Document:

Exhibit 10.1

 

CREDIT AGREEMENT

 

among

 

BUCKEYE ENERGY SERVICES LLC and

FARM & HOME OIL COMPANY LLC,

as Borrowers,

 

and

 

The Several Lenders

from Time-to-time Parties Hereto,

 

and

BNP PARIBAS,

as Administrative Agent and as Collateral Agent

 

and

 

BNP PARIBAS,

as Lead Arranger

 

Dated as of May 20, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
   

  	
  Defined Terms

  	
  1

  
	
   

  	
  1.2

  	
   

  	
  Other Definitional Provisions

  	
  37

  
	
   

  	
  1.3

  	
   

  	
  Rounding

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  AMOUNT
  AND TERMS OF THE LOANS AND COMMITMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
   

  	
  Revolving Credit Loans

  	
  37

  
	
   

  	
  2.2

  	
   

  	
  Daylight Overdraft Loans

  	
  38

  
	
   

  	
  2.3

  	
   

  	
  Swing Line Loans

  	
  38

  
	
   

  	
  2.4

  	
   

  	
  Procedure for Borrowing

  	
  38

  
	
   

  	
  2.5

  	
   

  	
  Refunding of Swing Line Loans

  	
  40

  
	
   

  	
  2.6

  	
   

  	
  Refunding of Daylight Overdraft Loans

  	
  41

  
	
   

  	
  2.7

  	
   

  	
  Commitment Fee

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  LETTERS
  OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
   

  	
  Letters of Credit

  	
  42

  
	
   

  	
  3.2

  	
   

  	
  Procedure for Issuance of Letters of Credit

  	
  43

  
	
   

  	
  3.3

  	
   

  	
  Fees, Commissions and Other Charges

  	
  45

  
	
   

  	
  3.4

  	
   

  	
  L/C Participations

  	
  45

  
	
   

  	
  3.5

  	
   

  	
  Reimbursement Obligations of the Borrowers

  	
  47

  
	
   

  	
  3.6

  	
   

  	
  Obligations Absolute

  	
  47

  
	
   

  	
  3.7

  	
   

  	
  Role of the Issuing Lenders

  	
  48

  
	
   

  	
  3.8

  	
   

  	
  Letter of Credit Request

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  GENERAL
  PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
   

  	
  Increase, Termination or Reduction of Commitments

  	
  49

  
	
   

  	
  4.2

  	
   

  	
  Interest Rates and Payment Dates

  	
  50

  
	
   

  	
  4.3

  	
   

  	
  Conversion and Continuation Options

  	
  51

  
	
   

  	
  4.4

  	
   

  	
  Minimum Amounts of Tranches; Maximum Number of Tranches

  	
  52

  
	
   

  	
  4.5

  	
   

  	
  Repayment of Loans; Evidence of Debt

  	
  52

  
	
   

  	
  4.6

  	
   

  	
  Optional Prepayments

  	
  53

  
	
   

  	
  4.7

  	
   

  	
  Mandatory Prepayments

  	
  53

  
	
   

  	
  4.8

  	
   

  	
  Computation of Interest and Fees

  	
  54

  
	
   

  	
  4.9

  	
   

  	
  Pro Rata Treatment and Payments

  	
  54

  
	
   

  	
  4.10

  	
   

  	
  Requirements of Law

  	
  55

  
	
   

  	
  4.11

  	
   

  	
  Taxes

  	
  56

  
	
   

  	
  4.12

  	
   

  	
  Lending Offices

  	
  60

  
	
   

  	
  4.13

  	
   

  	
  Credit Utilization Reporting

  	
  60

  
	
   

  	
  4.14

  	
   

  	
  Indemnity

  	
  60

  
	
   

  	
  4.15

  	
   

  	
  Inability to Determine Interest Rate

  	
  60

  

 

i

 

	
   

  	
  4.16

  	
   

  	
  Illegality

  	
  61

  
	
   

  	
  4.17

  	
   

  	
  Replacement of Lenders

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
   

  	
  Financial Condition

  	
  62

  
	
   

  	
  5.2

  	
   

  	
  No Change

  	
  63

  
	
   

  	
  5.3

  	
   

  	
  Existence; Compliance with Law

  	
  63

  
	
   

  	
  5.4

  	
   

  	
  Power; Authorization; Enforceable Obligations

  	
  63

  
	
   

  	
  5.5

  	
   

  	
  No Conflicts

  	
  63

  
	
   

  	
  5.6

  	
   

  	
  No Material Litigation

  	
  64

  
	
   

  	
  5.7

  	
   

  	
  No Default

  	
  64

  
	
   

  	
  5.8

  	
   

  	
  Ownership of Property; Liens

  	
  64

  
	
   

  	
  5.9

  	
   

  	
  Intellectual Property

  	
  64

  
	
   

  	
  5.10

  	
   

  	
  No Burdensome Restrictions

  	
  64

  
	
   

  	
  5.11

  	
   

  	
  Taxes

  	
  64

  
	
   

  	
  5.12

  	
   

  	
  Federal Regulations

  	
  65

  
	
   

  	
  5.13

  	
   

  	
  ERISA

  	
  65

  
	
   

  	
  5.14

  	
   

  	
  Investment Company Act; Other Regulations

  	
  66

  
	
   

  	
  5.15

  	
   

  	
  Subsidiaries

  	
  66

  
	
   

  	
  5.16

  	
   

  	
  Security Documents

  	
  66

  
	
   

  	
  5.17

  	
   

  	
  Accuracy and Completeness of Information

  	
  66

  
	
   

  	
  5.18

  	
   

  	
  Labor Relations

  	
  67

  
	
   

  	
  5.19

  	
   

  	
  Insurance

  	
  67

  
	
   

  	
  5.20

  	
   

  	
  Solvency

  	
  67

  
	
   

  	
  5.21

  	
   

  	
  Use of Letters of Credit and Proceeds of Loans

  	
  67

  
	
   

  	
  5.22

  	
   

  	
  Environmental Matters

  	
  68

  
	
   

  	
  5.23

  	
   

  	
  Risk Management Policy

  	
  69

  
	
   

  	
  5.24

  	
   

  	
  AML Laws

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
   

  	
  Conditions Precedent

  	
  70

  
	
   

  	
  6.2

  	
   

  	
  Conditions to Each Credit Extension

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
   

  	
  Financial Statements

  	
  75

  
	
   

  	
  7.2

  	
   

  	
  Certificates; Other Information

  	
  75

  
	
   

  	
  7.3

  	
   

  	
  Payment of Obligations

  	
  76

  
	
   

  	
  7.4

  	
   

  	
  Conduct of Business and Maintenance of Existence

  	
  76

  
	
   

  	
  7.5

  	
   

  	
  Maintenance of Property; Insurance

  	
  77

  
	
   

  	
  7.6

  	
   

  	
  Inspection of Property; Books and Records;
  Discussions

  	
  77

  
	
   

  	
  7.7

  	
   

  	
  Notices

  	
  77

  
	
   

  	
  7.8

  	
   

  	
  Environmental Laws

  	
  78

  
	
   

  	
  7.9

  	
   

  	
  Periodic Audit of Borrowing Base Assets

  	
  78

  
	
   

  	
  7.10

  	
   

  	
  Risk Management Policy

  	
  79

  
	
   

  	
  7.11

  	
   

  	
  Collections on Accounts Receivable

  	
  79

  
	
   

  	
  7.12

  	
   

  	
  Taxes

  	
  79

  
	
   

  	
  7.13

  	
   

  	
  Additional Collateral

  	
  80

  

 

ii

 

	
   

  	
  7.14

  	
   

  	
  Use of Proceeds

  	
  80

  
	
   

  	
  7.15

  	
   

  	
  Cash Management

  	
  80

  
	
   

  	
  7.16

  	
   

  	
  Wind-Up Accounts

  	
  81

  
	
   

  	
  7.17

  	
   

  	
  Legacy Accounts

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
   

  	
  Financial Condition Covenants

  	
  81

  
	
   

  	
  8.2

  	
   

  	
  Limitation on Indebtedness

  	
  81

  
	
   

  	
  8.3

  	
   

  	
  Limitation on Liens

  	
  82

  
	
   

  	
  8.4

  	
   

  	
  Limitation on Fundamental Changes

  	
  83

  
	
   

  	
  8.5

  	
   

  	
  Restricted Payments

  	
  84

  
	
   

  	
  8.6

  	
   

  	
  Limitation on Sale of Assets

  	
  84

  
	
   

  	
  8.7

  	
   

  	
  Limitation on Investments

  	
  84

  
	
   

  	
  8.8

  	
   

  	
  Limitation on Optional Payments and Modifications of
  Subordinated Debt Instruments

  	
  85

  
	
   

  	
  8.9

  	
   

  	
  Limitation on Transactions with Affiliates

  	
  86

  
	
   

  	
  8.10

  	
   

  	
  Accounting Changes

  	
  86

  
	
   

  	
  8.11

  	
   

  	
  Limitation on Negative Pledge Clauses

  	
  86

  
	
   

  	
  8.12

  	
   

  	
  Limitation on Lines of Business

  	
  87

  
	
   

  	
  8.13

  	
   

  	
  Governing Documents

  	
  87

  
	
   

  	
  8.14

  	
   

  	
  Limitation on Modification of Risk Management Policy

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
   

  	
  Events of Default

  	
  87

  
	
   

  	
  9.2

  	
   

  	
  Right to Cure

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
   

  	
  Appointment

  	
  90

  
	
   

  	
  10.2

  	
   

  	
  Delegation of Duties

  	
  90

  
	
   

  	
  10.3

  	
   

  	
  Exculpatory Provisions

  	
  91

  
	
   

  	
  10.4

  	
   

  	
  Reliance by Agents

  	
  91

  
	
   

  	
  10.5

  	
   

  	
  Notice of Default

  	
  91

  
	
   

  	
  10.6

  	
   

  	
  Non-Reliance on Agents and Other Lenders

  	
  91

  
	
   

  	
  10.7

  	
   

  	
  Indemnification

  	
  92

  
	
   

  	
  10.8

  	
   

  	
  Agent in Its Individual Capacity

  	
  92

  
	
   

  	
  10.9

  	
   

  	
  Successor Administrative Agent

  	
  92

  
	
   

  	
  10.10

  	
   

  	
  Collateral Matters

  	
  93

  
	
   

  	
  10.11

  	
   

  	
  The Lead Arranger

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
   

  	
  Amendments and Waivers

  	
  94

  
	
   

  	
  11.2

  	
   

  	
  Notices

  	
  95

  
	
   

  	
  11.3

  	
   

  	
  No Waiver; Cumulative Remedies

  	
  97

  
	
   

  	
  11.4

  	
   

  	
  Survival of Representations and Warranties

  	
  97

  
	
   

  	
  11.5

  	
   

  	
  Release of Collateral and Guarantee Obligations

  	
  97

  

 

iii

 

	
   

  	
  11.6

  	
   

  	
  Payment of Expenses and Taxes

  	
  97

  
	
   

  	
  11.7

  	
   

  	
  Successors and Assigns; Participations and
  Assignments

  	
  98

  
	
   

  	
  11.8

  	
   

  	
  Adjustments; Set-off

  	
  101

  
	
   

  	
  11.9

  	
   

  	
  Counterparts

  	
  102

  
	
   

  	
  11.10

  	
   

  	
  Severability

  	
  102

  
	
   

  	
  11.11

  	
   

  	
  Integration

  	
  102

  
	
   

  	
  11.12

  	
   

  	
  GOVERNING LAW

  	
  102

  
	
   

  	
  11.13

  	
   

  	
  Submission to Jurisdiction

  	
  102

  
	
   

  	
  11.14

  	
   

  	
  Acknowledgements

  	
  103

  
	
   

  	
  11.15

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
  103

  
	
   

  	
  11.16

  	
   

  	
  Confidentiality

  	
  103

  
	
   

  	
  11.17

  	
   

  	
  Specified Laws

  	
  104

  

 

iv

 

	
  SCHEDULES

  
	
   

  
	
   

  	
  Schedule 1.0

  	
  Lenders, Commitments, and Applicable Lending Offices

  
	
   

  	
  Schedule 1.1(A)

  	
  Tier 1 Counterparty Credit Exposure Limits

  
	
   

  	
  Schedule 1.1(B)

  	
  Tier 2 Counterparty Credit Exposure Limits

  
	
   

  	
  Schedule 1.1(C)

  	
  Approved Inventory Locations

  
	
   

  	
  Schedule 1.1(D)

  	
  Wind-Up Accounts

  
	
   

  	
  Schedule 1.1(E)

  	
  Legacy Accounts

  
	
   

  	
  Schedule 2.2(A)

  	
  Wire Instructions for Revolving Credit Loans and
  Swing Line Loans

  
	
   

  	
  Schedule 2.2(B)

  	
  Bank Account for Daylight Overdraft Loans

  
	
   

  	
  Schedule 5.1(d)

  	
  Undisclosed Liabilities

  
	
   

  	
  Schedule 5.1(e)

  	
  Acquisitions

  
	
   

  	
  Schedule 5.4

  	
  Consents and Authorizations

  
	
   

  	
  Schedule 5.9

  	
  Intellectual Property

  
	
   

  	
  Schedule 5.15

  	
  Subsidiaries

  
	
   

  	
  Schedule 5.16

  	
  Filing Jurisdictions

  
	
   

  	
  Schedule 5.19

  	
  Insurance

  
	
   

  	
  Schedule 5.22

  	
  Environmental Matters

  
	
   

  	
  Schedule 6.1(t)

  	
  Existing Indebtedness to be Repaid

  
	
   

  	
  Schedule 8.2

  	
  Existing Indebtedness

  
	
   

  	
  Schedule 8.3

  	
  Existing Liens

  
	
   

  	
  Schedule 8.7

  	
  Investments

  
	
   

  
	
  EXHIBITS

  
	
   

  
	
   

  	
  Exhibit A-1

  	
  Form of Revolving
  Credit Note

  
	
   

  	
  Exhibit A-2

  	
  Form of Daylight Overdraft Note

  
	
   

  	
  Exhibit A-3

  	
  Form of Swing Line Note

  
	
   

  	
  Exhibit B

  	
  Form of Security Agreement

  
	
   

  	
  Exhibit C

  	
  Form of Pledge Agreement

  
	
   

  	
  Exhibit D

  	
  Form of Section 4.11 Certificate

  
	
   

  	
  Exhibit E

  	
  Form of Secretary’s Certificate

  
	
   

  	
  Exhibit F

  	
  Form of Assignment and Acceptance

  
	
   

  	
  Exhibit G

  	
  Form of Borrowing Base Report

  
	
   

  	
  Exhibit H

  	
  Risk Management Policy

  
	
   

  	
  Exhibit I-A

  	
  Form of Opinion of Vinson & Elkins LLP

  
	
   

  	
  Exhibit I-B

  	
  Form of Opinion of Morgan, Lewis &
  Bockius LLP

  
	
   

  	
  Exhibit J

  	
  Form of Hedged Inventory and Position Report

  
	
   

  	
  Exhibit K

  	
  Form of Guarantee

  
	
   

  	
  Exhibit L

  	
  Form of Compliance Certificate

  
	
   

  	
  Exhibit M

  	
  Form of Dividend Compliance Certificate

  
	
   

  	
  Exhibit N

  	
  Form of Increase and New Lender Agreement

  
	
   

  	
  Exhibit O

  	
  Form of Marked-to-Market Report

  
	
   

  	
  Exhibit P

  	
  Form of Perfection Certificate

  
	
   

  	
  Exhibit Q

  	
  Form of
  Subordinated Debt Compliance Certificate

  

 

v

 

	
  ANNEXES

  
	
   

  
	
   

  	
  Annex I-A

  	
  Form of Borrowing
  Notice

  
	
   

  	
  Annex I-B

  	
  Form of Letter of Credit Request

  
	
   

  	
  Annex II

  	
  Form of Continuation/Conversion Notice

  
	
   

  	
  Annex III

  	
  Form of Notice of Prepayment

  
	
   

  	
  Annex IV

  	
  Form of Credit Utilization Summary

  
	
   

  	
  Annex V

  	
  Form of Sub-Limit Election Notice

  

 

vi

 

CREDIT AGREEMENT

 

CREDIT
AGREEMENT, dated as of May 20, 2008, among BUCKEYE ENERGY SERVICES LLC, a
limited liability company organized under the Laws of Delaware (the “BES
Borrower”), FARM & HOME OIL COMPANY LLC, a limited company
organized under the Laws of Pennsylvania (the “Parent Borrower”,  and, together with the BES Borrower, the “Borrowers”),
the several banks and other financial institutions or entities from
time-to-time parties to this Agreement (the “Lenders”) and BNP PARIBAS,
a bank organized under the Laws of the Republic of France (“BNP Paribas”),
as lead arranger, as collateral agent (in such capacity, the “Collateral
Agent”) and as administrative agent (together with any successor
Administrative Agent appointed pursuant to Section 10.9, in such
capacity the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrowers
desire that from time to time the Lenders make advances and issue or
participate in standby and documentary letters of credit; and

 

WHEREAS, the Lenders are
willing to make such advances and issue or participate in such standby and
documentary letters of credit, in each case, on the terms and conditions of
this Agreement;

 

NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the parties agree as
follows:

 

SECTION 1.                                DEFINITIONS

 

1.1                                 Defined Terms. 
As used in this Agreement, the following terms shall have the following
meanings:

 

“364-Day Letters of Credit Sub-Limit”: the
amount set forth under the heading “364-Day Letters of Credit Sub-Limit” in clause
(b)(i) or clause (b)(ii), as applicable, of the definition of “Sub-Limit”
in this Section 1.1.

 

“364-Day Trade Sub-Limit Letter of Credit”:
as defined in Section 3.1(b).

 

“Acceptable Investment Grade Credit
Enhancement”: (i) a letter of credit or (ii) a
guarantee, credit default swap or other customary credit support, in each case,
provided by any Person who is Investment Grade.

 

“Account”: as defined
in Section 9-102 of the New York Uniform Commercial Code.

 

“Account Control Agreements”: with respect to
any Deposit Account, Commodities Account or Securities Account, an account
control agreement in form and substance reasonably acceptable to each Grantor
and the Collateral Agent.

 

“Account Debtor”: a
Person who is obligated to a Loan Party under an Account Receivable or Exchange Receivable of
such Loan Party.

 

“Account Receivable”:
an Account or Payment Intangible of any Loan Party.

 

 

“Acquisition”: the purchase of Farm &
Home Oil Company, the predecessor-in-interest to Parent Borrower, by Buckeye
Energy Holdings LLC, pursuant to the Purchase Agreement, dated as of December 21,
2007, among Buckeye Energy Holdings LLC, Farm & Home Oil Company,
Richard A. Longacre, as seller’s representative, and the shareholders of Farm &
Home Oil Company.

 

“Actual Knowledge”: when applied to any Loan
Party, the actual knowledge of a Responsible Person of such Loan Party; “Actually
Known” or other similar terms shall have correlative meanings.

 

“Administrative Agent”:
as defined in the introductory paragraph of this Agreement.

 

“Affiliate”: as to
any Person, any other Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of
a Person (including, with its correlative meanings, “controlled by” and “under
common control with”) means the power, directly or indirectly, either to (a) vote
(i) when used with reference to any Loan Party, more than 30% of the
securities having ordinary voting power for the election of directors of such
Person, and shall be applicable solely with respect to Buckeye Partners, L.P.
and its Subsidiaries, and (ii) when used with reference to any Agent or
Lender, 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.

 

“Agent-Related Person”:
as defined in Section 10.3.

 

“Agents”: the Administrative Agent and the
Collateral Agent, and “Agent” means each of them, as the context requires.

 

 “Aggregate
Eligible In the Money Forward Contracts Amount”: the
aggregate Marked-to-Market Value of all Eligible Forward Contracts of a Loan Party (on
a counterparty by counterparty basis) with a positive value, minus (on a counterparty
by counterparty basis), without duplication, the sum of (i) margin
consisting of cash and Cash Equivalents held by such Loan Party from any Forward Contract Counterparties
thereof plus (ii) any claim of offset or other counterclaim
Actually Known to such Loan Party to have been asserted in respect of such Eligible
Forward Contract by the Forward Contract Counterparty of such Eligible Forward
Contract, which are reasonably expected to be deducted from payment.

 

“Aggregate Eligible Out of the Money Forward
Contracts Amount”: the aggregate Marked-to-Market
Value of all Eligible Forward Contracts of a Loan Party (on a counterparty by
counterparty basis) with a negative value, plus, without duplication,
margin for those Eligible Forward Contracts consisting of cash and Cash
Equivalents posted by such Loan Party
with any Forward Contract Counterparties thereof.

 

“Agreement”: this
Credit Agreement.

 

“AML Laws”:  as defined in Section 5.24.

 

“Applicable Financial Statements”: the most
recent monthly financial statements delivered by the Borrowers to the
Administrative Agent pursuant to Section 7.1 (the most recent
financial statements so delivered, the “Monthly Financials”); provided
that, the Borrowers may, in their sole discretion, elect to deliver to the
Administrative Agent updated financial statements, dated after the date of the
Monthly Financials, in form similar to the Monthly Financials (the “Updated
Financials”), which 

 

2

 

such Updated
Financials shall be the Applicable Financial Statements until the delivery of
the next Monthly Financials.

 

“Applicable Lending Office”:
for each Lender and for each Type of Loan, and/or participation in any
Reimbursement Obligation, the lending office of such Lender designated on Schedule
1.0 (or, as the case may be, in the Assignment and Acceptance pursuant to
which such Lender became a party hereto) for such Type of Loan and/or
participation in any Reimbursement Obligation (or any other lending office from
time-to-time notified to the Administrative Agent by such Lender) as the office
at which its Loans and/or participation in any Reimbursement Obligation of such
Type are to be made and maintained.

 

“Applicable Margin”:
on any date with respect to (a) Eurodollar Loans, a rate per annum equal
to 1.375%, (b) Cost of Funds Loans, a rate per annum equal to 1.375% and (c) Base
Rate Loans, a rate per annum equal to 0.00%.

 

“Approved Fund”: (a) with
respect to any Lender, any Bank CLO of such Lender, and (b) with respect
to any Lender that is a fund that invests in commercial loans and similar
extensions of credit, any other fund that invests in commercial 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.

 

“Approved Inventory
Location”: any pipeline, third-party carrier or storage facility that (i) has
acknowledged the Collateral Agent’s Perfected First Lien on the inventory owned
by any Loan Party located in or at such pipeline, third party carrier or
storage facility pursuant to an acknowledgement substantially in the form of
Annex 2 to the Security Agreement, or pursuant to another waiver or
acknowledgment having substantially the same effect, (ii) is owned by the
same Person as is described in clause (iii) hereof, or (iii) has been
notified of, and has been requested to acknowledge, the Perfected First Lien on
the inventory owned by any Loan Party located in or at such pipeline,
third-party carrier or storage facility, substantially in the form of Annex 2
to the Security Agreement, and, in the case of clause (iii), which has (A) been
approved as of the Closing Date and set forth on Schedule 1.1(C) as
an Approved Inventory Location or (B) been approved by the Administrative
Agent, in its sole discretion, from time to time after the Closing Date.  Schedule 1.1(C) shall be deemed
amended to include such Approved Inventory Locations without further action
immediately upon the Administrative Agent’s approval.

 

“Assignee”: as
defined in Section 11.7(c).

 

“Assignment and Acceptance”:
as defined in Section 11.7(c).

 

“Assignment of Claims Act”: the Federal
Assignment of Claims Act of 1940 (31 U.S.C. §3727 et seq.) and any similar
state or local laws, together with all rules, regulations or interpretations
related thereto.

 

“Availability”: at
any time, an amount equal to the least of (A) the Total Borrowing Base at
such time minus the Total Extensions of Credit at such time, (B) the
Total Commitment minus the Total Extensions of Credit at such time and (C) the
Maximum Amount minus the Total Extensions of Credit at such time.

 

“Availability Certification”: as defined in Section 6.2(e).

 

3

 

“Available Commitment”:
as to any Lender at any time, an amount equal to the excess, if any, of (i) the
amount of such Lender’s Commitment at such time over (ii) such Lender’s
Extensions of Credit outstanding at such time.

 

“Bank CLO”: as to any
Lender, any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by such Lender or an Affiliate of such
Lender.

 

“Barrel”: forty-two U.S. gallons.

 

“Base Rate”: for any
day, the rate per annum (rounded upward, if necessary, to the next 1/16 of 1%)
equal to the greater of (a) the Federal Funds Effective Rate in effect on
such day plus 1⁄2 of 1% and (b) the Prime Rate in effect on such day.

 

“Base Rate Loans”:
Loans whose rate of interest is based upon a Base Rate.

 

“Benefited Lender”:
as defined in Section 11.8(a).

 

“BES Borrower”: as defined in the introductory
paragraph of this Agreement.

 

“BNP Paribas”: as defined in the introductory
paragraph of this Agreement.

 

“Board”: the U.S.
Board of Governors of the Federal Reserve System of the United States (or any
successor).

 

“Borrowers”: as
defined in the introductory paragraph of this Agreement.

 

“Borrowing Base”:  on any date, solely with respect to the
assets of any Loan Party:

 

	
   

  	
  (i)

  	
   

  	
  100% of Eligible Cash and Cash Equivalents; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  95% of Eligible L/C Backed Accounts Receivable; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
   

  	
  90% of Eligible Tier 1 Accounts Receivable; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
   

  	
  85% of Eligible Tier 2 Accounts Receivable; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
   

  	
  90% of Eligible Net Liquidity in Brokerage Accounts;
  plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
   

  	
  90% of Eligible L/C Backed Unbilled Accounts
  Receivable; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
   

  	
  85% of Eligible Unbilled Tier 1 Accounts Receivable;
  plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
   

  	
  80% of Eligible Unbilled Tier 2 Accounts Receivable;
  plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ix)

  	
   

  	
  85% of Eligible Hedged Inventory; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
   

  	
  80% of Eligible Unhedged Inventory; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xi)

  	
   

  	
  80% of Eligible Letters of Credit Issued for
  Commodities Not Yet Received; plus

  

 

4

 

	
   

  	
  (xii)

  	
   

  	
  80% of Eligible Exchange Receivables; plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xiii)

  	
   

  	
  70% of Eligible Short Term Unrealized Forward Gains;
  plus

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xiv)

  	
   

  	
  50% of Eligible Medium Term Unrealized Forward
  Gains; less

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xv)

  	
   

  	
  120% of the Swap Amounts due to Qualified
  Counterparties; less

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xvi)

  	
   

  	
  100% of the First Purchaser Lien Amount; less

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (xvii)

  	
   

  	
  100% of tax liabilities, including the Excise Taxes.

  

 

Any
amounts described in categories (i) through (xvii) above which may fall
into more than one of such categories shall be counted only once under the
category with the highest applicable advance rate percentage, when making the
calculation under this definition.  In
calculating the Total Borrowing Base for the Loan Parties, the following
adjustments shall be made:

 

(A)                              the aggregate value of those portions of
the Borrowing Base of the Loan Parties described in clauses (iv), (viii),
(xiii) and (xiv) related to Restricted Tier 2 Counterparties in excess of 25%
of the Total Borrowing Base then in effect shall be excluded from the Borrowing
Base;

 

(B)                                the aggregate exposure of the Loan Parties under Eligible Accounts Receivable
(including Eligible Unbilled Accounts Receivable), Eligible Exchange
Receivables or Eligible Forward Contracts to any type of counterparty or any
specific counterparty, if applicable, thereunder in excess of the applicable
amount approved under the exposure limit guidelines for the Loan Parties set
forth in the Risk Management Policy shall be excluded from the Borrowing Base;

 

(C)                                the aggregate credit exposure of the Loan
Parties to each Tier 1 Counterparty in excess of the applicable limits set
forth in Schedule 1.1(A) for such counterparty, if any, shall be
excluded from the Borrowing Base;

 

(D)                               the aggregate credit exposure of the Loan Parties to each Tier 2 Counterparty in excess of
the applicable limits equal to the greater of (x) the limits set forth in Schedule
1.1(B) for such counterparty, if any or (y) $400,000 shall be
excluded from the Borrowing Base;

 

(E)                                 the aggregate Borrowing Base of the Loan
Parties attributable to the Eligible Short Term Unrealized Forward Gain and the
Eligible Medium Term Unrealized Forward Gain in excess of 20% of the Total
Borrowing Base then in effect shall be excluded from the Borrowing Base;

 

(F)                                 each category of the Borrowing Base shall
be calculated taking into account (without duplication) any applicable
eliminations and reductions related to any asserted offset, Actually Known to
the relevant Loan Party, to such asset category that the relevant Loan Party
believes, in good faith is reasonably likely to occur;

 

(G)                                the aggregate exposure of the Loan Parties under Eligible Inventory related to
biofuels (excluding ethanol) in excess of 15% of the 

 

5

 

aggregate value of Eligible Inventory included in the
Total Borrowing Base then in effect shall be excluded from the Borrowing Base;
and

 

(H)                               the value of the Total Borrowing Base at
any time shall be the aggregate value of the Borrowing Base for the Loan
Parties as of the applicable Borrowing Base Date.

 

“Borrowing Base Date”: with respect to the Loan
Parties at any time, the most recent date as of which the Loan Parties have
based a Borrowing Base Report to be delivered by the Loan Parties pursuant to Section 7.2(c).

 

“Borrowing Base Report”:
a report certified by a Responsible Person of each Loan Party, substantially in
the form of Exhibit G, with appropriate insertions and schedules,
showing the Total Borrowing Base of the Loan Parties, as of the date set forth
therein and the basis on which it was calculated, together with the following
supporting information:

 

(i)                                     for Eligible Cash and Cash Equivalents
and Eligible Net Liquidity in Brokerage Accounts, copies of summary account
statements, to the extent available, issued by the bank, brokerage and futures
accounts where such assets are held, as of the applicable Borrowing Base Date,
and for Eligible Net Liquidity in Brokerage Accounts, additional statements for
each commodities futures account that account for any (x) discounted face
value of any U.S. Treasury Securities held in such account that are zero coupon
securities issued by the United States of America and (y) unearned
interest on such U.S. Treasury Securities;

 

(ii)                                  a schedule of each Eligible L/C Backed
Account Receivable and each Eligible L/C Backed Unbilled Account Receivable,
listing the amount and counterparty under the related Account Receivable and
the issuing bank, the applicant, the expiration date, the  terms
of the auto-renewal provision, if any, and the face value of the related letter
of credit (or, if applicable, the maximum value of the related letter of credit
after giving effect to any tolerance included therein, and the amount of such
tolerance);

 

(iii)                               a schedule of each Eligible Tier 1
Accounts Receivable, Eligible Tier 2 Accounts Receivable, Eligible Unbilled
Tier 1 Accounts Receivable, Eligible Unbilled Tier 2 Accounts Receivable, Eligible
Short Term Unrealized Forward Gains and Eligible Medium Term Unrealized Forward
Gains, in each case listing the amount, the counterparty, the time outstanding,
if applicable, the contra account balance thereof and, if applicable, all
margin monies received and/or paid and the details of any related letters of
credit;

 

(iv)                              for Eligible Inventory, (A) a
schedule of (1) inventory locations and (2) Market Value and
inventory volumes by location and type of Eligible Commodity, net of exchange
payable offset, as well as a balancing reconciliation and copies of all
documents, agreements, and receipts underlying the information delivered
pursuant to this clause (iv); provided that, the Loan Parties
shall have ten (10) Business Days at the end of each calendar month to
deliver such balancing reconciliation, copies and receipts described above to
the Administrative Agent and (B) a listing of all new inventory storage
locations where Eligible Inventory has been located since the date of the most
recent Borrowing Base Report;

 

6

 

(v)                                 a schedule of Eligible Exchange
Receivables, which shall present the net amount of Eligible Exchange
Receivables for each counterparty, together with the contra account balance
thereof;

 

(vi)                              for Eligible Letters of Credit Issued for
Commodities Not Yet Received, (i) a calculation demonstrating in
reasonable detail the aggregate available and undrawn amount of each such
letter of credit minus the amount of any other liabilities then existing
which may be satisfied by such Letters of Credit, and (ii) a schedule
listing each letter of credit giving rise to Eligible Letters of Credit Issued
for Commodities Not Yet Received, together with the name of the applicant, the
expiration date of the related letter of credit, and the face value thereof
(or, if applicable, the maximum value of such letter of credit after giving
effect to any tolerance included therein, and the amount of such tolerance);

 

(vii)                           a schedule of the First Purchaser Lien
Amount, setting forth the holder of each First Purchaser Lien and the aggregate
First Purchaser Lien Amount of such holder;

 

(viii)                        a schedule showing the Excise Tax
liability report for the Loan Parties;

 

(ix)                                a schedule of each Commodity Hedging
Agreement listed by counterparty, together with the Marked-to-Market Value of
such Commodity Hedging Agreements;

 

(x)                                   a schedule of each Financial Hedging
Agreement listed by counterparty, together with the Marked-to-Market Value of
each Financial Hedging Agreement; and

 

(xi)                                a summary report showing the total amount
outstanding under each type of Extension of Credit.

 

“Borrowing Date”: any
Business Day specified (i) in a Borrowing Notice as a date on which a Loan
requested by any Borrower is to be made or (ii) in a Letter of Credit
Request as a date on which a Letter of Credit requested by any Borrower is to
be issued or renewed.

 

“Borrowing Notice”: as defined in Section 2.4(a).

 

“Brokerage Account Deducts”: as defined in the
definition of “Eligible Net Liquidity in Brokerage Accounts” in this Section 1.1.

 

“Business”: as
defined in Section 5.22(b).

 

“Business Day”: (i) for
all purposes other than as covered by clause (ii) of this definition, a
day other than a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close, and, (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day as
described in clause (i) of this definition and which is also a day on
which dealings in United States Dollar deposits are carried out in the
interbank market.

 

“Capital Stock”: any
and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, all membership interests in a
limited liability company, all partnership interests in a limited partnership,
or any and all similar ownership interests in a Person (other 

 

7

 

than a corporation,
limited liability company or limited partnership) and any and all warrants,
rights or options to purchase any of the foregoing.

 

“Cash Collateral”:
with respect to any Letter of Credit, cash or deposit account balances
denominated in United States Dollars that has been pledged to the Collateral
Agent for the ratable benefit of the Secured Parties to secure repayment of
such Letters of Credit.

 

“Cash Collateralize”:
to deposit in a Controlled Account or to pledge and deposit with or deliver to
the Collateral Agent, for the ratable benefit of the Secured Parties, Cash
Collateral as collateral for the Obligations pursuant to documentation
reasonably satisfactory to the Collateral Agent.

 

“Cash Equivalents”: (a) securities
with maturities of twelve (12) months or less from the date of acquisition or
acceptance which are issued or fully guaranteed or insured by the United
States, or any agency or instrumentality thereof, (b) bankers’
acceptances, certificates of deposit and eurodollar time deposits with maturities
of twelve (12) months or less from the date of acquisition and overnight bank
deposits, in each case, of any Lender or of any international or national
commercial bank with commercial paper rated, on the day of such purchase, at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof
by Moody’s, (c) commercial paper, variable rate or auction rate
securities, or any other short-term, liquid investment having ratings, on the
date of purchase, of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody’s and that matures or resets not
more than twelve (12) months after the date of acquisition, (d) obligations
of any U.S. state or a division, public instrumentality or taxing authority
thereof, having on the date of purchase a rating of at least AAA or the
equivalent thereof by S&P or at least Aaa or the equivalent thereof by
Moody’s, (e) fully collateralized repurchase agreements with a term of not
greater than seven (7) days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria described
in clause (b) above, and (f) investments in money market funds,
mutual funds or other pooled investment vehicles a majority of whose assets of
which are comprised of securities of the types described in clauses (a), (b),
(c), (d) or (e) above or that is otherwise reasonably acceptable to
the Administrative Agent.

 

“Cash Management Bank”: BNP Paribas or any
other bank from time-to-time designated by the Borrowers as the bank at which
any Loan Party
maintains any Deposit Account, Commodities Account or Securities Account and
which is reasonably acceptable to the Administrative Agent.

 

“Change of Control”: the occurrence of any of
the following events: (a) Buckeye Partners, L.P. shall cease to own and
control, of record and beneficially, directly or indirectly, a majority of each
class of outstanding voting Capital Stock of each Borrower or (b) each
Borrower shall cease to own and control, of record and beneficially, directly
or indirectly, 100% of each class of outstanding Capital Stock of each of its
Subsidiaries free and clear of all Liens; provided that, this clause (b) shall
not prohibit a Borrower from selling, transferring, merging, consolidating,
amalgamating, liquidating, winding up or dissolving any Subsidiary to the
extent not otherwise prohibited by this Agreement.

 

“Chapter 11 Debtor”:  as defined in the definition of “Eligible
Account Receivable” in this Section 1.1.

 

“Closing Date”: the
date on which the conditions precedent set forth in Section 6.1
shall be satisfied or waived.

 

“Code”: the Internal
Revenue Code of 1986.

 

“Collateral”: all
property and interests in property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.

 

8

 

“Collateral Agent”: as defined in the
introductory paragraph of this Agreement.

 

 “Commitment”:
at any date, as to any Lender, the obligation of such Lender to make Revolving
Credit Loans to the Borrowers pursuant to Section 2.1 and to
participate in Swing Line Loans, Daylight Overdraft Loans and Letters of Credit
in an aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such Lender’s name on Schedule 1.0
under the caption “Commitment” or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender becomes a party hereto, as such amount
may be changed from time-to-time in accordance with the terms of this
Agreement.  As of the Closing Date, the
original aggregate amount of the Commitments is $150,000,000.

 

“Commitment Fee Rate”: for any day, the rate
per annum equal to 0.375%.

 

“Commitment Percentage”: as to any Lender at
any time, the percentage which such Lender’s Commitment then constitutes of the
Total Commitment (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of Revolving
Credit Loans made by such Lender plus the amount of the undivided
interest of such Lender in any then-outstanding Letters of Credit issued, and
Swing Line Loans and Daylight Overdraft Loans made, at that time constitutes of
the Total Extensions of Credit at such time).

 

“Commitment Period”:
the period from and including the date hereof to but not including the
Termination Date or such earlier date on which the Commitments shall terminate
as provided herein.

 

“Commodity Account”: as defined in Section 9-102
of the New York Uniform Commercial Code.

 

“Commodity Contract”:
(a) any Physical Commodity Contract or (b) any Commodity Hedging
Agreement.

 

“Commodity Hedging Agreement”:
(i) any forward commodity contracts, swaps, options, collars, caps, or
floor transactions, in each case based on Eligible Commodities and (ii) any
other similar transaction (including any option to enter into any of the
foregoing) or any combination of the foregoing.

 

“Commonly Controlled Entity”: an entity,
whether or not incorporated, which is under common control with the Borrowers
within the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrowers and which is treated as a single employer under Section 414(b) or
(c) of the Code or, for purposes of the Code, Section 414(m) or (o) of
the Code.

