Document:

exv10w92

 

EXHIBIT
10.92

Execution

 

 

CREDIT AGREEMENT

dated as of February 28, 2007

among

EARTH LNG, INC.,

as Borrower,

EARTH BIOFUELS, INC.

and

APPLIED LNG TECHNOLOGIES USA, L.L.C.

FLEET STAR, INC.

APOLLO LEASING, INC.

ARIZONA LNG, L.L.C.

as Loan Parties,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

and

FOURTH THIRD LLC

as Agent and Sole Lead Arranger

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	Section 1. Definitions; Interpretation 
	 	 	1	 
	 
	1.1. Definitions 
	 	 	1	 
	 
	1.2. Interpretation 
	 	 	12	 
	 
	Section 2. Credit Facilities 
	 	 	12	 
	 
	2.1. Commitments 
	 	 	12	 
	 
	2.2. Omitted 
	 	 	13	 
	 
	2.3. Loan Accounting 
	 	 	13	 
	2.3.1. Recordkeeping 
	 	 	13	 
	2.3.2. Notes 
	 	 	13	 
	 
	2.4. Interest 
	 	 	13	 
	2.4.1. Interest Rates 
	 	 	13	 
	2.4.2. Interest Payment Dates; Interest Reserve Account 
	 	 	14	 
	2.4.3. Setting and Notice of LIBOR Rates 
	 	 	15	 
	2.4.4. Computation of Interest 
	 	 	15	 
	 
	2.5. Fees 
	 	 	15	 
	2.5.1. Fourth Third’s Fees 
	 	 	15	 
	 
	2.6. Prepayment 
	 	 	15	 
	2.6.1. Voluntary Prepayment 
	 	 	15	 
	2.6.2. Mandatory Prepayment 
	 	 	16	 
	2.6.3. All Prepayments
	 	 	16	 
	 
	2.7. Repayment 
	 	 	16	 
	 
	2.8. Payment 
	 	 	16	 
	2.8.1. Making of Payments 
	 	 	16	 
	2.8.2. Application of Payments and Proceeds 
	 	 	16	 
	2.8.3. Payment Dates
	 	 	17	 
	2.8.4. Set-off
	 	 	17	 
	2.8.5. Proration of Payments 
	 	 	17	 
	 
	Section 3. Yield Protection 
	 	 	18	 
	 
	3.1. Taxes 
	 	 	18	 
	 
	3.2. Increased Cost 
	 	 	19	 
	 
	3.3. Funding Losses 
	 	 	20	 
	 
	3.4. Manner of Funding; Alternate Funding Offices 
	 	 	20	 
	 
	3.5. Mitigation of Circumstances; Replacement of Lenders 
	 	 	21	 

i

 

	 	 	 	 	 
	 	 	Page
	3.6. Conclusiveness of Statements; Survival 
	 	 	21	 
	 	 	 	 	 
	Section 4. Conditions Precedent 
	 	 	21	 
	 	 	 	 	 
	4.1. Credit Extension
	 	 	21	 
	4.1.1. Prior Debt 
	 	 	22	 
	4.1.2. Omitted 
	 	 	22	 
	4.1.3. Interest and Fees 
	 	 	22	 
	4.1.4. Delivery of Loan Documents
	 	 	22	 
	4.1.5. Representations and Warranties 
	 	 	24	 
	4.1.6. No Default 
	 	 	24	 
	4.1.7. Diligence 
	 	 	24	 
	4.1.8. No Material Adverse Change 
	 	 	24	 
	4.1.9. Reservation of Shares 
	 	 	24	 
	 	 	 	 	 
	Section 5. Representations and Warranties 
	 	 	24	 
	 	 	 	 	 
	5.1. Organization 
	 	 	24	 
	 	 	 	 	 
	5.2.
Authorization; No Conflict 
	 	 	25	 
	 	 	 	 	 
	5.3. Validity; Binding Nature 
	 	 	25	 
	 	 	 	 	 
	5.4. Financial Condition 
	 	 	25	 
	 	 	 	 	 
	5.5. No Material Adverse Change 
	 	 	26	 
	 	 	 	 	 
	5.6. Litigation 
	 	 	26	 
	 	 	 	 	 
	5.7. Ownership of Properties; Liens 
	 	 	26	 
	 	 	 	 	 
	5.8. Capitalization 
	 	 	26	 
	 	 	 	 	 
	5.9. Pension Plans
	 	 	26	 
	 	 	 	 	 
	5.10. Compliance with Law; Investment Company Act; Other Regulated Entities
	 	 	27	 
	 	 	 	 	 
	5.11. Margin Stock
	 	 	27	 
	 	 	 	 	 
	5.12. Taxes
	 	 	27	 
	 	 	 	 	 
	5.13. Solvency
	 	 	28	 
	 	 	 	 	 
	5.14. Environmental Matters 
	 	 	28	 
	 	 	 	 	 
	5.15. Insurance
	 	 	29	 
	 	 	 	 	 
	5.16. Information
	 	 	29	 
	 	 	 	 	 
	5.17. Intellectual Property
	 	 	29	 
	 	 	 	 	 
	5.18. Labor Matters
	 	 	29	 
	 	 	 	 	 
	5.19. No Default
	 	 	29	 
	 	 	 	 	 
	5.20. Foreign Assets Control Regulations and Anti-Money Laundering 
	 	 	30	 
	5.20.1. OFAC 
	 	 	30	 
	5.20.2. Patriot Act 
	 	 	30	 

ii

 

	 	 	 	 	 
	 	 	Page
	5.21. Gas Supply and Hedge Contracts
	 	 	31	 
	 	 	 	 	 
	Section 6. Affirmative Covenants 
	 	 	30	 
	 	 	 	 	 
	6.1. Information
	 	 	30	 
	6.1.1. Annual Report 
	 	 	30	 
	6.1.2. Interim Reports 
	 	 	31	 
	6.1.3. Compliance Certificate 
	 	 	31	 
	6.1.4. Reports to SEC and Shareholders 
	 	 	31	 
	6.1.5.
Notice of Default; Litigation; ERISA Matters 
	 	 	31	 
	6.1.6. Management Report 
	 	 	32	 
	6.1.7. Projections 
	 	 	32	 
	6.1.8. Other Information 
	 	 	32	 
	 	 	 	 	 
	6.2. Books; Records; Inspections
	 	 	32	 
	 	 	 	 	 
	6.3. Maintenance of Property; Insurance
	 	 	33	 
	 	 	 	 	 
	6.4.
Compliance with Laws; Payment of Taxes and Liabilities
	 	 	34	 
	 	 	 	 	 
	6.5. Maintenance of Existence
	 	 	34	 
	 	 	 	 	 
	6.6. Employee Benefit Plans
	 	 	34	 
	 	 	 	 	 
	6.7. Environmental Matters
	 	 	34	 
	 	 	 	 	 
	6.8. Further Assurances
	 	 	35	 
	 	 	 	 	 
	6.9. Collateral Access Agreements 
	 	 	36	 
	 	 	 	 	 
	6.10. Board Observation Rights
	 	 	36	 
	 	 	 	 	 
	6.11. Reservation of Shares
	 	 	36	 
	 	 	 	 	 
	Section 7. Negative Covenants 
	 	 	37	 
	 	 	 	 	 
	7.1. Debt 
	 	 	37	 
	 	 	 	 	 
	7.2. Liens
	 	 	38	 
	 	 	 	 	 
	7.3. Subsidiaries 
	 	 	39	 
	 	 	 	 	 
	7.4. Restricted Payments
	 	 	39	 
	 	 	 	 	 
	7.5. Mergers; Consolidations; Asset Sales
	 	 	40	 
	 	 	 	 	 
	7.6. Modification of Organizational Documents
	 	 	40	 
	 	 	 	 	 
	7.7. Use of Proceeds
	 	 	40	 
	 	 	 	 	 
	7.8. Transactions with Affiliates
	 	 	40	 
	 	 	 	 	 
	7.9. Inconsistent Agreements 
	 	 	41	 
	 	 	 	 	 
	7.10. Business Activities
	 	 	41	 
	 	 	 	 	 
	7.11. Investments
	 	 	41	 
	 	 	 	 	 
	7.12. Omitted 
	 	 	42	 

iii

 

	 	 	 	 	 
	 	 	Page
	7.13. Fiscal Year
	 	 	42	 
	 	 	 	 	 
	7.14. Financial Covenants
	 	 	42	 
	7.14.1. Fixed Charge Coverage Ratio 
	 	 	42	 
	7.14.2. EBITDA 
	 	 	42	 
	 	 	 	 	 
	7.15. Deposit Accounts and Securities Accounts
	 	 	42	 
	 	 	 	 	 
	7.16. Sale-Leasebacks 
	 	 	43	 
	 	 	 	 	 
	7.17. Hazardous Substances 
	 	 	43	 
	 	 	 	 	 
	Section 8. Events of Default; Remedies 
	 	 	43	 
	 	 	 	 	 
	8.1. Events of Default
	 	 	43	 
	8.1.1. Non-Payment of Credit 
	 	 	43	 
	8.1.2. Default Under Other Debt 
	 	 	43	 
	8.1.3. Bankruptcy; Insolvency 
	 	 	43	 
	8.1.4. Non-Compliance with Loan Documents 
	 	 	44	 
	8.1.5. Representations; Warranties 
	 	 	44	 
	8.1.6. Pension Plans 
	 	 	44	 
	8.1.7. Judgments 
	 	 	44	 
	8.1.8. Invalidity of Collateral Documents 
	 	 	45	 
	8.1.9. Invalidity of Intercreditor Provisions 
	 	 	45	 
	8.1.10. Change of Control 
	 	 	45	 
	8.1.11. Gas Supply and Hedge Contracts
	 	 	45	 
	 	 	 	 	 
