together with all Charges,
equals the total amount of interest which would have accrued at the Applicable
Rate if the Applicable Rate had at all times been in effect. If any payment
hereunder, for any reason, results in Borrowers having paid interest in excess
of that permitted by applicable law, then all excess amounts theretofore
collected by Lender shall be credited on the principal balance of the
Obligations (or, if all sums owing hereunder have been paid in full, refunded
to Borrowers), and the amounts thereafter collectible hereunder shall
immediately be deemed reduced, without the necessity of the execution of any
new document, so as to comply with applicable law and permit the recovery of
the fullest amount otherwise called for hereunder. 

Borrowers
hereby agree to pay all costs of collection, including, without limitation,
Attorneys’ Fees, if this Note is not paid when due, whether or not legal
proceedings are commenced. 

All
of the obligations of Borrowers hereunder are joint, several and primary. No
Borrower shall be, or be deemed to be, an accommodation party with respect to
this Note. 

Presentment or other demand
for payment, notice of dishonor and protest are expressly waived. 

This
Note is issued, not as a refinancing or refunding of or payment toward, but as
a continuation of, the Obligations of Borrowers to Lender pursuant to that
certain Revolving Loan Note dated as of July 30, 2010 in the principal amount
of $40,000,000 (the “Prior Note”), together with any and all additional
Revolving Loans incurred under this Note. Accordingly, this Note shall not be
construed as a novation or extinguishment of the Obligations arising under the
Prior Note, and its issuance shall not affect the priority of any Lien granted
in connection with the Prior Note. Interest accrued under the Prior Note prior
to the Effective Date remains accrued and unpaid under this Note and does not
constitute any part of the principal amount of the Indebtedness evidenced
hereby. All Revolving Loans created or existing under, pursuant to, as a result
of, or arising out of, the Prior Note shall, together with any and all
additional Revolving Loans incurred under this Note, continue in existence
under this Note, which Obligations Borrowers acknowledge, reaffirm, and confirm
to Lender. The Indebtedness evidenced by this Note will continue to be secured by all of the collateral and other security granted to
Lender under the Prior Note and the other Loan Documents. 

THIS
NOTE HAS BEEN DELIVERED AND ACCEPTED AT AND SHALL BE DEEMED TO HAVE BEEN MADE
AT CINCINNATI, OHIO. THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF OHIO (WITHOUT REFERENCE TO OHIO CONFLICTS OF LAW PRINCIPLES). 

AS
A SPECIFICALLY BARGAINED INDUCEMENT FOR AGENT AND LENDERS TO ENTER INTO THE
CREDIT AGREEMENT AND EXTEND CREDIT TO BORROWERS, BORROWERS, AGENT AND LENDERS
AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
NOTE, ITS VALIDITY OR PERFORMANCE, AND WITHOUT LIMITATION ON THE ABILITY OF
AGENT OR ANY LENDER, OR ITS RESPECTIVE SUCCESSORS AND ASSIGNS, TO EXERCISE ALL
RIGHTS AS TO THE LOAN COLLATERAL AND TO INITIATE AND PROSECUTE IN ANY
APPLICABLE JURISDICTION ACTIONS RELATED TO REPAYMENT OF THE OBLIGATIONS, SHALL
BE INITIATED AND PROSECUTED AS TO BORROWERS, AGENT AND LENDERS AND THEIR
SUCCESSORS AND ASSIGNS AT CINCINNATI, OHIO. AGENT, LENDERS AND BORROWERS EACH
CONSENT TO AND SUBMIT TO THE EXERCISE OF JURISDICTION OVER THEIR RESPECTIVE
PERSONS BY ANY COURT SITUATED AT CINCINNATI, OHIO HAVING JURISDICTION OVER THE 

SUBJECT
MATTER, AND EACH CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL
DIRECTED TO BORROWERS, AGENT AND LENDERS AT THEIR RESPECTIVE ADDRESSES SET FORTH
IN SECTION 12.2 OF THE CREDIT AGREEMENT OR AS OTHERWISE PROVIDED UNDER
THE LAWS OF THE STATE OF OHIO. EACH BORROWER WAIVES ANY OBJECTION BASED ON FORUM
NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT. 

AS A SPECIFICALLY BARGAINED INDUCEMENT FOR AGENT AND LENDERS
TO ENTER INTO THE CREDIT AGREEMENT AND EXTEND CREDIT TO BORROWERS, BORROWERS,
AGENT AND LENDERS EACH WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION,
CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE OR THE
CONDUCT OF THE RELATIONSHIP AMONG AGENT, LENDERS AND BORROWERS. 

 [Signature Page Follows]

          In
Witness Whereof, Borrowers, intending to be legally bound, have caused this
Note to be executed and delivered by its duly authorized officer as of the day
and year and at the place set forth above. 

	
  

 	
  

 	
  

 
	
  

 	
 INDUSTRIAL SERVICES OF
 AMERICA, INC.

 
	
  

 
	
  

 	
 By:

 	
 /s/ Alan Schroering 

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Alan Schroering, Chief
 Financial Officer

 
	
  

 	
  

 	
  

 
	
  

 	
 ISA INDIANA, INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan Schroering 

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Alan Schroering, Chief Financial
 Officer

 

SIGNATURE PAGE TO

AMENDED AND RESTATED REVOLVING LOAN NOTE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]