 

“Compliance Certificate”: as defined in Section 7.2(a).

 

“Conduit Lender”: any
special purpose corporation organized and administered by any Lender (or an
Affiliate of such Lender) for the purpose of making Loans required to be made
by such Lender or of funding such Lender’s participation in any unpaid
Reimbursement Obligation and designated as its Conduit Lender by such Lender in
a written instrument; provided, that the designation by any Lender of a
Conduit Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan or a participation in any unpaid Reimbursement
Obligation under this Agreement if, for any reason, its Conduit Lender fails to
fund any such Loan or participation in any unpaid Reimbursement Obligation, and
the designating Lender (and not the Conduit Lender) shall have the sole right
and responsibility to deliver all consents and waivers required or requested
under this Agreement with respect to its Conduit Lender; provided,  further, that no
Conduit Lender shall (a) be entitled to receive any greater amount
pursuant to Section 4.10, 4.11, 4.16 or 11.6
than the designating Lender would have been entitled to 

 

9

 

receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed
to have any commitment hereunder.

 

“Confidential Information”:
as defined in Section 11.16.

 

“Consolidated Current Assets”:
as of any date of determination, all assets of the Parent Borrower and its
Subsidiaries that, in accordance with GAAP, would be classified as current
assets on a consolidated balance sheet of the Parent Borrower and its
Subsidiaries.

 

“Consolidated Current Liabilities”:
as of any date of determination, all liabilities of the Parent Borrower and its
Subsidiaries that, in accordance with GAAP, would be classified as current
liabilities on a consolidated balance sheet of the Parent Borrower and its
Subsidiaries; provided that, all Loans outstanding hereunder from
time-to-time shall be deemed to be Consolidated Current Liabilities.

 

“Consolidated Leverage Ratio”:
as of any date of determination, the ratio (expressed as a decimal) of (a) Consolidated
Total Liabilities as of such date (minus any Subordinated Indebtedness
up to, but not to exceed, 50.00% of the Consolidated Total Liabilities as of
such date) to (b) Consolidated Tangible Net Worth as of such date.

 

“Consolidated Net Working Capital”:
as of any date of determination, (a) (i) Consolidated Current Assets
as of such date plus (ii) the aggregate outstanding principal
amount of Subordinated Indebtedness included in Consolidated Current
Liabilities as of such date (not to exceed an amount equal to 50.00% of
Consolidated Current Liabilities as of such date) minus (b) Consolidated
Current Liabilities as of such date; provided that, an
aggregate amount not exceeding $5,000,000 that is included in Consolidated
Current Assets due from Affiliates (who are not Loan Parties) shall be included
in the calculation of Consolidated Net Working Capital but only to the extent
that such amounts due from Affiliates (who are not Loan Parties) arise under
transactions that (A) include terms no less favorable in a material
respect to the applicable Borrower than would be obtainable in comparable arm’s-
length transactions with a Person that is not an Affiliate of such Borrower and
(B) are for goods or services in the ordinary course of business.

 

“Consolidated Tangible Net Worth”: as of any
date of determination, (a) the shareholders’, members’ or partners’ equity
as shown on the balance sheet of the Parent Borrower and its Subsidiaries in
accordance with GAAP as of such date (including investments in joint ventures) plus
(b) the aggregate outstanding principal amount of Subordinated
Indebtedness as of such date (not to exceed an amount equal to 50.00% of
Consolidated Tangible Net Worth as of such date), minus all
goodwill and intangible assets of the Parent Borrower and its Subsidiaries,
determined, in each of the clauses (a) and (b) above, on a
consolidated basis in accordance with GAAP; provided that, an aggregate
amount not exceeding $5,000,000 that is included in the shareholders’, members’
or partners’ equity as shown on the balance sheet of the Parent Borrower and
its Subsidiaries due from Affiliates (who are not Loan Parties) shall be
included in the calculation of Consolidated Tangible Net Worth but only to the
extent, that such amounts due from Affiliates (who are not Loan Parties) arise
under transactions that (A) include terms no less favorable in a material
respect to the Borrowers than would be obtainable in comparable arm’s length
transactions with a Person that is not an Affiliate of the Borrowers or (B) are
not for goods or services in the ordinary course of business.

 

“Consolidated Total Liabilities”:
as of any date of determination, all liabilities of the Parent Borrower and its
Subsidiaries that, in accordance with GAAP, would be included in determining
total liabilities on a consolidated balance sheet of the Parent Borrower and
its Subsidiaries as of such date, excluding Indebtedness permitted under Section 8.2(g) incurred
with respect to (i) fuel tax liabilities of 

 

10

 

the Loan Parties
and (ii) obligations of the Loan Parties under product purchase and/or supply
agreements.

 

“Continuation/Conversion Notice”: as defined in
Section 4.3(a).

 

“Continue”, “Continuation”
and “Continued”: the continuation of a Eurodollar
Loan or Cost of Funds Loan, as applicable, from one Interest Period to the next
Interest Period.

 

“Contractual Obligation”:
as to any Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.

 

“Controlled Account”: each Pledged Account that
is subject to an Account Control Agreement.

 

“Convert”, “Conversion”
and “Converted”: a conversion of Base Rate Loans
into Eurodollar Loans or Cost of Funds Loans, a conversion of Eurodollar Loans
into Base Rate Loans or Cost of Funds Loans, or a conversion of Cost of Funds
Loans into Eurodollar Loans or Base Rate Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one Applicable
Lending Office to another.

 

 “Cost
of Funds”: the rate quoted by the Administrative Agent
in New York, New York to a Borrower at or about the time of the making of any
Loan as the cost of funds of the Administrative Agent (as determined by the
Administrative Agent in the Administrative Agent’s sole discretion) for the
relevant Interest Period then applicable to such Loan.

 

“Cost of Funds Loan”:
Loans the rate of interest of which is based upon the Cost of Funds.

 

“Credit Utilization Summary”:
as defined in Section 4.13.

 

“Cure Deadline”: with respect to any calendar
month, the third Business Day following the earlier of (i) the date that
is 30 days following the end of the such calendar month and (ii) the date
on which financial statements required to be delivered pursuant to Section 7.1(b) with
respect to such calendar month have been delivered.

 

“Daylight Overdraft Lender”:
BNP Paribas.

 

“Daylight Overdraft Loan”:  as defined in Section 2.2(a).

 

“Daylight Overdraft Loan Sub-Limit”:
the amount set forth under the heading “Daylight Overdraft Loan Sub-Limit” in clause
(b)(i) or clause (b)(ii), as applicable, of the definition of “Sub-Limit”
in this Section 1.1.

 

“Daylight Overdraft Participation Amount”:
as defined in Section 2.6(b).

 

“Default”: any of the
events specified in Section 9.1, whether or not any requirement for
the giving of notice, the lapse of time, or both, or any other condition, has
been satisfied.

 

11

 

“Delta”: in relation to an option referencing
an Eligible Commodity, the change in the option premium under such option for a
one unit change in the price of the underlying Eligible Commodity.

 

“Delta Equivalent Basis”: the method of
calculating the quantity of cash (or futures) position in Eligible Commodities
that will theoretically hedge an option position against an adverse change in
the price of any underlying Eligible Commodities by multiplying the Delta of
the option by the relevant contract size or nominal amount.

 

“Deposit Account”: as defined in Section 9-102
of the New York Uniform Commercial Code.

 

“Disclosing Party”:
as defined in Section 11.16(b).

 

“Disposition”:  with respect to any Property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms “Dispose” and “Disposed of” shall have
correlative meanings.

 

“Dividend
Compliance Certificate”: as defined in Section 8.5.

 

“Eligible Account Receivable”: as of any
Borrowing Base Date, an Account Receivable valued at the then-outstanding
unpaid balance thereof as of such date as to which the following requirements
have been fulfilled:

 

(a)           such Account Receivable arises from
the conduct of the Loan Parties’ energy-related businesses (other than power)
in conformity with Section 8.12;

 

(b)           the relevant Loan Party has lawful and absolute title to such
Account Receivable subject only to Permitted Borrowing Base Liens or Liens in
favor of the Collateral Agent for the benefit of the Secured Parties under the
Loan Documents; provided that, the aggregate amount of all Eligible
Accounts Receivable, if any, included in the Borrowing Base that are subject to
the Permitted Borrowing Base Liens shall be reduced by the aggregate amount
secured by such Permitted Borrowing Base Lien (except that amounts secured by (i) inchoate
Liens securing amounts not yet delinquent or with respect to which enforcement
proceedings are yet permitted by law or contract to be initiated, (ii) Liens
being contested in good faith, by appropriate proceedings, and with respect to
which adequate collateral reasonably satisfactory to the Administrative Agent
has been provided and (iii) Liens permitted by Section 8.3(i) in
excess of the offset rights granted by the applicable Loan Party, shall not be
subtracted from Eligible Accounts Receivable);

 

(c)           such Account Receivable is a valid,
legally enforceable obligation of the party who is obligated under such Account
Receivable;

 

(d)           the aggregate amount of all Accounts
Receivable included as Eligible Accounts Receivable due from a particular
Account Debtor shall be reduced by the amount that is, or which any relevant Loan Party has a reasonable basis to believe may
be, subject to any dispute, offset, counterclaim or other claim or defense on
the part of such Account Debtor (including (i) the amount, if any, by
which the portion of the Aggregate Eligible Out of the Money Forward Contracts
Amount specific to such Account Debtor exceeds the portion of the Aggregate
Eligible In the Money Forward Contracts Amount specific to such Account Debtor,
and (ii) without duplication, any trade payables, accrued liabilities, net
exchange payables and offsets specific to 

 

12

 

such Account Debtor, including marked to market
losses) or to any claim on the part of the Account Debtor denying payment
liability under such Account Receivable; provided, however, that
in the event that the amount that is subject to any such dispute, offset,
counterclaim or other claim or defense is secured with cash or Cash Equivalent
margin or Acceptable Investment Grade Credit Enhancement, such portion secured
by such margin or Acceptable Investment Grade Credit Enhancement will not be
excluded from eligibility so long as the applicable Loan Party determines it is has a reasonable
likelihood of success in such dispute, counterclaim or other claim or defense;

 

(e)           such Account Receivable is not
evidenced by any chattel paper, promissory note or other  instrument unless such chattel paper,
promissory note or other  instrument is
subject to a Perfected First Lien and delivered to the Collateral Agent for the
benefit of the Secured Parties;

 

(f)            such Account Receivable is subject
to a Perfected First Lien, and such Account Receivable is not subject to any
Liens other than Perfected First Liens or Permitted Borrowing Base Liens;

 

(g)           such Account Receivable has been
invoiced (if the issuance of such an invoice is a condition precedent to the
Account Debtor’s obligation to pay) or payment of the Account Receivable is
otherwise due and payable; provided that, such Account Receivable shall
qualify as an Eligible Account Receivable only if such Account Receivable is
not more than thirty (30) days past due; provided further, that, an “Eligible
Account Receivable” shall include any Account Receivable for which an extension
of three (3) days or less has been granted by such Loan Party if such Account Receivable has been paid
during the period of such extension; provided  further, that, an
Account Receivable for which the issuance of an invoice is a condition
precedent to the Account Debtor’s obligation to pay, but for which an invoice
was not issued on or before the applicable Borrowing Base Date, shall be an
Eligible Account Receivable if the applicable Loan Party provides evidence reasonably
satisfactory to the Administrative Agent that such invoice has been issued
before the delivery of the related Borrowing Base Report;

 

(h)           such Account Receivable complies with
all applicable Laws and regulations to which the relevant Loan Party is subject;

 

(i)            such Account Receivable is reduced
by any prepayment or, without duplication, cash margin deposit;

 

(j)            if the Account Debtor of such
Account Receivable is a debtor under Chapter 11 of the United States Bankruptcy
Code (a “Chapter 11 Debtor”), then such Account Receivable arose after
the commencement of the bankruptcy case (the “Petition Date”) of such
Account Debtor or has been assumed by such Account Debtor;

 

(k)           at the time of the sale giving rise
to such Account Receivable, the Account Debtor is not in contractual default on
any other obligations to a Loan Party (other than any amounts subject to a good faith
dispute under the applicable contract and any Account Debtor that is a Chapter
11 Debtor solely with respect to contractual defaults that occurred prior to
the Petition Date of such Account Debtor) and such Loan Party has no other reason to anticipate that
any such prior Indebtedness or newly arising Indebtedness of such Account
Debtor will not be paid when due;

 

(l)            the Account Debtor obligated on such
Account Receivable (i) has not admitted in writing its inability to pay
its debts generally or made a general assignment for the benefit of its 

 

13

 

creditors, (ii) has not instituted or had
instituted against it a proceeding seeking to adjudicate it a debtor, bankrupt
or insolvent or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official of it or for any substantial part of its
property, and (iii) has not taken any corporate action to authorize any of
the foregoing;

 

(m)          the Account Debtor of such Account
Receivable shall not be a Governmental Authority unless all actions required
under any Assignment of Claims Act applicable to such Account Receivable and
such Governmental Authority shall have been taken to approve and permit the
assignment of rights to payment thereunder or thereon to the Collateral Agent,
for the ratable benefit of the Secured Parties, under the Security Documents;

 

(n)           if the Account Debtor of such Account
Receivable is incorporated in, or primarily conducting business in, any
jurisdiction outside of the United States, such Account Debtor is approved or
deemed approved, in accordance with requirements and procedures set forth in
the definitions of “Tier 1 Counterparty” and “Tier 2 Counterparty”, as
applicable, in this Section 1.1; and

 

(o)           such Account Receivable is not
otherwise determined, in the sole discretion of the Supermajority Lenders, to
be ineligible.

 

“Eligible Broker”:  as defined in the definition of “Eligible Net
Liquidity in Brokerage Accounts” in this Section 1.1.

 

“Eligible Cash and Cash Equivalents”:  as of any Borrowing Base Date, currency
consisting of United States Dollars or Cash Equivalents, in each case, which (i) have
been deposited in a Controlled Account with a Cash Management Bank, (ii) is
subject to a Perfected First Lien, and (iii) is subject to no other Liens
other than Permitted Cash Management Liens.

 

“Eligible Commodities”: natural gas, natural
gas liquids, transmix, ethanol, biofuels, 
crude oil, refined petroleum products (including heating oil, diesel,
gasoline, kerosene, jet fuel and propane), and any other product or by-product
of any of the foregoing, rights to transmit, transport or store any of the
foregoing, or, with the consent of the Required Lenders, any other energy
commodities that are of the type which are purchased, sold or otherwise traded
in physical, futures, forward or over-the-counter markets; provided
that, additional commodities may be included as Eligible Commodities under this
Agreement from time to time after the Closing Date in accordance with the
following procedure: (x) the Borrowers shall deliver a written request to
the Administrative Agent for such approval by the Required Lenders of such
commodity, which request shall be provided by the Administrative Agent to the
Lenders, including, without limitation, if requested by a Lender, through
posting on Intralinks or other web site in use to distribute information to the
Lenders, or by other electronic mail, or other notice procedure permitted under
Section 11.2; and (y) the Required Lenders shall inform the
Administrative Agent of such approval in writing (by electronic communication,
telecopy or facsimile) within ten (10) Business Days after receipt of
notice from the Administrative Agent; provided  further that,
failure of a Lender to respond to any request for approval within the time
period provided for hereby shall be deemed to be approval of such commodity,
except in the case of a request by the Borrowers to include power as an
Eligible Commodity, in which such case such failure by the Required Lenders
shall not be deemed to be approval of power as an Eligible Commodity.  The Administrative Agent may, in its sole discretion,
extend such ten (10) Business Day period if the Administrative Agent
determines that any commodity requires additional review by the Lenders.  The definition of “Eligible Commodities” in
this Section 1.1 shall be deemed amended to include such commodity
without further action immediately 

 

14

 

upon the Required Lenders’ approval of such commodity in accordance
with the procedure described in this definition.

 

“Eligible Exchange Receivable”: an Exchange
Receivable of a Loan Party with a Tier 1 Counterparty or a Tier 2 Counterparty; provided,
however, that the value of an Eligible Exchange Receivable shall be the
Market Value as of any Borrowing Base Date of the Eligible Commodities required
to be delivered to such Loan Party.

 

“Eligible Forward Contract”: a Forward Contract
of a Loan Party
with a Tier 1 Counterparty or a Tier 2 Counterparty which (a) conforms to
the Risk Management Policy, (b) is evidenced by a written agreement or a
trade confirmation enforceable against the Tier 1 Counterparty or Tier 2
Counterparty thereto, (c) is subject to a Perfected First Lien, subject
only to Permitted Borrowing Base Liens, (d) has not been terminated and is
not subject to termination by reason of a default or any other termination
event thereunder and (e) the Forward Contract Counterparty thereto is not
a Governmental Authority unless all actions required under any applicable
Assignment of Claims Act, if any, applicable to such Forward Contract and such
Governmental Authority shall have been taken to approve and permit the
assignment of rights to payment thereunder or thereon to the Collateral Agent,
for the ratable benefit of the Secured Parties, under the Security Documents.

 

“Eligible Hedged Inventory”: as of any
Borrowing Base Date, the Market Value of Eligible Inventory which has been
Hedged as of such date.

 

“Eligible Inventory”: as of any Borrowing Base
Date, all inventory of a Loan Party consisting of Eligible Commodities valued at the then
current Market Value as of such date, and in all instances as to which the
following requirements have been fulfilled:

 

(a)           the inventory is owned by the
relevant Loan Party free and clear of all Liens other than Perfected First
Liens or Permitted Borrowing Base Liens;

 

(b)           the inventory has not been identified
for deliveries so that one or more buyers may have rights to the inventory that
could be superior to the Perfected First Liens, nor shall such inventory have
become subject to a customer’s ownership or lien;

 

(c)           the inventory is (A) in storage
on the property of the relevant Loan Party, (B) is in transit under the
control and ownership of such Loan Party or is in transit on a water borne
vessel chartered, rented, owned or leased by such Loan Party with the 3/3 bills
of lading issued to or endorsed to the order of the Collateral Agent for the ratable
benefit of the Secured Parties or (C) is in an Approved Inventory
Location;

 

(d)           the inventory is subject to
a Perfected First Lien, subject to Permitted Borrowing Base Liens; and

 

(e)           the inventory has not otherwise been
determined, in the sole discretion of the Supermajority Lenders, to be
ineligible.

 

“Eligible L/C Backed Accounts Receivable”: as
of any Borrowing Base Date, an Account Receivable from a counterparty to a
Commodity Contract whose obligations thereunder are supported by a letter of
credit issued by a bank or credit insurer that is Investment Grade which does
not terminate earlier than ten (10) days after such date; provided
that, if the Administrative Agent shall so request, the issuing bank or credit
insurer in respect of such letter of credit shall have been notified of, and
the applicable Loan Party shall have used commercially reasonable efforts to
cause such issuing bank or 

 

15

 

credit insurer to acknowledge in writing, the Lien of the
Administrative Agent on the proceeds of such letter of credit or such issuing
bank or credit insurer shall have consented to the assignment of the proceeds
of such letter of credit to the Administrative Agent.

 

“Eligible L/C Backed Unbilled Accounts Receivable”:
as of any Borrowing Base Date, an Account Receivable that has not actually been
invoiced prior to the applicable Borrowing Base Date, from a counterparty to a
Commodity Contract whose obligations thereunder are supported by a letter of
credit issued by a bank or credit insurer that is Investment Grade which does
not terminate earlier than ten (10) days after such date; provided
that, if the Administrative Agent shall so request, the issuing bank or credit
insurer in respect of such letter of credit shall have been notified of, and
the applicable Loan Party shall have used commercially reasonable efforts to
cause such issuing bank or credit insurer to acknowledge in writing, the Lien
of the Administrative Agent on the proceeds of such letter of credit or such
issuing bank or credit insurer shall have consented to the assignment of the
proceeds of such letter of credit to the Administrative Agent.

 

“Eligible Letters of Credit Issued for Commodities
Not Yet Received”: as of any Borrowing Base Date, the aggregate available
and undrawn amount of Letters of Credit related to the physical purchase by the
relevant Loan Party of
Eligible Commodities, which Eligible Commodities have not yet been received by
such Loan Party as
of such date, minus any other liabilities then existing which may be
satisfied by such Letters of Credit for the purchase of the Eligible
Commodities as of such date for which title has passed to the relevant Loan
Party as of such date but which Eligible Commodities have not yet been received
by such Loan Party as of such date.

 

“Eligible Medium Term Unrealized Forward Gain”:
as of any Borrowing Base Date, the Aggregate Eligible In the Money Forward
Contracts Amount at such date, minus the absolute value of the Aggregate
Eligible Out of the Money Forward Contracts Amount at such date, in each case,
for Eligible Forward Contract obligations whose final cash or physical
settlement is during the period exceeding six (6) months but no greater
than twelve months after such Borrowing Base Date.

 

“Eligible Net Liquidity in Brokerage Accounts”:
as of any Borrowing Base Date, the amount of “net liquidating value” or “net
equity” (however designated) in any commodities futures account of a Loan Party as of such date maintained with BNP
Paribas, any broker with which a Legacy Account is maintained or a reputable
broker reasonably acceptable to the Administrative Agent (each, an “Eligible
Broker”) which is subject to (i) a Perfected First Lien, subject only
to Permitted Borrowing Base Liens and any customary lien of such Eligible
Broker in connection with any indebtedness of such Loan Party to such Eligible Broker solely with
respect to such account (including, but not limited to, any right of the
Eligible Broker to close out open positions of such Loan Party without prior demand for additional
margin and without prior notice) (such amounts in a commodities futures account
subject to the liens (other than the Perfected First Lien) and close-out rights
set forth in this clause (i), the “Brokerage Account Deducts”), and (ii) an
Account Control Agreement (subject to Section 7.17, other than with
respect to any Legacy Account) among the Collateral Agent, such Loan Party that owns such account and the Eligible
Broker with which such account is maintained. 
Eligible Net Liquidity in Brokerage Accounts shall include any
discounted face value of any U.S. Treasury Securities held as of such date in
such account that are zero coupon securities issued by the United States of
America minus any unearned interest on such U.S. Treasury Securities as
of such date; provided that, the maturity date thereof is within six
months of the relevant Borrowing Base Date; provided, further
that, the Eligible Net Liquidity in Brokerage Accounts as calculated pursuant
to this definition shall not include any Brokerage Account Deducts.

 

“Eligible Short Term Unrealized Forward Gain”:
as of any Borrowing Base Date, the Aggregate Eligible In the Money Forward Contracts
Amount at such date, minus the absolute value of the 

 

16

 

Aggregate Eligible Out of the Money Forward Contracts Amount at such
date, in each case, for Eligible Forward Contract obligations whose final cash
or physical settlement is during the period ending six (6) months after
such Borrowing Base Date.

 

“Eligible Tier 1 Account Receivable”:
at the time of any determination thereof, each Eligible Account Receivable from
a Tier 1 Counterparty.

 

“Eligible Tier 2 Account Receivable”:
at the time of any determination thereof, each Eligible Account Receivable from
a Tier 2 Counterparty.

 

“Eligible Unbilled Account Receivable”:
as of any Borrowing Base Date, each Account Receivable of a Loan Party which would be an Eligible Account
Receivable but for the fact that such Account Receivable has not actually been
invoiced prior to such Borrowing Base Date.

 

“Eligible Unbilled Tier 1 Account Receivable”:
at the time of any determination thereof, each Eligible Unbilled Account
Receivable from a Tier 1 Counterparty.

 

“Eligible Unbilled Tier 2 Account Receivable”:
at the time of any determination thereof, each Eligible Unbilled Account
Receivable from a  Tier 2 Counterparty.

 

“Eligible Unhedged Inventory”: as of any Borrowing
Base Date, the Market Value of Eligible Inventory as of such date which has not
been Hedged.

 

“Environmental Laws”:
any and all Laws pertaining to pollution, protection of human health or the
environment, remediation of contamination, Hazardous Substances, or workplace
health and safety, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601, et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air
Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. § 1471 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601
through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Safe
Drinking Water Act, 42 U.S.C. §§ 300f through 300j; and the Occupational Safety
and Health Act, 29 U.S.C. § 651 et seq.; as such Laws have been amended or
supplemented, and the regulations promulgated pursuant thereto, and all related
or analogous state or local laws.

 

“Environmental Permits”:
any permit, license, registration, consent, approval and other
authorization - and the filing of any notification, report or assessment
necessary to maintain authorization - as required under any Environmental Law
for the operation of the business of any Loan Party conducted on or from the
properties owned or used by any Loan Party.

 

“ERISA”: the Employee
Retirement Income Security Act of 1974.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements current on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto), as now and from time to time hereafter in effect,
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of such
Board) maintained by a member bank of the Federal Reserve System.

 

17

 

“Eurodollar Base Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in United States Dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period
appearing on Reuters Reference LIBOR 01 (or any successor page) at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.  In
the event that such rate does not appear on Reuters Reference LIBOR 01 (or
otherwise on such screen), the “Eurodollar Base Rate” shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered United States Dollar deposits at or about 11:00 a.m.
(New York City time), two (2) Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its Eurodollar Loan to be
outstanding during such Interest Period.

 

“Eurodollar Loans”:
Loans for which the applicable rate of interest is based upon the Eurodollar
Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such
day in accordance with the following formula (rounded upwards to the nearest
1/100th of 1%):

 

	
   

  	
  Eurodollar Base
  Rate

  	
   

  
	
   

  	
  1.00 -
  Eurocurrency Reserve Requirements

  	
   

  

 

“Event of Default”:
any of the events specified in Section 9.1 for which any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.

 

“Exchange Receivable”:
to the extent of the non-cash consideration to be received, any right to
receive consideration that would be an Account Receivable but for the fact that
the consideration to be received by the relevant Loan Party consists in whole or in part of the
delivery of Eligible Commodities.

 

“Excise Taxes”: any amounts which are due and
owing to any Governmental Authority with respect to the sale of products
(excluding franchise taxes and taxes on net income or capital).

 

“Excluded Accounts”: the Wind-Up Accounts, the
Payroll Account and the Intermediate Investment Account.

 

“Excluded Taxes”: as defined in Section 4.11(e).

 

“Executive Order”:  as defined in Section 5.24(a).

 

“Extensions of Credit”: at any date, as to any
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding plus (b) the amount of such Lender’s participation (to
the extent of its Commitment Percentage), in the L/C Obligations then
outstanding plus (c) the amount of such Lender’s Commitment
Percentage of the aggregate principal amount of Swing Line Loans then
outstanding plus (d) the amount of such Lender’s Commitment
Percentage of the aggregate principal amount of Daylight Overdraft Loans then
outstanding.

 

18

 

“Federal Funds Effective Rate”:
for any day, the rate per annum equal to the weighted average of the interest
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding 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 the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

 

“FERC”: the U.S.
Federal Energy Regulatory Commission.

 

“Financial Hedging Agreement”:
any currency swap, cross-currency rate swap, currency option, interest rate
option, interest rate swap, cap or collar agreement or similar arrangement or
any other similar transaction (including any option to enter into any of the
foregoing) or any combination of the foregoing including, without limitation,
any derivative relating to interest rate or currency rate risk, in each case
which is not a Commodity Hedging Agreement.

 

“Financing Lease”:
any lease of property, real or personal, the obligations of the lessee in
respect of which are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.

 

“First Purchaser Lien”:
a so-called “first purchaser” Lien, as defined in Texas Bus. & Com.
Code Section 9.343, comparable Laws of the states of Oklahoma, Kansas,
Mississippi, Wyoming or New Mexico, or any other comparable Law of any such
jurisdiction or any other applicable jurisdiction.

 

“First Purchaser Lien Amount”: as of any
Borrowing Base Date, in respect of any property of the Loan Parties subject to a First Purchaser Lien, the
aggregate amount of the obligations outstanding as of such date giving rise to
such First Purchaser Lien as of such date, less any portion of such
obligations that are secured or supported by cash, Cash Equivalents or
Acceptable Investment Grade Credit Enhancement.

 

“Fiscal Year”:
the fiscal year of any Borrower, which consists of a twelve (12) month period
beginning on each July 1 and ending on each June 30.

 

“Forward Contract”: a
Commodity Contract with a delivery date more than two (2) days after the
contract is entered into.

 

“Forward Contract Counterparty”: any
counterparty to a Forward Contract of a Loan Party.

 

“Futures Contract”: a contract for making or
taking delivery of Eligible Commodities that is traded on a market-recognized
commodity exchange, which contract meets the specification and delivery
requirements of commodity futures contracts on such commodity exchange, the
value of which shall be reflected in a Commodity Account.

 

“GAAP”: generally
accepted accounting principles in the United States of America in effect from
time-to-time.

 

“Governing Documents”: with respect to (a) a
corporation, its articles or certificate of incorporation, continuance or
amalgamation and by-laws, (b) a partnership, its certificate of limited
partnership or partnership declaration, as applicable, and partnership
agreement, (c) a limited liability company, its certificate of formation
and operating agreement and (d) any other Person, the other organizational
or governing documents of such Person.

 

19

 

“Governmental Authority”:
any nation or government, any state, provincial or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.

 

“Grantors”: any Person executing and delivering
a Security Document, or becoming party to a Security Document (by supplement or
otherwise), pursuant to this Agreement.

 

“Guarantee”: the Guarantee to be executed and
delivered by the Loan Parties, substantially in the form of Exhibit K.

 

“Guarantee Obligation”:
as to any Person (the “guaranteeing person”),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of an obligation for which the guaranteeing person has issued a
reimbursement, counterindemnity or similar monetary obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the “primary obligations”)
of a third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1)  for
the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the obligee of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided,  however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business.  The terms “Guarantee”
and “Guaranteed” used as a verb shall have a correlative meaning.  The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrowers in good faith.  Guaranteed Obligation shall not include any
performance bonds, surety bonds, appeal bonds or customs bonds required in the
ordinary course of business or in connection with the enforcement of rights or
claims of any Loan Party or in connection with judgments that do not result in
a Default or an Event of Default.

 

“Guarantors”: any
Person executing and delivering the Guarantee, or becoming party to the
Guarantee (by supplement or otherwise), pursuant to this Agreement.

 

“Hazardous Substances”: (a) any hazardous
materials, hazardous wastes, hazardous substances, toxic wastes and toxic
substances as those or similar terms are defined under any Environmental Laws; (b) 
asbestos; (c) PCBs; and (d) any other hazardous, radioactive or toxic
substance, material, pollutant or contaminant regulated under any Environmental
Law.

 

“Hedged”:  in relation to Eligible Inventory, if the
purchase or sale price thereof has been materially hedged as evidenced by a
position report in form and substance reasonably similar to Exhibit J
(a “Hedged Inventory and Position Report”) or, if
not in the Hedged Inventory and Position Report, as otherwise reasonably
acceptable to the Administrative Agent through one or a combination of
Commodity Contracts or Futures Contracts entered into or held in accordance
with the Risk Management 

 

20

 

Policy for the corresponding volume of physical Eligible Commodities
held in Eligible Inventory; provided that, the applicable Loan Parties’ rights under such Commodity Contracts or
Futures Contracts and all amounts due or to become due to the relevant Loan Party under or in respect of such Commodity
Contracts or Futures Contracts are subject to a Perfected First Lien.

 

“Hedged Inventory and Position Report”:
as defined in the definition of “Hedged” in this Section 1.1.

 

“Increase Amount”: as defined in Section 4.1(b)(iii).

 

“Increase and New Lender Agreement”: as defined
in Section 4.1(b)(iii).

 

“Increase Period”: the period from the Syndication
Date until (but excluding) the Termination Date.

 

“Increasing Lender”: as defined in Section 4.1(b)(iii).

 

“Indebtedness”: of
any Person at any date, without duplication, (a) all indebtedness of such
Person for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of property or services (other
than trade liabilities incurred in the ordinary course of business and payable
in accordance with customary practices and not past due for more than ninety
(90) days), (b) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument, (c) all obligations of
such Person under Financing Leases or Synthetic Leases, (d) all
obligations of such Person in respect of letters of credit, acceptances or
similar instruments issued or created for the account of such Person, (e) all
liabilities of a third party secured by (or for which the holder of such
obligations has an existing right, contingent or otherwise, to be secured by)
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (f) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (e) above, and (g) for the
purposes of Section 9.1(e) only, all obligations of such
Person in respect of Commodity Hedging Agreements and Financial Hedging
Agreements.  The amount of any
Indebtedness under (x) clause (e) shall be equal to the lesser of (A) the
stated amount of the relevant obligations and (B) the fair market value of
the property subject to the relevant Lien and (y) clause (g) shall be
the net amount, including any net termination payments, required to be paid to
a counterparty rather than the notional amount of the applicable Commodity
Hedging Agreement or Financial Hedging Agreement.

 

“Indemnified Liabilities”:  as defined in Section 11.6.

 

“Indemnitee”:  as defined in Section 11.6.

 

“Ineligible Transferee”: Persons identified by
the Borrowers to the Administrative Agent and the Lenders from time-to-time as
Persons to whom no interest in a Loan or a Commitment may be transferred
pursuant to Section 11.7 for competitive reasons.

 

“Insolvency”: with
respect to any Multiemployer Plan, the condition that such plan is insolvent
within the meaning of Section 4245 of ERISA.

 

“Insolvent”:
pertaining to a condition of Insolvency.

 

“Intellectual Property”:  as defined in Section 5.9.

 

21

 

“Interest Payment Date”:
(a) with respect to any Base Rate Loan, (i) prior to the Termination
Date, the last Business Day of each month and (ii) the Termination Date, (b) as
to any Eurodollar Loan having an Interest Period of three months or shorter,
the last day of such Interest Period, (c) as to any Cost of Funds Loan
having an Interest Period of one day, one week or two weeks, the last Business
Day of each month, (d) as to any Cost of Funds Loan having an Interest
Period of one month, two months or three months, the last day of such Interest
Period, (e) as to any Eurodollar Loan or Cost of Funds Loan having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period and (f) as to any Loan (other than any Base
Rate Loan) the date of any repayment or prepayment made in respect thereof.

 

“Interest Period”: (a) with
respect to any Eurodollar Loan:

 

(i)       initially, the period commencing on the Borrowing
Date or Conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one (1), two (2), three (3) or six (6) months
thereafter, as selected by the relevant Borrower of such Eurodollar Loan in its
Borrowing Notice or Continuation/Conversion Notice, as the case may be, given
with respect thereto; and

 

(ii)      thereafter, each period commencing on the
last day of the immediately preceding Interest Period applicable to such
Eurodollar Loan and ending one (1), two (2), three (3) or six (6) months
thereafter, as irrevocably selected by the relevant Borrower in its
Continuation/Conversion Notice to the Administrative Agent not less than three (3) Business
Days prior to the last day of the then current Interest Period with respect
thereto;

 

(b)           with respect to any Cost of Funds
Loan:

 

(i)       initially, the period commencing on the
Borrowing Date, as the case may be, with respect to such Cost of Funds Loan and
ending one (1) day, one (1) or two (2) weeks, or one (1), two
(2), three (3) or six (6) months thereafter, as selected by the
relevant Borrower in its Borrowing Notice or Continuation/Conversion Notice, as
the case may be, given with respect thereto; and

 

(ii)      thereafter, each period commencing on the
last day of the immediately preceding Interest Period applicable to such Cost
of Funds Loan and ending one (1) day, one (1) or two (2) weeks,
or one (1), two (2), three (3) or six (6) months thereafter, as
selected by the relevant Borrower in its Continuation/Conversion Notice to the
Administrative Agent;

 

provided
that, with respect any Eurodollar Loan or Cost of Funds Loan:

 

(A)       if any Interest Period would otherwise
end on a day that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business Day;

 

(B)        any Interest Period with respect to any
Loan that would otherwise extend beyond the Termination Date, shall end on the
Termination Date; and

 

22

 

(C)        any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the applicable calendar month.

 

“Intermediate Investment Account”: the deposit
account no. 2079951076125 (or any successor account established in accordance
with the applicable provisions of the Security Agreement and Section 5.16(d) of
this Agreement) held at a Cash Management Bank in the name of a Loan Party
holding (i) the proceeds of Accounts Receivable relating to Intermediate
Investments and credit card purchases of transportation fuels from retail
distributors that have received Intermediate Investments and (ii) funds
transferred from time to time by a Loan Party to pay operating expenses in the
ordinary course; provided that, the oil companies that have provided the
Intermediate Investment Advances may have access and withdrawal rights with
respect to such account.

 

“Intermediate Investment Advances”: funds
advanced by an oil company to any Loan Party intended to be invested by such
Loan Party in one or more retail distributors of transportation fuels to
support such distributors’ meeting the oil company’s branding requirements.

 

“Intermediate Investments”: investments made
with the proceeds of Intermediate Investment Advances by any Loan Party in
retail distributors of transportation fuels to support such distributors’
meeting the relevant oil company’s branding requirements.

 

“Investment”: any advance, loan, extension of
credit or capital contribution to, investment in, or purchase or acquisition of
any stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, any Person.

 

“Investment Grade”:
with respect to any Person, the long term senior unsecured non-credit enhanced
credit rating or shadow rating of which is BBB- or higher by S&P or Baa3 or
higher by Moody’s.

 

“ISP98”:  as defined in Section 3.1(g).

 

“Issuing Lenders”: BNP Paribas and each other
Lender from time-to-time designated by the Borrowers as an Issuing Lender with
the prior consent of the Administrative Agent (such consent not to be
unreasonably withheld), each in its capacity as issuer of any Letter of Credit.

 

“Laws”: collectively,
all international, foreign, Federal, state, provincial and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law, but if not having the force of law,
then in respect of which compliance is customary in the Loan Parties’ industry.

 

“L/C Fee Payment Date”:
with respect to any Letter of Credit outstanding during any month, the fifth
Business Day of the immediately following month (or if any such day is not a
Business Day, the next succeeding Business Day), or if earlier, the expiration
date of the last outstanding Post-Termination LOC.

 

23

 

“L/C Obligations”: at any time, an amount equal
to the sum of (a) the aggregate undrawn amount of the then-outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters
of Credit that have not then been reimbursed or converted into a Loan pursuant
to Section 3.5(b).

 

“L/C Participants”: with respect to any Letter
of Credit, all of the Lenders other than the Issuing Lender thereof.

 

“Lead Arranger”: BNP Paribas.

 

“Legacy Accounts”: subject to Section 7.17,
those commodities accounts held by the Loan Parties as set forth on Schedule
1.1(E).

 

“Lenders”:
as defined in the introductory paragraph to this Agreement and, as the context
requires, includes, the Issuing Lenders, the Daylight Overdraft Lender and the
Swing Line Lender.  As of the Closing
Date, each Lender is specified on Schedule 1.0.

 

“Letter of Credit Request”:
a request by a Borrower for a new Letter of Credit or an amendment to an
existing Letter of Credit, in each case pursuant to Section 3.2 and
substantially in the form of Annex I-B or other form reasonably
satisfactory to the applicable Issuing Lender and the Administrative Agent.