	8.2. Remedies 
	 	 	45	 
	 	 	 	 	 
	Section 9. Agent 
	 	 	46	 
	 	 	 	 	 
	9.1. Appointment; Authorization 
	 	 	46	 
	 	 	 	 	 
	9.2. Delegation of Duties 
	 	 	46	 
	 	 	 	 	 
	9.3. Limited Liability 
	 	 	46	 
	 	 	 	 	 
	9.4. Reliance 
	 	 	46	 
	 	 	 	 	 
	9.5. Notice of Default 
	 	 	47	 
	 	 	 	 	 
	9.6. Credit Decision 
	 	 	47	 
	 	 	 	 	 
	9.7. Indemnification 
	 	 	48	 
	 	 	 	 	 
	9.8. Agent Individually 
	 	 	48	 
	 	 	 	 	 
	9.9. Successor Agent 
	 	 	48	 
	 	 	 	 	 
	9.10. Collateral Matters
	 	 	49	 
	 	 	 	 	 
	Section 10. Miscellaneous 
	 	 	49	 
	 	 	 	 	 
	10.1. Waiver; Amendments 
	 	 	49	 
	 	 	 	 	 
	10.2. Notices 
	 	 	50	 
	 	 	 	 	 
	10.3. Computations 
	 	 	50	 

iv

 

	 	 	 	 	 
	 	 	Page
	10.4. Costs; Expenses
	 	 	50	 
	 	 	 	 	 
	10.5. Indemnification by Borrower 
	 	 	51	 
	 	 	 	 	 
	10.6. Marshaling; Payments Set Aside 
	 	 	51	 
	 	 	 	 	 
	10.7. Nonliability of Lenders 
	 	 	52	 
	 	 	 	 	 
	10.8. Assignments; Participations 
	 	 	52	 
	10.8.1. Assignments 
	 	 	52	 
	10.8.2. Participations 
	 	 	53	 
	 	 	 	 	 
	10.9. Confidentiality 
	 	 	54	 
	 	 	 	 	 
	10.10. Captions 
	 	 	54	 
	 	 	 	 	 
	10.11. Nature of Remedies
	 	 	55	 
	 	 	 	 	 
	10.12. Counterparts 
	 	 	55	 
	 	 	 	 	 
	10.13. Severability 
	 	 	55	 
	 	 	 	 	 
	10.14. Entire Agreement 
	 	 	55	 
	 	 	 	 	 
	10.15. Successors; Assigns 
	 	 	55	 
	 	 	 	 	 
	10.16. Governing Law 
	 	 	55	 
	 	 	 	 	 
	10.17. Forum Selection; Consent to Jurisdiction 
	 	 	56	 
	 	 	 	 	 
	10.18. Waiver of Jury Trial 
	 	 	56	 

v

 

	 	 	 
	Annexes
	 	 
	 
	 	 
	Annex I

	 	Commitments and Pro Rata Shares
	Annex II

	 	Addresses
	 
	 	 
	Exhibits
	 	 
	 
	 	 
	Exhibit A

	 	Form of Assignment Agreement
	Exhibit B

	 	Form of Compliance Certificate
	Exhibit C

	 	Form of Note
	Exhibit D

	 	Form of Warrant
	Exhibit E

	 	Form of Warrant Purchase Agreement
	 
	 	 
	Schedules
	 	 
	 
	Schedule 4.1

	 	Prior Debt
	Schedule 5.6

	 	Litigation
	Schedule 5.8

	 	Capitalization
	Schedule 5.12

	 	Taxes
	Schedule 5.14

	 	Environmental Matters
	Schedule 5.15

	 	Insurance
	Schedule 5.18

	 	Labor Matters
	Schedule 7.1

	 	Existing Debt
	Schedule 7.2

	 	Existing Liens
	Schedule 7.11

	 	Existing Investments
	Schedule 7.15

	 	Bank Accounts

vi

 

CREDIT AGREEMENT

     Credit Agreement dated as of February 28, 2007 (as amended, restated or otherwise modified
from time to time, this “Agreement”) among EARTH LNG, INC., a Texas corporation
(“Borrower”), EARTH BIOFUELS, INC., a Delaware corporation, (“Parent”), the
financial institutions party hereto from time to time (“Lenders”) and Fourth Third LLC, a
Delaware limited liability company (in its individual capacity, “Fourth Third”), as Sole
Lead Arranger and Agent for all Lenders.

     In consideration of the mutual agreements herein contained, the parties hereto agree as
follows:

Section 1. Definitions; Interpretation.

          1.1. Definitions.

     When used herein the following terms shall have the following meanings:

     Acceleration Event means the occurrence of any of the following: (i) an Event of
Default under Section 8.1.3; (ii) an Event of Default under Section 8.1.1 and the
termination of the Commitments pursuant to Section 8.2; or (iii) any other Event of
Default under Section 8.1 and the election by the Required Lenders to declare the
Obligations to be due and payable pursuant to Section 8.2.

     Acquisition means any transaction or series of related transactions for the purpose of
or resulting, directly or indirectly, in (a) the acquisition of all or a substantial portion of the
assets of a Person, or of all or a substantial portion of any business or division of a Person, (b)
the acquisition of in excess of 50% of the capital stock, partnership interests, membership
interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other than a Person that is
already a Subsidiary).

     Adjusted Working Capital means the remainder of (a) the consolidated current assets of
Borrower and its Subsidiaries minus the amount of cash and cash equivalents included in such
consolidated current assets, minus (b) the consolidated current liabilities of Borrower and its
Subsidiaries minus the amount of consolidated short-term Debt (including current maturities of
long-term Debt) of Borrower and its Subsidiaries included in such consolidated current liabilities.

     Affiliate of any Person means (a) any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person, (b) any officer or
director of such Person and (c) with respect to any Lender, any entity administered or managed by
such Lender or an Affiliate or investment advisor thereof which is engaged in making, purchasing,
holding or otherwise investing in commercial loans. A Person shall be deemed to be “controlled by”
any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the election of directors or
managers or power to direct or cause the direction of the management and policies of

1

 

such Person whether by contract or otherwise. Unless expressly stated otherwise herein, neither
Agent nor any Lender shall be deemed an Affiliate of any Loan Party.

     Agent means Fourth Third LLC in its capacity as agent for all Lenders hereunder and
any successor thereto in such capacity.

     Agreement has the meaning set forth in the Preamble.

     Applicable Margin means 10.00% per annum.

     Approved Fund means (a) any fund, trust or similar entity that invests in commercial
loans in the ordinary course of business and is advised or managed by (i) a Lender, (ii) an
Affiliate of a Lender, (iii) the same investment advisor that manages a Lender or (iv) an
Affiliate of an investment advisor that manages a Lender or (b) any finance company, insurance
company or other financial institution which temporarily warehouses loans for any Lender or any
Person described in clause (a) above.

     Arizona LNG means Arizona LNG, L.L.C., a Nevada limited liability company.

     Assignee has the meaning set forth in Section 10.8.1.

     Assignment Agreement means an agreement substantially in the form of Exhibit A.

     Board of Directors has the meaning ascribed to it in Section 6.10.

     Borrower
has the meaning set forth in the Preamble.

     Business Day
means any day on which commercial banks are open for commercial
banking business in San Francisco, California and New York, New York, and on which dealings
are carried on in the London interbank eurodollar market.

     Calculation Date means each of the Closing Date and the 15th day of each calendar
month thereafter.

     Capital Expenditures means all expenditures which, in accordance with GAAP, would be
required to be capitalized and shown on the consolidated balance sheet of Borrower, but excluding
expenditures made in connection with the replacement, substitution or restoration of assets to the
extent financed (a) from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored, (b) with cash awards of compensation
arising from the taking by eminent domain or condemnation of the assets being replaced, or (c) with
cash proceeds of Dispositions that are reinvested in accordance with this Agreement.

     Capital Lease means, with respect to any Person, any lease of (or other agreement
conveying the right to use) any real or personal property by such Person that, in conformity with
GAAP, is accounted for as a capital lease on the balance sheet of such Person.

2

 

     Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not
more than one year after such time, issued or guaranteed by the United States Government or any
agency thereof, (b) commercial paper, or corporate demand notes, in each case (unless issued by a
Lender or its holding company) rated at least A-l by Standard & Poor’s Ratings Group or P-l by
Moody’s Investors Service, Inc., (c) any certificate of deposit (or time deposit represented by a
certificate of deposit) or banker’s acceptance maturing not more than one year after such time, or
any overnight Federal Funds transaction that is issued or sold by any Lender (or by a commercial
banking institution that is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000), (d) any repurchase agreement entered
into with any Lender (or commercial banking institution of the nature referred to in clause (c)
above) which (i) is secured by a fully perfected security interest in any obligation of the type
described in any of clauses (a) through (c) above and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase obligation of such
Lender (or other commercial banking institution) thereunder, (e) money market accounts or mutual
funds which invest predominantly in assets satisfying the foregoing requirements and (f) other
short term liquid investments approved in writing by Agent.

     Closing Date means the date on which the conditions set forth in Section 4.1
have been satisfied or waived by the Lenders.

     Collateral means all property and interests in property and proceeds thereof now
owned or hereafter acquired by any Loan Party and any other Person who has granted a Lien to the
Agent, in or upon which a Lien now or hereafter exists in favor of any Lender or the Agent for the
benefit of the Agent and Lenders, whether under this Agreement or under any other documents
executed by any such Persons and delivered to the Agent; provided, however, that
with respect to Parent, the term “Collateral” includes only (i) all capital stock of the Borrower
now owned or hereafter acquired by Parent and (ii) all proceeds and products of any and all of the
property listed in clause (i) and all collateral security and guarantees given by any Person with
respect to any of such property, and excludes all other property or proceeds thereof now owned or
hereafter acquired by Parent.