 

“Letters of Credit”: as defined in Section 3.1(a).

 

“Lien”: any mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing); provided that, neither  (a) any interest or title of a lessor
under any leases or subleases entered into by the Loan Parties in the ordinary
course of business nor (b) licenses, sub-licenses, leases or sub-leases
granted to third parties in the ordinary course of business consistent with
past practices shall be Liens hereunder.

 

“Loan”: any loan made pursuant to this
Agreement.

 

“Loan Documents”:
this Agreement, the Notes, Letter of Credit Requests, the Perfection
Certificate, the Guarantee and the Security Documents.

 

“Loan Parties”: each
of the Borrowers and each Subsidiary of a Borrower that is party to a Loan
Document.

 

“Long Position”:  the aggregate quantity measured in Barrels of
Eligible Commodities attributable to the Loan Parties resulting from the
following long positions:

 

(a)           all
inventory of a Loan Party in respect of Eligible Commodities;

 

(b)           all
imbalances (whether in storage or in pipelines or otherwise) of Eligible
Commodities due to each Loan Party;

 

(c)           all
Physical Commodity Contracts of each Loan Party for the purchase or positive
exchange of Eligible Commodities;

 

24

 

(e)           all
Futures Contracts of each Loan Party for the purchase of Eligible Commodities;

 

(f)            all
options under a Commodity Hedging Agreement or a Financial Hedging Agreement of
each Loan Party, in each case calculated on a Delta Equivalent Basis, that
equates to a contracted purchase by the relevant Loan Party of Eligible
Commodities (regardless if financially settled); and

 

(g)           all
Commodity Hedging Agreements where a Loan Party is a fixed price purchaser;

 

provided that, solely with respect to the definition of “Long
Position” in this Section 1.1, Eligible Commodities shall include
any other commodities permitted under the Risk Management Policy (including the
use of Eligible Commodities as a component of the definition of any other term
used in the definition of Long Position).

 

“Marked-to-Market Report”:
a comprehensive marked-to-market report of the Loan Parties’ Eligible Commodities purchase and sale
positions as evidenced by a position report in form and substance reasonably
similar to Exhibit O.  Such
report shall include all existing positions for all current and future time
periods and cover all contracts that create either an obligation or a right
under a Commodity Contract and/or that generate price exposure for any Eligible
Commodities and shall include Marked-to Market Value for each position
considered.  The contracts shall include
but not be limited to contracts for spot and future deliveries of Eligible
Commodities, exchanges, derivatives (including Physical Commodity Contracts,
Commodity Hedging Agreements and Financial Hedging Agreements) and Futures
Contracts; provided that, solely with respect to the definition of “Marked-to-Market
Report” in this Section 1.1, Eligible Commodities shall include any
other commodities permitted under the Risk Management Policy (including the use
of Eligible Commodities as a component of the definition of any other term used
in the definition of Marked-to-Market Report).

 

“Marked-to-Market Value”:
with respect to any Commodity Contract of any Person on any date:

 

(a)           in the case of a Commodity Contract
for the purchase, sale, transfer or exchange of any physical Eligible
Commodities, the unrealized gain or loss on such Commodity Contract, determined
by comparing (i) the amount to be paid or received under such Commodity
Contract for such Eligible Commodities pursuant to the terms thereof to (ii) the
Market Value of such Eligible Commodities on such date, and

 

(b)           in the case of any other Commodity
Contract, the unrealized gain or loss on such Commodity Contract determined by
calculating the amount to be paid or received under such other Commodity
Contract pursuant to the terms thereof as if the cash settlement of such other
Commodity Contract were to be calculated on such date of determination by
reference to the Market Value of the Eligible Commodities which is the subject
of such other Commodity Contract;

 

provided,
that (i) in the case of any Commodity Contract that is, in whole or in
part, an option by its terms, the amount so calculated shall reflect industry
standard valuation models approved by the Administrative Agent and (ii) in
the case of amounts due under any Forward Contract with a delivery date more
than one year from the date of determination, each such amount shall be
discounted to present value in a commercially reasonable manner unless
otherwise discounted as part of the calculation referred to above.

 

25

 

“Market Value”: with respect to an Eligible
Commodity on any date, the price at which such Eligible Commodities could be
purchased or sold for delivery on that date or during the applicable period
adjusted to reflect the specifications thereof and the location and
transportation differential, determined by using prices (a) on the New
York Mercantile Exchange, the COMEX, the London Metal Exchange, the New York
Board of Trade, the International Petroleum Exchange, the Intercontinental
Commodities Exchange, the Chicago Board of Trade, the Chicago Mercantile
Exchange or, if a price for any such Eligible Commodities (or delivery period
or location) is not available on such exchanges, such other markets or
exchanges recognized as such in the commodities trading industry, including
over-the-counter markets and private quotations, or as published in an
independent industry recognized source, in each case reasonably selected by the
Loan Parties,
(b) if such a price for any such Eligible Commodities is not available in
any market or exchange described in clause (a) above, any other exchange
or market reasonably selected by the Loan Parties and reasonably satisfactory to the
Administrative Agent on such date or (c) if such a price for any such
Eligible Commodities is not available in any market or exchange described in
clauses (a) or (b) above, such other value determined pursuant to
methodology reasonably selected by the Loan Parties and reasonably satisfactory to the
Administrative Agent.

 

“Material Adverse Effect”:
a material adverse effect on (a) the business, assets, property,
operations or condition (financial or otherwise) of the Borrowers and their
respective Subsidiaries, taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.

 

“Materials of Environmental Concern”:
any gasoline or petroleum (including crude oil or any fraction thereof) or any
pollutant, contaminant, dangerous good, Hazardous Substances, toxic substances,
materials or wastes, defined or regulated as such in or under, or which form
the basis of liability under, any Environmental Law(s) or Environmental
Permit, including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation, medical waste, mold, microbial matters,
radioactive materials and electromagnetic fields.

 

“Maximum Amount”: on
any date of determination, the lesser of (i) $250,000,000 and (ii) the
Maximum Sub-Limit in effect on such date.

 

“Maximum Consolidated
Leverage Ratio”:  (a) from the Closing Date until the date
the first election is made by the Borrowers pursuant to clause (a)(ii) of
the definition of “Sub-Limit” in this Section 1.1, 7.00:1.00, and (b) thereafter,
at any time that the Maximum Sub-Limit is an amount specified in the table in clause
(a)(ii) of the definition of “Sub-Limit”, the amount set forth
opposite such Maximum Sub-Limit in such table under the heading “Maximum
Consolidated Leverage Ratio”.

 

“Maximum Position Limits”: the limits set forth
below opposite the then-current Maximum Sub-Limit as the maximum position (defined
as the maximum quantities, in Barrels, which, at a fixed price, the Loan
Parties hold either as a Net Long Position, Net Short Position or Net Basis
Position, all such positions including, without limitation, options on a Delta
Equivalent Basis), which the Loan Parties may hold at any time on an aggregate
basis, irrespective of whether financed hereunder or otherwise:

 

	
   

  	
   

  	
  Maximum Position Limits – Eligible

  Commodities (excluding natural gas)

  	
   

  	
  Maximum Position

  Limits (natural gas)

  	
   

  
	
  Maximum

  Sub-Limit

  	
   

  	
  Net Long

  Position

  	
   

  	
  Net Short

  Position

  	
   

  	
  Net Basis

  Position

  	
   

  	
  Net Long

  Position

  	
   

  	
  Net Short

  Position

  	
   

  	
  Net Basis

  Position

  	
   

  
	
  $

  	
  150,000,000

  	
   

  	
  350,000

  	
   

  	
  25,000

  	
   

  	
  4,000,000

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  
	
  $

  	
  200,000,000

  	
   

  	
  420,000

  	
   

  	
  50,000

  	
   

  	
  5,000,000

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  
	
  $

  	
  250,000,000

  	
   

  	
  500,000

  	
   

  	
  75,000

  	
   

  	
  6,000,000

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  	
  zero

  	
   

  

 

26

 

; provided that, notwithstanding the Maximum Position Limits set
forth above, the initial Net Long Position, Net Short Position and Net Basis
Position of the Loan Parties with respect to natural gas shall not exceed zero
unless (x) the Borrowers have delivered a written request to the
Administrative Agent for such approval by the Required Lenders to increase the
initial Maximum Position Limits for natural gas to specified levels, which
request shall be provided by the Administrative Agent to the Lenders,
including, without limitation, if requested by a Lender, through posting on
Intralinks or other web site in use to distribute information to the Lenders,
or by other electronic mail, or other notice procedure permitted under Section 11.2;
and (y) the Required Lenders shall inform the Administrative Agent of such
approval in writing (by electronic communication, telecopy or facsimile) within
ten (10) Business Days after receipt of notice from the Administrative
Agent; provided  further that, failure of a Lender to respond to
any request for approval within the time period provided for hereby shall be
deemed to be approval of such request; provided  further that,
solely with respect to the definition of “Maximum Position Limits” in this Section 1.1,
Eligible Commodities shall include any other commodities permitted under the
Risk Management Policy.

 

“Maximum Sub-Limit”: the amount set forth under
the heading “Maximum Sub-Limit” in clause (a)(i) or clause
(a)(ii), as applicable, of the definition of “Sub-Limit” in this Section 1.1;
provided that, the Maximum Sub-Limit shall at no time be an amount less
than $150,000,000 or greater than $250,000,000.

 

“Minimum Consolidated Net Working Capital
Amount”:  (a) from
the Closing Date until the date the first election is made by the Borrowers
pursuant to clause (a)(ii) of the definition of “Sub-Limit” in this
Section 1.1, $30,000,000, and (b) thereafter, at any time that
the Maximum Sub-Limit is an amount specified in the table in clause (a)(ii) of
the definition of “Sub-Limit” in this Section 1.1, the amount set
forth opposite such Maximum Sub-Limit in such table under the heading “Minimum
Consolidated Net Working Capital”.

 

“Minimum Consolidated Tangible Net Worth
Amount”: (a) from the Closing Date until the date
the first election is made by the Borrowers pursuant to clause (a)(ii) of
the definition of “Maximum Sub-Limit” in this Section 1.1,
$40,000,000, and (b) thereafter, at any time that the Maximum Sub-Limit is
an amount specified in the table in clause (a)(ii) of the
definition of “Sub-Limit” in this Section 1.1, the amount set forth
opposite such Maximum Sub-Limit in such table under the heading “Minimum
Consolidated Tangible Net Worth”.

 

“Monthly Financials”: as defined in the
definition of “Applicable Financial Statements” in this Section 1.1.

 

“Moody’s”: Moody’s
Investors Service, Inc., or any successor to its rating agency business.

 

“Multiemployer Plan”:
a Plan which is a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA and which is subject to Title IV of ERISA.

 

“Net Basis Position”:  the aggregate net quantity of Eligible
Commodities, measured in Barrels, purchased or sold under Commodity Contracts
of an Eligible Commodity that is Hedged by a sale or purchase under a Commodity
Contract at a different delivery location, for delivery during a 

 

27

 

different time period, or for different grades of the same Eligible
Commodity, less the hedging impact from any storage and/or transportation
contract; provided that, solely with respect to the definition of “Net
Basis Position” in this Section 1.1, Eligible Commodities shall
include any other commodities permitted under the Risk Management Policy
(including the use of Eligible Commodities as a component of the definition of
any other term used in the definition of Net Basis Position).

 

“Net Long Position”:  at any time, the amount (but not less than
zero) by which Long Positions exceed Short Positions.

 

“Net Short Position”:  at any time, the amount (but not less than
zero) by which Short Positions exceed Long Positions.

 

“New Lenders”: as defined in Section 4.1(b)(iii).

 

“Non-Excluded Taxes”:
as defined in Section 4.11(a).

 

“Non-Exempt Lender”:
as defined in Section 4.11(e).

 

“Note” and “Notes”:
as defined in Section 4.5(e).

 

“Notice of Prepayment”: as defined in Section 4.6.

 

“Obligations”: the
unpaid principal amount of, and interest (including, without limitation,
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrowers, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) on the Loans and Reimbursement Obligations, and
all other obligations and liabilities of the Loan Parties to the Secured
Parties, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, or out of or
in connection with this Agreement, the Notes, the Security Documents, any other
Loan Documents, any Letter of Credit, any Commodity Hedging Agreement with a
Qualified Counterparty, any Financial Hedging Agreement with a Qualified
Counterparty and any other document made, delivered or given in connection
therewith or herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all fees and disbursements of counsel to the Agents or to the Lenders that are
required to be paid by a Loan Party pursuant to the terms of the Loan
Documents) or otherwise; provided that, (i) obligations of any
Borrower or any Subsidiary under any Commodity Hedging Agreement to a Qualified
Counterparty or Financial Hedging Agreement to a Qualified Counterparty shall
be secured and guaranteed pursuant to the Security Documents and the Guarantee
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors
effected in the manner permitted by this Agreement shall not require the
consent of holders of obligations under any Commodity Hedging Agreement or
Financial Hedging Agreement.

 

“OFAC”:  as defined in Section 5.24.

 

“Other Taxes”: as
defined in Section 4.11(b).

 

“Parent Borrower”: as defined in the
introductory paragraph of this Agreement.

 

“Parent Subordinated Indebtedness”:
Subordinated Indebtedness of the Borrowers or any of their Subsidiaries owing
to Buckeye Partners, L.P. or any of its Subsidiaries that are not Loan Parties.

 

28

 

“Participant” and “Participants”:
as defined in Section 11.7(b).

 

“Participation”: as defined in Section 11.7(b).

 

“Payment Intangible”: as defined in Section 9-102
of the New York Uniform Commercial Code.

 

“Payroll Account”: the demand deposit account
no. 2000037555542 held in the name of the Parent Borrower at Wachovia Bank,
N.A. (or any successor account established in accordance with the applicable
provisions of the Security Agreement and Section 5.16(d) of this
Agreement).

 

“PBGC”: the Pension
Benefit Guaranty Corporation established pursuant to Subtitle A of
Title IV of ERISA.

 

“Perfected First Lien”: any perfected, first
priority Lien or security interest (or its substantial equivalent under
applicable Laws) granted by a Loan Party pursuant to a Security Document in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties; provided
that, in the case of inventory that is not located in the United States or
contracts, Accounts Receivable or Payment Intangibles not governed by Laws of
the United States of America or any state or political subdivision thereof, the
validity and priority of such Lien shall be confirmed by an opinion of special
local counsel, the form and substance of which shall be reasonably satisfactory
to the Administrative Agent.

 

“Perfection Certificate”: the Perfection
Certificate to be executed and delivered by the Loan Parties, substantially in
the form of Exhibit P.

 

“Performance Letter of Credit”:
a standby Letter of Credit issued to support bonding, performance, swap, transportation
and tariff requirements relating to Eligible Commodities (other than the
obligation to pay for the purchase of Eligible Commodities).

 

“Permitted Borrowing Base Liens”:
collectively, (i) First Purchaser Liens, (ii) Permitted Cash
Management Liens, (iii) Liens permitted under Section 8.3(k) which
have been appealed and which have been bonded or fully covered by insurance
which coverage has been acknowledged in writing, in each case, by institutions
reasonably acceptable to the Administrative Agent within sixty (60) days from
the entry of such judgments or decrees, (iv) Liens of carriers,
warehousemen, mechanics, materialmen, and any similar Lien arising by operation
of law securing obligations to pay or provide consideration for goods or
services with respect to Eligible Commodities, which obligations are not past
due, (v) inchoate tax liens and (vi) Liens permitted under Section 8.3(i).

 

“Permitted Cash
Management Liens”:  Liens with
respect to (i) all amounts due to the Cash Management Banks in respect of
customary fees and expenses for the routine maintenance and operation of each
Excluded Account or Pledged Account, (ii) the face amount of any checks
which have been credited to any Excluded Account or Pledged Account, but are
subsequently returned unpaid because of uncollected or insufficient funds, (iii) other
returned items or mistakes made in crediting any Excluded Account or Pledged
Account, (iv) any currency, Cash Equivalents, commodities or Commodities
Contracts deposited in, or credited to, any Excluded Account or Pledged Account
which are specifically permitted by the account documentation (including any
Account Control Agreement) of such Excluded Account or Pledged Account and (v) any
Excluded Account or Pledged Account which arise by operation of law.

 

29

 

“Permitted Equity Contribution”: any purchase
by Buckeye Energy Holdings LLC of any common units of Capital Stock issued by
any Loan Party that is the direct Subsidiary of Buckeye Energy Holdings LLC in
exchange for cash.

 

“Permitted Liens”: any of the Liens described
in clauses (a) through (n) of Section 8.3.

 

“Person”: an
individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

 

“Petition Date”:  as defined in paragraph (j) the
definition of “Eligible Account Receivable” in this Section 1.1.

 

“Physical Commodity Contract”:  a contract for the purchase, sale, transfer
or exchange of any physical Eligible Commodity.

 

“Plan”: at a
particular time, any employee benefit plan which is covered by ERISA and in
respect of which the Borrowers or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge Agreement”:
the Pledge Agreement to be executed and delivered by the Loan Parties party
thereto, substantially in the form of Exhibit C.

 

“Pledged Account”: all Commodity Accounts,
Deposit Accounts and Securities Accounts of any Grantor, other than Excluded
Accounts.

 

“Pledged Collateral”:  as defined in the Pledge Agreement.

 

“Post-Termination LOC”: as defined in Section 3.1(e).

 

“Prime Rate”: for any
day, a rate per annum that is equal to the corporate base rate of interest
established by the Administrative Agent from time-to-time and, if requested,
provided to the relevant Borrower prior to the delivery of the relevant Borrowing
Notice.  The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
available.

 

“Properties”: as
defined in Section 5.22(a).

 

“Qualified Counterparty”:
any counterparty to any Financial Hedging Agreement or Commodity Hedging
Agreement entered into between a Loan Party and a Person which, at the time
such Financial Hedging Agreement or Commodity Hedging Agreement was entered
into, was a Lender or an Affiliate of a Lender.

 

“Refunded Daylight
Overdraft Loan”: as defined in Section 2.6(a).

 

“Refunded Swing Line Loan”: as defined in Section 2.5.

 

“Register”: as
defined in Section 11.7(d).

 

“Regulation U”:
Regulation U of the Board.

 

“Reimbursement Date”:
as defined in Section 3.4(c).

 

30

 

“Reimbursement Obligations”: the obligation of
the Borrowers to reimburse any Issuing Lender, pursuant to Section 3.5(a) for
Unreimbursed Amounts.

 

“Reorganization”:
with respect to any Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event”:
any of the events set forth in Section 4043(c) of ERISA, other than
those events as to which the thirty (30) day notice period is waived under PBGC
Reg. § 4043.

 

“Representatives”: as
defined in Section 11.16.

 

“Requested Increase Amount”: as defined in Section 4.1(b)(i).

 

“Requested Increase Effective Date”: as defined
in Section 4.1(b)(i).

 

“Required Lenders”:
at any time, Lenders holding more than 50.00% of either (i) the Total
Commitments, or (ii) if the Commitments have been terminated, the Total
Extensions of Credit then outstanding.

 

“Requirement of Law”:
as to any Person, any Law or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Person”:
with respect to any Loan Party, the chief executive officer, president,
chairman, senior vice-president, executive vice-president, vice-president of
finance or treasurer of such Loan Party; provided that, with respect to
any Borrowing Base Report, “Responsible Person” shall include any vice
president responsible for the oversight of the trading and financial operations
of such Loan Party.

 

“Restricted Tier 2 Counterparty”: as defined in
the definition of “Tier 2 Counterparty” in this Section 1.1.

 

“Revolving Credit Loans”:  as defined in Section 2.1(a).

 

“Risk Management Policy”:
the risk management policy of the Loan Parties applicable to the funding activities of
the Loan Parties as
approved by the Board of Directors of the Parent Borrower  and as in effect as of the date hereof, and
as the same may be modified in accordance with Section 7.10(a).

 

“Section 4.11 Certificate”:
as defined in Section 4.11.

 

“Secured Parties”: the Lenders, the Issuing
Lenders, the Administrative Agent and the other Agents, Qualified
Counterparties and their respective successors, endorsees, transferees and
assigns.

 

“Securities Account”: as defined in Section 8-501
of the New York Uniform Commercial Code.

 

“Security Agreement”: the Security Agreement to
be executed and delivered by the Loan Parties, substantially in the form of Exhibit B.

 

“Security Documents”: the collective reference
to the Account Control Agreements, the Pledge Agreement, the Security
Agreement, and all other security documents hereafter delivered to the

 

31

 

 

Collateral Agent granting a Lien on any asset or assets of any Person
to secure any of the Obligations or to secure any guarantee of any such
Obligations.

 

“Short Position”: the aggregate quantity
measured in Barrels of Eligible Commodities attributable to the Loan Parties
resulting from the following short positions:

 

(a)           all
imbalances (whether in storage or in pipelines or otherwise) of Eligible
Commodities due from each Loan Party;

 

(b)           all
Physical Commodity Contracts of each Loan Party for the sale or negative
exchange of Eligible Commodities;

 

(c)           all
Futures Contracts of each Loan Party for the sale of Eligible Commodities;

 

(d)           all
options under a Commodity Hedging Agreement or a Financial Hedging Agreement of
each Loan Party, in each case calculated on a Delta Equivalent Basis, that
equates to a contracted sale by the relevant Loan Party of Eligible Commodities
(regardless if financially settled); and

 

(e)           all
Commodity Hedging Agreements where a Loan Party is the fixed price seller;

 

provided that, solely with respect to the definition of “Short
Position” in this Section 1.1, Eligible Commodities shall include
any other commodities permitted under the Risk Management Policy (including the
use of Eligible Commodities as a component of the definition of any other term
used in the definition of Short Position).

 

“Single Employer Plan”:
any Plan which is covered by Title IV of ERISA, but which is not a
Multiemployer Plan.

 

“S&P”: Standard
and Poor’s Ratings Group, or any successor to its rating agency business.

 

“Specified Laws”: (i) Trading
with the Enemy Act, and each of the foreign assets control regulations of the
United States Treasury Department (31 C.F.R., Subtitle B,
Chapter V) and any other enabling legislation or executive order relating
thereto, and (ii) the USA PATRIOT Act.

 

“Stop Loss Cure Amount”: as defined in Section 7.10(b).

 

“Sub-Limit”:

 

(a)           with respect to the Maximum
Sub-Limit:

 

(i)            from the date of this Agreement
until the date the first election is made by the Borrowers pursuant to clause
(a)(ii) of this definition, $150,000,000; and

 

(ii)           at any time after the Syndication
Date, so long as no Default or Event of Default has occurred and is continuing
or would result from such election, the amount set forth in the table below
under the heading “Maximum Sub-Limit” elected by the Borrowers from time to
time by written notice delivered to the Administrative Agent in the form
attached hereto as Annex V (the “Sub-Limit Election Notice”); provided
that, at the time of any such election of any such amount as the Maximum
Sub-Limit, but not for any other purpose herein, each of the Borrowers’
Consolidated Net Working Capital, 

 

 

 

 

32

 

 

Consolidated Tangible Net Worth and Consolidated
Leverage Ratio at such time of election, each as determined by the Applicable
Financial Statements, are within the requirements set forth opposite such
amount in the table below; provided  further that, the Maximum
Sub-Limit shall at no time exceed the Total Commitment at such time; provided
further that, if at any time the Borrowers elect to reduce the Maximum
Sub-Limit, the Borrowers shall prepay the Loans and/or Cash Collateralize,
replace or decrease (if the beneficiary of such Letter of Credit agrees to such
decrease) the amount of outstanding Letters of Credit to the extent required by
Section 4.7(c) on the date of such election:

 

	
  Maximum Sub-Limit

  	
   

  	
  Minimum 

  Consolidated 

  Tangible Net Worth

  	
   

  	
  Minimum 

  Consolidated Net 

  Working Capital

  	
   

  	
  Maximum 

  Consolidated Leverage 

  Ratio

  	
   

  
	
  $

  	
  150,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  7.0:1.00

  	
   

  
	
  $

  	
  200,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  7.0:1.00

  	
   

  
	
  $

  	
  250,000,000

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  7.0:1.00

  	
   

  

 

(b)           with respect to each of the Swing
Line Loan Sub-Limit, the Daylight Overdraft Loan Sub-Limit, the 364-Day Letters
of Credit Sub-Limit or the Subsidiary L/C Sub-Limit:

 

(i)            from the date of this Agreement
until the date the first election is made by the Borrowers pursuant to clause
(a)(ii) of this definition, the amount set forth opposite the applicable
Sub-Limit in the table below:

 

	
  Sub-Limit

  	
   

  	
  Amount

  	
   

  
	
  Daylight Overdraft Loan Sub-Limit

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  364-Day Letters of Credit Sub-Limit

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  Subsidiary L/C Sub-Limit

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
  Swing Line Loan Sub-Limit

  	
   

  	
  $

  	
  15,000,000

  	
   

  

 

(ii)           thereafter, at any time, the amount
set forth in the table below under the heading “Swing Line Loan Sub-Limit”, the
“Daylight Overdraft Loan Sub-Limit”, the “364-Day Letters of Credit Sub-Limit”
or the “Subsidiary L/C Sub-Limit” opposite the then-current Maximum Sub-Limit:

 

	
  Maximum 

  Sub-Limit

  	
   

  	
  Daylight Overdraft 

  Loan Sub-Limit

  	
   

  	
  364-Day Letters of

  Credit Sub-Limit

  	
   

  	
  Swing Line Loan

  Sub-Limit

  	
   

  	
  Subsidiary 

  L/C Sub-Limit

  	
   

  
	
  $

  	
  150,000,000

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
  $

  	
  200,000,000

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  $

  	
  250,000,000

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

“Sub-Limit Election Notice”: as defined in the
definition of “Sub-Limit” in this Section 1.1.

 

“Subordinated Debt Compliance Certificate”: as
defined in Section 8.8.

 

“Subordinated Indebtedness”:
any Indebtedness of the Borrowers and their Subsidiaries: (i) subject to Section 8.8,
the payment of the principal of and interest on which and other obligations of
such Person in respect thereof are subordinated to the prior payment in full of
the principal of and interest (including by its terms post-petition interest)
on the Loans and all other Obligations of the Borrowers to the Agents and the
Lenders under the Loan Documents on terms and conditions approved in writing by

 

 

33

 

 

the Administrative Agent; provided that, so long as no Default
or Event of Default has occurred and is continuing, the Borrowers and their
Subsidiaries may make scheduled payments of interest on Subordinated
Indebtedness; (ii) any portion which is guaranteed by any Loan Party and
all Guarantee Obligations in respect of such guarantee of such subordinated
Indebtedness are subordinated to the Guarantees and all other Obligations of
such Person to the Agents and the Lenders under the Loan Documents in the
manner and to the extent such subordinated Indebtedness is subordinated to the
Loans and all other Obligations of the Borrowers to the Agents and the Lenders under
the Loan Documents under subclause (i) of this definition; (iii) such
Indebtedness shall not have a maturity date earlier than six (6) months
after the Termination Date; (iv) mandatory prepayments of such
Indebtedness shall not be permitted earlier than six (6) months after the
earlier of (A) the Termination Date and (B) the payment in full of
principal of and interest (including by its terms post-petition interest) on
the Loans and all other Obligations of the Loan Parties to the Agents and the
Lenders under the Loan Documents (except for mandatory prepayments due under
customary covenants relating to changes of control, the sale of assets,
casualty events, or equity issuances, and excess cash flows); (v) all
financial covenants contained therein corresponding to the covenants contained
in Sections 8.1 of this Agreement shall contain ratio levels, amounts
and thresholds less restrictive on the Borrowers and their Subsidiaries than
the corresponding ratio levels, amount and thresholds contained in the corresponding
covenants in the Loan Documents; and (vi) which shall not be secured in
all or in part by any portion of the Collateral.

 

“Subsidiary”: as to
any Person, a corporation, partnership or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.

 

“Subsidiary L/C Sub-Limit”: the amount set
forth under the heading “Subsidiary L/C Sub-Limit” in clause (b)(i) or
clause (b)(ii), as applicable, of the definition of “Sub-Limit” in this Section 1.1.

 

“Supermajority Lenders”: at any time, Lenders
holding more than 75% of (i) the sum of Total Commitments, or (ii) if
the Commitments have been terminated, the Total Extensions of Credit then
outstanding.

 

“Swap Amounts due to Qualified Counterparties”:  as of any Borrowing Base Date, any amounts
due to the Qualified Counterparties from the Loan Parties under Commodity Hedging Agreements, which
are based on the Qualified Counterparty’s reasonable calculation of the
Marked-to-Market Value of the aggregate amounts of such contracts.

 

 “Swing Line
Lender”: BNP Paribas, in its capacity as lender of Swing Line Loans
hereunder.

 

“Swing Line Loan
Sub-Limit”: the amount set forth under the heading “Swing Line Loan
Sub-Limit” in clause (b)(i) or clause (b)(ii), as
applicable, of the definition of “Sub-Limit” in this Section 1.1.

 

“Swing Line Loans”: as defined in Section 2.3(a).

 

“Swing Line Participation Amount”: as defined
in Section 2.5(b).

 

 

 

 

34

 

 

“Syndication Date”: the date on which the Lead
Arranger notifies the Parent Borrower that the primary syndication has been
completed.

 

“Synthetic Lease”: any lease of property, real
or personal, the obligations of the lessee in respect of which are treated as
an operating lease for financial accounting purposes and a Financing Lease for
tax purposes, in accordance with GAAP.

 

“Taxes”: as defined
in Section 4.11(a).

 

“Termination Date”: May 20,
2011, or, if such date is not a Business Day, the next preceding Business Day.

 

“Tier 1 Counterparty”:
in relation to an Eligible Account Receivable or Eligible Forward Contract, the
counterparty thereto to the extent that (i) (a) such counterparty is
Investment Grade, (b) such counterparty’s obligations with respect thereto
are supported by Acceptable Investment Grade Credit Enhancement or (c) such
counterparty and the credit exposure of the Loan Parties to such counterparty
has either (A) been approved as of the Closing Date by the Lenders in
their sole discretion and set forth on Schedule 1.1(A) as a Tier 1
Counterparty or (B) been approved by the Required Lenders, in their sole
discretion, from time to time after the Closing Date in accordance with the
following procedure: (x) the Borrowers shall deliver a written request to
the Administrative Agent for such approval by the Required Lenders of such
counterparty and credit exposure, which request shall be provided by the Administrative
Agent to the Lenders, including, without limitation, if requested by a Lender,
through posting on Intralinks or other web site in use to distribute
information to the Lenders, or by other electronic mail, or other notice
procedure permitted under Section 11.2; and (y) the Required
Lenders shall inform the Administrative Agent of such approval in writing (by
electronic communication, telecopy or facsimile) within five (5) Business
Days after receipt of notice from the Administrative Agent; provided
that, failure of a Lender to respond to any request for approval within the
time period provided for hereby shall be deemed to be approval of such
counterparty as a Tier 1 Counterparty by such Lender; provided  further
that, the Supermajority Lenders, in their sole discretion, may from time to
time revoke the Tier 1 Counterparty status of any counterparty previously
approved as a Tier 1 Counterparty or reduce the previously-approved credit
exposure of the Loan Parties to such counterparty, which revocation or
reduction shall be effective as of the first Borrowing Base Date that is at
least ten (10) days after the delivery of written notice of such
revocation or reduction by the Administrative Agent to the Borrowers.  The Administrative Agent may, in its sole
discretion, extend such five (5) Business Day period if the Administrative
Agent determines that any counterparty requires additional review by the
Lenders. Schedule 1.1(A) shall be deemed amended to include such
Tier 1 Counterparties without further action immediately upon the Required
Lenders’ approval of such Tier 1 Counterparty and the related credit exposure
in accordance with the procedure described in this definition.

 

“Tier 2 Counterparty”: in relation to an
Eligible Account Receivable or Eligible Forward Contract, the counterparty
thereto to the extent that (a) it is not a Tier 1 Counterparty and (b) either
(i) the aggregate credit exposure of the Loan Parties to such counterparty
(generally Accounts Receivable and other amounts owing to the Loan Parties from
such counterparty under any Commodity Contract) does not exceed $400,000 for
any counterparty described in this clause (b)(i) or to the extent
and for so long as such exposure exceeds $400,000, the amount of any such
Eligible Receivable from such counterparty shall be deemed to be $400,000 (such
a counterparty, a “Restricted Tier 2 Counterparty”), or (ii) each
such counterparty and the credit exposure of the Loan Parties to such
counterparty has either (A) been approved as of the Closing Date by the
Lenders in their sole discretion and set forth on Schedule 1.1(B) as
a Tier 2 Counterparty or (B) been approved by the Required Lenders, in
their sole discretion, from time to time after the Closing Date in accordance
with the following procedure: (x) the Borrowers shall deliver a written
request to the Administrative Agent for such approval by the Required Lenders
of such 

 

 

 

 

35

 

 

counterparty and credit exposure, which request shall be provided by the
Administrative Agent to the Lenders, including, without limitation, if
requested by a Lender, through posting on Intralinks or other web site in use
to distribute information to the Lenders, or by other electronic mail, or other
notice procedure permitted under Section 11.2; and (y) the
Required Lenders shall inform the Administrative Agent of such approval in
writing (by electronic communication, telecopy or facsimile) within five (5) Business
Days after receipt of notice from the Administrative Agent; provided
that, failure of a Lender to respond to any request for approval within the
time period provided for hereby shall be deemed to be approval of such
counterparty as a Tier 2 Counterparty by such Lender; and provided  further
that, the Supermajority Lenders, in their sole discretion, may from time to
time revoke the Tier 2 Counterparty status of any counterparty previously
approved as a Tier 2 Counterparty or reduce the previously-approved credit
exposure of the Loan Parties to such counterparty, which revocation or
reduction shall be effective as of the first Borrowing Base Date that is at
least ten (10) days after the delivery of written notice of such
revocation or reduction by the Administrative Agent to the Borrowers.  The Administrative Agent may, in its sole
discretion, extend such five (5) Business Day period if the Administrative
Agent determines that any counterparty requires additional review by the
Lenders.  Schedule 1.1(B) shall
be deemed amended to include such Tier 2 Counterparties and the related credit
exposure without further action immediately upon the Required Lenders’ approval
of such Tier 2 Counterparty in accordance with the procedure described in this
definition.

 

“Total Borrowing Base”: at any time, an amount
equal to the sum of the Borrowing Base of each Loan Party.

 

“Total Commitment”:
the aggregate amount of all Commitments of all Lenders.

 

“Total Extensions of Credit”: at any time, the
aggregate outstanding principal and/or face amount of the Extensions of Credit
of the Lenders then in effect.

 

 “Trade
Letter of Credit”: a commercial or standby Letter of
Credit supporting the purchase of Eligible Commodities.

 

“Trading Business”: with respect to each
Lender, the day-to-day activities of such Lender or a division or Affiliate of
such Lender relating to the proprietary purchase, sale, hedging and/or trading
of commodities, including, without limitation, Eligible Commodities, and any
related derivative transactions.

 

“Tranche”: Loans, the
then-current Interest Periods which all begin on the same date and end on the
same later date (whether or not such Loans shall originally have been made on
the same day).

 

“Transferee”: as
defined in Section 11.7(f).

 

“Type”: as to any
Loan, its nature as a Base Rate Loan, a Eurodollar Loan or a Cost of Funds
Loan.

 

“UCP 600”: as defined
in Section 3.1(g).

 

“United States Dollars”
and “$”: dollars in lawful currency of the United
States of America.

 

“Unreimbursed Amount”:
as defined in Section 3.5(a).

 

 

 

 

36

 

 

“Updated Financials”: as defined in the
definition of “Applicable Financial Statements” in this Section 1.1.

 

“USA PATRIOT Act”:  as defined in Section 5.24.

 

“Wind-Up Accounts”: those demand deposit
accounts, securities accounts and commodities accounts as set forth on Schedule
1.1(D).

 

1.2           Other
Definitional Provisions.

 

(a)           Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in any Notes or any other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.

 

(b)           As
used herein and in any Notes, any other Loan Documents and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrowers and their respective Subsidiaries not defined in Section 1.1 and (subject to Section 1.2(c))
accounting terms partly defined in Section 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.

 

(c)           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 Section, Schedule, Exhibit and
Annex references are to this Agreement unless otherwise specified.

 

(d)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

 

(e)           Unless
otherwise expressly provided herein, (i) references to Governing
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, waivers, supplements and other modifications thereto and (ii) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.

 

1.3           Rounding. 
Any financial ratios required to be maintained by the Borrowers pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

 

SECTION 2.                                AMOUNT AND TERMS OF THE LOANS AND COMMITMENTS

 

2.1           Revolving
Credit Loans.

 

(a)           Subject
to the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans under the Commitments (the “Revolving Credit Loans”)
to each Borrower in an amount requested by such Borrower from time-to-time
during the Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender’s Commitment Percentage of the sum
of (i) the L/C Obligations then outstanding, (ii) the aggregate
principal amount of the Swing Line Loans then outstanding and (iii) the
aggregate principal amount of the Daylight Overdraft Loans then outstanding,
does not exceed such Lender’s Commitment at such time. During the 

 

 

 

37

 

 

Commitment Period, the Borrowers may borrow, prepay the Revolving
Credit Loans in whole or in part, and reborrow Revolving Credit Loans, all in
accordance with the terms and conditions hereof.

 

(b)           Revolving
Credit Loans may be denominated only in United States Dollars and may from
time-to-time be (i) Eurodollar Loans, (ii) Base Rate Loans, (iii) Cost
of Funds Loans or (iv) a combination thereof, in each case, as the
applicable Borrower shall notify the Administrative Agent in accordance with Sections 2.4 and 4.3. 
No Revolving Credit Loan shall be made as a Eurodollar Loan after the
day that is one month prior to the Termination Date.

 

2.2           Daylight
Overdraft Loans.

 

(a)           Subject
to the terms and conditions hereof, the Daylight Overdraft Lender agrees to
make daylight overdraft loans with respect to Deposit Accounts of the Borrowers
located at the Collateral Agent (individually, a “Daylight Overdraft
Loan” and collectively, the “Daylight Overdraft
Loans”) to each Borrower from time-to-time during
the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the Daylight Overdraft Loans Sub-Limit then in
effect; provided that, (i) the aggregate principal amount of
Daylight Overdraft Loans outstanding at any time, when aggregated with the
Daylight Overdraft Lender’s Commitment Percentage of the Total Extensions of
Credit, may exceed the Daylight Overdraft Loan Sub-Limit then in effect or such
Daylight Overdraft Lender’s Commitment then in effect and (ii) the
Borrowers shall not request, and the Daylight Overdraft Lender shall not make,
any Daylight Overdraft Loan if, after giving effect to the making of such
Daylight Overdraft Loan, the aggregate amount of the Available Commitments
would be less than zero.  During the
Commitment Period, the Borrowers may use the Daylight Overdraft Loan Sub-Limit
by borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof.

 

(b)           Daylight
Overdraft Loans shall be Base Rate Loans. 
Subject to Section 2.6, each Daylight Overdraft Loan shall
mature at 4:00 p.m. (New York City time), on the Borrowing Date therefor.

 

2.3           Swing
Line Loans.

 

(a)           Subject
to the terms and conditions hereof, the Swing Line Lender agrees to make a
portion of the credit under the Commitments available to each Borrower by
making swing line loans (individually, a “Swing Line Loan” and
collectively, the “Swing Line Loans”)
to any Borrower from time-to-time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the Swing Line Loan
Sub-Limit then in effect; provided that, (i) the aggregate
principal amount of Swing Line Loans outstanding at any time, when aggregated
with the Swing Line Lender’s Commitment Percentage of the Total Extensions of
Credit, may exceed the Swing Line Loan Sub-Limit then in effect or such Swing
Line Lender’s Commitment then in effect and (ii) the Borrowers shall not
request, and the Swing Line Lender shall not make, any Swing Line Loan if,
after giving effect to the making of such Swing Line Loan, the aggregate amount
of the Available Commitments would be less than zero.  During the Commitment Period, the Borrowers
may use the Swing Line Loan Sub-Limit by borrowing, repaying and reborrowing,
all in accordance with the terms and conditions hereof.

 

(b)           Swing
Line Loans shall be Base Rate Loans. 
Subject to Section 2.5, each Swing Line Loan shall mature
five (5) days after the Borrowing Date therefor.

 

2.4           Procedure
for Borrowing.

 

(a)           The
Borrowers may borrow under the Commitments during the Commitment Period on any
Business Day; provided that, other than with respect to a request for a
Daylight Overdraft 

 

 

 

 

38

 

 

Loan, such Borrower shall give the Administrative Agent, irrevocable
notice (which notice must be received by the Administrative Agent, (x) in
the case of a Revolving Credit Loan, prior to 12:00 Noon (New York City time), (A) three
(3) Business Days prior to the requested Borrowing Date, if all or any
part of the requested Revolving Credit Loans are to be initially Eurodollar
Loans, or (B) on the same Business Day of the requested Borrowing Date,
otherwise, and (y) in the case of a Swing Line Loan, prior to 3:00 p.m.
(New York City time) on the requested Borrowing Date, in each case, in the form
attached hereto as Annex I-A (the “Borrowing Notice”), specifying:

 

(i)       whether
the borrowing is to be a Revolving Credit Loan, Daylight Overdraft Loan or a
Swing Line Loan;

 

(ii)      the
amount to be borrowed;

 

(iii)     the
requested Borrowing Date;

 

(iv)    in the
case of a Revolving Credit Loan, whether the borrowing is to be a Base Rate
Loan, a Cost of Funds Loan, a Eurodollar Loan or a combination thereof;

 

(v)     in the
case of a Revolving Credit Loan, the respective amounts of each such Type of
Revolving Credit Loan; and

 

(vi)    in the
case of a Revolving Credit Loan, if the borrowing is to be entirely or partly
of Eurodollar Loans or Cost of Funds Loans, the respective amounts of each such
Type of Revolving Credit Loan and the respective lengths of the initial
Interest Periods therefor;

 

provided, further, that, in the case of
Daylight Overdraft Loans, (w) no Borrowing Notice shall be required, (x) on
any Business Day and with respect to any Deposit Account located at the
Collateral Agent, the Daylight Overdraft Lender will consider making a Daylight
Overdraft Loan based on a statement showing the accounts payable due and owing
from such Deposit Account on such day and the Eligible Accounts Receivable
expected by a Borrower to be received in such Deposit Account on such day, (y) the
making of a Daylight Overdraft Loan by the Daylight Overdraft Lender shall be
deemed to constitute a representation by the Borrowers that the conditions
contained in Section 6.2 have been satisfied, and (z) the
making of any Daylight Overdraft Loan shall not constitute a waiver of the
failure of any condition in Section 6.2 to be satisfied or any
other Default or Event of Default.

 

(b)      Each
borrowing under the Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $100,000 or a whole multiple thereof (or, if the then
Available Commitments are less than $100,000, such lesser amount) and (y) in
the case of Eurodollar Loans and Cost of Funds Loans, $1,000,000 or a whole multiple
of $100,000 in excess thereof.

 

(c)      Upon
receipt of any notice from a Borrower pursuant to Section 2.4(a) with
respect to a requested borrowing under the Commitments (other than a notice in
respect of a Swing Line Loan or a Daylight Overdraft Loan), the Administrative
Agent shall promptly notify each Lender thereof.  Each Lender (other than the Swing Line Lender
with respect to a Swing Line Loan and the Daylight Overdraft Lender with
respect to a Daylight Overdraft Loan) will make the amount of its pro  rata
share of each borrowing available to the Administrative Agent for the account
of such Borrower at the Administrative Agent’s office specified in Section 11.2 prior to 3:00 p.m. (New York City
time) on the Borrowing Date requested by such Borrower in funds immediately
available to the Administrative Agent. 
Each Revolving Credit Loan will then promptly be made available on the
Borrowing Date to such Borrower by the Administrative Agent by wire transfer to
the account of such Borrower set forth on Schedule 2.2(A) in like
funds as received by the Administrative Agent. 
Each Swing Line Loan will 

 

 

 

 

39

 

 

promptly be made available on the Borrowing Date to the applicable
Borrower by the Swing Line Lender by wire transfer to the account of such
Borrower set forth on Schedule 2.2(A). 
Each Daylight Overdraft Loan will be made available on the Borrowing
Date to the applicable Borrower by the Daylight Overdraft Lender by crediting
the amount of such Daylight Overdraft Loan to the account of such Borrower set
forth on Schedule 2.2(B), such account to be held at the Daylight
Overdraft Lender.

 

2.5           Refunding
of Swing Line Loans.  (a) 
If the Administrative Agent shall not have received full repayment in cash of
any Swing Line Loan on or before 1:00 p.m. (New York City time) on the day
that is five (5) Business Days after the making of such Swing Line
Loan, the Swing Line Lender may, not later than 3:00 p.m. (New York City
time), on such day, request on behalf of the Borrower of such Swing Line Loan
(which hereby irrevocably authorizes the Swing Line Lender to act on its
behalf), that each Lender, including the Swing Line Lender, make a Revolving
Credit Loan (which initially shall be a Base Rate Loan) in an amount equal to
such Lender’s Commitment Percentage of the outstanding amount of the portion of
such Swing Line Loan (a “Refunded Swing Line Loan”).  In accordance with Section 2.5(d),
unless any of the events described in Section 9.1(f) shall have
occurred and be continuing (in which event the procedures of clause (b) of
this Section 2.5 shall apply), each Lender shall make the proceeds
of its Revolving Credit Loan available to the Swing Line Lender for the account
of the Swing Line Lender at the Swing Line Lender’s Applicable Lending Office
for Base Rate Loans prior to 11:00 a.m. (New York City time) in
funds immediately available on the Business Day next succeeding the date such
request is made.  The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans.

 

(b)           If
prior to the making of any Revolving Credit Loan pursuant to paragraph (a) of this Section 2.5 one of the events described in Section 9.1(f) shall have occurred and be continuing,
each Lender shall, on the date such Revolving Credit Loan was to have been made, purchase an
undivided participating interest in the then-outstanding Swing Line
Loans in an amount
equal to its Commitment Percentage of such Swing Line Loans that were
to have been repaid with such Revolving Credit Loans (the “Swing Line Participation Amount”).  Each Lender shall promptly transfer to the Swing Line
Lender, in
immediately available funds, the amount of its Swing Line Participation Amount
and upon receipt thereof the Swing Line Lender shall deliver to such Lender a Swing Line Loan participation certificate, in a form
specified by the Swing Line Lender, dated the date of receipt of the Swing Line
Participation Amount and in such amount.

 

(c)           Whenever,
at any time after the Swing Line Lender has received from any 
Lender such Lender’s Swing Line Participation Amount, the Swing Line
Lender receives any
payment on account thereof, the Swing Line Lender shall distribute to such  Lender its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s participating interest was
outstanding and funded, and in the case of principal and interest payments, to
reflect such Lender’s pro  rata portion of such payment if such
payment is not sufficient to pay the principal of and interest on all Swing
Line Loans then due) in like funds as received; provided,
however, that in the event that such payment received by the Swing Line
Lender is required to
be returned, such Lender shall return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it in like funds as such payment is required to be
returned by the Swing Line Lender.

 

(d)           Each
Lender’s obligation to make Revolving Credit Loans referred to in Section 2.5(a) and to purchase participating interests
pursuant to Section 2.5(b) shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrowers, or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of an Event of Default, (iii) any
failure to satisfy any condition precedent to extensions of credit set forth 

 

 

 

 

40

 

 

in Section 6, (iv) any adverse change in the condition
(financial or otherwise) of any Loan Party, (v) any breach of this
Agreement by any Loan Party or any other Lender or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

2.6           Refunding
of Daylight Overdraft Loans.

 

(a)           If
the Administrative Agent shall not have received full repayment in cash of any
Daylight Overdraft Loan on or before 3:00 p.m. (New York City time) on the
Borrowing Date of such Daylight Overdraft Loan, the Daylight Overdraft Lender
may, not later than 4:00 p.m. (New York City time), on such day, request
on behalf of such Borrower (which hereby irrevocably authorizes the Daylight
Overdraft Lender to act on its behalf), that each Lender make a Revolving
Credit Loan (which initially shall be a Base Rate Loan) in an amount equal to
the outstanding amount of such Daylight Overdraft Loan (a “Refunded Daylight
Overdraft Loan”).  In accordance with
Section 2.6(d), unless any of the events described in Section 9.1(f) shall
have occurred and be continuing (in which event the procedures of clause (b) of
this Section 2.6 shall apply), each Lender shall make the proceeds
of its Revolving Credit Loan available to the Daylight Overdraft Lender for the
account of the Daylight Overdraft Lender at the Daylight Overdraft Lender’s
Applicable Lending Office for Base Rate Loans prior to 11:00 a.m. (New
York City time) in funds immediately available on the Business Day next
succeeding the date such request is made. 
The proceeds of such Revolving Credit Loans shall be immediately applied
to repay the Daylight Overdraft Loans.

 

(b)           If
prior to the making of any Revolving Credit Loan pursuant to paragraph (a) of
this Section 2.6 one of the events described in Section 9.1(f) shall
have occurred and be continuing, each 
Lender shall, on the date such Revolving Credit Loan was to have been
made, purchase an undivided participating interest in the then-outstanding
Daylight Overdraft Loans in an amount equal to its Commitment Percentage of
such Daylight Overdraft Loans that were to have been repaid with such Revolving
Credit Loans (the “Daylight Overdraft Participation Amount”).  Each Lender shall promptly transfer to the
Daylight Overdraft Lender, in immediately available funds, the amount of its
Daylight Overdraft Participation Amount and upon receipt thereof the Daylight
Overdraft Lender shall deliver to such Lender a Daylight Overdraft Loan
participation certificate, in a form specified by the Daylight Overdraft
Lender, dated the date of receipt of the Daylight Overdraft Participation
Amount and in such amount.

 

(c)           Whenever,
at any time after the Daylight Overdraft Lender has received from any Lender
such Lender’s Daylight Overdraft Participation Amount, the Daylight Overdraft
Lender receives any payment on account thereof, the Daylight Overdraft Lender
shall distribute to such Lender its Daylight Overdraft Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participating interest was
outstanding and funded, and in the case of principal and interest payments, to
reflect such Lender’s pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Daylight Overdraft Loans
then due) in like funds as received; provided, however, that in
the event that such payment received by the Daylight Overdraft Lender is
required to be returned, such Lender shall return to the Daylight Overdraft
Lender any portion thereof previously distributed by the Daylight Overdraft
Lender to it in like funds as such payment is required to be returned by the
Daylight Overdraft Lender.

 

(d)           Each
Lender’s obligation to make Revolving Credit Loans referred to in Section 2.6(a) and
to purchase participating interests pursuant to Section 2.6(b) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Daylight Overdraft Lender, the
Borrowers, or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of an Event of Default, (iii) any failure to
satisfy any condition precedent to extensions of credit set forth in 

 

 

 

41

 

 

Section 6, (iv) any adverse change in the condition
(financial or otherwise) of any Loan Party, (v) any breach of this
Agreement by any Loan party or any other Lender or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

2.7           Commitment
Fee.  The Borrowers agree to pay to
the Administrative Agent for the account of each Lender a commitment fee for
the period from and including the first day of the Commitment Period to but not
including the Termination Date, computed at the Commitment Fee Rate on the
average daily amount of the Available Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the fifteenth
day after the last Business Day of each March, June, September and December (or,
if such day is not on a Business Day, the next succeeding Business Day) and on
the Termination Date or such earlier date as the Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof.

 

SECTION 3.                                LETTERS OF CREDIT

 

3.1           Letters
of Credit.

 

(a)           Subject
to the terms and conditions hereof, each Issuing Lender severally agrees to
issue letters of credit (“Letters of Credit”) for the account of each
Borrower on behalf of Loan Parties from time-to-time during the Commitment
Period; provided that, after giving effect to any Letter of Credit
requested by a Borrower:

 

(i)            the
Total Extensions of Credit shall not exceed the Total Borrowing Base at such
time;

 

(ii)           Sections 3.1(b), (c) and
(d) shall
not be contravened at any time;

 

(iii)          the
Total Extensions of Credit shall not exceed the Total Commitments at any time;

 

(iv)          the
Total Extensions of Credit shall not exceed the Maximum Amount at such time;
and

 

(v)           the
aggregate outstanding amount of Letters of Credit issued for the accounts of
the Borrowers on behalf of Loan Parties (other than the Borrowers) shall not
exceed the Subsidiary L/C Sub-Limit.

 

(b)           Each
Trade Letter of Credit shall, subject to Section 3.2, expire no
later than the earlier of ninety (90) days after the date of issuance and the
Termination Date; provided that, at any time, Trade Letters of
Credit may be issued that expire after the Termination Date but no later than
the earlier of ninety (90) days after the date of issuance and ninety (90) days
after the Termination Date then in effect if such Letters of Credit are Cash
Collateralized no later than twenty (20) days prior to the Termination Date in
an amount equal to 103% of the undrawn face amount of each such Trade Letter of
Credit; provided  further that, at any time,
Trade Letters of Credit may be issued that expire later than ninety (90) days
following issuance but no later than the earlier of 364 days after the date of
issuance and six months after the Termination Date then in effect (any Trade
Letter of Credit issued pursuant to this proviso having an expiration date
later than ninety (90) days following issuance but less than 364 days following
issuance, a “364-Day Trade Sub-Limit Letter of Credit”) so long as the
face amount of such Trade Letters of Credit, together with the sum of the then
already outstanding L/C Obligations in respect of (i) 364-Day Trade
Sub-Limit Letters of Credit and (ii) Performance Letters of Credit, would
not exceed the 364-Day Letters of Credit Sub-Limit if such 364-Day Trade
Sub-Limit Letters of Credit that expire 

 

 

 

42

 

 

after the Termination Date are Cash Collateralized no later than twenty
(20) days prior to the Termination Date in an amount equal to 103% of the
undrawn face amount of each such 364-Day Trade Sub-Limit Letter of Credit.  For the avoidance of doubt, subject to the
provisions of Section 3.1(a), Trade Letters of Credit other than
364-Day Trade Sub-Limit Letters of Credit may be issued hereunder in an
aggregate outstanding amount not to exceed the lesser of the Total Commitments,
the Total Borrowing Base or the Maximum Amount.

 

(c)           Each
Performance Letter of Credit shall, subject to Section 3.2, expire
no later than the earlier of 364 days after the date of issuance and the
Termination Date; provided that, at any time, Performance
Letters of Credit may be issued that expire after the Termination Date but no
later than the earlier of 364 days after issuance and six months after the
Termination Date then in effect if such Letters of Credit are Cash
Collateralized no later than twenty (20) days prior to the Termination Date in
an amount equal to 103% of the undrawn face amount of each such Letter of
Credit; provided  further that, Performance
Letters of Credit may only be issued in an amount that does not exceed an
amount equal to (a) the 364-Day Letters of Credit Sub-Limit minus (b) the
sum of the then already outstanding L/C Obligations in respect of (i) 364-Day
Trade Sub-Limit Letters of Credit and (ii) Performance Letters of Credit.

 

(d)           At
any time, the aggregate undrawn face amount of outstanding Letters of Credit
which expire following the Termination Date shall not exceed $25,000,000.

 

(e)           The
obligations of the L/C Participants to purchase participations in the
obligations of the Issuing Lenders under outstanding Letters of Credit pursuant
to Section 3.4 shall
survive the Termination Date with respect to Letters of Credit which have been
Cash Collateralized pursuant to Section 3.1 until the earliest of (i) the
expiration date for such Letters of Credit, (ii) the date the entire
amount available under such Letters of Credit are drawn and such drawings are
repaid, and (iii) the date that is six (6) months after the
Termination Date; provided that, notwithstanding any other provision of
this Section 3.1(e), with respect to any Letter of Credit having an
expiration date following the Termination Date (such a Letter of Credit, a “Post-Termination
LOC”), in no event shall the obligations of the L/C Participants to
purchase participations in the obligations of an Issuing Lender under a
Post-Termination LOC pursuant to Section 3.4 expire or terminate prior to the Business Day
following the expiration, cancellation or termination of the last remaining
outstanding Post-Termination LOC.

 

(f)            From
time-to-time, each Borrower may Cash Collateralize any Letter of Credit issued
for its account in an amount equal to the undrawn face amount of such Letter of
Credit.  Cash Collateralized amounts with
respect to a Letter of Credit shall be applied by the Collateral Agent to the
payment of drafts drawn under such Letter of Credit.  After such Letter of Credit shall have
expired or been fully drawn upon and all Reimbursement Obligations with respect
to such Letter of Credit shall have been satisfied, the balance, if any, in
such cash collateral account shall be returned to such Borrower.

 

(g)           Each
Letter of Credit shall be subject to the International Standby Practices (“ISP98”)
International Chamber of Commerce Publication No. 590 or Uniform Customs
and Practice for Documentary Credits No. 600 (“UCP 600”), as
applicable, and to the extent not inconsistent with ISP 98 or UCP 600, the Laws
of the State of New York.

 

3.2           Procedure
for Issuance of Letters of Credit.  (a) Each
Borrower may from time-to-time request that any Issuing Lender issue or amend a
Letter of Credit by delivering to such Issuing Lender and the Administrative
Agent a Letter of Credit Request and such other certificates, documents and
other papers and information as such Issuing Lender may reasonably request
(consistent with requests made by such Issuing Lender from other
similarly-situated account parties).  In
the case of a request for an initial issuance of any Letter of Credit, such
Letter of Credit Request shall specify:

 

 

 

 

43

 

 

 

(i)          the
maximum amount of such Letter of Credit and the account party therefor;

 

(ii)         whether
such Letter of Credit is a Performance Letter of Credit or a Trade Letter of
Credit;

 

(iii)        the
requested date on which such Letter of Credit is to be issued;

 

(iv)       the
purpose and nature of the proposed Letter of Credit;

 

(v)        the
name and address of the beneficiary of such Letter of Credit;

 

(vi)       the
expiration or termination date of the Letter of Credit;

 

(vii)      the
documents to be presented by such beneficiary in the case of a drawing or
demand for payment thereunder; and

 

(viii)     the
delivery instructions for such Letter of Credit.

 

In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Request shall specify in form and detail satisfactory to the
Administrative Agent and the Issuing Lender thereof:

 

(i)          the
Letter of Credit to be amended;

 

(ii)         the
requested date of the proposed amendment;

 

(iii)        the
nature of the proposed amendment; and

 

(iv)       the
delivery instructions for such amendment.

 

Any
such Letter of Credit Request must be received by the applicable Issuing Lender
and the Administrative Agent by no later than 11:00 a.m. (New York City
time), one (1) Business Day prior to the date such Letter of Credit is to
be issued or amended, or such other time as previously agreed between the
Administrative Agent and the applicable Borrower.  Upon the issuance of any Letter of Credit or
any amendment to an outstanding Letter of Credit, the Administrative Agent and
the applicable Lenders shall be entitled to assume that the Letter of Credit
Request and certificates, documents and other papers and information reasonably
requested by the relevant Issuing Lender in connection therewith were completed
and delivered to the satisfaction of such Issuing Lender.

 

(b)           Upon
receipt of a Letter of Credit Request by an Issuing Lender, such Issuing Lender
will confirm with the Administrative Agent (by telephone and in writing) that
the Administrative Agent has received a copy of such Letter of Credit Request
and, if not, such Issuing Lender will provide the Administrative Agent, with a
copy thereof.  Upon receipt by such
Issuing Lender of confirmation from the Administrative Agent, that the
requested Letter of Credit or amendment is permitted in accordance with the
terms hereof, such Issuing Lender shall, on the requested date, issue a Letter
of Credit for the account of the requesting Borrower or enter into the
applicable amendment, as the case may be, in each case in accordance with such
Issuing Lender’s usual and customary business practices.

 

(c)           Notwithstanding
anything herein to the contrary, an Issuing Lender is under no obligation to
issue or provide any Letter of Credit unless consented to by such Issuing
Lender and the Administrative Agent, if:

 

 

 

 

 

 

44

 

 

(i)            Any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain such Issuing Lender from issuing or
amending such Letter of Credit, or any Requirement of Law applicable to such
Issuing Lender or any request or directive (whether or not having the force of
Law) from any Governmental Authority with jurisdiction over such Issuing Lender
shall prohibit, or request that such Issuing Lender refrain from, the issuance
or amending of a Letter of Credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Lender with respect to such Letter
of Credit any restriction, reserve or capital requirement (in the case of an
amendment of a Letter of Credit, for which such Issuing Lender is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall impose upon
such Issuing Lender any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which such Issuing Lender in good faith
deems material to it; or

 

(ii)           such
Letter of Credit is not in form and substance reasonably acceptable to such
Issuing Lender thereof or the issuance of such Letter of Credit shall violate
any applicable policies of such Issuing Lender that apply to its customers
generally.

 

(d)           Within
one (1) Business Day after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the Issuing Lender thereof will also deliver to the
applicable Borrower and the Administrative Agent, a true and complete copy of
such Letter of Credit or amendment.

 

3.3           Fees,
Commissions and Other Charges.

 

(a)           Letter
of Credit Fee.  Each Borrower
requesting a Letter of Credit shall pay to the Administrative Agent, for the
account of the relevant Issuing Lender and the L/C Participants a letter of
credit commission, with respect to each outstanding Letter of Credit, in an
amount equal to a per annum fee of 1.375% times the average daily
maximum amount available to be drawn under such Letter of Credit from time to
time; provided that, the letter of credit commission for each such
Letter of Credit shall not be in an amount less than $600, and, in each case,
shall be shared ratably among the L/C Participants and the Issuing Lender of
such Letter of Credit in accordance with their respective Commitment
Percentages.  Such commissions shall be
payable monthly in arrears on each L/C Fee Payment Date.  With respect to any Letter of Credit that
expires after the Termination Date, on or prior to the Termination Date, the
applicable Borrower shall pay to the Administrative Agent, for the account of
the relevant Issuing Lender and the L/C Participants, an amount equal to the
letter of credit commission to be owed with respect to such Letter of Credit
for the period from the Termination Date until the expiration date of such
Letter of Credit.

 

(b)           Other
Charges.  In addition to the
foregoing fees and commissions, the relevant Borrower shall pay or reimburse
each Issuing Lender of any Letter of Credit for such normal and customary costs
and expenses as are incurred or charged by such Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.  The applicable Borrower shall
pay each Issuing Lender of any Letter of Credit a fee of $100 for any amendment
of a Letter of Credit issued by such Issuing Lender.

 

(c)           Distribution
of Fees.  The Administrative Agent
shall, within two (2) Business Days following its receipt thereof,
distribute to the relevant Issuing Lenders and the L/C Participants all fees
and commissions received by the Administrative Agent for their respective
accounts pursuant to this Section 3.3, and shall promptly notify
the Administrative Agent of such distribution.

 

 

 

45

 

 

3.4           L/C
Participations.

 

(a)           Each
Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lenders to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from each such Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk,
an undivided interest in such Issuing Lender’s obligations and rights under
each Letter of Credit issued or provided by such Issuing Lender hereunder and
the amounts paid by such Issuing Lender thereunder equal to such L/C
Participant’s Commitment Percentage.

 

(b)           Each
L/C Participant’s obligation to accept and purchase for such L/C Participant’s
own account and risk, an undivided interest in an Issuing Lender’s obligations
and rights under each Letter of Credit issued or provided by such Issuing
Lender hereunder and the amounts paid by such Issuing Lender thereunder equal
to such L/C Participant’s Commitment Percentage shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such L/C Participant may have against any Issuing Lender, any
Borrower, or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of an Event of Default, (iii) any adverse change
in the condition (financial or otherwise) of any Loan Party, (iv) any
breach of this Agreement by any Loan Party or any other Lender or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.

 

(c)           If
any Borrower fails to reimburse any Issuing Lender pursuant to Section 3.5(a) at
the time and on the due date specified in such Section (the “Reimbursement
Date”), such Issuing Lender shall so notify the
Administrative Agent (with a copy to the Borrowers), which notice shall be
provided on a Business Day, and specify in such notice the amount of the
Unreimbursed Amount.  Immediately upon
receipt of such notice from such Issuing Lender, the Administrative Agent shall
notify each L/C Participant of the Reimbursement Date, the Unreimbursed Amount,
and the amount of such L/C Participant’s Commitment Percentage.

 

(d)           If
any amount required to be paid by any L/C Participant to any Issuing Lender
pursuant to Section 3.4(a), 3.4(b) and 3.4(c) in
respect of any Unreimbursed Amount is paid to such Issuing Lender within one (1) Business
Day after such L/C Participant receives a copy of the notice delivered by the
relevant Issuing Lender to the Administrative Agent, pursuant to Section 3.4(c) (provided
that, if such notice is not received by such L/C Participant prior to 11:00 a.m.
(New York City time), the amount required to be paid shall be due on the second
Business Day following the receipt of such notice), such L/C Participant shall
pay on that Business Day to such Issuing Lender from its Applicable Lending
Office for the Letter of Credit for which reimbursement is being sought on
demand an amount equal to the product of (i)  such amount, times
(ii) the daily average Federal Funds Effective Rate, as quoted by such
Issuing Lender, during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360.  If any such amount required to
be paid by any L/C Participant pursuant to this Section 3.4 is not
in fact made available to the applicable Issuing Lender by such L/C Participant
within such one (1) Business Day period, such Issuing Lender shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to Base Rate Loans hereunder.  A
certificate of any Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section 3.4 shall be conclusive in
the absence of manifest error.

 

(e)           Whenever,
at any time after any Issuing Lender has made payment under any Letter of
Credit and has received from any L/C Participant its Commitment Percentage of
such payment in accordance with Section 3.4(c), such Issuing Lender
receives any payment related to such Letter of Credit (whether directly from
the Borrowers or otherwise, including proceeds of collateral applied thereto by
such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will 

 

 

 

46

 

 

distribute to such L/C Participant its Commitment Percentage thereof; provided, however, that in the event that any
such payment received by such Issuing Lender shall be required to be returned
by such Issuing Lender, such L/C Participant shall return to such Issuing
Lender the portion thereof previously distributed by such Issuing Lender to it.

 

3.5           Reimbursement
Obligations of the Borrowers.

 

(a)           Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
or demand for payment under such Letter of Credit, the Issuing Lender of such
Letter of Credit shall promptly notify the applicable Borrower and the Administrative
Agent thereof.  If such Borrower receives
notice (confirmed by telephone) from such Issuing Lender of a drawing or demand
for payment under a Letter of Credit prior to 11:00 a.m. (New York City
time), on any Business Day, such Borrower shall reimburse such Issuing Lender
on such Business Day for the Unreimbursed Amount of such Letter of Credit.  If such Borrower receives notice (confirmed
by telephone) from such Issuing Lender of a drawing or demand for payment under
a Letter of Credit at or after 11:00 a.m. (New York City time), on any
Business Day, such Borrower shall so reimburse such Issuing Lender on the
Business Day immediately following the Business Day upon which such notice was
received by such Borrower; provided that, such Borrower may reimburse
such Issuing Lender with the proceeds of Revolving Credit Loans, Daylight
Overdraft Loans or Swing Line Loans made pursuant to Section 2.4 or
with proceeds from any other source. Such reimbursement shall be made directly
to such Issuing Lender in an amount equal to (i) the amount so paid and (ii) any
Non-Excluded Taxes and any reasonable fees, charges or other costs or expenses
incurred by such Issuing Lender at its Applicable Lending Office in immediately
available funds (such amount that has not been reimbursed by such Borrower
being, the “Unreimbursed Amount”).

 

(b)           If the relevant
Issuing Lender shall not have received full reimbursement for any drawing prior to the time such reimbursement is
due for such drawing pursuant to Section 3.5(a) (unless an
event of the type described in Section 9.1(f) shall have
occurred and be continuing with respect to the Borrower, in which case the
procedures specified in Section 3.4 for funding by L/C Participants
shall apply), such drawing or demand for payment under a Letter of Credit shall
constitute a request by such Borrower for a borrowing pursuant to Section 2.4
of Revolving Credit Loans that are Base Rate Loans in the amount equal to the
Unreimbursed Amount of such Letter of Credit. 
The Borrowing Date with respect to such borrowing shall be the date of
such drawing or payment.

 

(c)           With
respect to Unreimbursed Amounts that are not paid on the date due, interest
shall be payable on any and all Unreimbursed Amounts from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full (either in cash or upon the making of a Revolving Credit Loan)
at the applicable rate which would be payable on any outstanding Revolving
Credit Loans which were then overdue.

 

3.6           Obligations
Absolute.  (a)  Each
Borrower’s obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which such Borrower may have or have had
against any Issuing Lender, the Administrative Agent, any beneficiary of a
Letter of Credit or any other Person.

 

(b)           Subject
to the provisions of UCP 600, each Borrower agrees with each Issuing Lender
that such Issuing Lender shall not be responsible for, and the Borrowers’
Reimbursement Obligations under Section 3.5(a) shall not be
affected by, among other things, (i) the validity or genuineness of
documents submitted to the Issuing Lender for payment under the Letter of
Credit or of any endorsements thereon, even though such documents shall in fact
prove to be invalid, fraudulent or forged, (ii) any dispute between or
among the Borrowers and any beneficiary of any Letter of Credit or 

 

 

 

 

47

 

 

any other party to which such Letter of Credit may be transferred, (iii) any
claims whatsoever of such Borrower against any beneficiary of such Letter of
Credit or any such transferee, (iv) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations of
the Borrowers in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from the terms of any Letter of Credit or
any document executed or delivered in connection with the issuance or payment
thereof, or (v) any payment by the Issuing Lender of any Letter of Credit
against presentation of any document or certificate that does not strictly
comply with the terms of such Letter of Credit, or any payment made by any
Issuing Lender under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including arising in
connection with any proceeding of the type described in Section 9.1(f).

 

(c)           No
Issuing Lender shall be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by such Issuing Lender’s gross negligence or willful
misconduct.

 

(d)           Each
Borrower agrees that any action taken or omitted by any Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the New York Uniform Commercial Code
shall be binding on such Borrower and shall not result in any liability of such
Issuing Lender to such Borrower.

 

3.7           Role of the Issuing Lenders.  (a) 
The responsibility of any Issuing Lender to any Borrower in connection with any
draft presented for payment under any Letter of Credit issued on behalf of such
Borrower shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered by or on behalf of the beneficiary under such Letter of
Credit in connection with such presentment are in conformity with such Letter
of Credit.  In addition, each Lender and
the Borrowers agree that, in paying any drawing or demand for payment under any
Letter of Credit, the Issuing Lender of such Letter of Credit shall not have
any responsibility to inquire as to the validity or accuracy of any document
presented in connection with such drawing or demand for payment or the
authority of the Person executing or delivering the same.

 

(b)           No
Agent-Related Person nor any of the respective correspondents, participants or
assignees of any Issuing Lender shall be liable to any Lender for: (i) any
action taken or omitted in connection herewith in respect of any Letter of
Credit at the request or with the approval or deemed approved of the Required
Lenders; (ii) any action taken or omitted in respect of any Letter of
Credit in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any Letter of
Credit or any document delivered in connection with the issuance or payment of
such Letter of Credit.

 

(c)           The
Borrowers hereby assume all risks of the acts or omissions of any beneficiary
or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall
not, preclude a Borrower from pursuing such rights and remedies as it may have
against such beneficiary or transferee. 
No Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the Issuing Lenders shall be liable or responsible
for any of the matters described in Section 3.6; provided, however,
that anything in such Section or elsewhere herein to the contrary
notwithstanding, the Borrowers may have a claim against any Issuing Lender and
such Issuing Lender may be liable to the Borrowers, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrowers which the Borrowers proved 

 

 

 

 

48

 

 

were caused by such Issuing Lender’s willful failure
to pay under any Letter of Credit after the presentation to it by the
beneficiary of documents strictly complying with the terms and conditions of
such Letter of Credit.  In furtherance
and not in limitation of the foregoing: (i) any Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary;
and (ii) no Issuing Lender shall be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a 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.

 

3.8           Letter
of Credit Request.  To the extent that any material
provision of any Letter of Credit Request related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall apply.

 

SECTION 4.                                GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

 

4.1           Increase,
Termination or Reduction of Commitments.

 

(a)           The
Borrowers shall have the right, from time to time, upon not less than three (3) Business
Days’ notice to the Administrative Agent, to terminate the Commitments or, from
time-to-time, to irrevocably reduce the amount of the Commitments; provided
that, no such termination or irrevocable reduction of Commitments shall be
permitted to the extent that, after giving effect thereto and to any
prepayments of the Loans and Cash Collateralization of the Letters of Credit
made on or before the effective date thereof, the Total Extensions of Credit
would exceed the Total Commitment then in effect.  Any such irrevocable reduction shall be in an
amount equal to $500,000 or a whole multiple thereof and shall reduce
permanently the Commitments then in effect.

 

(b)           The
Commitments may be increased at any time during the Increase Period to a Total
Commitment not to exceed $250,000,000 as follows:

 

(i)            Not
more than thirty (30) days and not less than fifteen (15) days prior to the
proposed effective date of such increase in Commitments, the Borrowers may make
a written request for such increase to the Administrative Agent, who shall
forward a copy of any such request to each of the Lenders.  Each request by the Borrowers pursuant to the
immediately preceding sentence shall specify a proposed effective date of such
increase (the “Requested Increase Effective Date”), the aggregate amount
of such requested increase in Commitments (the “Requested Increase Amount”),
and shall constitute an invitation to each Lender to increase its Commitment by
a ratable portion of such Requested Increase Amount.

 

(ii)           Each
Lender, acting in its sole discretion and with no obligations to increase its
Commitment pursuant to this Section 4.1(b), shall by written notice
to the Borrowers and the Administrative Agent advise the Borrowers and the
Administrative Agent whether or not such Lender agrees to all or any portion of
such increase in Commitment within ten (10) days after the Borrowers’
request.  Any such Lender may accept all
of such ratable increase, a portion of such increase, or decline to accept any
of such increase in Commitment.  If any
Lender shall not have responded affirmatively within such ten (10) day
period, such Lender shall be deemed to have rejected the Borrowers’ request for
an increase in Commitment in full. 
Promptly following the conclusion of such ten (10) day period, the
Administrative Agent shall notify the Borrowers of the results of such request
to the Lenders to so increase the Commitments by the Requested Increase Amount.

 

 

 

 

49

 

 

(iii)          If
the aggregate amount of the increases in Commitment which the Lenders have
accepted in accordance with Section 4.1(b)(ii) shall be less
than the Requested Increase Amount, the Administrative Agent (subject to the
approval of the Borrowers and the Issuing Lenders) may offer to such additional
Persons (including Lenders) as may be agreed by the Borrowers and the
Administrative Agent (to the extent not Existing Lenders, “New Lenders”)
the opportunity to make available such amount of new Commitments as may be required
so that the aggregate increases in Commitments by the existing Lenders and new
Commitments by the New Lenders shall equal the Requested Increase Amount (the
aggregate increases in Commitments by the existing Lenders and new Commitments
by the New Lenders, the “Increase Amount”).  Such Increase Amount shall be in an amount
equal to $50,000,000 or a whole multiple thereof.  The effectiveness of all such increases in
Commitments are subject to the satisfaction of the following conditions: (A) each
Lender that so elects to increase its Commitments (each an “Increasing
Lender”), each New Lender, the Administrative Agent and the Borrowers shall
have executed and delivered an agreement, substantially in the form attached
hereto as Exhibit N (an “Increase and New Lender Agreement”);
(B) the Total Commitment after giving effect to such increases shall not
exceed $250,000,000; (C) any fees and other amounts (including, without
limitation, pursuant to Section 11.6) payable by the Borrowers in
connection with such increase and accession shall have been paid; (D) no
Default or Event of Default has occurred and is continuing or would result from
such increase in the Commitments; (E) each of the Borrowers’ Consolidated
Net Working Capital, Consolidated Tangible Net Worth and Consolidated Leverage
Ratio at the time of such increase, each as determined by the Applicable
Financial Statements, are within the requirements set forth opposite the
Maximum Amount equal to the Total Commitments after giving effect to such increases;
and (F) delivery of a certificate of a Responsible Person of the Borrowers
as to the matters set forth in Sections 6.2(b), (c) and (e).

 

(iv)          On
any Requested Increase Effective Date, (i) each Increasing Lender or New
Lender shall make available to the Administrative Agent such amounts in
immediately available funds as the Administrative Agent shall determine, for
the benefit of the other relevant Lenders, as being required in order to cause,
after giving effect to such increase and the use of such amounts to make
payments to such other relevant Lenders, each Lender’s portion of the
outstanding Loans of all the Lenders to equal its Commitment Percentage of such
Loans and (ii) the Borrowers shall be deemed to have repaid and reborrowed
all outstanding Loans of all the Lenders to equal its Commitment Percentage of
such outstanding Loans as of the date of any increase in the Commitments (with
such reborrowing to consist of the Types of Loans, with related Interest
Periods if applicable, specified in a notice delivered by the Borrowers in
accordance with the requirements of Section 4.3).  The deemed payments made pursuant to clause (ii) of
the immediately preceding sentence in respect of each Eurodollar Loan shall be
subject to indemnification by the Borrowers pursuant to the provisions of Section 4.14
if the deemed payment occurs other than on the last day of the related Interest
Periods.

 

(v)           Upon
the Requested Increase Effective Date, Schedule 1.0 of the Increase and
New Lender Agreement, which shall reflect the Commitments and Commitment
Percentages of the Lenders at such time, shall be deemed to supersede Schedule
1.0 hereto without any further action or consent of any party.  The Administrative Agent shall cause a copy
of such revised Schedule 1.0 to be available to the Issuing Lenders and
the Lenders.