     Collateral Access Agreement means an agreement in form and substance reasonably
satisfactory to Agent pursuant to which a mortgagee or lessor of real property on which Collateral
is stored or otherwise located, or a warehouseman, processor or other bailee of Inventory or other
property owned by any Loan Party, acknowledges the Liens of Agent and waives (or, if approved by
Agent, subordinates) any Liens held by such Person on such property, and, in the case of any such
agreement with a mortgagee or lessor, permits Agent reasonable access to and use of such real
property during the continuance of an Event of Default to assemble, complete and sell any
Collateral stored or otherwise located thereon.

     Collateral Documents means, collectively, the Guarantee and Collateral Agreement,
each Mortgage, and each other agreement or instrument pursuant to or in connection with which any
Loan Party or any other Person grants a security interest in any Collateral to Agent for the
benefit of Lenders, each as amended, restated or otherwise modified from time to time.

     Commitment means, as to any Lender, such Lender’s Pro Rata Share of the Loan
Commitment.

3

 

     Compliance Certificate means a certificate substantially in the form of Exhibit B.

     Computation Period means each period of one Fiscal Quarter ending on March 31, 2007,
two consecutive Fiscal Quarters ending on June 30, 2007, three consecutive Fiscal Quarters ending
on September 30, 2007, and four consecutive Fiscal Quarters ending on the last day of a Fiscal
Quarter thereafter.

     Consolidated Net Income means, with respect to Borrower and its Subsidiaries for any
period, the consolidated net income (or loss) of Borrower and its Subsidiaries for such period,
excluding (i) consolidated net income of any Person for any period prior to such Person becoming a
Subsidiary, (ii) any gains or losses from Dispositions, (iii) any extraordinary gains or
extraordinary losses, (iv) any net income of any Subsidiary to the extent that such Subsidiary is
unable, by virtue of any legal or contractual prohibition, from distributing such net income to
the Borrower, and (iv) any gains or losses from discontinued operations.

     Contingent Obligation means any agreement, undertaking or arrangement by which any
Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other distributions upon the
shares of any other Person. The amount of any Person’s obligation in respect of any Contingent
Obligation shall (subject to any limitation set forth therein) be deemed to be the principal amount
of the debt, obligation or other liability supported thereby.

     Control Agreement means a tri-party deposit account, securities account or
commodities account Control Agreements by and among the applicable Loan Party, Agent and the
depository, securities intermediary or commodities intermediary, and each in form and substance
reasonably satisfactory in all respects to Agent and in any event providing to Agent “control” of
such deposit account, securities or commodities account within the meaning of Articles 8 and 9 of
the UCC.

     Controlled Group means all members of a controlled group of corporations and all
members of a controlled group of trades or businesses (whether or not incorporated) under common
control which, together with a Loan Party, are treated as a single employer under Section
414 of the IRC or Section 4001 of ERISA.

     Debt of any Person means, without duplication, (a) all indebtedness of such Person for
borrowed money, (b) all indebtedness evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such Person as lessee under Capital Leases which have been or should be
recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all
obligations of such Person to pay the deferred purchase price of property or services (excluding
trade accounts payable in the ordinary course of business), (e) all indebtedness secured by a Lien
on the property of such Person, whether or not such indebtedness shall have been assumed by such
Person (with the amount thereof being measured as the fair market value of such property), (f) all
obligations, contingent or otherwise, with respect to letters of credit (whether or not drawn),
banker’s acceptances and surety bonds issued for the account of such

4

 

Person, (g) all Hedging Obligations of such Person, (h) all Contingent Obligations of such Person,
(i) all non-compete payment obligations and earn-out and similar obligations, (j) all obligations
of such Person in respect of capital stock issued by such Person, to the extent that such Person
is obligated to redeem, retire or repurchase such capital stock or set apart any funds therefor,
on or prior to the date one year after the Maturity Date, (k) all indebtedness of the types listed
in (a) through (j) or (1) of any partnership of which such Person is a general partner and (k) all
obligations of such Person under any synthetic lease transaction, where such obligations are
considered borrowed money indebtedness for tax purposes but the transaction is classified as an
operating lease in accordance with GAAP.

     Default means any event that, if it continues uncured, will, with the lapse of time
or the giving of notice or both, constitute an Event of Default.

     Default Rate has the meaning set forth in Section 2.4.1.

     Disposition means, as to any asset or right of any Loan Party, (a) any sale, lease,
assignment or other transfer (other than to Borrower or any of its Wholly-Owned Domestic
Subsidiaries), (b) any loss, destruction or damage thereof or (c) any condemnation, confiscation,
requisition, seizure or taking thereof, excluding (i) Dispositions in any Fiscal Year, the Net
Cash Proceeds of which do not in the aggregate exceed $250,000, or in the case of any Disposition
described in clause (b) above, $150,000, (ii) the sale or other transfer of Inventory in the
ordinary course of business and (iii) any transfers of cash.

     Dollar and $ mean lawful money of the United States of America.

     Domestic Loan Party Subsidiary means Borrower and each Domestic Subsidiary of
Borrower.

     Domestic Subsidiary means any Subsidiary that is incorporated or organized under the
laws of a State within the United States of America or the District of Columbia.

     Durant Deposit means a deposit of $1,860,000 made to the Interest Reserve Account on
the Closing Date as reserve against the payment of certain mechanics liens at the Durant, Oklahoma
facility of Durant Biofuels, LLC, an Oklahoma limited liability company.

     EBITDA means, for any period, Consolidated Net Income for such period plus, to the
extent deducted in determining such Consolidated Net Income for such period, (i) Interest Expense,
(ii) income tax expense, (iii) depreciation and amortization, (iv) transaction expenses incurred
in connection with the financing contemplated by this Agreement, and (v) Restricted Payments paid
pursuant to Section 7.4.

     Environmental Claims means all claims, however asserted, by any governmental,
regulatory or judicial authority or other Person alleging potential liability or responsibility
under or for violation of any Environmental Law, or for release or injury to the environment or
any Person or property or natural resources.

     Environmental Laws means all present or future federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, including all amendments,
together

5

 

with all administrative orders, directed duties, requests, licenses, authorizations and permits
of, and agreements with, any Governmental Authority, in each case relating to any matter arising
out of or relating to health and safety, or pollution or protection of the environment, natural
resources or workplace, including any of the foregoing relating to the presence, use, production,
recycling, reclamation, generation, handling, transport, treatment, storage, disposal,
distribution, discharge, release, emission, control, cleanup or investigation or management of any
Hazardous Substance.

     ERISA means the Employee Retirement Income Security Act of 1974, as amended.

     Event of Default means any of the events described in Section 8.1.

     Excluded Taxes has the meaning set forth in Section 3.1(a).

     Executive Order 13224 has the meaning set forth in Section 5.21.1.

     Exercisable Shares has the meaning set forth in Section 6.11.

     Fee Letter means, that certain letter agreement dated as of even date herewith
between Agent and Borrower, as amended, restated or otherwise modified from time to time.

     First Interest Reserve Period has the meaning set forth in Section 2.4.2.

     Fiscal Quarter means a fiscal quarter of a Fiscal Year.

     Fiscal Year means the fiscal year of Borrower and its Subsidiaries, which period
shall be the 12-month period ending on December 31 of each year.

     Fixed Charge Coverage Ratio means, for any Computation Period, the ratio of (a) the
total for such Computation Period of EBITDA minus all Capital Expenditures to (b) the sum for such
Computation Period of (i) Interest Expense of Borrower and its Subsidiaries accrued during such
period and payable in cash, plus (ii) required payments of principal of Debt (including the Loan),
(iii) income tax expense, plus (iv) dividends paid by Apollo Leasing, Inc. during such period
pursuant to Section 7.4(iii); provided, that for the first three Computation
Periods, the actual amounts referred to in clauses (a) and (b) for such Computation Periods shall
be multiplied by 4, 2 and 4/3, respectively.

     Foreign Lender means any Lender that is not a United States person under and as
defined in Section 7701(a)(30) of the IRC.

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

     Fourth Third has the meaning set forth in the preamble hereto.

     FRB means the Board of Governors of the Federal Reserve System or any successor
thereto.

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     GAAP means generally accepted accounting principles in effect in the United States of
America set forth from time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board (or agencies with similar functions of comparable
stature and authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

     Gas Supply and Hedge Contracts, means, collectively, the Gas Price Hedge Agreement,
dated June 2006, between Apollo Resources International, Inc. and Arizona LNG and the Gas Sale
Purchase and Service Agreement, dated November 1, 2005, between BP Energy Company and Arizona LNG.

     Governmental Authority means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or controlled, through stock
or capital ownership or otherwise, by any of the foregoing.

     Guarantee and Collateral Agreement means the Guarantee and Collateral Agreement dated
as of the Closing Date by each Loan Party and other grantor or pledgor signatory thereto in favor
of Agent, as amended, restated or otherwise modified from time to time.

     Hazardous Substances means any waste, chemical, substance, or material listed,
defined, classified, or regulated as a hazardous waste, hazardous substance, pollutant,
contaminant, toxic substance, or hazardous, dangerous or radioactive material, chemical or waste
or otherwise regulated by any Environmental Law, including, without limitation, any petroleum or
any derivative, waste, or byproduct thereof, radon, asbestos, and polychlorinated biphenyls.