 

4.2           Interest
Rates and Payment Dates.

 

(a)           Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurodollar Rate for such Eurodollar
Loan determined for such day plus the Applicable Margin.

 

(b)           Each
Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus
the Applicable Margin.

 

 

 

 

50

 

 

(c)           Each
Cost of Funds Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Cost of Funds for such
Cost of Funds Loan determined for such day plus the Applicable Margin.

 

(d)           (i) If
all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans and Reimbursement Obligations
(whether or not overdue) (to the extent legally permitted) shall bear interest
at a rate per annum that is equal to (x) in the case of the Loans, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans plus
2%, and (ii) if all or a portion of any interest payable on any Loan or
Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans plus 2%,
in each case, with respect to clauses (i) and (ii) above, from the
date of such non-payment until such amount is paid in full (after as well as
before judgment).

 

(e)           Interest
shall be payable in arrears on each Interest Payment Date.

 

4.3           Conversion
and Continuation Options.

 

(a)           The
Borrowers may elect from time-to-time to Convert Eurodollar Loans to Base Rate
Loans or Cost of Funds Loans by giving the Administrative Agent at least two (2) Business
Days’ prior irrevocable notice of such election in the form attached hereto as
Annex II (the “Continuation/Conversion Notice”), such
Continuation/Conversion Notice specifying the amount and the date such
Conversion is to be made; provided that, any such Conversion of
Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto.  The Borrowers may elect
from time-to-time to Convert Base Rate Loans or Cost of Funds Loans to
Eurodollar Loans by giving the Administrative Agent irrevocable notice of such
election (in the form of a Continuation/Conversion Notice) prior to 12:00 Noon
(New York City time) at its New York office, three (3) Business Days
before the date of such election.  Any
such notice of Conversion to Eurodollar Loans shall specify the amount to be
Converted, the date of such Conversion and the length of the initial Interest
Period or Interest Periods therefor.  The
Borrowers may elect from time-to-time to Convert Base Rate Loans to Cost of
Funds Loans or Convert Cost of Funds Loans to Base Rate Loans by giving the
Administrative Agent irrevocable notice of such election (in the form of a
Continuation/Conversion Notice) prior to 12:00 Noon (New York City time) at its
New York office, one (1) Business Day before the date of such
election.  Any such notice of Conversion
shall specify the amount to be Converted, the date of such Conversion and the
length of the initial Interest Period or Interest Periods therefor.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.  All or any part of outstanding Eurodollar
Loans, Base Rate Loans or Cost of Funds Loans may be Converted as provided herein;
provided that, (i) no Base Rate Loan or Cost of Funds Loan may be
Converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
reasonably determined that such a Conversion is not appropriate and (ii) no
Base Rate Loan or Costs of Funds Loan may be Converted into a Eurodollar Loan
after the date that is one (1) month prior to the Termination Date.

 

(b)           Any
Eurodollar Loans or Cost of Funds Loans may be Continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrowers giving the Administrative Agent irrevocable notice (in the form of a
Continuation/Conversion Notice) prior to 12:00 Noon (New York City time), at
its New York office, in each case, three (3) Business Days before the date
such Eurodollar Loans or Cost of Funds Loans are to be Continued, in accordance
with the applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to 

 

 

 

 

51

 

 

be applicable to such Loans.  If
the relevant Borrower fails to give timely notice requesting a Continuation,
then the applicable Loans shall be made as, or converted to, Base Rate
Loans.  Any automatic Conversion to Base
Rate Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Loans or Cost of Funds Loans.

 

(c)           During
the existence of an Event of Default, no Revolving Credit Loan may be requested
as, Converted to or Continued as Eurodollar Loans or Cost of Funds Loans if the
Required Lenders have reasonably determined that such a request, Conversion or
Continuation is not appropriate.

 

4.4           Minimum
Amounts of Tranches; Maximum Number of Tranches.  (a)  All
borrowings, Conversions and Continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each Tranche shall be equal to $1,000,000 or a
whole multiple of $100,000 in excess thereof.

 

(b)           No
more than fifteen (15) Tranches of Eurodollar Loans shall be outstanding at any
one time.

 

4.5           Repayment
of Loans; Evidence of Debt.

 

(a)           Each
Borrower unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender the then unpaid principal amount of each Loan
and Reimbursement Obligation of such Borrower owing to such Lender on the
Termination Date (or such earlier date on which the Loans mature in accordance
with this Agreement, become due and payable pursuant to Section 9.1
or the Commitments terminate pursuant to Section 4.1).  Each Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans and Reimbursement
Obligations of such Borrower from time-to-time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 4.2.

 

(b)           Each
Lender shall maintain in accordance with its usual practice a record or records
setting forth all of the indebtedness of the Borrowers to such Lender resulting
from each Loan of such Lender from time-to-time, including the amounts of principal
and interest payable and paid to such Lender from time-to-time under this
Agreement.

 

(c)           The
Administrative Agent on behalf of the Borrowers, shall maintain the Register
required by Section 11.7(d), and shall include a subaccount therein
for each Lender, in which it shall record, for each Loan (i) the amount of
such Loan and a copy of the Note, if any, evidencing such Loan, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder, and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrowers and each
Lender’s share thereof.

 

(d)           The
entries made in the Register and the records of each Lender maintained pursuant
to Section 4.5(b) shall, to the extent permitted by applicable
Law, be prima facie evidence of the existence and amounts of the obligations of
the Borrowers therein recorded (absent manifest error); 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 the Borrowers to
repay (with applicable interest) the Loans and other Extensions of Credit made
to such Borrowers by such Lender in accordance with the terms of this
Agreement.

 

 

 

52

 

 

(e)           Each
Borrower agrees that, upon the request to the Administrative Agent by any
Lender, such Borrower will execute and deliver to such Lender a promissory note
evidencing the Revolving Credit Loan, Daylight Overdraft Loans or the Swing
Line Loans, as applicable, of such Lender, substantially in the form of Exhibit A-1,
A-2 or A-3, as applicable, with appropriate insertions as to date
and principal amount individually a “Note” and, collectively,
the “Notes”.

 

4.6           Optional
Prepayments.  Each Borrower may at
any time and from time-to-time prepay the Loans made to it, in whole or in
part, without premium or penalty, upon notice in the form attached hereto as
Annex III (the “Notice of Prepayment”) delivered to the Administrative
Agent (x) no later than 11:00 a.m. (New York City time) at least
three (3) Business Days prior to the proposed prepayment date in the case
of Eurodollar Loans, (y) no later than 11:00 a.m. (New York City
time) one (1) Business Day prior to the proposed prepayment date in the
case of Revolving Credit Loans that are Base Rate Loans or Cost of Funds Loans,
and (z) not later than 11:00 a.m. (New York City time) on the
proposed prepayment date in the case of Swing Line Loans, in each case, which
notice shall specify (A) the date and amount of prepayment, (B) which
Loans shall be prepaid and (C) whether the prepayment is of Base Rate
Loans, Cost of Funds Loans, Eurodollar Loans or a combination thereof, and, if
of a combination thereof, the amount allocable to each; provided that,
if a Eurodollar Loan or Cost of Funds Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, or such Borrower revokes
any notice of prepayment previously delivered pursuant to this Section 4.6,
such Borrower shall also pay any amounts owing pursuant to Section 4.14.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to Section 4.14.  Partial prepayments pursuant to this Section 4.6
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.

 

4.7           Mandatory
Prepayments.

 

(a)           If
on any Borrowing Base Date, the Total Extensions of Credit exceed the Total
Borrowing Base, the Borrowers shall prepay the Loans and/or Cash Collateralize,
replace or decrease (if the beneficiary of such Letter of Credit agrees to such
decrease) the amount of outstanding Letters of Credit in an amount so that,
after giving effect to any such action, the Total Extensions of Credit do not
exceed the Total Borrowing Base, no later than the Business Day immediately
following the date that is the earlier of (x) the date on which the
Borrowing Base Report for such Borrowing Base Date is required to be delivered
pursuant to Section 7.2(c) and (y) the date on which such
Borrowing Base Report is actually delivered.

 

(b)           If
on any date the Total Extensions of Credit exceed the Total Commitment, the
Borrowers shall prepay the Loans and/or Cash Collateralize, replace or decrease
(if the beneficiary of such Letter of Credit agrees to such decrease) the
amount of outstanding Letters of Credit in an amount so that, after giving
effect to any such action, the Total Extensions of Credit do not exceed the
Total Commitment, no later than three (3) Business Days immediately
following such date.

 

(c)           If
on any date the Total Extensions of Credit exceed the Maximum Amount then in
effect, the Borrowers shall prepay the Loans and/or Cash Collateralize, replace
or decrease (if the beneficiary of such Letter of Credit agrees to such
decrease) the amount of outstanding Letters of Credit in an amount so that,
after giving effect to any such action, the Total Extensions of Credit do not
exceed the Maximum Amount then in effect, no later than three (3) Business
Days immediately following such date.

 

(d)           If
on any date the aggregate outstanding amount of L/C Obligations in respect of
364-Day Trade Sub-Limit Letters of Credit and Performance Letters of Credit
exceeds the 364-Day 

 

 

 

 

53

 

 

Letters of Credit Sub-Limit then in effect, the Borrowers shall Cash
Collateralize, replace or decrease (if the beneficiary of such Letter of Credit
agrees to such decrease) the amount of outstanding 364-Day Trade Letters of
Credit and Performance Letters of Credit in an amount so that, after giving
effect to any such action, the aggregate outstanding amount of L/C Obligations
in respect of 364-Day Trade Sub-Limit Letters of Credit and Performance Letters
of Credit does not exceed the 364-Day Letters of Credit Sub-Limit then in
effect, no later than three (3) Business Days immediately following such
date.

 

(e)           The
Borrowers shall notify the Administrative Agent (and, in the case of prepayment
of a Swing Line Loan, the Swing Line Lender) by written notice of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan,
not later than 11:00 a.m. (New York City time), three Business Days before
the date of the prepayment, (ii) in the case of prepayment of a Revolving
Credit Loan that is a Base Rate Loan or Cost of Funds Loan, not later than
11:00 a.m. (New York City time) one Business Day before the date of the
prepayment and (iii) in the case of prepayment of a Swing Line Loan, not
later than 11:00 a.m. (New York City time) on the date of prepayment.  Each such notice shall specify the prepayment
date, the principal amount of each Loan or portion thereof to be prepaid and,
in the case of a mandatory prepayment, a reasonably detailed calculation of the
required amount of such prepayment. 
Promptly following receipt of any such notice (other than a notice
relating solely to Swing Line Loans), the Administrative Agent shall advise the
Lenders of the contents thereof.  Each
prepayment of an extension of credit shall be applied ratably to the Loans
included in the prepaid extension of credit and otherwise in accordance with
this Section 4.7(e). 
Prepayments shall be accompanied by accrued interest to the extent
required by Section 4.2.

 

(f)            Any
prepayment of Loans pursuant to this Section 4.7, and the rights of
the Lenders in respect thereof, are subject to the provisions of Section 4.9.

 

4.8           Computation
of Interest and Fees.

 

(a)           All
fees and interest on Eurodollar Loans and Cost of Funds Loans shall be
calculated on the basis of a 360-day year for the actual days elapsed.  Interest on Base Rate Loans shall be
calculated on the basis of a 365/366-day year, as the case may be, for the
actual days elapsed.  The Administrative
Agent shall as soon as practicable notify the Borrowers and the Lenders of each
determination of each Eurodollar Rate for any Eurodollar Loans
outstanding.  Any change in the interest
rate on a Loan resulting from a change in the Base Rate shall become effective
as of the opening of business on the day on which such change becomes
effective.  The Administrative Agent
shall as soon as practicable notify the Borrowers and the Lenders of the
effective date and the amount of each such change in interest rate.

 

(b)           Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrowers
and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the
request of the Borrowers, deliver to the Borrowers a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 4.2(a) or (b).

 

4.9           Pro
Rata Treatment and Payments.

 

(a)           Each
borrowing by any Borrower from the Lenders hereunder and any reduction of the
Commitment shall be made pro  rata according to the respective
Commitment Percentages, as applicable, of the Lenders.  Each payment (including each prepayment) by
any Borrower on account of principal of and interest and fees on the Revolving
Credit Loans and Reimbursement Obligations shall be made pro  rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans and Reimbursement Obligations then held by the Lenders.

 

 

 

 

54

 

 

(b)           All
payments (including prepayments) to be made by the Borrowers hereunder on
account of principal of Loans (other than Base Rate Loans) shall be accompanied
by a payment in an amount equal to all accrued and unpaid interest on such
Loans.  All payments (including
prepayments) to be made by the Borrowers hereunder (other than in respect of
Daylight Overdraft Loans), whether on account of principal, interest, fees or
otherwise, shall be made without set-off or counterclaim and shall be made
prior to 1:00 p.m. (New York City time) on the due date thereof to the
Administrative Agent, in the case of Revolving Credit Loans, for the account of
the Lenders, and in the case of Swing Line Loans, for the account of the Swing
Line Lender, at the Administrative Agent’s office specified in Section 11.2
in immediately available funds. All payments made by the Borrowers on account
of Daylight Overdraft Loans shall be made without set-off or counterclaim and
shall be made prior to 4:00 p.m. (New York City time) on the Borrowing
Date of such Daylight Overdraft Loan to the Administrative Agent for the
account of the Daylight Overdraft Lender at the Administrative Agent’s office
specified in Section 11.2 in immediately available funds. The
Administrative Agent shall distribute such payments, in the case of Revolving
Credit Loans, to the Lenders, in the case of Daylight Overdraft Loans, to the
Daylight Overdraft Lender, and in the case of Swing Line Loans, to the Swing
Line Lender, promptly upon receipt in like funds as received.  If any payment hereunder (other than payments
on Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment obligation shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.  If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.

 

(c)           Unless
the Administrative Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount.  If
such amount is not made available to the Administrative Agent by the required
time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative
Agent.  A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this Section 4.9 shall be conclusive in the absence of
manifest error.  If such Lender’s
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans on demand, from the Borrowers (without duplication of the interest
otherwise applicable thereto).

 

(d)           The
application of any payment of Loans (including optional and mandatory
prepayments) shall be made, first, to Base Rate Loans, second, to Cost of Funds
Loans, and third, to Eurodollar Loans. 
Each payment of the Loans (except in the case of Daylight Overdraft
Loans, Swing Line Loans and Revolving Credit Loans that are Base Rate Loans)
shall be accompanied by accrued interest to the date of such payment on the
amount paid.

 

4.10         Requirements
of Law.  (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made subsequent
to the date hereof:

 

 

 

 

 

55

 

 

(i)            does
or shall subject any Lender to any Tax or increased Tax of any kind whatsoever
with respect to this Agreement, any Note or any Eurodollar Loan made by it, any
Letter of Credit issued by it (except for changes in the rate of tax on the
overall net income of such Lender or Non-Excluded Taxes for which
indemnification or additional costs are paid pursuant to Section 4.11)
or change the basis of taxation of payments to such Lender in respect thereof;

 

(ii)           does
or shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any office
of such Lender which is not otherwise included in the determination of the
Eurodollar Rate; or

 

(iii)          does
or shall impose on such Lender any other condition, cost or expense;

 

and the result of
any of the foregoing is to increase the cost to such Lender of making,
Converting into, Continuing or maintaining Eurodollar Loans or issuing,
providing and maintaining Letters of Credit or holding an interest in any
Issuing Lender’s obligations thereunder, or to reduce any amount receivable by
the Lender in respect thereof;

 

then, in any such
case, the Borrowers shall promptly, after receiving notice as specified in
clause (c) of this Section 4.10, pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduced amount receivable plus any Taxes thereon.

 

(b)           If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority made subsequent
to the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time-to-time, the Borrowers shall promptly pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction plus
any taxes thereon.

 

(c)           If
any Lender becomes entitled to claim any additional amounts pursuant to this Section 4.10, it shall promptly notify the Borrowers
(with a copy to the Administrative Agent) of the event by reason of which it
has become so entitled.  A certificate as
to any additional amounts payable pursuant to this Section 4.10 submitted by such Lender to the
Borrowers (with a copy to the Administrative Agent) shall be presumed to be
correct in the absence of manifest error. 
The agreements in this Section 4.10 shall survive the termination of this
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable hereunder.

 

4.11         Taxes.

 

(a)           Any
and all payments by each Loan Party under or in respect of this Agreement or
any other Loan Documents to which such Loan Party is a party shall be made free
and clear of, and without deduction or withholding for or on account of, any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities (including penalties, interest and additions
to tax) with respect thereto, whether now or hereafter imposed, levied,
collected, withheld or assessed by any taxation authority or other Governmental
Authority (collectively, “Taxes”), unless required by law.  If 

 

 

 

 

 

56

 

 

any Loan Party shall be required under any Requirement of Law to deduct
or withhold any Taxes from or in respect of any sum payable under or in respect
of this Agreement or any of the other Loan Documents to the Lender (including
for purposes of this Section 4.11 and Section 4.10 any
assignee, successor or participant), (i) such Loan Party shall make all
such deductions and withholdings in respect of Taxes, (ii) such Loan Party
shall pay the full amount deducted or withheld in respect of Taxes to the
relevant taxation authority or other Governmental Authority in accordance with
any Requirement of Law, and (iii) the sum payable by such Loan Party shall
be increased as may be necessary so that after such Loan Party has made all
required deductions and withholdings (including deductions and withholdings
applicable to additional amounts payable under this Section 4.11)
such Lender receives an amount equal to the sum it would have received had no
such deductions or withholdings been made in respect of Non-Excluded
Taxes.  For purposes of this Agreement
the term “Non-Excluded Taxes” are Taxes other than, (A) in the case
of a Lender, Taxes that are imposed on its overall net income (and franchise
taxes imposed in lieu thereof) by the jurisdiction under the laws of which such
Lender is organized, of its applicable lending office, and, in the case of any
Non-Exempt Lender that provides the Borrowers with an IRS Form W-8ECI, the
United States, or, in each case, any political subdivision thereof, unless such
type of Taxes are imposed solely as a result of such Lender having executed,
delivered or performed its obligations or received payments under, or enforced,
this Agreement, the Notes or any of the other Loan Documents (in which case
such Taxes will be treated as Non-Excluded Taxes) and (B) in the case of a
Non-Exempt Lender, any withholding tax that is imposed on amounts payable to
such Non-Exempt Lender at the time such Non-Exempt Lender becomes a party to
this Agreement (or designates a different Applicable Lending Office pursuant to
Section 4.11(i)) or is attributable to such Non-Exempt Lender’s
failure to comply with Section 4.11(e), except to the extent that such
Non-Exempt Lender (or its assignor, if any) was entitled, at the time of
designation of a different Applicable Lending Office (or assignment), to
receive additional amounts from the Loan Parties with respect to such
withholding tax pursuant to this Section 4.11(a).

 

(b)           In
addition, each Loan Party hereby agrees to pay any present or future stamp,
recording, documentary, excise, property or value-added taxes, or similar
taxes, charges or levies that arise from any payment made under or in respect
of this Agreement or any other Loan Document or from the execution, delivery or
registration of, any performance under, or otherwise with respect to, this
Agreement or any other Loan Document (collectively, “Other Taxes”).

 

(c)           Each
Loan Party hereby agrees to indemnify the Lenders and each Agent for, and to
hold each harmless against, the full amount of Non-Excluded Taxes and Other
Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 4.11 imposed on or paid by such
Lender or Agent, and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto.  The indemnity by the Loan Parties provided
for in this Section 4.11(c) shall apply and be made whether or
not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder
is sought have been correctly or legally asserted.  Amounts payable by any Loan Party under the
indemnity set forth in this Section 4.11(c) shall be paid
within ten (10) days from the date on which any Lender or Agent makes
written demand therefor.  Notwithstanding
anything herein to the contrary, no Lender or Agent shall be indemnified for
any Non-Excluded Taxes or Other Taxes hereunder unless such Lender or Agent
shall make written demand on such Loan Party for indemnification hereunder no
later than 180 days after the earlier of (i) the date on which such Lender
(or Agent on behalf of such Lender) makes payment of the Non-Excluded Taxes or
Other Taxes and (ii) the date on which the relevant taxation authority or
other Governmental Authority makes written demand upon such Lender or Agent for
payment of the Non-Excluded Taxes or Other Taxes (for purposes of this clause
(ii), “written demand” means a written notice that includes the amount of such
Non-Excluded Taxes or Other Taxes).  Any
such demand shall be in writing and shall describe in reasonable detail any
such Non-Excluded Taxes or Other Taxes. 
In the event such Lender or Agent fails 

 

 

 

57

 

 

to give a Loan Party timely written demand as provided herein, the Loan
Party shall not have any obligation to pay such claim for indemnification.

 

(d)           Within
thirty (30) days after the date of any payment of Taxes, the applicable Loan
Party (or any Person making such payment on behalf of the Loan Parties) shall
furnish to the applicable Lender or Agent for its own account a certified copy
of the original official receipt evidencing payment thereof.

 

(e)           For
purposes of this Section 4.11(e), the terms “United States” and “United
States person” shall have the meanings specified in Section 7701 of the
Code.  Each Lender (including for
avoidance of doubt any assignee, successor or participant) that either (i) is
not incorporated under the laws of the United States, any State thereof, or the
District of Columbia or (ii) whose name does not include “Incorporated,” “Inc.,”
“Corporation,” “Corp.,” “P.C.,” “N.A.,” “National Association,” “insurance
company,” or “assurance company” (a “Non-Exempt Lender”) shall deliver
or cause to be delivered to the Loan Parties the following properly completed
and duly executed documents:

 

(i)            in
the case of a Non-Exempt Lender that is not a United States person, a complete
and executed (x) U.S. Internal Revenue Form W-8BEN with Part II
completed in which Lender claims the benefits of a tax treaty with the United
States providing for a zero or reduced rate of withholding (or any successor
forms thereto), including all appropriate attachments or (y) a U.S.
Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

 

(ii)           in
the case of a Non-Exempt Lender that is an individual, (x) a complete and
executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms
thereto) and a certificate substantially in the form of Exhibit D
(a “Section 4.11 Certificate”) or (y) a complete and executed
U.S. Internal Revenue Service Form W-9 (or any successor forms thereto);
or

 

(iii)          in
the case of a Non-Exempt Lender that is organized under the laws of the United
States, any State thereof, or the District of Columbia, a complete and executed
U.S. Internal Revenue Service Form W-9 (or any successor forms thereto);
or

 

(iv)          in
the case of a Non-Exempt Lender that (x) is not organized under the laws
of the United States, any State thereof, or the District of Columbia and (y) is
treated as a corporation for U.S. federal income tax purposes, a complete and
executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms
thereto) and a Section 4.11 Certificate; or

 

(v)           in
the case of a Non-Exempt Lender that (A) is treated as a partnership or
other non-corporate entity, and (B) is not organized under the laws of the
United States, any State thereof, or the District of Columbia, (x)(i) a
complete and executed U.S. Internal Revenue Service Form W-8IMY (or any
successor forms thereto) (including all required documents and attachments) and
(ii) a Section 4.11 Certificate, and (y) without duplication,
with respect to each of its beneficial owners and the beneficial owners of such
beneficial owners looking through chains of owners to individuals or entities
that are treated as corporations for U.S. federal income tax purposes (all such
owners, “beneficial owners”), the documents that would be provided by each such
beneficial owner pursuant to this Section 4.11(e) if each such
beneficial owner were a Lender; provided, however, that no such
documents will be required with respect to a beneficial owner to the extent the
actual Lender is determined to be in compliance with the requirements for
certification on behalf of its beneficial owner as may be provided in
applicable U.S. Treasury regulations, or the requirements of this clause (v) are
otherwise determined to be unnecessary as determined by the Loan Party in its
sole discretion; provided, however, that Lender shall be provided
an opportunity to establish such compliance as reasonable; or

 

 

 

 

58

 

 

(vi)          in
the case of a Non-Exempt Lender that is disregarded for U.S. federal income tax
purposes, the document that would be provided by its beneficial owner for U.S.
federal income tax purposes pursuant to this Section 4.11(e) if
such beneficial owner were the Lender; or

 

(vii)         in
the case of a Non-Exempt Lender that (A) is not a United States person and
(B) is acting in the capacity as an “intermediary” (as defined in U.S.
Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY
(or any successor form thereto) (including all required documents and
attachments) and (ii) a Section 4.11 Certificate, and (y) if the
intermediary is a “non-qualified intermediary” (as defined in U.S. Treasury
Regulations), from each person upon whose behalf the “non-qualified
intermediary” is acting the documents that would be provided by each such
person pursuant to this Section 4.11(e) if each such person
were Lender.

 

If any Lender
provides a form pursuant to clause (i)(x) and the form provided by such
Lender at the time such Lender first becomes a party to this Agreement or, with
respect to a grant of a participation, the effective date thereof indicate a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be treated as Taxes other than “Non-Excluded Taxes” (“Excluded
Taxes”) and shall not qualify as Non-Excluded Taxes unless and until such
Lender provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate shall be considered Excluded
Taxes solely for the periods governed by such form.  If, however, on the date a Person becomes an
Assignee, successor or Participant to this Agreement, the Lender transferor was
entitled to indemnification or additional amounts under this Section 4.11,
then the Lender Assignee, successor or Participant shall be entitled to
indemnification or additional amounts to the extent (and only to the extent),
that the Lender transferor was entitled to such indemnification or additional
amounts for Non-Excluded Taxes, and the Lender Assignee, successor or Participant
shall be entitled to additional indemnification or additional amounts for any
other or additional Non-Excluded Taxes.

 

(f)            For
any period with respect to which a Lender has failed to provide the Loan
Parties with the appropriate form, certificate or other document described in Section 4.11(e),
if required (other than (i) if such failure is due to a change in any
Requirement of Law, or in the interpretation or application thereof, occurring
after the date on which a form, certificate or other document originally was
required to be provided by such Lender or (ii) if it is legally
prohibited), such Lender shall not be entitled to indemnification or additional
amounts under sub-section (a) or (c) of this Section 4.11
with respect to Non-Excluded Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender become
subject to Non-Excluded Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Loan Parties shall take
such steps as such Lender shall reasonably request to assist such Lender in
recovering such Non-Excluded Taxes.

 

(g)           If
any Agent or Lender determines, in its sole discretion, that it has received a
refund of any Non-Excluded Taxes or Other Taxes as to which it has been
indemnified by the Loan Parties or with respect to which the Loan Parties have
paid additional amounts pursuant to this Section 4.11, it shall pay
over such refund to the Loan Parties (but only to the extent of indemnity
payments made, or additional amounts paid, by the Loan Parties under this Section 4.11
with respect to the Non-Excluded Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Agent or Lender and without
interest (other than any interest paid by the relevant taxation authority or
other Governmental Authority with respect to such refund); provided
that, the Loan Parties, upon the request of such Agent or Lender, agree to
repay the amount paid over to the Loan Parties (plus any penalties,
interest or other charges imposed by the relevant taxation authority or other
Governmental Authority) to such Agent or Lender in the event such Agent or
Lender is required to repay such refund to such taxation authority or other
Governmental Authority.  In no event
shall any Agent or Lender be required to arrange its Tax affairs to claim any
refund.  This Section 4.11(g) shall
not be construed to require any Agent or Lender to make available its Tax
returns (or any other information relating to its 

 

 

 

 

59

 

 

Taxes that it deems confidential in its sole discretion) to the Loan
Parties or any other person. 
Notwithstanding anything to the contrary, in no event shall any Agent or
Lender be required to pay any amount to the Loan Parties the payment of which
would place it in a less favorable net after-Tax position than it would have
been in if the additional amounts giving rise to such refund of Non-Excluded
Taxes had never been paid.

 

(h)           Without
prejudice to the survival of any other agreement of the Loan Parties hereunder,
the agreements and obligations of the Loan Parties contained in this Section 4.11
shall survive the termination of this Agreement and the other Loan
Documents.  Nothing contained in Section 4.10
or this Section 4.11 shall require any Agent or Lender to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.

 

(i)            Each
Lender hereby agrees that, upon the occurrence of any circumstances entitling
such Lender to additional amounts pursuant to this Section 4.11, at
the request of the Borrowers, such Lender shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions), at
the sole cost and expense of the Borrowers, to designate a different Applicable
Lending Office if the making of such a change would avoid the need for, or
materially reduce the amount of, any such additional amounts that may
thereafter accrue and would not be, in the sole judgment of such Lender, legally
inadvisable or commercially or otherwise disadvantageous to such Lender in any
respect.

 

4.12         Lending
Offices.  Loans of each Type made by any Lender shall
be made and maintained at such Lender’s Applicable Lending Office for Loans of
such Type.

 

4.13         Credit
Utilization Reporting.  Within five (5) Business
Days after the end of each calendar month, each Issuing Lender shall deliver a
report to the Administrative Agent, substantially in the form of Annex IV (a “Credit
Utilization Summary”), setting forth, for each Letter
of Credit issued or provided by such Issuing Lender, (i) the amount
available to be drawn or utilized under such Letters of Credit as of the end of
such calendar month and (ii) the amount of any drawings, payments or
reductions of such Letters of Credit during such month, in each case, on an
aggregate and per Letter of Credit basis. 
Upon receiving notice from a Borrower or the beneficiary under a Letter
of Credit issued or provided by such Issuing Lender of a reduction or
termination of such Letter of Credit, each Issuing Lender shall notify the
Administrative Agent thereof.

 

4.14         Indemnity.  The Borrowers agree to indemnify each Lender
and to hold each Lender harmless from any actual loss or expense which such
Lender may sustain or incur as a consequence of (a) default by any
Borrower in making a borrowing of, Conversion into or Continuation of Costs of
Funds Loans or Eurodollar Loans after such Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b) default
by the Borrowers in making any prepayment after the Borrowers have given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans or Cost of Funds Loans on a day
which is not the last day of an Interest Period with respect thereto.  This covenant shall survive the termination
of this Agreement and the payment in full of the Loans, Reimbursement
Obligations and all other amounts payable hereunder.

 

4.15         Inability
to Determine Interest Rate.  (a) If
prior to the first day of any Interest Period:

 

(i)            the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the relevant Eurodollar Rate for such Interest Period, or

 

 

 

 

60

 

 

(ii)           the
Administrative Agent shall have received notice from the Required Lenders that
the relevant Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their affected Revolving Credit Loans during such
Interest Period;

 

then the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers, and the Lenders as soon as practicable thereafter.

 

(b)           If
such notice is given with respect to the Eurodollar Rate applicable to
Revolving Credit Loans, (w) any such Eurodollar Loan requested to be made
on the first day of such Interest Period shall be made as Base Rate Loans, (x) any
Base Rate Loans that were to have been Converted on the first day of such
Interest Period to Eurodollar Loans shall continue as Base Rate Loans, (y) any
Cost of Funds Loans that were to have been Converted on the first day of such
Interest Period to Eurodollar Loans shall continue as Cost of Funds Loans and (z) any
outstanding Eurodollar Loans shall be Converted to Base Rate Loans on the first
day of such Interest Period.  Until such
notice has been revoked by the Administrative Agent, no further Eurodollar
Loans shall be made or Continued as such, nor shall the Borrowers have the
right to Convert Base Rate Loans or Cost of Funds Loans to Eurodollar Loans

 

(c)           The
Administrative Agent shall promptly revoke (i) any such notice pursuant to
clause (a) above if the Administrative Agent determines that the relevant
circumstances have ceased to exist and (ii) any such notice pursuant to
clause (b) above upon receipt of notice from the Required Lenders that the
relevant circumstances described in such clause (b) have ceased to exist.

 

4.16         Illegality.  Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, Continue
Eurodollar Loans as such and Convert Base Rate Loans or Cost of Funds Loans to
Eurodollar Loans shall forthwith be cancelled and (b) such Lender’s Loans
then outstanding as Eurodollar Loans, if any, shall be Converted automatically
to Base Rate Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law.  If any such Conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrowers shall pay to such Lender
such amounts, if any, as may be required pursuant to Section 4.14.

 

4.17         Replacement
of Lenders.  If (a)(i)(A) any
Borrower is required to pay any additional amount to or indemnify any Lender
pursuant to Section 4.11 or (B) any Lender requests
compensation under Section 4.10, and (ii) in the case of Section 4.11,
the Lender has declined to designate a different Applicable Lending Office as
provided in Section 4.11(i), (b) any Lender invokes Section 4.16,
(c) any Lender defaults in its obligations to fund Loans hereunder, or (d) if
any Lender has failed to consent to a proposed amendment, waiver or other
modification that, pursuant to the terms of Section 11.1, requires
the consent of all the Lenders, or all affected Lenders, and with respect to
which the Required Lenders shall have granted their consent, then, in each
case, so long as no Default or Event of Default shall have occurred and be
continuing, the Borrowers may, at their sole cost and expense, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
and obligations contained in Section 11.7), all of its interests,
rights (other than its existing rights to payments pursuant to Sections 4.10
and 4.11) and obligations under this Agreement and the other Loan
Documents to an assignee that shall assume such obligations and become a Lender
pursuant to the terms of this Agreement and the other Loan Documents; provided
that, the transferring Lender shall have received payment of an amount equal to
(i) the outstanding principal of its Loans, accrued interest thereon, and
accrued fees payable to it hereunder, from 

 

 

 

 

61

 

 

the Assignee and (ii) any additional amounts (including indemnity
payments) payable to it hereunder from the Borrowers; provided  further
that, if, upon such demand by the Borrowers, such Lender elects to waive its
request for additional compensation pursuant to Sections 4.10 or 4.11,
or consents to the proposed amendment, waiver or other modification, the demand
by the Borrowers for such Lender to so assign all of its rights and obligations
under this Agreement shall thereupon be deemed withdrawn.  Nothing in Sections 4.11(i) or
this Section 4.17 shall affect or postpone any of the rights of any
Lender or any of the Obligations of the Borrowers under any of the foregoing
provisions of Sections 4.10, 4.11 or  4.16 in any manner.

 

SECTION 5.                                REPRESENTATIONS AND WARRANTIES

 

To
induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Revolving Credit Loans and provide other Extensions of Credit,
the Borrowers hereby jointly and severally represent and warrant to the
Administrative Agent and each Lender that:

 

5.1           Financial
Condition.  (a) The audited
consolidated balance sheet of the Parent Borrower  and its consolidated Subsidiaries at June 30,
2007 and the related consolidated statements of income and of cash flows for
the fiscal year ended on such date, audited by Kreischer Miller, copies of each
which have heretofore been furnished to each Lender, in each case, present
fairly in all material respects the consolidated financial condition of the
Parent Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the fiscal year then ended.  The
financial statements described in this Section 5.1(a), including
the related schedules and notes thereto, have been prepared in accordance with
GAAP, in each case applied consistently throughout the periods involved (except
as approved by such accountants and as disclosed therein).

 

(b)           The
unaudited consolidated balance sheet of the Parent Borrower and its
consolidated Subsidiaries as at December 31, 2007 and the related
unaudited consolidated statements of income and of cash flows for the six
months ended on such date, prepared in accordance with GAAP, and certified by a
Responsible Person of the Parent Borrower, copies of each of which have
heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the Parent Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the six months then
ended (subject to normal year-end audit adjustments and the absence of
footnotes).

 

(c)           The
unaudited consolidated balance sheets of the BES Borrower and its consolidated
Subsidiaries as at December 31, 2007 and the related unaudited
consolidated statements of income and of cash flows for the fiscal year ended
on such date, certified by a Responsible Person of the BES Borrower, copies of
each of which have heretofore been furnished to each Lender, present fairly in
all material respects the consolidated financial condition of the BES Borrower
and its consolidated Subsidiaries as at such date, and the consolidated results
of their operations and their consolidated cash flows for the fiscal year then
ended (subject to normal year-end audit adjustments and the absence of
footnotes).

 

(d)           Except
as set forth on Schedule 5.1(d) hereto, none of the Borrowers had,
at the date of the most recent balance sheet referred to in Sections 5.1(a), (b) and
(c), as applicable, any material Guarantee Obligation, material contingent
liability or material liability for taxes, or any material long-term lease or
unusual forward or long-term commitment, including, without limitation, any
material interest rate or foreign currency swap or exchange transaction or
other financial derivative, which is not reflected in the foregoing statements
or in the notes thereto.

 

 

 

 

 

62

 

 

(e)           During
the period from June 30, 2007 to and including the date hereof, there has
been no sale, transfer or other disposition by any Loan Party or any of their
respective consolidated Subsidiaries of any material part of their respective
business or property and no purchase or other acquisition of any business or
property (including any Capital Stock of any other Person) material in
relation to the consolidated financial condition of such Loan Party and its
consolidated Subsidiaries at June 30, 2007, other than the divestiture of
substantially all of the assets and liabilities associated with the retail
business of the Parent Borrower pursuant to that certain Purchase Agreement
dated as of March 3, 2008 by and among Parent Borrower, Buckeye Energy
Holdings LLC and Inergy Propane LLC, and those other sales, transfers,
dispositions and acquisitions listed on Schedule 5.1(e).

 

5.2           No
Change.  Since June 30, 2007 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.

 

5.3           Existence;
Compliance with Law.  Each of the Borrowers and their
Subsidiaries (a) is duly formed or 
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate (or analogous)
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where such
qualification is required, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.

 

5.4           Power;
Authorization; Enforceable Obligations.  Each of the
Loan Parties has the corporate (or analogous) power and authority, and the
legal right, to execute, deliver and perform the Loan Documents to which it is
a party and, in the case of the Borrowers, to borrow hereunder and has taken
all necessary corporate (or analogous) action to authorize the borrowings on
the terms and conditions of this Agreement and any Notes and to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party.  Except for (a) the filing of
UCC financing statements and equivalent filings for foreign jurisdictions, (b) consents
to be obtained in the future in the performance of the ordinary course of the
applicable Loan Party’s business for such Loan Party to conduct its business
and (c) the filings or other actions listed on Schedule 5.4 (and
including, without limitation, such other authorizations, approvals,
registrations, actions, notices, or filings as have already been obtained, made
or taken and are in full force and effect), no consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person, including without limitation the FERC, to which
a Borrower or any of their Subsidiaries is subject, is required in connection
with the borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of the Loan Documents to which the Loan Parties are
a party.  As of the Closing Date, there
are no contracts as to which further consent of the FERC may be required in
connection with the exercise of remedies by the Administrative Agent or the
Collateral Agent under the Loan Documents are contracts for the transportation
of certain Eligible Commodities.  This
Agreement and each other Loan Document to which they are a party have been duly
executed and delivered on behalf of the Loan Parties and constitutes a legal,
valid and binding obligation of such Loan Party, as applicable, enforceable
against such Loan Party in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally, and subject
to general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.

 

5.5           No
Conflicts.  The execution, delivery and
performance by the Loan Parties of the Loan Documents to which each of the Loan
Parties is a party, the borrowings hereunder and the use of the proceeds
thereof by the Loan Parties (i) will not violate any Requirement of Law,
including any rules 

 

 

 

 

63

 

 

or regulations promulgated by the FERC, in each case
to the extent applicable to or binding upon such Loan Party or its properties, (ii) will
not violate a material Contractual Obligation of any Borrower or any of their
Subsidiaries, except where such violation could not reasonably be expected to
have a Material Adverse Effect and (iii) will not result in, or require,
the creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation
(other than Liens created by the Security Documents in favor of the Collateral
Agent for the ratable benefit of the Secured Parties and Permitted Liens).

 

5.6           No
Material Litigation.  No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the Actual Knowledge of the Borrowers, threatened by or against any Borrower
or any of their Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or (b) which
could reasonably be expected to have a Material Adverse Effect.

 

5.7           No
Default.   None of the Borrowers or any of their
Subsidiaries is in default under or with respect to any Contractual Obligations
in any respect which could reasonably be expected to have a Material Adverse
Effect.  No Default or Event of Default
has occurred and is continuing.

 

5.8           Ownership
of Property; Liens.  Except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their intended
purposes and except where the failure to have such title could not reasonably
be expected to have a Material Adverse Effect, each Borrower and each of their
Subsidiaries has good and defensible title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except Permitted Liens.

 

5.9           Intellectual
Property.  Each Borrower and each of their
Subsidiaries owns, is licensed to use or has a common law or contractual right
to access and use, all material trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the “Intellectual
Property”). 
Except as set forth on Schedule 5.9, no claim has been filed and
to the Actual Knowledge of the Borrowers, no claim has been asserted by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor to the
Actual Knowledge of the Borrowers is there any valid basis for any such claim
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect.  The use of such
Intellectual Property by the applicable Borrower or Subsidiary does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.

 

5.10         No
Burdensome Restrictions.  No Requirement
of Law or Contractual Obligation of any Borrower or any of their Subsidiaries
has or would reasonably be expected to have a Material Adverse Effect.

 

5.11         Taxes.  (a) Each
Borrower and each of their Subsidiaries has timely filed or caused to be filed
all income, franchise and other material Tax returns required to be filed and
has timely paid all income, franchise and other material Taxes due and payable
by it or imposed with respect to any of its property and all other income,
franchise and other material Taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any Taxes the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the applicable Borrower or Subsidiary).

 

 

 

 

 

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(b)           No
tax liens have been filed and, to the Actual Knowledge of the Borrowers, no
claim is being asserted with respect to Taxes, except for statutory liens for
Taxes not yet due and payable or for Taxes the amount or validity of which are
currently being contested in good faith by appropriate proceedings and, in each
case, with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrowers.

 

5.12         Federal
Regulations.   No part of the proceeds of any
Extension of Credit will be used for “purchasing” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under
Regulation U, or for any purpose which violates, or which would be
inconsistent with, the provisions of the regulations of the Board.  If requested by any Lender or the
Administrative Agent, the Borrowers will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in said
Regulation U.

 

5.13         ERISA. 
Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the six-year period prior to the date on which this
representation is made or deemed made or is reasonably expected to occur with
respect to any Single Employer Plan, and each Plan (including, to the Actual
Knowledge of any Borrower, a Multiemployer Plan or a multiemployer welfare plan
maintained pursuant to a collective bargaining agreement) has complied in all
respects with the applicable provisions of ERISA, the Code and the constituent
documents of such Plan, except for instances of non-compliance that, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.  No termination of a Single
Employer Plan has occurred during such six-year period or is reasonably
expected to occur (other than a termination described in Section 4041(b) of
ERISA), and no Lien in favor of the PBGC or a Plan has arisen during such
six-year period or is reasonably expected to arise.  Except to the extent that any such excess
could not reasonably be expected to have a Material Adverse Effect, the present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued
benefits.  Except to the extent that such
liability could not reasonably be expected to have a Material Adverse Effect, (i) none
of the Borrowers nor any Commonly Controlled Entity have had a complete or
partial withdrawal from any Multiemployer Plan, and (ii) the Loan Parties
would not become subject to any liability under ERISA if any Borrower or any
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. 
To the Actual Knowledge of the Borrowers, no such Multiemployer Plan is
in Reorganization, Insolvent or terminating or is reasonably expected to be in
Reorganization, become Insolvent or be terminated.  Except to the extent that any such excess
could not reasonably be expected to have a Material Adverse Effect, the present
value (determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Borrowers and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) other than such liability disclosed in the financial statements of the
Borrowers does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits.  Neither the
Borrowers nor any Commonly Controlled Entity has engaged in a prohibited
transaction under Section 406 of ERISA and/or Section 4975 of the
Code in connection with any Plan that would subject any Loan Party to liability
under ERISA and/or Section 4975 of the Code that could reasonably be
expected to have a Material Adverse Effect. 
There is no other circumstance which may give rise to a liability in
relation to any Plan that could reasonably be expected to have a Material
Adverse Effect.

 

 

 

 

 

 

65

 

5.14         Investment
Company Act; Other Regulations. 
None of the Loan Parties is an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940.  As of the Closing Date, except
with respect to the transportation of certain Eligible Commodities and the
ownership and operation of facilities in connection with the transportation and
storage of certain Eligible Commodities, none of the Loan Parties or any Person
Controlling the Loan Parties is subject to the jurisdiction of the FERC or any rules and
regulations promulgated thereby.  None of
the Loan Parties is subject to regulation under any Federal, State or
Provincial statute or regulation (other than Regulation X of the Board)
which limits its ability to incur Indebtedness.

 

5.15         Subsidiaries.  Schedule
5.15 sets forth as of the Closing Date the name of each direct or indirect
Subsidiary of each Borrower, their respective forms of organization, their
respective jurisdictions of organization, the total number of issued and
outstanding shares or other interests of Capital Stock thereof, the classes and
number of issued and outstanding shares or other interests of Capital Stock of
each such class, and with respect to the Borrowers, the name of each holder of
Capital Stock thereof and the number of shares or other interests of such
Capital Stock held by each such holder and the percentage of all outstanding
shares or other interests of such class of Capital Stock held by such holders.

 

5.16         Security
Documents.  (a)  The provisions of each Security Document are effective
to create in favor of the Collateral Agent for the ratable benefit of the
Secured Parties a legal, valid and enforceable Lien in all right, title and
interest of each Loan Party party thereto in the “Collateral” described
therein.

 

(b)           When
any stock certificates representing Pledged Collateral are delivered to the
Collateral Agent, and proper financing statements or other applicable filings
listed in Schedule 5.16 have been filed in the offices in the
jurisdictions listed in Schedule 5.16, the Pledge Agreement shall
constitute a fully perfected first Lien on, and security interest in, all
right, title and interest of the Loan Party party thereto in the “Pledged
Collateral” described therein, which can be perfected by such filing, prior and
superior in right to any other Person.

 

(c)           When
proper financing statements or other applicable filings listed in Schedule
5.16 have been filed in the offices in the jurisdictions listed in Schedule
5.16, the Security Agreement shall constitute a fully perfected first Lien
on, and security interest in, all right, title and interest of those Loan
Parties party thereto in the portion of the “Collateral” described therein that
consists of assets included in a Borrowing Base hereunder, which can be
perfected by such filing, prior and superior in right to any other Person
subject to any Permitted Borrowing Base Liens.

 

(d)           When
an Account Control Agreement has been entered into with respect to each Pledged
Account, the Security Agreement shall constitute a fully perfected first Lien
on, and security interest in, all right, title and interest of the Loan Party
party thereto in the portion of the “Collateral” described therein that
consists of Pledged Accounts, prior and superior in right to any other Person
subject to any Permitted Cash Management Liens.

 

5.17         Accuracy and Completeness of
Information.   All written factual information, reports and
other papers and data (other than projections, estimates, pro forma information
and other forward-looking statements) with respect to the Loan Parties or their
assets that were furnished, and all written factual statements and
representations that were made, to the Agents or the Lenders by any Loan Party
or on behalf of any Loan Party at its direction, were, taken as a whole, at the
time the same were so furnished or made, and in light of the circumstances when
made, complete and correct in all material respects, and did not, as of the
date so furnished or made, contain any untrue statement of a material fact 

 

 

66

 

 

or omit to state any material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made.  The
projections, estimates, pro forma information and other forward-looking
statements contained in the materials referenced above were based upon good
faith estimates and assumptions believed by the Loan Parties to be reasonable
at the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.

 

5.18         Labor
Relations.  No Borrower or
Subsidiary is engaged in any unfair labor practice which could reasonably be
expected to have a Material Adverse Effect. 
Except as could not reasonably be expected to have a Material Adverse
Effect, there is (a) no unfair labor practice complaint pending or, to the
knowledge of the Responsible Persons of each Borrower, threatened against any
Borrower or any of their Subsidiaries before the National Labor Relations Board
and no grievance or arbitration proceeding arising out of or under a collective
bargaining agreement is so pending or threatened, (b) no strike, labor
dispute, slowdown or stoppage pending or, to the Actual Knowledge of each
Borrower, threatened against any Borrower or any of their Subsidiaries, and (c) no
union representation question existing with respect to the employees of any
Borrower or any of their Subsidiaries and no union organizing activities are
taking place with respect to any thereof.

 

5.19         Insurance. 
As of the Closing Date, each Loan Party has, with respect to its
properties and business, insurance covering the risks, in the amounts, with the
deductible or other retention amounts, and with the carriers, listed on Schedule
5.19, which insurance meets the requirements of Section 7.5
hereof and Section 5(k) of each Security Agreement as of the date
hereof and the Closing Date.

 

5.20         Solvency.  As
of the Closing Date, and each other Borrowing Date, immediately after giving
effect to Loans and Letters of Credit to be made, issued or provided on such
date, (i) the amount of the “present fair saleable value” of the assets of
each Borrower and of such Borrower and its Subsidiaries, taken as a whole, will
exceed the amount of all “liabilities of each Borrower and of such Borrower and
its Subsidiaries, taken as a whole, contingent or otherwise”, such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (ii) the present fair saleable
value of the assets of each Borrower and of such Borrower and its Subsidiaries,
taken as a whole, will, be greater than the amount that will be required to pay
the liabilities of such Borrower and of such Borrower and its Subsidiaries,
taken as a whole, on their respective debts as such debts become absolute and
matured, (iii) neither any Borrower nor such Borrower and its
Subsidiaries, taken as a whole, will have, an unreasonably small amount of
capital with which to conduct their respective businesses, and (iv) each
Borrower and such Borrower and its Subsidiaries, taken as a whole, will be able
to pay their respective debts as they mature. 
For purposes of this Section 5.20, “debt” means “liability
on a claim”, “claim” means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, and (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

 

5.21         Use
of Letters of Credit and Proceeds of Loans.

 

(a)           The
proceeds of the Revolving Credit Loans shall be used by the Borrowers for the
purpose of (i) financing the performance of the Loan Parties related to
the purchase, sale, transfer or exchange of Eligible Commodities and the
carrying of Accounts Receivable, (ii) providing payments for 

 

 

67

 

 

the margin requirements of the Loan Parties under Commodity Contracts
and Financial Hedging Agreements and (iii) funding the general working
capital requirements of the Loan Parties.

 

(b)           Letters
of Credit shall be used by the Borrowers for the purpose of (i) financing
the general working capital requirements of the Loan Parties, (ii) facilitating
and financing the purchase of Eligible Commodities for the purpose of resale or
storage, (iii) securing transportation obligations of the Loan Parties
relating to Eligible Commodities, (iv) securing performance and margin
requirements of the Loan Parties under Commodity Contracts and Financial
Hedging Agreements and (v) supporting the participation of the Parent
Borrower and its Subsidiaries in a group captive insurance company in an amount
not to exceed $630,000.

 

(c)           The
proceeds of Daylight Overdraft Loans shall be used by the Borrowers for the
purpose of (i) refinancing Reimbursement Obligations or (ii) financing
payments to be made from the related deposit account of the Borrowers held with
the Administrative Agent, so long as Eligible Accounts Receivable covering the
same are expected to be received on the day of such Daylight Overdraft Loan.

 

(d)           The
proceeds of Swing Line Loans shall be used by the Borrowers for the purpose of (i) financing
the general working capital requirements of the Loan Parties, (ii) financing
the performance of the Loan Parties related to the purchase, sale, transfer or
exchange of Eligible Commodities and the carrying of Accounts Receivable, (iii) providing
payments for the margin requirements of the Loan Parties under Commodity
Contracts and Financial Hedging Agreements and (iv) financing Reimbursement
Obligations.

 

5.22         Environmental
Matters.  Except as set
forth on Schedule 5.22:

 

(a)           To
the best of each Borrower’s knowledge and belief, such knowledge and belief
being that of a reasonable person who had conducted due diligence and good
faith inquiry, the facilities and properties owned, leased or operated by the
Loan Parties (the “Properties”) do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any
Environmental Law except in either case insofar as such violation or liability,
or any aggregation thereof, is not reasonably likely to result in a Material
Adverse Effect.

 

(b)           To
the best of each Borrower’s knowledge and belief, such knowledge and belief
being that of a reasonable person who had conducted due diligence and good
faith inquiry, except where the failure to be in compliance could not
reasonably be expected to have a Material Adverse Effect, the Properties and
all operations at the Properties are in compliance in all material respects,
and have, for the lesser of the last five years or for the duration of their
ownership, lease, or operation by Loan Parties, been in compliance in all material
respects with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by any Borrower or any of
their Subsidiaries (the “Business”) which
could materially interfere with the continued operation of the Properties or
materially impair the fair saleable value thereof.  All Environmental Permits necessary in
connection with the ownership and operation of each Borrower’s or Subsidiary’s
business have been obtained and are in full force and effect, except where any
such non-compliance or failure to obtain and maintain in full force and effect
(individually or in the aggregate) has not had and is  not reasonably likely to result in a Material
Adverse Effect.

 

(c)           None
of the Borrowers or any of their Subsidiaries has received any written notice
of violation, alleged violation, non-compliance, liability or potential
liability regarding 

 

 

68

 

 

environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the Business, nor do any Borrower or any of their
Subsidiaries have knowledge or reason to believe that any such notice will be
received or is being threatened, except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters that
is or are reasonably likely to result in a Material Adverse Effect.

 

(d)           To
the best of each Borrower’s knowledge and belief, such knowledge and belief
being that of a reasonable person who had conducted due diligence and good
faith inquiry, Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could give rise to liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law, except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result in a
Material Adverse Effect.

 

(e)           No
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of the Borrowers, threatened, under any Environmental Law to
which any Borrower or any of their Subsidiaries are or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business, except
insofar as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in a Material Adverse
Effect.

 

(f)            There
has been no release or threat of release of Materials of Environmental Concern
at or from the Properties, or arising from or related to the operations of the
Borrowers or any of their Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws, except
insofar as any such violation or liability referred to in this paragraph, or
any aggregation thereof, is not reasonably likely to result in a Material
Adverse Effect.

 

5.23         Risk
Management Policy. The Risk Management Policy has been duly adopted in
accordance with the internal risk policies of the Borrowers, is in full force
and effect with respect to all Loan Parties, and has been previously delivered
to the Administrative Agent and certified by a Responsible Person of the
Borrowers as being a true and correct copy and in full force and effect, and is
attached hereto as Exhibit H.

 

5.24         AML
Laws.

 

(a)           None
of the Loan Parties is, and to its knowledge, none of its Affiliates is in
violation of any Requirement of Law relating to terrorism or money laundering
(collectively, “AML Laws”),
including, but not limited to, Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 (the “Executive Order”),
and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (“USA
PATRIOT Act”).

 

(b)           No
Loan Party is and to its knowledge, no Affiliate or broker or other agent of
any Loan Party is acting or benefiting in any capacity in connection with the
Loans is any of the following:

 

(i)       a
Person that is listed in the annex to, or is otherwise subject to the
provisions of the Executive Order or any other applicable OFAC regulations;

 

 

69

 

 

(ii)      a
Person owned or controlled by, or acting on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order or any other applicable OFAC regulations;

 

(iii)     a
Person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any applicable AML Law;

 

(iv)    a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order or other applicable OFAC regulations; or

 

(v)     a Person
that is named as a “specially designated national” or “blocked person” on the
most current list published by the U.S. Treasury Department Office of Foreign
Assets Control (“OFAC”) at its official website, currently available at
www.treas.gov/offices/enforcement/ofac/ or any replacement website or other
replacement official publication of such list.

 

(c)           None
of the Loan Parties is and to its knowledge, no broker or other agent of any
Loan Party acting in any capacity in connection with the Loans (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any person described in paragraph (b) above,
(ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or
other applicable OFAC regulations, or (iii) engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
applicable AML Law.

 

SECTION 6.                                CONDITIONS PRECEDENT

 

6.1           Conditions
Precedent.  The agreement
of each Lender to make the initial Loan requested to be made by it and the
agreement of the Issuing Lender to issue the initial Letter of Credit is
subject to the satisfaction, immediately prior to or concurrently with the
making of such Loan on the Closing Date, of the following conditions precedent:

 

(a)           Loan
Documents.  The Administrative Agent
shall have received:

 

(i)       this
Agreement, executed and delivered by a duly authorized officer of each of the
Borrowers;

 

(ii)      the
Pledge Agreement, executed and delivered by a duly authorized officer of each
party thereto;

 

(iii)     the
Security Agreement, executed and delivered by a duly authorized officer of each
party thereto;

 

(iv)    the
Guarantee, executed and delivered by a duly authorized officer of each party
thereto;

 

(v)     the
Perfection Certificate, executed and delivered by a duly authorized officer of
each Loan Party;

 

(vi)    for each
Lender requesting the same, a Note of each Borrower substantially in the form
of Exhibit A-1 and conforming to the requirements hereof and
executed by a duly authorized officer of each Borrower;

 

 

70

 

 

(vii)   for each
Daylight Overdraft Lender requesting the same, a Note of each Borrower
substantially in the form of Exhibit A-2 and conforming to the
requirements hereof and executed by a duly authorized officer of each Borrower;

 

(viii)  for each
Swing Line Lender requesting the same, a Note of each Borrower substantially in
the form of Exhibit A-3 and conforming to the requirements hereof
and executed by a duly authorized officer of each Borrower; and

 

(ix)     each of
the Account Control Agreements, executed and delivered by a duly authorized
officer of each party thereto.

 

(b)           Secretary’s
Certificates.  The Administrative
Agent shall have received a certificate of each Loan Party, dated the Closing
Date, substantially in the form of Exhibit E, with appropriate
insertions and attachments, reasonably satisfactory in form and substance to
the Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of such Loan Party, or, if applicable,
of the general partner or managing member or members of such Loan Party, on
behalf of such Loan Party.

 

(c)           Borrowing
Base Report.  The Administrative
Agent shall have received a pro forma Borrowing Base Report showing the pro
forma Borrowing Base as of April 30, 2008, with appropriate insertions and
supporting schedules and dated the Closing Date, reasonably satisfactory in
form and substance to the Administrative Agent, and executed by a Responsible
Person of each of the Loan Parties on behalf of such Loan Party.

 

(d)           Proceedings
of the Loan Parties.  The
Administrative Agent shall have received a copy of the resolutions, in form and
substance reasonably satisfactory to the Administrative Agent, of the Board of
Directors (or analogous body) of each Loan Party authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to
the Security Documents, certified on behalf of such Loan Party by the Secretary
or an Assistant Secretary of such Loan Party, or, if applicable, of the general
partner or managing member or members of such Loan Party, as of the Closing
Date, which certification shall be included in the certificate delivered in
respect of such Loan Party pursuant to Section 6.1(b), shall be in
form and substance reasonably satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

 

(e)           Incumbency
Certificates.  The Administrative
Agent shall have received a certificate of each Loan Party, dated the Closing
Date, as to the incumbency and signature of the officers of such Loan Party or,
if applicable, of the general partner or managing member or members of such
Loan Party, executing any Loan Document, or having authorization to execute any
certificate, notice or other submission required to be delivered to the
Administrative Agent or a Lender pursuant to this Agreement, which certificate
shall be included in the certificate delivered in respect of such Loan Party
pursuant to Section 6.1(b), shall be reasonably satisfactory in
form and substance to the Administrative Agent, and shall be executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
such Loan Party, or, if applicable, of the general partner or managing member
or members of such Loan Party, on behalf of such Loan Party.

 

(f)            Organizational
Documents.  The Administrative Agent
shall have received true and complete copies of the Governing Documents of
each Loan Party, certified as of the Closing Date as complete copies thereof by
the Secretary or an Assistant Secretary of such Loan Party, or, if applicable,
of the general partner or managing member or members of such Loan Party, on
behalf of such Loan Party, 

 

 

71

 

which certification shall be included in the certificate delivered in
respect of such Loan Party pursuant to Section 6.1(b) and
shall be in form and substance reasonably satisfactory to the Administrative
Agent.

 

(g)           Good
Standing Certificates.  The
Administrative Agent shall have received certificates (long form, if available)
dated as of a recent date from the Secretary of State or other appropriate
authority, evidencing the good standing of each Loan Party (i) in the
jurisdiction of its organization and (ii) in each other jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires it to qualify as a foreign Person except, as to this
subclause (ii), where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.

 

(h)           Consents,
Licenses and Approvals.  The
Administrative Agent shall have received a certificate of a Responsible Person
of each Borrower either (i) attaching copies of all consents,
authorizations and filings referred to in Section 5.4, and stating
that such consents, licenses and filings are in full force and effect or (ii) stating
that no such consents, licenses or approvals are so required.

 

(i)            Borrower’s
Certificate.  The Administrative
Agent shall have received a certificate signed by a Responsible Person of each
of the Borrowers, stating on behalf of such Borrower  that:

 

(i)     The
representations and warranties contained in Section 5 are true and
correct in all material respects on and as of such date, as though made on and
as of such date;

 

(ii)    No
Default or Event of Default exists; and

 

(iii)   There has
not occurred since June 30, 2007, an event or circumstance that has
resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(j)            Fees.  The Administrative Agent and the Lenders
shall have received the fees (including reasonable fees, disbursements and
other charges of counsel to the Agents) to be received on the Closing Date.

 

(k)           Legal
Opinion.  The Administrative Agent shall have received,
with a counterpart for each Lender, the executed legal opinion of Vinson &
Elkins LLP, counsel to the Borrowers, substantially in the form of Exhibit I-A,
and the executed legal opinion of Morgan, Lewis & Bockius LLP,
Pennsylvania counsel to the Borrowers, substantially in the form of Exhibit I-B,
such legal opinions covering such matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.

 

(l)            Collateral
and Risk Management Practices Review. 
The Administrative Agent and each Lender shall have received copies of a
collateral and risk management practices review, in form and substance
reasonably satisfactory, of all of the assets of the Borrowers that comprise each asset category set
forth in the definitions of “Borrowing Base” prepared by the Administrative
Agent’s internal auditor.

 

(m)          Risk
Management Policy.  The
Administrative Agent and the Lenders shall have received a copy of the Risk
Management Policy, including position and other limits, which shall be in the
form previously distributed to the Administrative Agent.

 

(n)           Lien
Searches.  The Administrative Agent
shall have received the results of a recent search by a Person reasonably
satisfactory to the Administrative Agent, of the Uniform Commercial Code, and
all customary judgment and tax Lien searches for financing transactions of this

 

 

72

 

 

nature in all applicable jurisdictions, which may have been filed with
respect to personal property of the Loan Parties, and the results of such
search shall be reasonably satisfactory to the Administrative Agent.

 

(o)           Actions
to Perfect Liens.  All filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in
the opinion of the Administrative Agent, desirable to perfect the Liens created
by the Security Documents shall have been filed, registered or recorded or
shall have been delivered to the Administrative Agent in proper form for
filing, registration or recordation.

 

(p)           Pledged
Collateral; Stock Powers; Pledged Interests; Pledged Notes; Pledged Chattel
Paper.  The Administrative Agent
shall have received:

 

(i)       the
certificates representing the shares or other equity interests pledged pursuant
to the Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof;

 

(ii)      all
promissory notes, if any, and other instruments pledged pursuant to the Pledge
Agreement, each endorsed in blank by a duly authorized officer of the pledgor
thereof; and

 

(iii)     the
original counterpart of all chattel paper, if any, pledged pursuant to the
Security Agreement, duly endorsed in a manner satisfactory to the
Administrative Agent and containing a legend, if required by the Administrative
Agent, that it is the original counterpart of such chattel paper.

 

Each Issuer (as
defined in the Pledge Agreement) referred to in the Pledge Agreement shall have
delivered an acknowledgement of and consent to such Pledge Agreement, executed
by a duly authorized officer of such Issuer, in substantially the form appended
to such Pledge Agreement.

 

(q)           Financial
Statements.  The Administrative Agent
and the Lenders shall have received copies of the financial statements listed
in Section 5.1.

 

(r)            Insurance.  The Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to it that all of the
requirements of Section 7.5 hereof and Section 5(k) of
the Security Agreement shall have been satisfied; provided
that, as of the Closing Date, the Administrative Agent shall have received
evidence that the premiums on each insurance policy have been paid and that the
Borrowers have made written request to the insurers to obtain the documents
required pursuant to Section 7.5 hereof and Section 5(k) of
the Security Agreement.

 

(s)           PATRIOT
Act.   The Administrative Agent and
the Lenders shall have received, sufficiently in advance of the Closing Date,
all documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act.

 

(t)            Indebtedness
to be Repaid. All Indebtedness and any other amounts owing by a Borrower or
a Subsidiary listed on Schedule 6.1(t) shall have been, or shall be
concurrently with the making of the initial Loans, repaid in full, and any
Liens created pursuant to any existing financing documents shall have been or
shall be, concurrently with the making of the initial Loans, released, and such
existing financing documents shall terminate and be of no further force and
effect upon such repayment; in each case pursuant to such payout letters, Lien
releases, termination statements, mortgage satisfactions and other documents as
the Collateral Agent may require, each of which shall be in form and substance
satisfactory to the Collateral Agent.

 

 

73

 

 

(u)           Acquisition
Documents. The Administrative Agent shall have received copies of any
publicly filed documents evidencing the consummation of the Acquisition.

 

(v)           Additional
Matters.  All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received such
other documents and legal opinions in respect of any aspect or consequence of
the transactions contemplated hereby or thereby as it shall reasonably request.

 

6.2           Conditions
to Each Credit Extension. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan, if any) and the agreement of the Issuing Lenders to issue or
provide any Letter of Credit (including, without limitation, the initial
Letters of Credit, if any) is subject to the satisfaction of the following
conditions precedent:

 

(a)           Borrowing
Notice.  The Administrative Agent shall
have received a Borrowing Notice or Letter of Credit Request pursuant to Section 2.4
or Section 3.2, as the case may be.

 

(b)           Representations
and Warranties.  Each of the
representations and warranties made by the Borrowers and the other Loan Parties
in or pursuant to the Loan Documents shall be true and correct in all material
respects on and as of such date as if such representation and warranty was made
on and as of such date, except to the extent any such representation and
warranty relates solely to a specified prior date, in which case such
representation and warranty shall be true and correct in all material respects
as of such specified date.

 

(c)           No
Default.  No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the extensions of credit requested to be made on such date.

 

(d)           Borrowing
Base Report.  The Administrative
Agent shall have timely received a Borrowing Base Report for the most recent
period for which such Borrowing Base Report is required to be delivered in
accordance with Section 7.2(c) .

 

(e)           Availability.  After giving effect to such extension of
credit requested to be made on such date, (i) The Total Extensions of
Credit shall not exceed the Total Commitment, (ii) the Total Extensions of
Credit shall not exceed the Total Borrowing Base as of the most recent
Borrowing Base Date, and (iii) the Total Extensions of Credit shall not
exceed the Maximum Amount, and in the case of each such extension of credit,
the Administrative Agent shall have received the certification of a Responsible
Person of such Borrower (such certificate, the “Availability Certification”)
stating that the conditions in this Section 6.2(e) are true
and correct as of such date.  Each such
Availability Certification shall be delivered pursuant to the applicable
Borrowing Notice.

 

(f)            Solvency.
Each Availability Certification delivered pursuant to Section 6.2(e) shall contain a
certification by each Loan Party that, after giving effect to such requested
extension of credit, (i) the amount of the “present fair saleable value”
of the assets of such  Loan Party will
exceed the amount of all “liabilities of such Loan Party, contingent or
otherwise”, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (ii) the
present fair saleable value of the assets of such Loan Party will, be greater
than the amount that will be required to pay the liabilities of such Loan Party
on its debts as such debts become absolute and matured, (iii) such Loan
Party will not have an unreasonably small amount of 

 

 

74

 

 

capital with which to conduct its businesses, and (iv) such Loan
Party will be able to pay its debts as they mature.

 

Each borrowing by and issuance of a Letter of Credit
on behalf of the Borrowers hereunder shall constitute a representation and
warranty by the Borrowers as of the date thereof that the conditions contained
in this Section 6.2 have been satisfied.

 

SECTION 7.                                AFFIRMATIVE COVENANTS

 

The
Borrowers hereby jointly and severally agree that, so long as any of the
Commitments remain in effect or any amount is owing to any Lender or the Agents
hereunder or under any other Loan Document (except contingent indemnification
and expense reimbursement obligations for which no claim has been made), the
Borrowers shall and shall cause each of their respective Subsidiaries to:

 

7.1           Financial
Statements.  Furnish to the
Administrative Agent (for distribution to each Lender):

 

(a)           as
soon as available, but in any event within 120 days after the end of each
fiscal year of the Parent Borrower, a copy of the audited consolidated balance
sheet of the Parent Borrower and a copy of the audited consolidating balance
sheet of the Parent Borrower and its consolidated Subsidiaries, in each case,
as at the end of such year and the related consolidated and consolidating
statements of income and retained earnings and cash flows for such year,
prepared in accordance with GAAP and setting forth in each case in comparative
form the figures for the previous year, reported on without a “going concern”
or like qualification or exception, or any qualification arising out of the
scope of the audit, by Kreischer Miller or other independent certified public
accountants of nationally recognized standing acceptable to the Required
Lenders; and

 

(b)           as
soon as available, but in any event not later than 30 days after the end of
each calendar month of the Parent Borrower (except for the calendar month
ending on December 31 of each fiscal year), the unaudited consolidated
balance sheet of the Parent Borrower and the unaudited consolidating balance
sheet of the Parent Borrower and its consolidated Subsidiaries, in each case,
as at the end of such calendar month and the related unaudited consolidated and
consolidating statements of income and retained earnings and cash flows for
such month and the portion of the fiscal year through the end of such month
prepared in accordance with GAAP and setting forth, beginning with the calendar
month ending on January 31, 2009, in each case in comparative form the
figures for the previous year, certified by a Responsible Person of the Parent
Borrower, as being fairly presented in all material respects (subject to normal
year end audit adjustments and the absence of footnotes);

 

All such financial statements shall fairly present
the financial condition of the Borrowers as of the dates thereof in all
material respects and shall be prepared in reasonable detail and, except as
noted herein, in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein) subject, in
the case of interim financial statements, to normal year-end adjustments.

 

7.2           Certificates;
Other Information.  Furnish to the
Administrative Agent (for distribution to the Lenders, including, without
limitation, if requested by a Lender, through posting on Intralinks or other
web site in use to distribute information to the Lenders):

 

(a)           concurrently
with the delivery of the financial statements referred to in Sections 7.1(a) and 7.1(b), a certificate of a Responsible Person
of the Parent Borrower substantially in 

 

 

75

 

 

the form of Exhibit L (such a certificate, a “Compliance
Certificate”) (A) stating that to the best of
such Person’s knowledge each Loan Party during such period has observed or
performed all of its covenants and other agreements and satisfied every
condition contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, in each case subject to the
qualifications, exceptions, caps, thresholds, grace, notice and cure periods,
waivers and consents contained therein or previously granted with respect
thereto, and that such Responsible Person has obtained no knowledge of any
Default or Event of Default, in each case except as specified in such
certificate and (B) showing in detail the calculations supporting such
Person’s certification of the Loan Parties’ compliance with the requirements of
Sections 8.1(a), (b) and (c); provided that, the Loan Parties
may, concurrently with the delivery of a Compliance Certificate pursuant to
this Section 7.2(a), furnish to the Collateral Agent an updated
Schedule A to the Security Agreement reflecting changes to Schedule A to the
extent such changes are permitted under this Agreement or under the other Loan
Documents, and an updated Schedule D to the Security Agreement reflecting
changes to Schedule D to the extent such changes are permitted under this
Agreement or under the other Loan Documents;

 

(b)           concurrently
with the delivery of the financial statements referred to in Section 7.1(b),
a written briefing on any material overdue Account Receivables or any other
impairment in the value of the assets of the Loan Parties;

 

(c)           within
seven (7) Business Days after the 15th day of each month and the final day
of each month, (i) a consolidated and consolidating Borrowing Base Report
for the Loan Parties; provided that, for any Borrowing Base Report
delivered during the period from the Closing Date to the date sixty (60) days
following the Closing Date, no consolidating Borrowing Base Report shall be
required for the Loan Parties, (ii) a copy of the Loan Parties’ trading
book and trading position reports detailing trades conducted during the
previous period, which will set forth information sufficient to confirm
compliance with the positions limits of the Risk Management Policy (including,
without limitation, positions for all current and future time periods and
including all instruments creating either an obligation to purchase or to sell
Eligible Commodities or otherwise generating price exposure), which shall set
forth in reasonable detail the information necessary to calculate compliance
with the Maximum Position Limits in form reasonably acceptable to the
Administrative Agent, and (iii) the Loan Parties’ Marked-to-Market Report,
in form reasonably acceptable to the Administrative Agent, and in each case,
certified by each Loan Party and dated the 15th day of such month or the final
day of such month, as applicable, or, if such day is not a Business Day, the
closest Business Day thereto;

 

(d)           if
any such report described in clause (c) above is not reasonably
satisfactory in form and substance to the Administrative Agent, the Loan
Parties shall promptly deliver such supplemental information as the
Administrative Agent may reasonably request; and

 

(e)           promptly,
such additional financial and other information regarding the Loan Parties as
any Lender may from time-to-time reasonably request.

 

7.3           Payment
of Obligations.  Pay, discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever nature, except where
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect thereto
have been provided on its books.

 

7.4           Conduct
of Business and Maintenance of Existence.  (a) Continue
to engage in business of the same general type as now conducted by it or as
described in Section 8.12 and preserve, renew and keep in full
force and effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises material to the conduct of its
business except as otherwise permitted pursuant to Section 8.4 or where the failure to do so could not
reasonably be expected to have a Material 

 

 

76

 

 

Adverse Effect; and (b) comply with all Contractual Obligations
and Requirements of Law, except to the extent that failure to comply therewith
could not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.

 

7.5           Maintenance
of Property; Insurance.  (i) Keep
all material property useful and necessary in its business in good working
order and condition (ordinary wear and tear excepted); (ii) maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business, which insurance shall name
the Collateral Agent for the ratable benefit of the Secured Parties as loss
payee with respect to the Collateral, in the case of property or casualty
insurance, and as an additional insured, in the case of liability insurance, as
its interests may appear; (iii) furnish to the Collateral Agent  (for distribution to the Lenders through
posting on Intralinks or other web site in use to distribute information to the
Lenders), upon request, full information as to the insurance carried, a copy of
the underlying policy, the related cover note and all addendums thereto; and (iv) promptly
pay all insurance premiums covering the Collateral.

 

7.6           Inspection
of Property; Books and Records; Discussions. 
At the sole expense of the Loan Parties: (i) keep proper books of
records and accounts in which complete and correct entries in conformity with
GAAP and all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities and (ii) permit representatives
of the Administrative Agent and the Lenders (x) to visit and inspect any
of its properties, and examine and make abstracts from any of its books and
records upon reasonable notice during normal business hours and as often as may
reasonably be desired; provided that, unless an Event of Default shall
have occurred and be continuing, such visits and inspections shall not be more
frequent than once in any twelve month period, and (y) to discuss the
business, operations, properties and financial and other condition of the Loan
Parties with officers and employees of the Loan Parties and with its
independent certified public accountants to the extent consistent with the national
policies of such independent certified public accountants, upon reasonable
notice during normal business hours; provided  further that,
unless an Event of Default shall have occurred and be continuing, such
discussions with the independent certified public accountants shall not be more
frequent than once in any twelve month period. 
Information obtained by the Administrative Agent pursuant to this Section 7.6
shall be shared with a Lender upon the request of such Lender.

 

7.7           Notices.  Promptly give notice to the Administrative
Agent (for distribution to the Lenders, including, without limitation, if
requested by a Lender, through posting on Intralinks or other web site in use
to distribute information to the Lenders) of:

 

(a)           the
occurrence of any Default or Event of Default;

 

(b)           any
(i) default or event of default under any Contractual Obligation of any
Loan Party or (ii) litigation, investigation or proceeding which may exist
at any time between any Loan Party and any Governmental Authority, which in
either case could reasonably be expected to have a Material Adverse Effect;

 

(c)           any
litigation or proceeding affecting any Loan Party in which the amount involved
is $2,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought;

 

(d)           the
following events, as soon as possible and in any event within 30 days after any
Borrower knows or should have reason to know thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Single
Employer Plan, a failure to make any required 

 

 

77

 

 

contribution to a Plan when such contributions have become due, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer Plan in
which a Borrower is reasonably expected to have a liability in excess of
$5,000,000 or (ii) the institution of proceedings or the taking of any
other action by the PBGC to terminate any Single Employer Plan;

 

(e)           any
time at which the Total Extensions of Credit exceeds the Total Borrowing Base;

 

(f)            the
occurrence of any other event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral or on the
other Liens created by the Security Documents;

 

(g)           any
Lien on, or claim asserted against, any of the Collateral (other than Liens
created hereby or Permitted Liens); and

 

(h)           any
other development or event that results in, or which could reasonably be
expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section 7.7
shall be accompanied by a statement of a Responsible Person setting forth details of the
occurrence referred to therein and stating what action the Loan Parties propose to take with
respect thereto.

 

7.8           Environmental
Laws.  (a)    Comply
with, and direct all tenants and subtenants, if any, to comply with, all
applicable Environmental Laws and obtain, comply with and maintain, and direct
all tenants and subtenants, if any, to obtain, comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws, except to the extent that failure to do so
could not be reasonably expected to have a Material Adverse Effect.

 

(b)           Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions, required under Environmental Laws, except
to the extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect, and promptly comply with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws, except
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.

 

7.9           Periodic
Audit of Borrowing Base Assets. 
Permit the Administrative Agent or any other designee of the
Administrative Agent to perform, or to have an independent inspector mutually
reasonably acceptable to the Borrowers and the Required Lenders perform, a periodic
due diligence inspection, test and review of all of the assets of the Borrowers
that comprise each asset category set forth in the definitions of “Borrowing
Base” on a mutually convenient Business Day twice during each twelve (12) month
period following the Closing Date, the results of which shall be reasonably
satisfactory to the Administrative Agent in all material respects and provided
by the Administrative Agent to each Lender; provided  however,
the Administrative Agent or any other designee of the Administrative Agent
shall be entitled to perform additional due diligence inspections, tests and
reviews of such inventory and accounts receivable on Business Days at any time
that the Administrative Agent or the Required Lenders deem necessary at any time
during the occurrence and continuance of an Event of Default; provided
further that the expense of all such due diligence inspections,
tests and reviews shall be borne exclusively by the Borrowers.