     Hedging Obligation means, with respect to any Person, any liability of such Person
under any interest rate, currency or commodity swap agreement, cap agreement or collar agreement,
and any other agreement or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices. The amount of any Person’s obligation
in respect of any Hedging Obligation shall be deemed to be the incremental obligation that would
be reflected in the financial statements of such Person in accordance with GAAP.

     Indemnified Liabilities has the meaning set forth in Section 10.5.

     Intercreditor Agreement means the intercreditor agreement, dated as of the Closing
Date, between Agent and the holder of Senior Debt (or a representative thereof), in form and
substance satisfactory to Agent.

     Interest Expense means for any period the consolidated interest expense of Borrower
and its Subsidiaries for such period (including all imputed interest on Capital Leases).

     Interest Reserve Account has the meaning set forth in Section 2.4.2.

     Interest Reserve Period has the meaning set forth in Section 2.4.2.

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     Inventory means all the “inventory” (as such term is defined in the UCC) of the
Borrower and its Subsidiaries, including, but not limited to, all merchandise, raw materials,
parts, supplies, work-in-process and finished goods intended for sale, together with all the
containers, packing, packaging, shipping and similar materials related thereto, and including such
inventory as is temporarily out of the Borrower’s or such Subsidiary’s custody or possession,
including inventory on the premises of others and items in transit.

     Investment means, with respect to any Person, (a) the purchase of any debt or equity
security of any other Person, (b) the making of any loan or advance to any other Person, (c)
becoming obligated with respect to a Contingent Obligation in respect of obligations of any other
Person (other than travel and similar advances to employees in the ordinary course of business) or
(d) the making of an Acquisition.

     IRC means the Internal Revenue Code of 1986, as amended.

     Last Pre Closing Audit Date means December 31, 2005.

     Legal Costs means, with respect to any Person, (a) all reasonable fees and charges of
any counsel, accountants, auditors, appraisers, consultants and other professionals to such
Person, (b) the reasonable allocable cost of internal legal services of such Person and all
reasonable disbursements of such internal counsel and (c) all court costs and similar legal
expenses.

     Lender Party has the meaning set forth in Section 10.5.

     Lenders has the meaning set forth in the Preamble.

     LIBOR Rate means, as of any Calculation Date, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to (i) the offered rate for deposits in Dollars for
the period of one month commencing on such Calculation Date and for the amount of the Loan, that
appears on Dow Jones Market Service (formerly known as the Telerate Service) at 11:00 a.m. London
time (or, if not so appearing, as published in the “Money Rates” section of The Wall Street
Journal or another national publication selected by Agent) on such Calculation Date, divided by
(ii) the sum of one minus the daily average during such period of one month of the aggregate
maximum reserve requirement (expressed as a decimal) then imposed under Regulation D of the FRB for
“Eurocurrency Liabilities” (as defined therein); provided, however, that in no event shall the
LIBOR Rate be a rate equal to less than 5.00% per annum.

     Lien means, with respect to any Person, any interest granted by such Person in any
real or personal property, asset or other right owned or being purchased or acquired by such
Person which secures payment or performance of any obligation and shall include any mortgage,
lien, encumbrance, charge or other security interest of any kind, whether arising by contract, as
a matter of law, by judicial process or otherwise.

     Loan Commitment means a commitment to make a loan pursuant to Section 2.1 on
the Closing Date in the aggregate principal amount for all Lenders of $15,000,000. The Loan
Commitment shall terminate upon the making of the Loan.

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     Loan Documents means this Agreement, the Notes, the Collateral Documents, the Fee
Letter, the Warrant, the Warrant Purchase Agreement, the Intercreditor Agreement and all
documents, instruments and agreements delivered in connection with the foregoing, all as amended,
restated or otherwise modified from time to time.

     Loan Party means Parent, Borrower and each Subsidiary of Borrower.

     Loan Party Subsidiary means Borrower and each Subsidiary of Borrower.

     Loan means the loan made pursuant to Section 2.1 or, at any time, the
aggregate unpaid amount of such loan, as applicable.

     Margin Stock means any “margin stock” as defined in Regulation T, U or X of the FRB.

     Material Adverse Effect means (a) a material adverse change in, or a material adverse
effect upon, the operations, assets, business, prospects, properties or condition (financial or
otherwise) of Loan Parties taken as a whole, (b) a material impairment of the ability of any Loan
Party to perform in any material respect any of its Obligations under any Loan Document or (c) a
material adverse effect upon any substantial portion of the Collateral under the Collateral
Documents or upon the legality, validity, binding effect or enforceability against any Loan Party
of any Loan Document.

     Maturity Date means February 28, 2010.

     Mortgage means a mortgage, deed of trust, leasehold mortgage or similar instrument
granting Agent a Lien on a real property interest of any Loan Party, each as amended, restated or
otherwise modified from time to time.

     Multiemployer Pension Plan means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Borrower or any member of the Controlled Group may have any
liability.

     Net Cash Proceeds means:

     (a) with respect to any Disposition, the aggregate cash proceeds (including cash
proceeds received pursuant to policies of insurance and by way of deferred payment of
principal pursuant to a note, installment receivable or otherwise, but only as and when
received) received by any Loan Party pursuant to such Disposition net of (i) the reasonable
direct costs relating to such Disposition (including sales commissions and legal, accounting
and investment banking fees, commissions and expenses), (ii) any portion of such proceeds
deposited in an escrow account pursuant to the documentation relating to such Disposition
(provided that such amounts shall be treated as Net Cash Proceeds upon their release from
such escrow account to the applicable Loan Party), (iii) taxes paid or reasonably estimated
by Borrower to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), (iv) amounts required to be applied
to the repayment of any Debt secured by a Lien (permitted hereunder) prior to the Lien of
Agent on the asset subject to such Disposition, and (v) so long as no Event of Default

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exists (or if an Event of Default exists, only with the prior written consent of Required
Lenders) (A) with respect to any Disposition described in clause (a) of the definition
thereof, all money actually applied within 180 days, or within 360 days pursuant to a
binding agreement executed within 180 days, to replace such assets with assets performing
the same or similar functions, and (B) with respect to any Disposition described in clause
(b) or (c) of the definition thereof, all money actually applied within 180 days, or within
360 days pursuant to a binding agreement executed within 180 days, to repair, replace or
reconstruct damaged property or property affected by loss, destruction, damage,
condemnation, confiscation, requisition, seizure or taking; and

     (b) with respect to any issuance of equity securities, the aggregate cash
proceeds received by Parent, Borrower or any Subsidiary pursuant to such issuance, net of
the reasonable direct costs relating to such issuance (including reasonable sales and
underwriter’s commission).

     Non-Excluded Taxes has the meaning set forth in Section 3.1(a).

     Note means a promissory note substantially in the form of Exhibit C, as the
same may be replaced, substituted, amended, restated or otherwise modified from time to time.

     Obligations means all liabilities, indebtedness and obligations (monetary (including
interest accrued at the rate provided in the applicable Loan Document after the commencement of a
bankruptcy proceeding whether or not a claim for such interest is allowed) or otherwise) of any
Loan Party under this Agreement, any other Loan Document, any Collateral Document or any other
document or instrument executed in connection herewith or therewith and all Hedging Obligations
permitted hereunder which are owed to any Lender or its Affiliate, in each case howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.

     OFAC has the meaning set forth in Section 6.4(a).

     Paid in Full means, with respect to any Obligations, the payment in full in cash and
performance of all such Obligations.

     Parent has the meaning set forth in the Preamble.

     Participant has the meaning set forth in Section 10.8.2.

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

     Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to
which Borrower or any member of the Controlled Group may have any liability, including any
liability by reason of having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.

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     Person means any natural person, corporation, partnership, trust, limited liability
company, association, Governmental Authority or unit, or any other entity, whether acting in an
individual, fiduciary or other capacity.

     Prepayment Amount means (i) with respect to any prepayment made on or before the
first anniversary of the Closing Date, an amount equal to 3% of the amount prepaid, (ii) with
respect to any prepayment of the Loan made after the first anniversary of the Closing Date but on
or before the second anniversary of the Closing Date, an amount equal to 1.5% of the amount
prepaid and (iii) with respect to any prepayment of the Loan made after the second anniversary of
the Closing Date, an amount equal to 0% of the amount prepaid.

     Prior Debt means the Debt listed on Schedule 4.1.

     Pro Rata Share means, with respect to any Lender, the applicable percentage (as
adjusted from time to time in accordance with the terms hereof) specified opposite such Lender’s
name on Annex I (or in such Lender’s Assignment Agreement) which corresponds to the Loan
Commitment, which percentage shall be with respect to the Loan if the Loan Commitment has
terminated.

     Replacement Lender has the meaning set forth in Section 3.5(b).

     Required Lenders means Lenders having Pro Rata Shares the aggregate Dollar equivalent
amount of which equals or exceeds more than 50% of the outstanding Loan, collectively.

     Second Interest Reserve Period has the meaning set forth in Section 2.4.2.

     Securitization has the meaning set forth in Section 10.9.

     Senior Debt shall mean indebtedness that is incurred by the Borrower under a
revolving credit facility that has been approved by Agent and that is subject to, and the Liens,
if any, securing which are subject to, the Intercreditor Agreement.

     Senior Debt Documents means the “Revolving Credit Documents” as defined in the
Interecreditor Agreement.

     Subsidiary means, with respect to any Person, a corporation, partnership, limited
liability company or other entity of which such Person owns, directly or indirectly, such number of
outstanding shares or other equity interests as to have more than 50% of the ordinary voting power
for the election of directors or other managers of such corporation, partnership, limited liability
company or other entity. Unless the context otherwise requires, each reference to Subsidiaries
herein shall be a reference to Subsidiaries of Borrower.