 

 

78

 

 

7.10         Risk
Management Policy.

 

(a)           Keep
the Risk Management Policy in full force and effect, and in accordance
therewith, conduct its business in compliance with the Maximum Position Limits
and the Risk Management Policy. The Borrowers shall provide at least ten (10) Business
Days prior written notice to the Administrative Agent of any proposed
amendment, modification, supplement or other change to such Risk Management
Policy, which proposed amendment, modification, supplement or other change must
receive the approval of the Administrative Agent (such approval not to be
unreasonably withheld, conditioned or delayed) if relating to the modifications
to credit limits or open or stop loss position limits or contract or commodity
traded limits.   Failure of the
Administrative Agent to respond to any proposed amendment, modification,
supplement or other change in writing setting forth its reasons for disapproval
within ten (10) Business Days of receipt of such written notice from the
Borrowers shall be deemed to be approval of such proposed amendment,
modification, supplement or other change by the Administrative Agent.  The Borrowers shall provide to the
Administrative Agent (for distribution to the Lenders, including, without
limitation, if requested by a Lender, through posting on Intralinks or other
web site in use to distribute information to the Lenders), within ten (10) days
of the effectiveness of any such amendment, modification, supplement or other
change, such revised Risk Management Policy in its entirety.

 

(b)           If
the Loan Parties shall be required by the terms of the Risk Management Policy
to eliminate exposure associated with positions that have caused the stop loss
limit to be exceeded, (i) Buckeye Energy Holdings LLC may, in its sole
discretion, make a Permitted Equity Contribution or (ii) the Borrowers
may, in their sole discretion, incur Subordinated Indebtedness pursuant to Section 8.2(b),
in each case, in a net amount not to exceed the amount by which such positions
exceed the stop loss limit (such amount, the “Stop Loss Cure Amount”).  The aggregate value of positions of the Loan
Parties shall be deemed to be reduced by the Stop Loss Cure Amount if such Stop
Loss Cure Amount is received by the Loan Parties within three (3) Business
Days after the stop loss limit was exceeded. 
For purposes of this Section 7.10(b), the term “stop loss
limit” shall have the meaning given to such term in the Risk Management Policy.

 

7.11         Collections
on Accounts Receivable.  Pursuant to
and in accordance with Section 3(c) of the Security Agreement, (i) direct
and use commercially reasonable efforts to cause each Account Debtor of an
Account Receivable that constitutes Collateral to pay all Proceeds of such
Account Receivable into a Controlled Account; provided that, Proceeds of
Accounts Receivable are not required to be paid into a Controlled Account to
the extent that, in the ordinary course of a Loan Party’s business, the
applicable Account Debtor pays or would pay Proceeds of such Accounts
Receivable into the Intermediate Investment Account or a Legacy Account, (ii) with
respect to any Proceeds of Account Receivables that constitute Collateral
received directly by a Loan Party from an Account Debtor that were not so paid
into a Controlled Account, cause such Proceeds to be promptly deposited into a
Controlled Account and until such time, hold such Proceeds in trust for the
Secured Parties segregated from the other funds of such Loan Party and (iii) otherwise
comply with Section 3(c) of the Security Agreement.

 

7.12         Taxes.  Timely file or cause to be filed all income,
franchise and other material Tax returns required to be filed by each Loan
Party and shall timely pay all income, franchise and other material Taxes due
and payable (other than any Taxes the amount or validity of which are being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of such Loan
Party).

 

7.13         Additional
Collateral.  With respect
to any new Subsidiary created or acquired after the Closing Date by any Loan Party, such Loan Party shall,
within thirty (30) days of the creation or acquisition of such Subsidiary:

 

 

79

 

 

(a)           cause
such Subsidiary to become party to the applicable Security Documents and
Guarantee;

 

(b)           cause
such Subsidiary to deliver to the Administrative Agent and the Lenders all
documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act;

 

(c)           take
such actions necessary or advisable to:

 

(i)       grant
in favor of the Collateral Agent for the ratable benefit of the Secured Parties
a legal, valid and enforceable Lien in all right, title and interest of such
Subsidiary in the Collateral of such Subsidiary, and cause such Lien described
in this Section 7.13(c) to be a Perfected First Lien on all
right, title and interest of such Collateral which can be perfected by the
filing of a Uniform Commercial Code financing statement, subject to the
existence and priority of such Liens permitted pursuant under Section 8.3;

 

(ii)      cause
any Collateral of such Subsidiary included in a Borrowing Base at any time to
be subject to a Perfected First Lien at such time, subject to the existence
and, in the case of such Liens which are Permitted Borrowing Base Liens, the
priority of such Liens permitted under Section 8.3;

 

(iii)     cause
an Account Control Agreement for each Deposit Account, Security Account and
Commodity Account of such Subsidiary to be executed and delivered by such
Subsidiary and the bank, broker or other Person maintaining such Deposit
Account, Security Account or Commodity Account to the extent required by the
Security Agreement;

 

(iv)    cause
each such Subsidiary (and Subsidiaries of such Subsidiary) (each, a “New
Subsidiary”, and collectively, the “New Subsidiaries”) to promptly (i) execute
and deliver to the Collateral Agent the addenda required by Section 24
of  the Pledge Agreement to grant to the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable Lien in the Capital Stock owned or to be owned by such
New Subsidiary and cause such Lien to be a Perfected First Lien, (ii) deliver,
pursuant to Section 6(e) of the Pledge Agreement, updated schedules
to the Pledge Agreement reflecting the Capital Stock of each such New
Subsidiary that is owned, directly or indirectly, by such Loan Party and (iii) deliver
to the Collateral Agent the certificates representing such Capital Stock, if
any, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of each such New Subsidiary; and

 

(v)     for
Collateral of such Subsidiary located outside of the United States and included
in the Borrowing Base and if otherwise reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

7.14         Use
of Proceeds.  Use the entire amount
of the proceeds of the Loans and the Letters of Credit as set forth in Section 5.21.

 

7.15         Cash
Management.  Maintain the
Intermediate Investment Account and all of the Pledged Accounts of the Loan
Parties at a Cash Management Bank.

 

7.16         Wind-Up
Accounts.  Close the Wind-Up Accounts
within thirty (30) days of the Closing Date.

 

 

80

 

 

7.17         Legacy
Accounts. Cause, within sixty (60) days of the Closing Date, either (i) each
Legacy Account to be closed or (ii) an Account Control Agreement for each
Legacy Account to be executed and delivered by the applicable Loan Party and
the bank, broker or other Person maintaining such Legacy Account; provided
that, the Administrative Agent, in its sole discretion, may extend such
deadline to a date no later than 90 days following the Closing Date.  Upon the execution and delivery of an Account
Control Agreement by the applicable Loan Party, Cash Management Bank and the
Collateral Agent, such Legacy Account shall become a “Controlled Account” for
purposes of this Agreement and other Loan Documents.

 

SECTION 8.                                NEGATIVE COVENANTS

 

The
Borrowers hereby jointly and severally agree that, so long as any of the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document (except
contingent indemnification and expense reimbursement obligations for which no
claim has been made), the Borrowers shall not, and shall not permit any
Subsidiary to, directly or indirectly:

 

8.1           Financial
Condition Covenants.

 

(a)           Minimum
Consolidated Net Working Capital. 
Permit, as of the last day of any calendar month, the Consolidated Net
Working Capital to be less than the Minimum Consolidated Net Working Capital
Amount elected as of such day in accordance with the definitions thereof.

 

(b)           Minimum
Consolidated Tangible Net Worth. 
Permit, as of the last day of any calendar month, Consolidated Tangible
Net Worth to be less than the Minimum Consolidated Tangible Net Worth Amount
elected as of such day in accordance with the definitions thereof.

 

(c)           Maximum
Consolidated Leverage Ratio. Permit, as of the last day of any calendar
month, the Consolidated Leverage Ratio to exceed the Maximum Consolidated
Leverage Ratio elected as of such day in accordance with the definition
thereof.

 

8.2           Limitation
on Indebtedness.  Create, incur,
assume or suffer to exist any Indebtedness, or permit any preferred stock to be
issued or outstanding, except:

 

(a)           Indebtedness
of the Borrowers arising under the Loan Documents, or any other guaranty of, or
suretyship arrangement for, the foregoing;

 

(b)           Subordinated
Indebtedness;

 

(c)           Indebtedness
of the Borrowers and their Subsidiaries not exceeding $5,000,000 in an
aggregate principal amount at any one time outstanding;

 

(d)           Indebtedness
of the Borrowers and their Subsidiaries for equipment acquired in the ordinary
course of business secured by purchase money Liens not exceeding $1,000,000 in
an aggregate principal amount at any one time outstanding;

 

(e)           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business or other cash management services in the ordinary course of
business; provided that, such Indebtedness (other than credit or
purchase cards) is extinguished within one (1) Business Day after
notification to the applicable Borrower of its incurrence; provided, further,
that such Indebtedness is (i) provided for by a 

 

 

81

 

 

bank or financial institution under an Account Control Agreement or (ii) with
respect to an Excluded Account or Legacy Account;

 

(f)            Indebtedness
incurred in the ordinary course of business in connection with workers’
compensation claims, surety or similar bonds or surety obligations required by
Law or third parties in connection with the operation of the Loan Parties’
properties in an aggregate amount not to exceed $500,000 at any time
outstanding; provided that, full reserves in conformity with GAAP for
all such obligations have been provided on the books of the relevant Loan
Party;

 

(g)           Indebtedness
incurred in the ordinary course of business in connection with unsecured
performance and bid bonds in an aggregate amount not to exceed $50,000,000 at
any time outstanding;

 

(h)           Indebtedness
incurred in the ordinary course of business consisting of a guarantee by a Loan
Party of trade credit obligations of any Loan Party;

 

(i)            Intermediate
Investment Advances;

 

(j)            secured
Indebtedness, the proceeds of which are concurrently used to repay in full, and
permanently reduce in full the Commitments with respect to, the Indebtedness
arising under the Loan Documents; and

 

(k)           Indebtedness
outstanding on the date hereof and listed on Schedule 8.2.

 

8.3           Limitation
on Liens.  Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except for:

 

(a)           Liens
for taxes, assessments or governmental charges or levies not yet due and
payable or which are being contested in good faith by appropriate proceedings, provided
that, adequate reserves with respect thereto are maintained on the books of
such Loan Party, in conformity with GAAP;

 

(b)           carriers’,
operators’, vendors’, suppliers’, workers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlord’s Liens, construction or other similar
Liens arising in the ordinary course of business or incident to the
development, operation and maintenance of property, each of which is in respect
of obligations that are not overdue for a period of more than 30 days or which
are being contested in good faith by appropriate proceedings or which have been
bonded over or otherwise adequately secured against;

 

(c)           Liens
in connection with workers’ compensation, unemployment insurance, social
security and old age pension legislation;

 

(d)           Liens
on cash or securities pledged to secure the performance of tenders, bids,
government contracts, trade contracts (other than for borrowed money), leases,
statutory obligations, regulatory obligations, surety and appeal bonds,
performance and return of money bonds and other obligations of a like nature
incurred in the ordinary course of business;

 

(e)           Permitted
Cash Management Liens;

 

(f)            easements,
rights-of-way, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any property of the Loan Parties for the purpose
of roads, pipelines, transmission lines, transportation lines, distribution
lines for the removal of gas, oil, coal or other minerals 

 

 

82

 

 

or timber, and other like purposes, or for the joint or common use of
real estate, rights of way, facilities and equipment, that secure obligations
that do not constitute Indebtedness, and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Loan Parties;

 

(g)           Liens
created pursuant to the Security Documents;

 

(h)           First
Purchaser Liens;

 

(i)            Liens
and netting and other offset rights granted by any Loan Party to counterparties
under Commodity Contracts and Financial Hedging Agreements on or with respect
to payment and other obligations owed by such Loan Party to such
counterparties;

 

(j)            Liens
on cash and short-term investments deposited as collateral by the Borrowers
under any Commodity Contract or Financial Hedging Agreement with the
counterparty (or counterparties) thereto;

 

(k)           Liens
securing judgments or other court-ordered awards or settlements for the payment
of money not constituting an Event of Default under Section 9.1(h) or
securing appeal or other surety bonds related to such judgments;

 

(l)            Liens
securing Indebtedness permitted under Sections 8.2(b), 8.2(d) and
 8.2(j); provided that, (i) other
than with respect of Liens permitted under Section 8.2(j), such
Liens do not at any time encumber any Collateral included in the Borrowing Base
and (ii) such Liens do not encumber any property other than the property
financed by such Indebtedness;

 

(m)          withdrawal
and access rights held by oil companies with respect to the Intermediate
Investment Account; and

 

(n)           Liens
in existence on the Closing Date that are listed on Schedule 8.3; provided
that, the Liens granted under the contracts listed on Schedule 8.3 (A) shall
not encumber any Collateral and (B) shall not secure obligations in an
aggregate amount exceeding $5,000,000 at any one time outstanding.

 

8.4           Limitation
on Fundamental Changes.  Enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets of such Loan Party, except for the following, in each case
so long as, at the time thereof and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing:

 

(a)           the
merger, consolidation, amalgamation or liquidation of any Subsidiary into a
Borrower in a transaction in which such Borrower is the surviving or resulting
entity;

 

(b)           the
merger, consolidation, amalgamation or liquidation of any Subsidiary into or
with a Subsidiary or the merger, consolidation, amalgamation or liquidation of
any Person into a Subsidiary or pursuant to which such Person will become a
Subsidiary in a transaction in which the resulting or surviving entity is a
Subsidiary;

 

(c)           the
merger, consolidation, amalgamation or liquidation of a Borrower into a
Borrower; and

 

 

83

 

 

(d)           the
conveyance, sale, lease, assignment, transfer or disposal of all, or
substantially all, of the property, business or assets of a Loan Party to
another Loan Party.

 

8.5           Restricted
Payments.  Declare or pay any dividend or make any other
distribution (by reduction of capital or otherwise) to any direct or indirect
owner of the Capital Stock of the Borrowers, whether in cash, property,
securities or a combination thereof, with respect to any of the Borrowers’
Capital Stock, or directly or indirectly redeem, purchase, retire or otherwise
acquire for value any of the Borrowers’ Capital Stock or set aside any amount
for any such purpose; provided that, notwithstanding the foregoing, the
Borrowers may pay dividends or make other distributions so long as no Default
or Event of Default has occurred and is continuing; provided, further
that, after giving effect to any such payment of dividends or making of other
distributions, the Borrowers shall be in compliance with the terms of Section 8.1;
provided  further that, prior to the paying of dividends or making
of other distributions pursuant to this Section 8.5, the Borrowers
shall deliver to the Administrative Agent a written certificate substantially
in the form of Exhibit M (such a certificate, a “Dividend
Compliance Certificate”) describing such payment or distribution, certifying
that the Borrowers shall be compliance with Sections 8.1(a), (b) and
(c) following such payment or distribution and showing in detail
the calculations supporting the Borrowers’ compliance with the requirements of Sections
8.1(a), (b) and (c).

 

8.6           Limitation
on Sale of Assets.  Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including
receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s
Capital Stock to any Person other than a Borrower or any wholly owned
Subsidiary, except:

 

(a)           the
sale or other disposition of obsolete or worn out property in the ordinary
course of business or the replacement of such property with equipment of
comparable value and use;

 

(b)           the
sale or other disposition from one Loan Party to another of any or all of the
assets of a Loan Party;

 

(c)           the
sale or other disposition of any property in the ordinary course of business,
provided that (other than inventory) the aggregate book value of all assets so
sold or disposed of in any period of twelve consecutive months shall not exceed
10% of consolidated total assets of the Borrowers and their respective
Subsidiaries as at the beginning of such twelve month period;

 

(d)           the
sale of Eligible Commodities in the ordinary course of business;

 

(e)           sales
or other dispositions of Investments permitted under Section 8.7 in
the ordinary course of business;

 

(f)            any
of the transactions described in Section 8.4; and

 

(g)           the
sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof.

 

8.7           Limitation
on Investments.  Make any
Investment in any Person, except:

 

(a)           extensions
of trade credit in the ordinary course of business (including, for the
avoidance of doubt, ordinary course extensions of credit under Commodity
Contracts and Financial Hedging Agreements made in accordance with the Risk
Management Policy);

 

(b)           Investments
in Cash Equivalents;

 

 

84

 

 

(c)           Investments
by any Loan Party in any other Loan Party;

 

(d)           Investments
consisting of cash and Cash Equivalents posted as collateral to satisfy margin
requirements with counterparties of Commodity Contracts or Financial Hedging
Agreements of the Borrowers or the Subsidiaries;

 

(e)           Investments
consisting of loans and advances to employees (x) for moving,
entertainment, travel and other similar expenses in the ordinary course of
business and (y) for the purchase of common stock and options; provided
that, no Default or Event of Default shall have occurred and be continuing and
the making of such loans and advances shall not result in a Default or Event of
Default;

 

(f)            Investments
(including debt obligations and equity securities) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customer and suppliers
arising in the ordinary course of business;

 

(g)           any
Intermediate Investments;

 

(h)           Investments
in an aggregate amount not in excess of $5,000,000 at any one time outstanding
valued on an out-of-pocket cost basis;

 

(i)            Investments
in existence on the Closing Date and listed on Schedule 8.7, together
with any renewals and extensions thereof so long as the principal amount of
such renewal or extension does not exceed the original principal amount of such
Investment; and

 

(j)            Investments
consisting of the reinvestment of proceeds of any property or casualty
insurance received by the Borrowers and their Subsidiaries resulting from any
casualty event affecting the property of the Loan Parties other than the
Collateral.

 

8.8           Limitation
on Optional Payments and Modifications of Subordinated Debt Instruments.  (a) Make
any optional payment or prepayment on or redemption or purchase of any
Subordinated Indebtedness; provided that, the Borrowers and their
Subsidiaries may make scheduled principal payments (whether by virtue of
scheduled amortization or required prepayment or redemption) with respect to
Parent Subordinated Indebtedness, so long as immediately prior to and after
giving effect to such payment, no Default or Event of Default shall have
occurred and be continuing and, after giving effect to any such payment of
principal, the Borrowers shall be in compliance with the terms of Section 8.1;
provided  further that, prior to the payment of principal pursuant
to this Section 8.8, the Borrowers shall deliver to the
Administrative Agent a written certificate substantially in the form of Exhibit Q
(such a certificate, a “Subordinated Debt Compliance Certificate”)
describing such payment, certifying that the Borrowers shall be in compliance
with Sections 8.1(a), (b) and (c) following such
payment and showing in detail the calculations supporting the Borrowers’
compliance with the requirements of Sections 8.1(a), (b) and
(c),  (b) except as provided
in clause (c) of this Section 8.8, amend, modify or
change, or consent or agree to any material amendment, modification or change
to any of the terms of, or rescind, terminate or waive of the terms of, any
such Subordinated Indebtedness (other than any such amendment, modification or
change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon or that would relax or waive any covenant, representation,
or warranty therein) or (c) amend the subordination or related provisions
of any Subordinated Indebtedness, without the consent of the Required Lenders.

 

 

85

 

 

8.9           Limitation
on Transactions with Affiliates. 
Engage in any transaction with any Affiliate (other than a Loan Party)
unless such transaction is (a) otherwise permitted under this Agreement
and (b) on terms no less favorable in all material respects to such Loan
Party than it would obtain in a comparable arm’s-length transaction with a
Person which is not an Affiliate or, if no comparable arm’s length transaction
with a Person that is not an Affiliate is available, then on terms that are
determined in good faith by the Board of Directors of the Parent Borrower to be
fair in light of customary practice and pricing in the related industry and
consistent with the prior practice of such Borrower or Subsidiary.

 

8.10         Accounting
Changes.  Make any
significant change in its accounting treatment or reporting practices, except
as required by GAAP, or change its Fiscal Year without providing the
Administrative Agent with ten (10) days’ prior written notice of such
change.  At the end of any calendar year
during which any such change has occurred, the affected Loan Party shall
prepare and deliver to the Administrative Agent (for distribution to the
Lenders through posting on Intralinks or other web site in use to distribute
information to the Lenders) an explanatory statement, in form and substance
reasonably satisfactory to the Administrative Agent, reconciling the previous
treatment or practice with the new treatment or practice.

 

8.11         Limitation
on Negative Pledge Clauses. 
Enter into any agreement with any Person which agreement effectively
prohibits or limits the ability of a Loan Party to create, incur, assume or
suffer to exist any Lien upon or otherwise transfer any interest in any of its
property, assets or revenues as Collateral, whether now owned or hereafter
acquired, other than:

 

(a)           this
Agreement;

 

(b)           the
Loan Documents;

 

(c)           any
industrial revenue bonds, purchase money mortgages or Financing Leases
permitted by this Agreement (in which cases, any prohibition or limitation
shall only be effective against the assets financed thereby);

 

(d)           leases
or other documents containing restrictions on assignment entered into in the
ordinary course of business;

 

(e)           licensing
agreements or management agreements with customary provisions restricting
assignment, entered into in the ordinary course of business;

 

(f)            joint
venture agreements containing customary and standard provisions regarding
ownership and distribution of the assets or equity interests of such joint
venture;

 

(g)           agreements
that neither restrict the Agents’ and Lenders’ ability to obtain first priority
liens on Collateral included in a Borrowing Base nor restrict the Agents’ and
Lenders’ ability to exercise the remedies available to them under applicable
law and the Security Documents, subject to liens permitted hereunder; provided
that, in no event shall such agreements restrict the payment of the Loans and
other Obligations;

 

(h)           agreements
entered into by a Loan Party with a third party customer or supplier of such
Loan Party in the ordinary course of business with respect to a transaction
that places restrictions on a portion of the cash of such Loan Party in an
amount reasonably related to the amount of such transaction on terms consistent
with the past practice of such Loan Party;

 

 

86

 

 

(i)            agreements
entered into in the ordinary course of business with commodity storage,
transportation and/or processing facilities that prohibit liens on the
commodities that are the subject thereof and which shall not be included in any
Borrowing Base; and

 

(j)            agreements
purporting to prohibit the existence of any Liens upon, or transferring of any
interest in, any Excluded Asset (as such term is defined in the Security
Agreement).

 

8.12         Limitation
on Lines of Business.  Enter into any
material line of business except for those lines of business in which the Loan
Parties are engaged on the Closing Date and activities reasonably related or
incidental thereto.

 

8.13         Governing
Documents.  Amend its
Governing Documents, in any manner that could reasonably be expected to be
materially adverse to the interests of the Lenders and the Agents, without the
prior written consent of the Required Lenders, which shall not be unreasonably
withheld or delayed.

 

8.14         Limitation
on Modification of Risk Management Policy. 
Modify or fail to adhere with the terms of the Risk Management Policy
except as permitted by Section 7.10(a).

 

SECTION 9.                                EVENTS OF DEFAULT

 

9.1           Events
of Default.  If any of the following
events shall occur and be continuing:

 

(a)           (i) any
Borrower shall fail to pay any principal of any Revolving Credit Loan or
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or (ii) any Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under the
other Loan Documents, within five (5) calendar days after such interest or
other amount becomes due and payable in accordance with the terms thereof or
hereof; or

 

(b)           any
representation or warranty made or deemed made by any Loan Party herein or in
any other Loan Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or

 

(c)           any
Loan Party shall default in the observance or performance of any covenant
contained in Sections 7.4(a), 7.7(a), 7.7(f), 7.7(g) or
8 of this Agreement, or Section 5  of
the Security Agreement (other than Sections 5(b)(i), (c), (d), (f)(i), (f)(ii) and
(g)); or

 

(d)           any
Loan Party shall default in the observance or performance of any other
obligation contained in this Agreement or any other Loan Document (other than
as provided in paragraphs (a), (b) and (c) of this Section 9.1),
and such default shall continue unremedied for a period of 30 days after the
earlier of (x) such Loan Party having Actual Knowledge of such default or (y) notice
thereof from the Administrative Agent to the Borrowers; or

 

(e)           any
Loan Party shall (A) default in any payment of principal of or interest on
any Indebtedness (other than the Loans or Reimbursement Obligations) or in the
payment of any Guarantee Obligation, beyond the applicable period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness or Guarantee Obligation was created, if the aggregate amount
of the Indebtedness and/or Guarantee Obligations of any Loan Party in respect
of which such default or defaults shall have occurred is at least $5,000,000; (B) default
in the observance or 

 

 

87

 

 

performance of any other agreement or condition
relating to any such Indebtedness or such Guarantee Obligation (in each case
involving the amounts specified in clause (A) above) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or (C) default in the observance or
performance of any obligation (payment or otherwise) under a Financial Hedging
Agreement or a Commodity Hedging Agreement if the counterparty thereof
exercises its right to terminate its position under such Financial Hedging
Agreement or Commodity Hedging Agreement and such Loan Party fails to pay such
amount when due, if in excess of $5,000,000, unless disputed in good faith by
such Loan Party; or

 

(f)            (i) any
Borrower or any of their Subsidiaries shall commence any case, proceeding or
other action (A) under any existing or future Law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, liquidation, winding-up or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Borrower or any of their Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Borrower or any of their Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or (iii) there shall be
commenced against any Borrower or any of their Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief with
regard to all or any substantial part of its assets, which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 30 days from the
entry thereof; or (iv)  any Borrower or any of their Subsidiaries shall
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) any Borrower or any of their Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts
as they become due; or

 

(g)           (i) any
Person shall engage in any “prohibited transaction” (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of any Loan Party or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Loan Parties or any
Commonly Controlled Entity incur, or in the reasonable opinion of the Required
Lenders are likely to incur, any liability in connection with a complete or
partial withdrawal from, or the Insolvency, Reorganization or termination of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could reasonably be expected to have a Material Adverse Effect; or

 

 

88

 

(h)           one
or more judgments or decrees shall be entered against any Loan Party involving
in the aggregate a liability (not paid or fully covered by insurance) in
excess of $5,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or

 

(i)            (i) any
of the Security Documents shall cease, for any reason, to be in full force and
effect, or any Loan Party shall so assert or (ii) the Lien created by any
of the Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or

 

(j)            the
Guarantee shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 11.5), to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

 

(k)           any
agreement or provision pertaining to the subordination of any Subordinated
Indebtedness (or any related provision) under a subordination agreement shall
cease, for any reason, to be in full force and effect; or

 

(l)            any
Change of Control shall occur; or

 

(m)          any Borrower shall fail to deliver (A) a
Borrowing Base Report when due in accordance with the terms of Section 7.2(c) and
the same shall remain unremedied for a period of two (2) Business Days or (B) any
of the items specified in clauses (i) through (xi), as applicable, of the
definition of “Borrowing Base Report” in Section 1 hereof when due
in accordance with the terms hereof and the same shall remain unremedied for a
period of five (5) Business Days;

 

then, and in any such event, (A) if such event
is an Event of Default specified in clause (i) or (ii) of
paragraph (f) of this Section 9.1 with respect to any
Borrower, the Commitments shall immediately and automatically terminate and the
Loans and Reimbursement Obligations (except as provided in the following
paragraph) hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the reasonable request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrowers declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the reasonable request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrowers, declare
the Loans and, except as provided in the following paragraph, Reimbursement
Obligations hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.

 

With
respect to all outstanding Letters of Credit with respect to which demand for
payment shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, each Borrower shall at such time Cash Collateralize an
amount equal to 103% of the aggregate then undrawn and unexpired amount of such
Letters of Credit.  Each Borrower hereby
grants to the Collateral Agent, for the benefit of the Issuing Lenders and the
L/C Participants, a security interest in such Cash Collateral to secure all
obligations of such Borrower under this Agreement and the other Loan
Documents.  Cash Collateralized amounts
shall be applied by the Collateral Agent to the payment of drafts drawn under
such Letters of Credit, and the unused portion thereof after all such Letters
of Credit shall have expired or been fully drawn upon, if any, shall be applied
to repay other obligations of such Borrower hereunder and 

 

 

89

 

 

under the Notes. 
After all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all other
obligations of each Borrower hereunder and under the Notes shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to each Borrower.  Each Borrower shall
execute and deliver to the Collateral Agent, for the account of the Issuing
Lenders and the L/C Participants, such further documents and instruments as the
Collateral Agent may reasonably request to evidence the creation and perfection
of the within security interest in such Cash Collateral account.

 

9.2           Right
to Cure.  Notwithstanding anything to the contrary
contained in Section 9.1, upon the occurrence of any Event of
Default under the covenants set forth in Section 8.1 by an amount
not exceeding 20% of the then-required applicable covenant level for any
calendar month, (i) Buckeye Energy Holdings LLC may make a Permitted
Equity Contribution (and the issuer of the Capital Stock so purchased may
invest the cash proceeds thereof as permitted under Section 8.7(c))
after the last day of such month or (ii) the Borrowers may incur
Indebtedness pursuant to Section 8.2(b) after the last day of
such month, and in each case, the proceeds so contributed or lent shall be
deemed to increase Consolidated Net Working Capital and Consolidated Tangible
Net Worth, as applicable, with respect to and as of the end of the applicable
calendar month for the purposes of calculating Consolidated Tangible Net Worth,
Consolidated Net Working Capital and the Consolidated Leverage Ratio in order
to determine compliance with Sections  8.1(a), (b) and
(c); provided that, such proceeds applied to the cure
right in this Section 9.2 (A) shall be received by the
Borrowers no later than the applicable Cure Deadline and (B) shall not
exceed the aggregate amount necessary to cure such Event of Default under Section 8.1
for such applicable month.  The parties
hereby acknowledge that this Section 9.2 may not be relied on for
purposes of calculating any financial ratios other than as applicable to Section 8.1
and shall not result in any adjustment to any ratio other than the Consolidated
Leverage Ratio or any amount other than the Consolidated Net Working Capital
and Consolidated Tangible Net Worth, as applicable, referred to in the
immediately preceding sentence.  Such
cure right under this Section 9.2 may be exercised no more than
twice during any period of twelve consecutive months and no more than three
times during the term of this Agreement.

 

SECTION 10.                          THE AGENTS

 

10.1         Appointment. 
Each Lender hereby irrevocably designates and appoints the Agents as the
agents of such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes each Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto.  Notwithstanding any provision
to the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.

 

10.2         Delegation
of Duties.  Each Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.

 

10.3         Exculpatory
Provisions.  Neither any
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates (each an “Agent-Related Person”)
shall be (i) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with this Agreement or any other
Loan Document (except for its or such Person’s own gross negligence or willful 

 

 

90

 

 

misconduct) or (ii) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement or
any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document
(including in any audit prepared by the Administrative Agent’s internal auditor
pursuant to Section 6.1(l)) or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of any Loan Party to perform its
obligations hereunder or thereunder.  The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.

 

10.4         Reliance
by Agents.  Each Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by such Agent
with reasonable care.  The Agents may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a notice of assignment, negotiation or transfer thereof shall have been
filed with such Agent.  Each Agent shall
be fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or as otherwise
required by Section 11.1 or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders or as otherwise required by Section 11.1
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders and all future holders of the Loans and all
other Obligations.

 

10.5         Notice
of Default.  No Agent shall
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless such Agent has received notice from a Lender, or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

 

10.6         Non-Reliance
on Agents and Other Lenders. 
Each Lender expressly acknowledges that none of the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
any Agent hereinafter taken, including any review of the affairs of the
Borrowers or any audit performed by the Administrative Agent’s internal auditor
pursuant to Section 6.1(l), shall be deemed to constitute any
representation or warranty by any Agent to any Lender.  Each Lender represents to the Agents that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property, financial
and other condition and creditworthiness of the Borrowers and the other Loan
Parties and made its own decision to extend credit to the Borrowers hereunder
and enter 

 

 

91

 

 

into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon any Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or under the other Loan
Documents, no Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrowers which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.  Without limiting the generality of the
foregoing, no Agent shall have any duty to monitor the Collateral used to
calculate any Borrowing Base or the reporting requirements or the contents of
reports delivered by the Borrowers.  Each
Lender assumes the responsibility of keeping itself informed at all times.

 

10.7         Indemnification. 
The Lenders agree to indemnify each Agent in its capacity as such (to
the extent not reimbursed by the Borrowers and without limiting the obligation
of the Borrowers to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans and Reimbursement Obligations and the cash
collateralization of the L/C Obligations) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by such Agent under or in
connection with any of the foregoing; provided that, no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Agent’s gross negligence or willful misconduct.  The agreements in this Section 10.7
shall survive the payment of the Loans, Reimbursement Obligations and all
amounts payable hereunder and the cash collateralization of the L/C
Obligations.

 

10.8         Agent
in Its Individual Capacity. Each Agent and its Affiliates may make
loans and other extensions of credit to, accept deposits from and generally
engage in any kind of business with the Borrowers and the other Loan Parties as
though such Agent were not an Agent hereunder and under the other Loan
Documents.  With respect to the Loans and
other Extensions of Credit made by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms “Lender”
and “Lenders” shall include each Agent in its individual capacity.

 

10.9         Successor
Administrative Agent.  The Administrative
Agent may resign as Administrative Agent upon 30 days’ notice to the
Lenders.  If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders, which successor Administrative
Agent shall be approved by the Borrowers, whereupon such successor
Administrative Agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor Administrative Agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans or other Obligations.  After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken  or omitted to be taken by it 

 

 

92

 

 

while it was Administrative Agent under this Agreement
and the other Loan Documents.  If no
successor Administrative Agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of such Administrative Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.  The Collateral Agent may, at any time, by
notice to the Lenders and the Administrative Agent, resign as Collateral Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of
the Collateral Agent hereunder shall automatically be assumed by, and inure to
the benefit of, the Administrative Agent, without any further act by the
Collateral Agent, the Administrative Agent or any Lender.  After any retiring Collateral Agent’s
resignation as Collateral Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Agreement and the other Loan
Documents.

 

10.10       Collateral
Matters.

 

(a)           The
Collateral Agent is authorized on behalf of all of the Lenders, without the
necessity of any notice to or further consent from the Lenders, from
time-to-time to take any action with respect to any Collateral or the Loan
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Loan Documents.

 

(b)           The
Lenders irrevocably authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent upon
any Collateral (i) upon termination of the Commitments, and payment in
full of all Loans and all other Obligations known to the Collateral Agent and
payable under this Agreement or any other Loan Document; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) constituting property in which the
Borrowers owned no interest at the time the Lien was granted or at any time
thereafter; (iv) constituting property leased to a Borrower under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
the Borrowers to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or ratified
in writing by all of the Lenders.  Upon
request by the Collateral Agent at any time, the Lenders will confirm in
writing the Collateral Agent’s authority to release particular types or items
of Collateral pursuant to this Section 10.10; provided that,
the absence of any such confirmation for whatever reason shall not affect the
Collateral Agent’s rights under this Section 10.10.

 

(c)           The
Collateral Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  The Collateral Agent shall not
be responsible for the negligence or misconduct of any agents or attorneys in
fact selected by it with reasonable care.

 

10.11       The
Lead Arranger.  The Lead Arranger, in its capacity as such,
shall not have any duties or responsibilities, nor shall it incur any liability
in such capacity, under this Agreement and the other Loan Documents.

 

SECTION 11.                          MISCELLANEOUS

 

11.1         Amendments
and Waivers.   Neither this
Agreement nor any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 11.1. 
Amendments, supplements and modifications to the Loan Documents that
expressly require the consent of the Administrative Agent and do not require
the 

 

 

93

 

 

consent of the Lenders may be entered into by the
Administrative Agent and the Borrowers without the consent of the Lenders.  Otherwise, the Required Lenders may, or, with
the written consent of the Required Lenders, the Administrative Agent may, from
time-to-time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents with the Borrowers for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Borrowers
hereunder or thereunder or (b) waive or consent to any departure from, 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 Loan Documents or any Default or Event of Default
and its consequences; provided, however,
that no such waiver or consent and no such amendment, supplement or
modification shall:

 

(i)       reduce
the amount or extend the scheduled date of maturity of any Loan or
Reimbursement Obligation hereunder or any installment thereof, or reduce the
stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration
date of any Lender’s Commitment, in each case without the consent of each
Lender affected thereby, or

 

(ii)      amend
or modify the definition of “Termination Date” or Section 4.9,
without the written consent of all of the Lenders, or

 

(iii)     amend
or modify the definition of “Applicable Margin” or the definition of any
component thereof, or reduce the stated rate of any interest or fee payable
under this Agreement, without the written consent of all of the Lenders, or

 

(iv)    amend,
modify or waive any provision of this Section 11.1 or change the
percentage specified in the definition of Required Lenders or Supermajority
Lenders, or consent to the assignment or transfer by the Borrowers of any of
their rights and obligations under this Agreement and the other Loan Documents,
in each case without the written consent of all of the Lenders, or

 

(v)     amend or
modify the definition of “Borrowing Base” or the definition of any component
thereof, in each case without the written consent of the Supermajority Lenders,
or

 

(vi)    consent
to the release by the Collateral Agent of all or substantially all of the
Collateral or release any Guarantor from their Guarantee Obligations under the
Guarantee, without the written consent of each Lender affected thereby, or

 

(vii)   amend,
modify or waive any provision of Section 10, or any other provision
affecting the rights, duties or obligations of any Agent, without the written
consent of any Agent directly affected thereby, or

 

(viii)  amend,
modify or waive any provision of Section 3, or any provision of Section 
11.7(c) affecting the right of the Issuing Lenders to consent to
certain assignments thereunder, without the written consent of the Issuing
Lenders.

 

Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans and other
Obligations.  In the case of any waiver,
the Borrowers, the Lenders and the Agents shall be restored to their former
positions and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.

 

 

94

 

 

11.2         Notices.

 

(a)           General.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by
hand, when delivered, (b) in the case of delivery by mail, three (3) Business
Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
electronically confirmed, addressed as follows in the case of Borrowers and the
Administrative Agent, and as set forth in Schedule 1.0 in the case of
the other parties hereto, or to such other address as may be hereafter notified
by the respective parties hereto:

 

	
  The
  Borrowers:

  	
  Buckeye
  Energy Services LLC

  
	
   

  	
  Five TEK Park

  
	
   

  	
  9999 Hamilton Boulevard

  
	
   

  	
  Breinigsville,
  PA 18031

  
	
   

  	
  Attention:  Mr. Vance E. Powers

  
	
   

  	
  Fax:
  484-232-4543

  
	
   

  	
   

  
	
  with a copy to:

  	
  Buckeye Energy Holdings
  LLC

  
	
   

  	
  Five TEK Park

  
	
   

  	
  9999 Hamilton Boulevard

  
	
   

  	
  Breinigsville, PA 18031

  
	
   

  	
  Attention:
  Mr. William H. Schmidt, Jr.

  
	
   

  	
  Fax: 610-904-4006

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Farm &
  Home Oil Company LLC

  
	
   

  	
  3115 State Road

  
	
   

  	
  Telford, PA 18969

  
	
   

  	
  Attention: Mr. Jim
  Boyd

  
	
   

  	
  Fax: 215-257-2088

  
	
   

  	
   

  
	
  with a copy to:

  	
  Buckeye Energy Holdings
  LLC

  
	
   

  	
  Five TEK Park

  
	
   

  	
  9999 Hamilton Boulevard

  
	
   

  	
  Breinigsville, PA 18031

  
	
   

  	
  Attention:
  Mr. William H. Schmidt, Jr.

  
	
   

  	
  Fax: 610-904-4006

  
	
   

  	
   

  
	
  The
  Administrative Agent:

  	
  For
  purposes of payments only,

  
	
   

  	
   

  
	
   

  	
  BNP
  Paribas RCC, Inc., as agent for BNP Paribas

  
	
   

  	
  525
  Washington Blvd.

  
	
   

  	
  Jersey
  City, New Jersey 07301

  
	
   

  	
  Attention:
  Lisa Ali, Loan Servicing

  
	
   

  	
  Fax:
  201-850-4022

  
	
   

  	
  Attention:
  Yuri Latorre, Loan Servicing

  
	
   

  	
  Fax:
  201-850-4022

  

 

 

95

 

 

	
   

  	
  For
  all other purposes,

  
	
   

  	
   

  
	
   

  	
  BNP
  Paribas

  
	
   

  	
  787
  Seventh Avenue, 9th Floor

  
	
   

  	
  New
  York, New York 10019

  
	
   

  	
  Attention:
  Keith Cox

  
	
   

  	
  Fax:
  212-841-2536

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  BNP
  Paribas RCC, Inc., as agent for BNP Paribas

  
	
   

  	
  525
  Washington Blvd.

  
	
   

  	
  Jersey
  City, New Jersey 07301

  
	
   

  	
  Attention:
  Lisa Ali, Loan
  Servicing

  
	
   

  	
  Fax:
  201-850-4022

  
	
   

  	
  Attention:
  Chering Kenawy/Mohammed Haque, Trade Finance

  
	
   

  	
  Fax:
  201-850-4024

  
	
   

  	
   

  
	
  with
  a copy to:

  	
  Cadwalader,
  Wickersham & Taft LLP

  
	
   

  	
  227
  W. Trade Street, Suite 2400

  
	
   

  	
  Charlotte,
  North Carolina 28202

  
	
   

  	
  Attention:
  Steven N. Cohen, Esq.

  
	
   

  	
  Fax:
  704-348-5200

  

 

provided that any notice, request or demand to or
upon the Administrative Agent, the Issuing Lenders or the Lenders pursuant to Section 2.4,
3.1, 3.3, 4.3, 4.6, 4.7, or 4.9 shall
not be effective until received.

 

(b)           Limited
Use of Electronic Mail.  Electronic
mail and internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used to deliver any notice hereunder.

 

(c)           Reliance
by Administrative Agent and Lenders. 
The Administrative Agent and the Lenders shall be entitled to rely and
act upon any notices (including telephonic notices) purportedly given by or on
behalf of the Borrowers even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  The Borrowers jointly and severally shall
indemnify the Administrative Agent and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

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

 

 

96

 

 

11.4         Survival
of Representations and Warranties. 
All representations and warranties made herein, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other Extensions of Credit
hereunder.

 

11.5         Release
of Collateral and Guarantee Obligations.

 

(a)           Upon
any sale or other transfer of any Collateral that is permitted under the Loan
Documents by any Loan Party or a sale of all of the assets of, or all of the
Capital Stock of, a Subsidiary in a transaction that is permitted under the
Loan Documents, or upon the effectiveness of any written consent to the release
of the security interest granted hereby in any Collateral pursuant to Section 10.10
hereof, the security interest in such Collateral shall automatically terminate
and any guarantee obligations under any Loan Document of any Person being
Disposed of in such Disposition shall automatically terminate, in each case, to
the extent necessary to permit consummation of such Disposition in accordance
with the Loan Documents.

 

(b)           Notwithstanding
anything to the contrary contained herein or any other Loan Document, when all
Obligations have been paid in full (except indemnification obligations for
which no claim has been made and of which no Responsible Person of any Loan
Party has Actual Knowledge), the Commitments have terminated and no Letter of
Credit shall be outstanding, the pledge and security interest granted pursuant
to this Agreement and the other Loan Documents shall automatically terminate,
all obligations of any Loan Party under the Guarantee or any other Loan
Document shall be automatically released, all rights to the Collateral shall
revert to the respective owners thereof, and upon request of the Borrowers, the
Collateral Agent shall (without notice to, or vote or consent of, any Lender or
Qualified Counterparty to any Commodity Hedging Agreement or any Financial
Hedging Agreement) take such actions as shall be required to evidence the
release of its security interest in all Collateral, and to evidence the release
of all guarantee obligations under any Loan Document.  Any such release of guarantee obligations
shall be deemed subject to the provision that such guarantee obligations shall
be reinstated if after such release any portion of any payment in respect of
the Obligations guaranteed thereby shall be rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of any Borrower or any Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any Borrower or any Guarantor or any substantial part of
its property, or otherwise, all as though such payment had not been made.

 

11.6         Payment
of Expenses and Taxes.  The Borrowers
jointly and severally agree (a) to pay or reimburse each Agent for all its
reasonable and documented out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, execution, delivery
and administration of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable and documented fees and disbursements of counsel to
the Administrative Agent (which shall be limited to one counsel per country), (c) to
pay or reimburse each Lender and each Agent for all its documented costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the documented fees and disbursements
of counsel (excluding the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent (including the fees and
expenses of Cadwalader, Wickersham & Taft LLP), (d) to pay or
reimburse the Administrative Agent for its documented costs and expenses
incurred in connection with inspections performed pursuant to Section 7.9
and audits performed pursuant to Section 6.1(l), and any other due
diligence performed in connection with the Credit Agreement and the other Loan
Documents, including the documented fees and disbursements of counsel to the
Administrative Agent 

 

 

97

 

 

(including the fees and expenses of Cadwalader,
Wickersham & Taft LLP), (e) to pay, indemnify, and hold each
Lender and each Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent
(including the determination of whether or not any such waiver or consent is
required) under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (f) to pay, indemnify, and hold each Lender,
the Issuing Lenders and the Agents, and each of their respective officers,
employees, directors, trustees, agents, advisors, affiliates and controlling
persons (each, an “Indemnitee”), harmless from and against any and all
other 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 Agreement, the other Loan Documents, and any such other documents,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrowers, any of their Subsidiaries, or any of the
Properties (all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”); provided that, the Borrowers shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities (i) to
the extent such Indemnified Liabilities are found by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee, or (ii) legal
proceedings commenced against an Indemnitee by any security holder or creditor
thereof arising out of and based upon rights afforded any such security holder
or creditor solely in its capacity as such. 
The agreements in this Section 11.6 shall survive repayment
of the Loans, Reimbursement Obligations and all other amounts payable hereunder.

 

11.7         Successors
and Assigns; Participations and Assignments.

 

(a)           This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Agents and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender (and any purported
such assignment or transfer by a Borrower without such consent of each Lender
shall be null and void), unless such assignment or transfer is from one
Borrower to another Borrower.

 

(b)           Any
Lender may, in accordance with applicable Law, at any time sell to one or more
banks, financial institutions or other entities (individually a “Participant”
and, collectively, the “Participants”) (so
long as no Default or Event of Default has occurred and is continuing, only to
a Person other than an Ineligible Transferee) participating interests in any
Loan or Reimbursement Obligation owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents (a “Participation”).  In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan, Reimbursement Obligation or other
interest for all purposes under this Agreement and the other Loan Documents,
and the Borrowers and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment to or waiver of any provision of any Loan Document, or any consent to
any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or the stated rate
of interest on, the Loans, Reimbursement Obligation or any fees payable to the
Lender hereunder, or postpone the date of the final maturity of the Loans or
Reimbursement Obligations, in each case to the extent subject to such
participation.  The Borrowers agree that
if amounts outstanding under 

 

 

98

 

 

this Agreement are due or unpaid during an Event of Default, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable Law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement; provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 11.8(a) as
fully as if it were a Lender hereunder. 
The Borrowers also agree that each Participant shall be entitled to the
benefits of, and bound by the obligations imposed on the Lenders in, Sections 4.10, 4.11, and 4.14 with
respect to its participation in the Commitments and the Revolving Credit Loans
and other Extensions of Credit outstanding from time-to-time as if it were a
Lender; provided that, a Participant shall not be entitled to receive
any greater payment in the case of Sections 4.10, 4.11, and 4.14 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 is
made with the Borrowers’ prior written consent expressly acknowledging such
Participant may receive a greater benefit; provided  further that,
a Participant that would be a Non-Exempt Lender if it were a Lender shall not
be entitled to the benefits of Section 4.11 to the extent such
Participant fails to comply with Section 4.11(e) as though it
were a Lender.

 

(c)           Any
Lender may, in accordance with applicable Law, at any time and from
time-to-time assign to any Lender or any Affiliate or Approved Fund thereof,
or, with the consent of the Administrative Agent, the Issuing Lenders and, so
long as no Default or Event of Default has occurred and is continuing, the
Borrowers (which consent shall not be unreasonably withheld or delayed), to any
other Person (the “Assignee”), all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit F,
appropriately completed (an “Assignment and Acceptance”),
executed by such Assignee, such assigning Lenders (and, in the case of an
Assignee that is not then a Lender or any Affiliate or Approved Fund thereof,
by the Administrative Agent, the Issuing Lenders, and, so long as no Default or
Event of Default has occurred and is continuing, the Borrowers) and attaching
the Assignee’s relevant tax forms, administrative details and wiring
instructions, and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that (i) each such assignment
to an Assignee (other than any Lender) shall be in an aggregate principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof (other
than in the case of (a) an assignment of all of a Lender’s interests under
this Agreement or (b) an assignment to an Affiliate or Approved Fund of
the Assignor), unless otherwise agreed by the Administrative Agent and, so long
as no Default or Event of Default has occurred and is continuing, the Borrowers
(such amount to be aggregated in respect of assignments by to any Lender and
the Affiliates or Approved Funds thereof), (ii) in the case of an
assignment by a Lender to a Bank CLO managed by such Lender or an Affiliate of
such Lender, unless such assignment to such Bank CLO has been consented to by
the Administrative Agent, the Issuing Lenders and the Borrowers (such consent
not to be unreasonably withheld or delayed), the assigning Lender shall retain
the sole right to approve any amendment, waiver or other modification of this
Agreement or any other Loan Document; provided that, the Assignment and
Acceptance between such Lender and such Bank CLO may provide that such Lender
will not, without the consent of such Bank CLO, agree to any amendment,
modification or waiver that requires the consent of each Lender directly
affected thereby pursuant to Section 11.1, and (iii) each
Assignee shall comply with the provisions of Section 4.11(c), (iv) so
long as no Default or Event of Default has occurred and is continuing, no such
assignment shall be made to an Ineligible Transferee.  Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Commitments as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an 

 

 

99

 

 

assigning Lender’s rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto).  Notwithstanding any provision of this
paragraph (c) and paragraph (e) of this Section 11.7, the
consent of the Borrowers shall not be required, and, unless requested by the
Assignee and/or the assigning Lender, new Notes shall not be required to be
executed and delivered by the Borrowers, for any assignment which occurs at any
time when any of the events described in Section 9.1(f) shall
have occurred and be continuing.  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 11.7 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 clause (b) of
this Section 11.7.

 

(d)           The
Administrative Agent, on behalf of the Borrowers, shall maintain at the address
of the Administrative Agent referred to in Section 11.2 a copy of
each Assignment and Acceptance delivered to it and a record of each
Participation and a register (the “Register”)
for the recordation of the names and addresses of the Lenders (including all
Assignees, successors and Participants) and the Commitments of, and principal
amounts of the Loans and other Obligations owing to, each Lender from
time-to-time.  The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may (and, in the case of
any Loan or other obligation hereunder not evidenced by a Note, shall) treat
each Person whose name is recorded in the Register as the owner of a Loan or
other Obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary.  Any assignment of any Loan or
other obligation hereunder, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register.  The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time-to-time upon reasonable prior notice.  If any Lender sells a Participation as
described in Section 11.7(b), it shall provide to the
Administrative Agent on behalf of the Borrowers, or maintain as agent of the
Borrowers, the information described in this paragraph and permit the
Administrative Agent and the Borrowers to review such information as reasonably
needed for the Administrative Agent and the Borrowers, as applicable, to comply
with their obligations under this Agreement or under any applicable Law or
governmental regulation or procedure.

 

(e)           Upon
its receipt of an Assignment and Acceptance executed by an assigning Lender and
an Assignee (and, in the case of an Assignee that is not then a Lender, by the
Administrative Agent, the Issuing Lenders and, so long as no Default or Event
of Default has occurred and is continuing, the Borrowers), together with
payment to the Administrative Agent by the assigning Lender of a registration
and processing fee of $3,500 (other than in the case of an assignment to a
Lender or an Affiliate of a Lender or any pledge or assignment by a Lender of
any Loan or Note to any Federal Reserve Bank), the Administrative Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
applicable Register and give notice of such acceptance and recordation to the
Lenders and the Borrowers.

 

(f)            The
Borrowers authorize each Lender to disclose to any Participant or Assignee
(each, a “Transferee”) and, so long as no Default or
Event of Default has occurred and is continuing, only to a Person other than an
Ineligible Transferee and only with the consent of the Borrowers (which consent
shall not be unreasonably withheld or delayed) any prospective Transferee in
each case, any and all financial information in such Lender’s possession
concerning the Borrowers and their Affiliates which has been delivered to such
Lender by or on behalf of the Borrowers pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrowers in connection
with such Lender’s credit evaluation of the Borrowers and their Affiliates
prior to becoming a party to this Agreement; provided that such
Transferee shall have agreed to be bound by the provisions of Section 11.15
hereof.

 

 

100

 

 

(g)           For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 11.7 concerning assignments of Loans and
other Extensions of Credit and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security interests,
including, without limitation, (i) any pledge or assignment by a Lender of
any Loan or Note to any Federal Reserve Bank in accordance with applicable Law
and (ii) any pledge or assignment by a Lender which is a fund to its
trustee for the benefit of such trustee and/or its investors to secure its
obligations under any indenture or Governing Documents to which it is a party; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(h)           Notwithstanding
the foregoing, any Lender may, with notice to, but without consent of, the
Borrowers and the Administrative Agent, and in accordance with the definition
of “Conduit Lender” set forth in Section 1.1 hereof and the terms
of this Section 11.7(h), designate a Conduit Lender and fund any of
the Loans or Unreimbursed Amounts which such Lender is obligated to make or pay
hereunder by causing such Conduit Lender to fund such Loans or Unreimbursed
Amounts on behalf of such Lender.  Any
Conduit Lender may assign any or all of the Loans or Unreimbursed Amounts it
may have funded hereunder to its designating Lender without the consent of the
Borrowers or the Administrative Agent and without regard to the limitations set
forth in Section 11.7(c). 
Each of the Borrowers, each Lender and each Agent hereby confirms that
it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar Law in connection with any obligation of such Conduit Lender under the
Loan Documents, for one year and one day after the payment in full of the
latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance. In addition, notwithstanding the foregoing,
any Conduit Lender may (i) with notice to, but without the prior written
consent of, the Borrowers and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
or Reimbursement Obligations to any financial institutions (consented to by the
Borrowers and the Administrative Agent) providing liquidity and/or credit
support to or for the account of such Conduit Lender to support the funding or
maintenance of Loans or Reimbursement Obligations by such Conduit Lender and (ii) disclose
on a confidential basis any non-public information relating to its Loans and
its Reimbursement Obligations to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such
Conduit Lender. This clause (h) may not be amended without the written
consent of any Conduit Lender directly affected thereby.

 

11.8         Adjustments;
Set-off.

 

(a)           If
any Lender (a “Benefited Lender”)
shall at any time receive any payment of all or part of its Loans or
Reimbursement Obligations, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 9.1(f),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans
or Reimbursement Obligations, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.  The Borrowers agree that each 

 

 

101

 

 

Lender so purchasing a portion of another Lender’s Loan may exercise
all rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.

 

(b)           In
addition to any rights and remedies of the Lenders provided by Law, each Lender
shall have the right, without prior notice to the Borrowers, any such notice
being expressly waived by the Borrowers to the extent permitted by applicable
Law, during the existence of an Event of Default, upon any amount becoming due
and payable by a Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of a Borrower.  Each Lender agrees promptly to notify the
Borrowers and the Administrative Agent after any such set-off and application
made by such Lender; provided that, the failure to give such notice
shall not affect the validity of such set-off and application.

 

11.9         Counterparts. 
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by facsimile
transmission or electronic mail transmission in portable document format of
signature pages hereto), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by facsimile transmission or by electronic mail in portable
document format shall be effective as delivery of a manually executed
counterpart hereof.  A set of the copies
of this Agreement signed by all the parties shall be lodged with the Borrowers
and the Administrative Agent.

 

11.10       Severability. 
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

11.11       Integration. 
This Agreement and the other Loan Documents represent the agreement of
the Borrowers, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other
Loan Documents.

 

11.12       GOVERNING
LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.13       Submission
to Jurisdiction.  Each party to this Agreement irrevocably and
unconditionally:

 

(a)           submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;

 

(b)           consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in 

 

 

102

 

 

any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;

 

(c)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Loan Parties as the case may be,
at their address set forth in Section 11.2 or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)           agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by Law or shall limit the right to sue in any other
jurisdiction; and

 

(e)           waives,
to the maximum extent not prohibited by Law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section 11.13
any special, exemplary, punitive or consequential damages.

 

11.14       Acknowledgements. 
Each Loan Party hereby acknowledges that:

 

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

 

(b)           none
of the Agents nor any Lender has any fiduciary relationship with or duty to the
Loan Parties arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Borrowers and the other
Loan Parties, on one hand, and the Agents and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c)           no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Loan Parties and the Lenders.

 

11.15       WAIVERS
OF JURY TRIAL.  EACH OF THE
LOAN PARTIES, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.16       Confidentiality.

 

(a)           Each
Agent and Lender shall (i) keep confidential (and shall cause its
directors, officers, employees, representatives, agents or auditors
(collectively, “Representatives”) to
keep confidential) all information that such Lender receives from or on behalf
of the Loan Parties other than information that is identified by the Loan
Parties as being non-confidential information (all such information that is not
so identified being “Confidential Information”);
provided that, nothing in this Section 11.16(d) shall
prevent the Administrative Agent or any Lender from disclosing, subject to the
terms and requirements of this Section 11.16(d), such information
to an Affiliate or its Representatives, (ii) use Confidential Information
solely for purposes of evaluating and administering the Loans and the Loan
Documents and (iii) subject to Section 11.16(d), not disclose
Confidential Information to Representatives of its Trading Business.  Notwithstanding anything in this Section 11.16
to the contrary, any Confidential Information may be disclosed by any Lender
(the affected Lender being, the “Disclosing Party”)
if the Disclosing Party is compelled by judicial process or is required by Law
or regulation or is requested to do so by any examiner or any other regulatory
authority or recognized self-regulatory 

 

 

103

 

 

organization including, without limitation, the New York Stock
Exchange, the Federal Reserve Board, the New York State Banking Department and
the Securities & Exchange Commission, in each case having or asserting
jurisdiction over the Disclosing Party.

 

(c)           The
obligations of each Lender and its Representatives under this Section 11.16
with respect to Confidential Information shall not apply to any Confidential
Information which, as of the date of disclosure to such Lender or its
Representatives is in the public domain or subsequently comes into the public
domain other than as a result of a breach of the obligations of any Lender or
its Representatives hereunder, or any information that was or becomes available
to such Lender or its Representatives from a person or source that is not, to
the knowledge of such Lender or its Representatives, bound by a confidentiality
agreement with the Loan Parties or otherwise prohibited from transferring such
information to such Lender or its Representatives, or any information which was
or becomes available to such Lender or its Representatives without any
obligation of confidentiality prior to its disclosure by or on behalf of the
Loan Parties.

 

(d)           Notwithstanding
anything herein to the contrary, each Lender may disclose Confidential
Information to those Representatives of its Trading Business, solely to the
extent (i) such disclosure is (A) advisable, in the good faith
discretion of such Lender, to assist such Lender in protecting and enforcing
its rights under the Loan Documents and other credit facilities with which such
Lender or its Affiliates has with the Borrowers (or their Affiliates) and (B) relevant
to such assistance,  (ii) such
Representatives have been advised of, and agree to, the confidential nature,
and restrictions on use, of such Confidential Information and need to know same
in connection with providing such assistance, and (iii) such Confidential
Information is not used for any purpose other than that set forth in this Section 11.16.

 

11.17       Specified
Laws.  Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the
Borrowers that pursuant to the requirements of the Specified Laws, it is
required to obtain, verify and record information that identifies the
Borrowers, which information includes the names and addresses of the Borrowers
and other information that will allow such Lender or Administrative Agent, as
applicable, to identify the Borrowers in accordance with the Specified Laws.

 

[Signature Pages Follow]

 

 

104

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

	
   

  	
  BUCKEYE ENERGY SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FARM & HOME OIL COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

105

 

 

	
   

  	
  AGENTS AND LENDERS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as Administrative Agent, Collateral Agent and Lead
  Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as Issuing Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as Swing Line Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

 

106

 

 

	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as Daylight Overdraft Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,

  
	
   

  	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

107Exhibit 10.2

 

FORM OF

SEALED AIR CORPORATION
PERFORMANCE SHARE UNITS

AWARD GRANT

2008-2009

 

THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.

 

Name:

 

Performance Period:   January 1, 2008 through December 31,
2009

 

TARGET AWARD

 

You have been granted by Sealed Air
Corporation (the “Company”) a target Performance Share Units award under the
Company’s 2005 Contingent Stock Plan for the two-year performance period 2008
through 2009, comprised of the following:

 

Target Performance Share Units:               
units

 

Each Performance Share Unit (a “Unit”)
will be equivalent to one share of Sealed Air Corporation common stock.

 

Your award is subject to the terms and
conditions of the Performance Share Units Program and the Company’s 2005
Contingent Stock Plan (collectively, the “Plan Documents”). If this award
agreement varies from the terms of the Plan Documents, the Plan Documents will
control.  A copy of the Performance Share
Units Program is attached as Appendix A. The 2005 Contingent Stock Plan is
included as an attachment to “Information for Recipients of Performance Share
Unit Awards Under the 2005 Contingent Stock Plan of Sealed Air Corporation.”

 

PERFORMANCE GOALS

 

The number of Units you earn will depend
on the performance of the Company relative to certain performance goals for the
two-year performance cycle from January 1, 2008 through December 31,
2009 (the “Performance Period”).  The
performance goals and their relative weightings are attached as Appendix B
hereto.

 

The determination of whether the
performance goals have been met will be made by the Organization and
Compensation Committee of the Company’s Board of Directors following the end of
the Performance Period.

 

1

 

OTHER IMPORTANT INFORMATION

 

·                  Units earned will receive dividend
equivalents paid in cash (without interest) based on the dividend rates in
effect during the Performance Period applied to the number of Units you earn,
which will be subject to the performance goals and vesting provisions described
above.

 

·                  You will not earn any Units if the
Company’s performance during the Performance Period is below threshold
performance as set forth on Exhibit B.

 

·                  If actual performance equals or exceeds
threshold performance, the number of Units earned will range from 50% to 200%
of your Target Performance Share Units award based on attainment against the
performance goals as set forth on Exhibit B.

 

·                  In order to receive any Units, you must
remain employed with the Company through December 31, 2009, except in the
case of death, disability or retirement as discussed below.  If you terminate employment prior to December 31,
2009 for reasons other than death, disability or retirement, you will forfeit
all Units.  Other special rules apply
in case of termination of employment following a Change in Control, as
described below.

 

·                  Units earned at the end of the
Performance Period, if any, will be paid in actual shares of Company common
stock, less the number of shares that may be withheld to satisfy applicable
withholding taxes.  Shares in settlement
for any Units earned will be issued on or before March 15, 2010.  Cash dividend equivalents accrued on the
earned Units will be paid in cash on or about the same time.

 

·                  If your employment terminates due to your
death or Disability (as defined in the 2005 Contingent Stock Plan) or you
retire (as defined below) during the Performance Period, you (or your estate,
in the event of your death) will receive a pro rata payout following the end of
the Performance Period, based upon the portion of the Performance Period during
which you were employed.  The actual
payout will not occur until after the end of the Performance Period, at which
time the performance and achievements during the Performance Period will be
used to determine the number of Units that you would have earned if you had
remained employed for the entire Performance Period prior to applying the pro
rata factor.  Any payout to you in case
of termination of employment during the Performance Period due to death, Disability
or retirement will be made at approximately the same time as payouts are made
to Participants who are still employed by the Company. You are considered to
have retired if your employment with the Company terminates when you have at
least 5 years of service and your combined age and years of service equal at
least 70, but excluding termination of employment due to your death or Disability
or termination of employment by the Company for cause.  “Cause” for this purpose means any of the
following as determined by the Company: (i) an act of gross negligence or
willful misconduct significantly injurious to the Company or any subsidiary, (ii) gross
dereliction of duties after notice to you and failure to correct the
deficiencies within a thirty (30) day period thereafter, or (iii) fraud in
your capacity as an employee.

 

2

 

·                  There is no automatic vesting of your
Units upon a “Change in Control” (as defined in the 2005 Contingent Stock Plan).  However, the 2005 Contingent Stock Plan
provides for pro rata vesting of your Units if within two years following the
Change in Control your employment is terminated either by the Company without
Cause or by you for “Good Reason” (also as defined in the 2005 Contingent Stock
Plan).

 

·                  The Organization and Compensation
Committee retains the right in its sole discretion to reduce any award which
would otherwise be payable, unless there has been a Change in Control, as
defined in the 2005 Contingent Stock Plan.

 

·                  This award is subject to the Company’s Policy on Recoupment of
Incentive Compensation, a current copy of which is attached as Appendix C.

 

·                  Payments will be taken into account for
purposes of the Company’s employee benefit plans and programs only to the
extent provided under the terms of such plans and programs.

 

FOR MORE INFORMATION.

 

If you have any questions about your
award or Units or need additional information, contact                             
at                               .

 

IN WITNESS WHEREOF, the Company has caused
this Award Grant to be executed by its duly authorized officer, and you have
hereunto set your hand, effective as of the Grant Date stated above.

 

	
  SEALED
  AIR CORPORATION

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
						

 

 

3

 

APPENDIX A

 

SEALED AIR CORPORATION

PERFORMANCE SHARE UNITS PROGRAM

 

PURPOSE

 

The Sealed Air Corporation Performance Share Units Program
(the “Program”) has been established effective as of January 1,
2008 (the “Effective Date”) to provide
long-term incentive compensation to key employees who are in a position to
influence the performance of Sealed Air Corporation and its subsidiaries (the “Company”),
and thereby enhance shareholder value over time.  The Program provides a significant additional
financial opportunity and complements other parts of the Company’s total
compensation program for key employees (base salary, annual performance plan,
and benefits).

 

ELIGIBILITY
AND PERFORMANCE PERIODS

 

The Committee (as defined in the “Program Administration”
section of the Program) will determine which employees of the Company are
eligible to participate in the Program from time to time.  Participants will be selected within 90 days
after the beginning of each multi-year performance cycle (“Performance Period”).  Each Performance Period will be of two or
more years duration as determined by the Committee and will commence on January 1
of the first year of the Performance Period. 
A new Performance Period will commence each year unless the Committee
determines otherwise.

 

TARGET AWARDS

 

At the time a Participant is selected for participation in
the Program for a Performance Period, the Committee will assign the Participant
a Performance Share Units Target Award to be earned if the Company’s target
performance levels are met for the Performance Period (the “Target Award”).  The Target Award will be expressed as a
number of Performance Share Units under the Company’s 2005 Contingent Stock
Plan and will be evidenced by a Performance Share Units award grant consistent
with the provisions of the 2005 Contingent Stock Plan.

 

MAXIMUM AND
THRESHOLD AWARDS

 

At the time a Participant is selected for participation in
the Program for a Performance Period, the Participant will be assigned maximum
and threshold award levels, expressed as a percentage of the Target Award.  Maximum award level represents the maximum
percentage of the Target Award that may be paid to a Participant for a
Performance Period based on performance above target performance levels.  Threshold award level represents the minimum
percentage of the Target Award that may be paid to a Participant for a
Performance Period based on performance below target performance levels.  Performance below the threshold performance
award level will earn no incentive payments.

 

 

 

Any award of Performance Shares
hereunder shall be subject to the individual award limit applicable under the
2005 Contingent Stock Plan.

 

PERFORMANCE
MEASURES

 

Performance measures that may be used under the Program
will be those “Performance Measures” defined in the 2005 Contingent Stock Plan.

 

PERFORMANCE
GOALS

 

The Committee will designate, within 90 days of the
beginning of each Performance Period:

 

·                  The performance measures and calculation methods to be used for the
Performance Period;

 

·                  A schedule for each performance measure relating achievement levels for
the performance measure to incentive award levels as a percentage of
Participants’ Target Awards; and

 

·                  The relative weightings of the performance measures for the Performance
Period.

 

The
performance goals established by the Committee for a Performance Period are
intended to satisfy the “objective compensation formula” requirements of
Treasury Regulations Section 1.162-27(e)(2).

 

PERFORMANCE
CERTIFICATION

 

As soon as practicable following the end of each
Performance Period and prior to any award payments for the Performance Period,
the Committee will certify the Company’s performance with respect to each
performance measure used for that Performance Period.

 

AWARD
CALCULATION AND PAYMENT

 

For each Performance Period, individual incentive awards
will be calculated and paid to each Participant who is still employed with the
Company (subject to the special provisions below for employees who terminate
employment due to death, disability or retirement) as soon as practicable
following the Committee’s certification of performance for the Performance
Period.  The amount of a Participant’s
incentive award to be paid based on each individual performance measure will be
calculated based on the following formula:

 

	
  Participant’s
  Target

  Award

  	
   

  X

  	
  Percentage
  of target award to be paid based on performance measure results

  	
   

  X

  	
  Relative
  weighting of performance measure

  	
   

  =

  	
  Amount
  of incentive award based on performance measure results

  

 

 

 

The
incentive amounts to be paid to the Participant based on each performance
measure will be summed to arrive at the Participant’s total incentive award
payment for the Performance Period.

 

Payments from the Program to a Participant, if any, will
be made in the form of one share of the Company’s common stock for each Unit
earned (rounded up to the nearest whole share if such calculation otherwise
would result in issuance of a fractional share).  A Participant receiving an award under the
Program will also receive a cash payment equal to the dividends that would have
been paid during the Performance Period on the Units earned by the Participant
had the Units been actual shares of Company common stock.

 

TERMINATION OF EMPLOYMENT DUE TO
DEATH, DISABILITY, RETIREMENT

 

If a Participant’s
employment terminates due to the Participant’s death or disability (as defined
in the 2005 Contingent Stock Plan) or retirement (as defined below) during the
Performance Period, the Participant (or the Participant’s estate, in the event
of the Participant’s death) will receive a pro rata payout following the end of
the Performance Period, based upon the portion of the Performance Period during
which the Participant was employed.  The
actual payout will not occur until after the end of the Performance Period, at
which time the performance and achievements during the Performance Period will
be used to determine the number of Units that the Participant would have earned
if the Participant had remained employed for the entire Performance Period
prior to applying the pro rata factor. 
Payouts to Participants whose employment terminates during the
Performance Period due to death, disability or retirement will be made at
approximately the same time as payouts are made to Participants who are still
employed by the Company. A Participant is considered to have retired if the
Participant’s employment with the Company terminates when the Participant has
at least 5 years of service and the Participant’s combined age and years of
service equals at least 70, but excluding termination of employment due to the
Participant’s death or disability or termination of employment by the Company
for cause.  “Cause” for this purpose
means any of the following as determined by the Company: (i) an act of
gross negligence or willful misconduct significantly injurious to the Company
or any subsidiary, (ii) gross dereliction of duties after notice to the
Participant and failure to correct the deficiencies within a thirty (30) day
period thereafter, or (iii) fraud in the Participant’s capacity as an
employee.

 

OTHER TERMINATION OF EMPLOYMENT

 

If a Participant’s
employment terminates prior to the end of a Performance Period for any reason
(whether voluntary or involuntary) other than death, disability or retirement,
the Participant will forfeit all rights to compensation under the Program, except
for any special provisions under the 2005 Contingent Stock Plan in connection
with certain terminations of employment following a Change in Control or unless
the Committee determines otherwise.

 

NEW HIRES OR PROMOTIONS INTO
ELIGIBLE POSITIONS

 

Participants will become
eligible for participation in the Program at their new position level beginning
with the Performance Period which begins on the January 1 immediately 

 

 

 

following their hire or promotion date.  No new performance awards or adjustments to
awards for Performance Periods that commenced prior to a Participant’s hire or
promotion date will be made.

 

IMPACT OF A
CHANGE IN CONTROL

 

Any special vesting or payment rules with respect to
awards under the Program in connection with a Change in Control will be
determined under the provisions of the 2005 Contingent Stock Plan.

 

PROGRAM
ADMINISTRATION

 

The Program will be administered by the Organization and Compensation Committee of the Company’s Board of
Directors in accordance with the terms of the 2005 Contingent Stock Plan.

 

MISCELLANEOUS

 

(i)            Amendment and Termination.  The Committee may amend, modify, or terminate
the Program at any time, provided that no amendment, modification or
termination of the Program shall reduce the amount payable to a Participant
under the Program as of the date of such amendment, modification or
termination.

 

(ii)           Incorporation of 2005 Contingent Stock Plan.  The terms and provisions of the 2005
Contingent Stock Plan are incorporated herein by reference.  In case of any conflict between this Program
and the 2005 Contingent Stock Plan, the 2005 Contingent Stock Plan will
control.

 

(iii)          Coordination With Other Company
Benefit Plans.  Payments under the
Program will be taken into account for purposes of the Company’s employee
benefit plans and programs only to the extent provided under the terms of such
plans and programs.

 

(iv)          Participant’s Rights.  A Participant’s rights and interests under
the Program may not be assigned or transferred by the Participant.  To the extent the Participant acquires a
right to receive payments from the Company under the Program, such right shall
be no greater than the right of any unsecured general creditor of the
Company.  Nothing contained herein shall
be deemed to create a trust of any kind or any fiduciary relationship between
the Company and the Participant. 
Designation as a Participant in the Program for a Performance Period
shall not entitle or be deemed to entitle the Participant to be designated as a
Participant for any subsequent Performance Periods or to continued employment
with the Company.

 

(v)           Effective Date.  While this Program is effective as of January 1,
2008, it is subject to approval of amendments to the 2005 Contingent Stock Plan
by the Company’s stockholders at the 2008 Annual Meeting.

 

 

APPENDIX B

 

Name:

 

Performance Period:  January 1, 2008 through December 31, 2009

 

Target Award:                    Performance Share Units

 

Threshold Award Level:  50% of Target Award

 

Maximum Award Level:  200% of Target Award

 

Performance Goal:  The percentage of the Target Award that will be
earned will be based on cumulative operating income for the period 2008 through
2009, subject to the exclusions set forth below, as follows:

 

	
   

  	
   

  	
  (millions)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Under $1,190

  	
   

  	
  0

  	
  %

  
	
  Threshold:

  	
   

  	
  $1,190

  	
   

  	
  50

  	
  %

  
	
  Target:

  	
   

  	
  $1,245

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
  $1,300

  	
   

  	
  150

  	
  %

  
	
  Maximum:

  	
   

  	
  $1,335 and above

  	
   

  	
  200

  	
  %

  

 

Award levels based on cumulative
operating income between any two of these levels would be based on a pro-rata
calculation of the number of shares to be awarded, except that no award will be
earned for cumulative operating income below $1,190 million.  Fractional shares earned will be rounded up
to the nearest whole share.

 

Additional Goals: 
If the above threshold level is achieved, then the number of shares
earned for each participant can be increased or decreased by up to 10% at the
discretion of the Organization and Compensation Committee depending on whether
either (or both) of the following additional performance goals is achieved:

 

	
  a.

  	
  Sales in BRIC countries (Brazil, Russia,
  India, China) of at least $327.4 million in 2009; and

  
	
  b.

  	
  2009 safety result (TRIR) of 1.43, excluding
  facilities acquired during the performance period.

  

 

Exclusions for calculation of
cumulative operating income:

 

The performance goals above shall exclude
the effect of the following:

 

	
  a.

  	
  All restructuring charges reported or accounted for in the 2008
  through 2009 consolidated financial statements as “restructuring charges,”
  and restructuring

  

 

 

programs
(including all unbudgeted charges and all non-recurring expenses related to the
company’s global manufacturing strategy) and all non-operating charges
associated with mergers and acquisitions, both if approved by the Board of
Directors no later than December 31, 2009. 
This exclusion shall include all restructuring charges approved by the
Board of Directors before 2008 that are recorded during 2008 through 2009;

 

b.              All charges related to goodwill impairment in the
calculation of operating expense and operating profit;

 

c.               All expenses (including litigation-related costs and
expenses), liabilities and accruals related to or arising from: (i) any
liabilities that W.R. Grace & Co. or any of its subsidiaries had
agreed to assume or as to which any of them indemnified the Corporation or any
of its subsidiaries under any of the agreements entered into in connection with
the Cryovac Transaction (as defined in the Corporation’s Financial Statements
included in the Corporation’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2002); (ii) any claim or lawsuit alleging
that the Corporation or any of its subsidiaries is or may be liable for any
liabilities of W. R. Grace & Co., Fresenius Medical Care Holdings, Inc.,
or any of their respective affiliates under any legal theory, including without
limitation any claim based on fraudulent transfer, fraudulent conveyance,
successor liability, or contractual obligation; (iii) any securities class
action litigation brought against the Corporation or any of its officers or
directors, including without limitation the case of MPERS/Senn v. Hickey, et
al.; (iv) any costs incurred to settle the aforementioned liabilities,
claims and lawsuits; or (v) any payment that the Corporation or any of its
subsidiaries may be required to make to any trust fund established under
federal law providing for the resolution of claims for bodily injury caused by
asbestos exposure.

 

d.              All expenses related to capital markets transactions
authorized by the Board of Directors. 
Such transactions will include the repurchase of bonds and stock.

 

e.               The effect (including related expenses) of any
acquisition or disposition transactions, whether or not closed during 2008
through 2009, provided that, as to transactions closed during 2008 through 2009
that were large enough to require Board of Director approval, the Board of
Directors has approved such transactions. 
However, the effect of any acquisition or disposition that closed prior
to 2008 shall not be excluded.

 

f.                 Any unbudgeted charges related to the implementation
of SAP, including the SAP go-live in the United States scheduled for 2008.

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