     Tax Returns has the meaning set forth in Section 5.12.

     Titled Vehicle means a vehicle owned by a Loan Party for which a certificate of title
has been issued by any jurisdiction pursuant to a statute described in section 9-311 (a)(2) or
9-311(a)(3) of the UCC, a security interest in which against such Loan Party can be perfected only
by notation on the certificate of title.

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     UCC means the Uniform Commercial Code as in effect in from time to time in the State
of New York.

     Warrant means the warrant to purchase shares of stock of Parent to be issued to
Fourth Third, substantially in the form of Exhibit D hereto, as the same may be amended,
restated, modified or otherwise supplemented from time to time.

     Warrant Purchase Agreement means the warrant purchase and registration rights
agreement, between Parent and Fourth Third, substantially in the form of Exhibit E
attached hereto.

     Warrant Stock has the meaning ascribed to such term in the Warrant.

     Wholly-Owned Domestic Subsidiary means any Wholly-Owned Subsidiary that is a Domestic
Subsidiary.

     Wholly-Owned Subsidiary means, as to any Subsidiary, all of the equity interests of
which (except directors’ qualifying shares) are at the time directly or indirectly owned by
Borrower and/or another Wholly-Owned Subsidiary of Borrower.

          1.2. Interpretation.

     In the case of this Agreement and each other Loan Document, (a) the meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms; (b) Annex, Exhibit,
Schedule and Section references are to such Loan Document unless otherwise specified; (c) the term
“including” is not limiting and means “including but not limited to”; (d) in the computation of
periods of time from a specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means
“to and including”; (e) unless otherwise expressly provided in such Loan Document, (i) references
to agreements and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation shall be construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or regulation; (f) this Agreement
and the other Loan Documents may use several different limitations, tests or measurements to
regulate the same or similar matters, all of which are cumulative and each shall be performed in
accordance with its terms; and (g) this Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to Agent, Borrower, Lenders and the other
parties hereto and thereto and are the products of all parties; accordingly, they shall not be
construed against Agent or Lenders merely because of Agent’s or Lenders’ involvement in their
preparation.

Section 2. Credit Facilities.

          2.1. Commitments.

     On and subject to the terms and conditions of this Agreement, each Lender, severally and for
itself alone, agrees to lend to Borrower on the Closing Date such Lender’s applicable Pro

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Rata Share of the Loan Commitment. The Commitments of Lenders to make the Loan shall terminate
concurrently with the making of the Loan. Any portion of the Loan which is repaid or prepaid, in
whole or in part, may not be reborrowed. The proceeds of the Loan will be disbursed to a deposit
account of the Borrower with JPMorgan Chase Bank, N.A. specified by Borrower in writing to the
Agent.

          2.2. Omitted.

          2.3. Loan Accounting.

          2.3.1.  Recordkeeping.

     Agent, on behalf of each Lender, shall record in its records the date and amount of the share
of the Loan made by each Lender and each repayment thereof. The aggregate unpaid principal amount
so recorded shall be rebuttably presumptive evidence of the principal amount of the Loan owing and
unpaid. The failure to so record any such amount or any error in so recording any such amount shall
not, however, limit or otherwise affect the Obligations of Borrower hereunder or under any Note to
repay the principal amount of the Loan hereunder, together with all interest accruing thereon.

          2.3.2. Notes.

     At the request of any Lender, the share of the Loan made by such Lender shall be evidenced by
a Note, with appropriate insertions, payable to the order of such Lender in a face principal
amount equal to the sum of such Lender’s Pro Rata Share of the Loan Commitment and payable in such
amounts and on such dates as are set forth herein.

          2.4. Interest.

          2.4.1. Interest Rates.

     Borrower promises to pay interest on the unpaid principal amount of the Loan for the period
commencing on February 1, 2007 (as though the Loan was made on that day) until the Loan is Paid in
Full at a rate per annum equal to the sum of the LIBOR Rate as in effect on the Calculation Date
coinciding with (in the case of the Closing Date) or immediately preceding (in the case of any
other Calculation Date), the interest payment date on which such interest is payable plus the
Applicable Margin; provided, that (i) at any time an Event of Default exists, if requested by the
Agent or the Required Lenders, the Applicable Margin corresponding to the Loan shall be increased
by two percentage points per annum (and, in the case of Obligations other than the Loan, such
Obligations shall bear interest at the LIBOR Rate plus the Applicable Margin plus two percentage
points per annum) (any such increased rate, the “Default Rate”), (ii) any such increase may
thereafter be rescinded by Required Lenders, notwithstanding Section 10.1, and (iii) upon
the occurrence of an Event of Default under Section 8.1.1 or 8.1.3, any such
increase described in the foregoing clause (i) shall occur automatically. In no event shall
interest payable by Borrower to Agent and Lenders hereunder exceed the maximum rate permitted under
applicable law, and if any such provision of this Agreement is in contravention of any such law,
such provision shall be deemed modified to limit such interest to the maximum rate permitted under
such law.

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          2.4.2. Interest Payment Dates; Interest Reserve Account.

     (a) Accrued interest on the Loan shall be payable in advance (except in arrears for that
portion of February occurring on or before the Closing Date) on the Closing Date (for the period
beginning on February 1, 2007 and ending on February 28, 2007 and thereafter on the first day of
each calendar month (for such calendar month), and, to the extent not paid in advance, upon a
prepayment of the Loan in accordance with Section 2.6 and at maturity, in each case, in
cash and, during the Interest Reserve Periods, as provided in Section 2.4.2(b). After
maturity and at any time an Event of Default exists, all accrued interest on the Loan shall be
payable in cash on demand at the rates specified in Section 2.4.1.

     (b) On or prior to the Closing Date, the Borrower shall establish a cash collateral account
with JPMorgan Chase Bank, N.A. in substance and form reasonably acceptable to Agent (subject to
clause (v) below, the “Interest Reserve Account”), over which Agent shall have sole
control and exclusive rights of withdrawal pursuant to a Control Agreement, subject to the
provisions of this Section. Deposits shall be made into the Interest Reserve Account as follows:

     (i) On the Closing Date Borrower shall deposit or cause to be deposited in the Interest
Reserve Account in immediately available funds an amount equal to the interest that will accrue on
the unpaid principal balance of the Loan during the period commencing on March 1, 2007 and ending
on August 31, 2007 (the “First Interest Reserve Period”), calculated at a rate per annum
equal to the sum of the LIBOR Rate as in effect on the Closing Date plus the Applicable Margin.

     (ii) Immediately upon the occurrence of an Event of Default under Section 7.14 for the
Fiscal Quarter ending June 30, 2007, Borrower shall increase the amount deposited in the Interest
Reserve Account to an amount equal to the interest that will accrue on the unpaid principal balance
of the Loan during the period commencing on September 1, 2007 and ending on February 28, 2008 (the
“Second Interest Reserve Period”, and together with the First Interest Reserve Period, each
an “Interest Reserve Period”), calculated at a rate per annum equal to the sum of the LIBOR
Rate as in effect on September 1, 2007 plus the Applicable Margin.

     (iii) Borrower shall deposit or cause to be deposited into the Interest Reserve Account such
amounts as may be required by Section 2.6.2.

     (iv) Agent shall withdraw available funds on each Interest Payment Date and apply same to the
payment of interest hereunder. In the event that Agent is prevented from withdrawing any amount
from the Interest Reserve Account for any reason or in the event that available funds on deposit in
the Interest Reserve Account are insufficient, Borrower shall nonetheless be required to make the
applicable payment of interest as otherwise required hereunder. Amounts deposited in the Interest
Reserve Account shall be invested by the Agent at the direction of the Borrower, in Investments
permitted by Section 7.11, so long as Agent has a first priority security interest therein
and any such investment can be liquidated so as to pay without penalty all interest that will
become payable during the applicable Interest Reserve Period; provided that the investment
of such amounts shall be controlled solely by the Agent during the continuance of any Event of
Default.

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     (v) In the event that the Interest Reserve Account is not established at JP Morgan Chase
Bank, N.A. subject to a Control Agreement as of the Closing Date, Borrower authorized Agent to
withhold from the proceeds of the Loan the amount required to be deposited on the Closing Date in
the Interest Reserve Account at a segregated deposit account of Agent at Deutsche Bank established
for such purpose and such deposit account at Deutsche Bank shall constitute the Interest Reserve
Account until Borrower establishes the Interest Reserve Account at JP Morgan Chase Bank, N.A.
subject to a Control Agreement. Upon such establishment at JP Morgan Chase Bank, N.A. subject to a
Control Agreement, unless an Event of Default is continuing, Agent shall transfer all funds in the
Deutsche Bank Investment Reserve Account to the JP Morgan Chase Bank, N.A. deposit.

          2.4.3. Setting and Notice of LIBOR Rates.

     The applicable LIBOR Rate as of each Calculation Date shall be determined by Agent, and
notice thereof shall be given by Agent promptly to Borrower and each Lender. Each determination of
the applicable LIBOR Rate by Agent shall be conclusive and binding upon the parties hereto, in the
absence of demonstrable error. Agent shall, upon written request of Borrower or any Lender,
deliver to Borrower or such Lender a statement showing the computations used by Agent in
determining any applicable LIBOR Rate hereunder

          2.4.4. Computation of Interest.

     Interest shall be computed for the actual number of days elapsed on the basis of a year of 360
days.

          2.5. Fees.

          2.5.1. Fourth Third’s Fees.

     Borrower agrees to pay to Fourth Third, for Fourth Third’s account, the fees set forth in the
Fee Letter.

          2.6. Prepayment.

          2.6.1. Voluntary Prepayment.

     (a) Borrower may from time to time at any time, on at least ninety (90) days’ written notice
to Agent (which shall promptly advise each Lender thereof) not later than 12:00 noon New York time
on such day, prepay the Loan in whole or in part without penalty or premium so long as any such
prepayment is on the first day of a calendar month, and is accompanied by all accrued and unpaid
interest on the Loan and payment of the Prepayment Amount. Such notice to Agent shall specify the
date and amount of prepayment. Any such partial prepayment shall be in an amount greater than or
equal to $1,000,000 or a higher integral multiple of $500,000.

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          2.6.2. Mandatory Prepayment.

     Borrower shall prepay the Loan until Paid in Full at the following times and in the following
amounts:

          (i) concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
Disposition, in an amount equal to such Net Cash Proceeds; and

          (ii) concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
issuance of its equity securities (other than equity securities that are issued to (x) Parent, (y)
management of Parent, or (z) to Persons that as of the date hereof hold equity in Parent), in an
amount equal to such Net Cash Proceeds; and

          2.6.3. All Prepayments.

     Any prepayment of the Loan on any day other than the first day of a calendar month shall
include interest on the principal amount being repaid to the extent not paid in advance and shall
be subject to Section 3.3.

          2.7. Repayment.

     The outstanding principal balance of the Loan shall be Paid in Full, for the account of each
Lender according to its Pro Rata Share thereof, on the Maturity Date unless accelerated sooner
pursuant to Section 8.2.

          2.8. Payment.

          2.8.1. Making of Payments.

     All payments of principal of or interest on the Notes, and of all fees, shall be made by
Borrower to Agent without setoff, recoupment or counterclaim and in immediately available funds at
the deposit account of Agent in New York, New York set forth on Annex II or at such other deposit
account in New York specified by Agent, in any case, not later than 1:00 p.m. New York time on the
date due, and funds received after that hour shall be deemed to have been received by Agent on the
following Business Day. Agent shall promptly remit to each Lender its share of all principal,
interest and fee payments received in collected funds by Agent for the account of such Lender. All
payments under Section 3.2 shall be made by Borrower directly to Lender entitled thereto.

          2.8.2. Application of Payments and Proceeds.

          (a) Except as set forth in Section 2.6.2, and subject to the provisions of
Sections 2.8.2(b) below, each payment by Borrower hereunder shall be applied to such
Obligations as Borrower shall direct by notice to be received by Agent on or before the date of
such payment or, in the absence of such notice, as Agent shall determine in its discretion.
Concurrently with each remittance to any Lender of its share of any such payment, Agent shall
advise such Lender as to the application of such payment.

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          (b) If an Event of Default or an Acceleration Event shall have occurred and be continuing,
notwithstanding anything herein or in any other Loan Document to the contrary, Agent shall apply
all or any part of payments in respect of the Obligations and proceeds of Collateral, in each case
as received by Agent, to the payment of the Obligations in the following order:

          (i) FIRST, to the payment of all fees, costs, expenses and indemnities due and owing to
Agent under this Agreement or any other Loan Document, and any other Obligations owing to Agent in
respect of sums advanced by Agent to preserve or protect the Collateral or to preserve or protect
its security interest in the Collateral (whether or not such Obligations are then due and owing to
Agent), until Paid in Full;

          (ii) SECOND, to the payment of all fees, costs, expenses and indemnities due and owing
to Lenders, pro rata based on each Lender’s Pro Rata Share thereof, until Paid in Full;

          (iii) THIRD, to the payment of all accrued and unpaid interest due and owing to Lenders,
pro rata based on each Lender’s Pro Rata Share thereof, until Paid in Full;

          (iv) FOURTH, to the payment of all principal of the Loan due and owing, pro rata based on
each Lender’s Pro Rata Share thereof, until Paid in Full; and

          (v) FIFTH, to the payment of all other Obligations owing to each Lender, pro rata based
on each Lender’s Pro Rata Share thereof, until Paid in Full.

          2.8.3. Payment Dates.

     If any payment of principal of or interest on the Loan, or of any fees, falls due on a day
which is not a Business Day, then such due date shall be extended to the immediately following
Business Day (unless such immediately following Business Day is the first Business Day of a
calendar month, in which case such due date shall be the immediately preceding Business Day) and,
in the case of principal, additional interest shall accrue and be payable for the period of any
such extension.

          2.8.4. Set-off.

     Borrower agrees that Agent and each Lender and its Affiliates have all rights of set-off and
bankers’ lien provided by applicable law, and in addition thereto, Borrower agrees that at any time
an Event of Default has occurred and is continuing, Agent and each Lender may apply to the payment
of any Obligations of Borrower hereunder, whether or not then due, any and all balances, credits,
deposits, accounts or moneys of Borrower then or thereafter with Agent or such Lender.
Notwithstanding the foregoing, no Lender shall exercise any rights described in the preceding
sentence without the prior written consent of Agent.

          2.8.5. Proration of Payments.

     If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by
application of set-off or otherwise, on account of principal of or interest on the Loan, but
excluding (i) any payment of principal or interest made in accordance with the terms

17

 

of this Agreement, and (ii) any payment pursuant to Section 3.1, 3.2, 3.5 or
10.8, then such Lender shall purchase from the other Lenders such participations in the
Loan held by them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase
shall be rescinded and the purchase price restored to the extent of such recovery.

Section 3. Yield Protection.

          3.1. Taxes.

          (a) Except as otherwise provided in this Section 3.1, all payments of principal and
interest on the Loan and all other amounts payable under any Loan Document shall be made free and
clear of and without deduction for any present or future income, excise, stamp, documentary,
property or franchise taxes and other taxes, fees, duties, levies, withholdings or other charges
of any nature whatsoever imposed by any taxing authority (“Taxes”), excluding (i) taxes
imposed on or measured by any Lender’s net income by the jurisdiction under which such Lender is
organized or conducts business, (ii) any branch profit taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which a Lender is located and
(iii) in the case of any Foreign Lender (other than a Replacement Lender under Section
3.7(b)), any withholding tax that (x) is in effect and would apply to amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, except to the
extent of any additional amounts to which such Foreign Lender’s assignor, if any, was entitled, at
the time of such assignment, to receive from the Borrower with respect to any withholding tax
pursuant to this Section 3.1, or (y) would not have been imposed but for Foreign Lender’s
failure (other than as a result of a change in law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental Authority) to comply
with Section 3.1(c) (collectively, “Excluded Taxes” and all such non-Excluded
Taxes, “Non-Excluded Taxes”). If any withholding or deduction from any payment to be made
by Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then Borrower shall: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) within thirty (30) days after the date of any such
payment of Taxes, forward to Agent an official receipt or other documentation satisfactory to
Agent evidencing such payment to such authority; and (iii) in the case of Non-Excluded Taxes, pay
to Agent for the account of Lenders such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Lender will equal the full amount such Lender would
have received had no such withholding or deduction (including deductions applicable to any
increase to any amount under this Section 3.1) been required.

          (b) The Borrower shall reimburse and indemnify, within 30 days after receipt of demand
therefor (with copy to the Agent), Agent and each Lender for all Non-Excluded Taxes (including any
net additional Taxes imposed by any jurisdiction on amounts payable under this Section 3.1)
paid by such Agent or such Lender and any liabilities arising therefrom or with respect thereto
(including any penalty, interest or expense), whether or not such Taxes were correctly or legally
asserted. A certificate of the Agent or such Lender (or of the Agent on behalf of such Lender)
claiming any compensation under this clause (c), setting forth the amounts to be

18

 

paid thereunder and delivered to the Borrower with copy to the Agent, shall be conclusive, binding
and final for all purposes, absent manifest error.

          (c) Each Foreign Lender that (i) is a party hereto on the Closing Date or (ii) becomes an
assignee of an interest under this Agreement under Section 10.8.1 after the Closing Date
(unless such Lender was already a Lender hereunder immediately prior to such assignment) shall
execute and deliver to Borrower and Agent one or more (as Borrower or Agent may reasonably
request) properly and duly completed and executed Forms W 8ECI, W 8BEN, W 8IMY (as applicable) or
successor form or other applicable form, certificate or document prescribed by the United States
Internal Revenue Service certifying as to such Lender’s entitlement to an exemption from or
reduction in U.S. withholding taxes with respect to payments to be made to such Foreign Lender
under the Loan Documents. Notwithstanding any other provision of this Section 3.1 to the
contrary, no Lender shall be required to deliver any form, certificate or document pursuant to
this paragraph that it is not legally able to deliver.

          (d) Each Lender that is not a Foreign Lender (other than any such Lender that is may be
treated as an “exempt recipient” under IRC Section 1.6049-4(c)(l)) that (i) is a party hereto on
the Closing Date or (ii) becomes an assignee of an interest under this Agreement under Section
10.8.1 after the Closing Date (unless such Lender was already a Lender hereunder immediately
prior to such assignment) shall execute and deliver to Borrower and Agent one or more (as Borrower
or Agent may reasonably request) properly and duly completed and executed Form W 9 (or any
successor form), certifying as to such Lender’s entitlement to an exemption from U.S. backup
withholding tax with respect to payments to be made to such Foreign Lender under the Loan
Documents. Notwithstanding any other provision of this Section 3.1 to the contrary, no
Lender shall be required to deliver any form, certificate or document pursuant to this paragraph
that it is not legally able to deliver.

          3.2. Increased Cost.

          (a) If, after the Closing Date, the adoption of, or any change in, any applicable law, rule or
regulation, or any change in the interpretation or administration of any applicable law, rule or
regulation by any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any request or directive
(whether or not having the force of law) of any such authority, central bank or comparable agency:
(i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB,
but excluding any reserve included in the determination of the LIBOR Rate pursuant to Section
2.4), special deposit or similar requirement against assets of, deposits with or for the account
of, or credit extended by any Lender; or (ii) shall impose on any Lender any other condition
affecting its Loan, its Note or its obligation to make the Loan; and the result of anything
described in clauses (i) above and (ii) is to increase the cost to (or to impose a cost on) such
Lender of making or maintaining the Loan, or to reduce the amount of any sum received or receivable
by such Lender under this Agreement or under its Note with respect thereto, then upon demand by
such Lender (which demand shall be accompanied by a statement setting forth the basis for such
demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to Agent), Borrower shall pay directly to such Lender such additional amount as will
compensate such Lender for such increased cost or such reduction, so long as such amounts have
accrued on or after the day which is 180 days prior

19

 

to the date on which such Lender first made demand therefor; provided, that if the event giving
rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to
include the period of retroactive effect.

          (b) If any Lender shall reasonably determine that any change in, or the adoption or phase-in
of, any applicable law, rule or regulation regarding capital adequacy, or any change in the
interpretation or administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the compliance by any Lender
or any Person controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Lender’s or such controlling
Person’s capital as a consequence of such Lender’s Commitments hereunder to a level below that
which such Lender or such controlling Person could have achieved but for such change, adoption,
phase-in or compliance (taking into consideration such Lender’s or such controlling Person’s
policies with respect to capital adequacy) by an amount deemed by such Lender or such controlling
Person to be material, then from time to time, upon demand by such Lender (which demand shall be
accompanied by a statement setting forth the basis for such demand and a calculation of the amount
thereof in reasonable detail, a copy of which shall be furnished to Agent), Borrower shall pay to
such Lender such additional amount as will compensate such Lender or such controlling Person for
such reduction, so long as such amounts have accrued on or after the day which is 180 days prior to
the date on which such Lender first made demand therefor; provided, that if the event giving rise
to such costs or reductions has retroactive effect, such 180 day period shall be extended to
include the period of retroactive effect.

          3.3. Funding Losses.

     Borrower hereby agrees that upon demand by any Lender (which demand shall be accompanied by a
statement setting forth the basis for the amount being claimed, a copy of which shall be furnished
to Agent), Borrower will indemnify such Lender against any net loss or expense which such Lender
may sustain or incur (including any net loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or maintain the Loan), as
reasonably determined by such Lender, as a result of (a) any payment or prepayment of the Loan of
such Lender on a date other than first day of a calendar month or (b) the failure of Borrower to
borrow the Loan on the Closing Date. For the purposes of this Section 3.3, all
determinations shall be made as if such Lender had actually funded and maintained the Loan during
each one month period for the Loan through the purchase of deposits having a maturity corresponding
to such one month period and bearing an interest rate equal to the LIBOR Rate for such one month
period.

          3.4. Manner of Funding; Alternate Funding Offices.

     Notwithstanding any provision of this Agreement to the contrary, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Pro Rata Share of the Loan in
any manner it may determine at its sole discretion. Each Lender may, if it so elects, fulfill its
commitment to make its advance of the Loan by causing any office, branch or Affiliate of such
Lender to make such advance of the Loan; provided that in such event for the purposes of this

20

 

Agreement such advance of the Loan shall be deemed to have been made by such Lender and the
obligation of Borrower to repay such advance of the Loan shall nevertheless be to such Lender and
shall be deemed held by it, to the extent of such Loan, for the account of such office, branch or
Affiliate.

          3.5. Mitigation of Circumstances; Replacement of Lenders.

          (a) Each Lender shall promptly notify Borrower and Agent of any event of which it has
knowledge which will result in, and will use reasonable commercial efforts available to it (and
not, in such Lender’s sole judgment, otherwise disadvantageous to such Lender) to mitigate or
avoid, any obligation by Borrower to pay any amount pursuant to Section 3.1 or 3.2. Without
limiting the foregoing, each Lender will designate a different funding office if such designation
will avoid (or reduce the cost to Borrower of) any event described above and such designation would
not, in such Lender’s sole judgment, be otherwise disadvantageous to such Lender.

          (b) If (i) Borrower becomes obligated to pay additional amounts to any Lender pursuant to
Section 3.1 or 32, or (ii) any Lender does not consent to any matter requiring its consent
under Section 10.1 when the Required Lenders have otherwise consented to such matter, then
Borrower may within 90 days thereafter designate another bank which is acceptable to Agent in its
reasonable discretion (such other bank being called a “Replacement Lender”) to purchase
the Pro Rata Share of the Loan of such Lender and such Lender’s rights hereunder, without recourse
to or warranty by, or expense to, such Lender, for a purchase price equal to the outstanding
principal amount of the Pro Rata Share of the Loan payable to such Lender plus any accrued but
unpaid interest on such Pro Rata Share of the Loan and all accrued but unpaid fees owed to such
Lender and any other amounts payable to such Lender under this Agreement, and to assume all the
obligations of such Lender hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Lender shall no longer be a party hereto or have any rights hereunder
(other than rights with respect to indemnities and similar rights applicable to such Lender prior
to the date of such purchase and assumption) and shall be relieved from all obligations to
Borrower hereunder, and the Replacement Lender shall succeed to the rights and obligations of such
Lender hereunder.

          3.6. Conclusiveness of Statements: Survival.

          (a) Determinations and statements of any Lender pursuant to Section 3.1, 3.2, or 3.3
shall be conclusive absent demonstrable error. Lenders may use reasonable averaging and
attribution methods in determining compensation under Sections 3.1, 3.2 and 3.3, and the
provisions of such Sections shall survive repayment of the Loan, cancellation of the Notes and
termination of this Agreement.

Section 4. Conditions Precedent.

     The obligation of each Lender to make its Pro Rata Share of the Loan is subject to the
following conditions precedent, each of which shall be satisfactory in all respects to Agent:

          4.1. Credit Extension.

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     The obligation of Lenders to fund the Loan is subject to the following conditions precedent,
each of which shall be satisfactory in all respects to Agent:

          4.1.1. Prior Debt.

     The Prior Debt has been (or concurrently with the initial borrowing will be) Paid in Full,
and all liens and security interests securing same shall have been terminated.

          4.1.2. Omitted.

          4.1.3. Interest and Fees.

     Borrower shall have paid all interest, fees, costs and expenses due and payable under this
Agreement and the other Loan Documents on the Closing Date.

          4.1.4. Delivery of Loan Documents.

     Borrower shall have delivered the following documents in form and substance satisfactory to
Agent (and, as applicable, duly executed by all Persons named as parties thereto and dated the
Closing Date or an earlier date satisfactory to Agent):

          (a) Agreement. This Agreement.

          (b) Notes. A Note, for each Lender requesting a Note.

          (c) Collateral Documents. The Guarantee and Collateral Agreement, all other Collateral
Documents, and all instruments, documents, certificates and agreements executed or delivered
pursuant thereto (including intellectual property assignments and pledged equity interests in the
Borrower and the Borrower’s Subsidiaries), with undated irrevocable transfer powers executed in
blank), in each case, executed and delivered by each Loan Party and each other Person named as a
party thereto.

          (d) Financing Statements. Properly completed Uniform Commercial Code financing
statements and other filings and documents required by law or the Loan Documents to provide Agent
perfected Liens (subject only to Liens permitted pursuant to Section 7.2) in the
Collateral.

          (e) Lien Searches. Copies of Uniform Commercial Code search reports listing all
effective financing statements filed against any Loan Party, with copies of such financing
statements.

          (f) Mortgages. Fee mortgages providing Agent perfected Liens (subject only to Liens
permitted pursuant to Section 7.2) in the owned and leased real property Collateral, with
ALTA loan title insurance policies issued by insurers reasonably acceptable to Agent and such
flood and/or earthquake insurance as Agent may reasonably request.

          (g) Collateral Access Agreements. Collateral Access Agreements reasonably requested
by Agent with respect to the Collateral.

22

 

          (h) Lien Release Letter. A letter releasing certain Liens on the property of certain
Loan Parties, executed and delivered by Oliver Kendall Kelley, Golden Spread Energy, Inc., GSEKFT,
Inc., Neptune Leasing, Inc., Parent, Apollo Resources International, Inc., Arizona LNG, Applied LNG
Technologies USA, L.L.C., Borrower, Agent and Greenfield Commercial Credit, L.L.C.

          (i) Intercreditor Agreement. The Intercreditor Agreement, executed and delivered by
Agent, the holder of Senior Debt and the Loan Parties.

          (j) Payoff; Release. Payoff letters evidencing payment in full of all Prior Debt,
termination of all agreements relating thereto and the release of all Liens granted in connection
therewith, with Uniform Commercial Code or other appropriate termination statements and documents
effective to evidence the foregoing.

          (k) Fee Letter. The Fee Letter, executed and delivered by the Borrower and Agent.

          (1) Letter of Direction. A letter of direction executed by the Borrower containing
funds flow information with respect to the proceeds of the Loan on the Closing Date.

          (m) Authorization Documents. For each Loan Party, such Person’s (i) charter (or
similar formation document), certified by the appropriate Governmental Authority, (ii) good
standing certificates in its state of incorporation (or formation) and in each other state
requested by Agent, (iii) limited liability company agreement, partnership agreement, bylaws (and
similar governing document), (iv) resolutions of its board of directors (or similar governing
body) approving and authorizing such Person’s execution, delivery and performance of the Loan
Documents to which it is party and the transactions contemplated thereby, and (v) signature and
incumbency certificates of its officers executing any of the Loan Documents, all certified by its
secretary or an assistant secretary (or similar officer) as being in full force and effect without
modification.

          (n) Opinions of Counsel. Opinions of counsel for each Loan Party, including local
Nevada and Arizona counsel, each in form and substance requested by Agent.

          (o) Insurance. Certificates or other evidence of insurance in effect as required by
Section 6.3(b), with endorsements naming Agent as lenders’ loss payee and/or additional
insured, as applicable.

          (p) Financials. The financial statements, projections and pro forma balance sheet
described in Section 5.4, including, without limitation, the audited financial statements
of Borrower (presented on a consolidated basis with the audited financial statements of Apollo
Resources International, Inc.) for the Fiscal Year ending December 31, 2005.

          (q) Environmental Reports. Environmental site assessment reports reasonably requested
by Agent, prepared by environmental engineers reasonably satisfactory to Agent and in form and
substance reasonably satisfactory to Agent.

23

 

          (r) Consents. Evidence that all necessary consents, permits and approvals
(governmental or otherwise) required for the execution, delivery and performance by each Loan
Party of the Loan Documents have been duly obtained and are in full force and effect.

          (s) Warrant. The Warrant, executed and delivered by Parent in favor of Fourth Third.

          (t) Warrant Purchase Agreement. The Warrant Purchase Agreement, executed and
delivered by Fourth Third and Parent.

          (u) Other Documents. Such other certificates, documents and agreements that may be
listed on the closing checklist provided by Agent to the Borrower or as Agent or any Lender may
reasonably request.

          4.1.5. Representations and Warranties. Each representation and warranty by each Loan
Party contained herein or in any other Loan Document shall be true and correct in all material
respects (without duplication of any materiality qualifier contained therein) as of the Closing
Date.

          4.1.6. No Default. No Default or Event of Default shall have occurred and be
continuing.

          4.1.7. Diligence. The Agent shall have completed, to its satisfaction, its remaining
due diligence, which includes review of equipment appraisals, obtaining management background
checks, and legal diligence, with the results thereof satisfactory to the Agent.

          4.1.8. No Material Adverse Change. Since the applicable Last Pre Closing Audit Date,
there has been no material adverse change in the operations, assets, business, properties,
prospects or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a
whole or the Parent and its Subsidiaries taken as a whole.

          4.1.9. Reservation of Shares. Parent shall have authorized and reserved for issuance
to Fourth Third that number of shares of Warrant Stock of Parent necessary for the purpose of
issuance to Fourth Third upon exercise of the Warrant and shall have issued to Fourth Third and
Fourth Third shall have received the Warrant to purchase not less than an aggregate number of
shares of Warrant Stock of Parent (subject to adjustment as set forth in the Warrant) being 4% of
the Warrant Stock of Parent as of the Closing Date.

Section 5. Representations and Warranties.

To induce Agent and Lenders to enter into this Agreement and to induce Lenders to make their Pro
Rata Shares of the Loan hereunder, Borrower represents and warrants to Agent and Lenders as
follows.

          5.1. Organization.

     Borrower is a corporation validly existing and in good standing under the laws of the State of
Texas; each other Loan Party is validly existing and in good standing under the laws of

24

 

the jurisdiction of its organization; and each Loan Party is duly qualified to do business in each
jurisdiction where, because of the nature of its activities or properties, such qualification is
required, except for such jurisdictions where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.

          5.2. Authorization; No Conflict.

     Each of Borrower and each other Loan Party is duly authorized to execute and deliver each Loan
Document to which it is a party, Borrower is duly authorized to borrow monies hereunder, and each
of Borrower and each other Loan Party is duly authorized to perform its Obligations under each Loan
Document to which it is a party. The execution, delivery and performance by Borrower of this
Agreement and by each of Borrower, each Loan Party of each Loan Document to which it is a party,
and the borrowings by Borrower hereunder, do not and will not (a) require any consent or approval
of any governmental agency or authority (other than any consent or approval which has been obtained
and is in full force and effect), (b) conflict with (i) any provision of applicable law, (ii) the
charter, by-laws, limited liability company agreement, partnership agreement or other
organizational documents of any Loan Party or (iii) any agreement, indenture, instrument or other
document, or any judgment, order or decree, which is binding upon any Loan Party or any of their
respective properties or (c) require, or result in, the creation or imposition of any Lien on any
asset of Borrower, any Loan Party (other than Liens in favor of Agent created pursuant to the
Collateral Documents).

          5.3. Validity; Binding Nature.

     Each of this Agreement and each other Loan Document to which Borrower or any other Loan Party
is a party is the legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting
the enforceability of creditors’ rights generally and to general principles of equity.

          5.4. Financial Condition.

          (a) The audited consolidated financial statements of Borrower and its Subsidiaries (presented
on a consolidated basis with the audited financial statements of Apollo Resources International,
Inc.) as at December 31, 2005, copies of each of which have been delivered pursuant hereto, were
prepared in accordance with GAAP (subject, in the case of such unaudited statements, to the
absence of footnotes and to normal year-end adjustments) and present fairly the consolidated
financial condition of such Persons as at such dates and the results of their operations for the
periods then ended.

          (b) The consolidated financial projections (including an operating budget and a cash flow
budget) of Parent and Borrower and their respective Subsidiaries for the 3 year period commencing
February 1, 2007 delivered to Agent and Lenders on or prior to the Closing Date (i) were prepared
by Parent and Borrower, respectively, in good faith and (ii) were prepared in accordance with
assumptions for which Parent and Borrower, respectively, has a reasonable basis, and the
accompanying consolidated pro forma balance sheets of Parent and Borrower and their respective
Subsidiaries as at the Closing Date, adjusted to give effect to the

25

 

consummation of the financing contemplated hereby as if such transactions had occurred on such
date, is consistent in all material respects with such projections.

          5.5. No Material Adverse Change.

     Since the applicable Last Pre Closing Audit Date, there has been no material adverse change
in the operations, assets, business, properties, prospects or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole or of the Parent and its Subsidiaries taken
as a whole.

          5.6. Litigation. No litigation (including derivative actions), arbitration proceeding
or governmental investigation or proceeding is pending or, to Borrower’s knowledge, threatened
against any Loan Party which could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, except as set forth in Schedule 5.6. As of the
Closing Date, other than any liability incident to such litigation or proceedings, neither Borrower
nor any other Loan Party has any material Contingent Obligations not listed on Schedule
7.1.

          5.7. Ownership of Properties; Liens.

     Each of Borrower and each other Loan Party owns good and, in the case of real property,
marketable title to all of its properties and assets, real and personal, tangible and intangible,
of any nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including infringement claims with
respect to patents, trademarks, service marks, copyrights and the like), except as permitted by
Section 7.2.

          5.8. Capitalization.

     All issued and outstanding equity securities of the Loan Parties are duly authorized and
validly issued, fully paid and non-assessable, and such securities were issued in compliance with
all applicable state and federal laws concerning the issuance of securities. All issued and
outstanding equity securities of the Loan Party Subsidiaries are free and clear of all Liens other
than those in favor of Agent. Schedule 5.8 sets forth the authorized equity securities of
each Loan Party as of the Closing Date. All of the issued and outstanding equity of Borrower is
owned by Parent, and all of the issued and outstanding equity of each of the Borrower’s
Subsidiaries is, directly or indirectly, owned by Borrower. As of the Closing Date, except as set
forth on Schedule 5.8, there are no pre-emptive or other outstanding rights, options,
warrants, conversion rights or other similar agreements or understandings for the purchase or
acquisition of any equity interests of any Loan Party.

          5.9. Pension Plans.

     During the twelve-consecutive-month period prior to the Closing Date or the making of the
Loan, (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by Borrower or any other Loan Party of

26

 

any material liability, fine or penalty. All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by any Loan Party or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining agreement or by
applicable law; neither any Loan Party nor any member of the Controlled Group has withdrawn or
partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with
respect to any such plan or received notice of any claim or demand for withdrawal liability or
partial withdrawal liability from any such plan, and no condition has occurred which, if
continued, could result in a withdrawal or partial withdrawal from any such plan, and neither any
Loan Party nor any member of the Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the IRC, that any such plan is or
may be terminated, or that any such plan is or may become insolvent.

          5.10. Compliance with Law; Investment Company Act; Other Regulated Entities.

     Borrower and each other Loan Party possesses all necessary authorizations, permits, licenses
and approvals from all Governmental Authorities in order to conduct their respective businesses as
presently conducted. All business and operations of the Borrower and each other Loan Party
complies with all applicable federal, state and local laws and regulations, except where the
failure so to comply could not reasonably be expected to result in a Material Adverse Effect.
Neither the Borrower nor any other Loan Party is operating any aspect of its business under any
agreement, settlement, order or other arrangement with any Governmental Authority. Neither
Borrower nor any other Loan Party is an “investment company” or a company “controlled” by an
“investment company” or a “subsidiary” of an “investment company”, within the meaning of the
Investment Company Act of 1940. None of any Loan Party, any Person controlling any Loan Party, or
any Subsidiary of any Loan Party, is subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal or state statute,
rule or regulation limiting its ability to incur Indebtedness, pledge its assets or perform its
Obligations under the Loan Documents.

          5.11. Margin Stock.

     Neither Borrower nor any Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or carrying Margin
Stock. No portion of the Obligations is secured directly or indirectly by Margin Stock.

          5.12. Taxes.

     Each of Borrower and each other Loan Party and each Non-Loan Party has filed all federal,
state, local and foreign income and franchise and other material tax returns, reports and
statements (collectively, the “Tax Returns”) with the appropriate governmental authorities
in all jurisdictions in which such Tax Returns are or were required to be filed. All such Tax
Returns are true and correct in all material respects. All Taxes, charges and other impositions
reflected therein or otherwise due and payable have been paid prior to the date on which any
liability may be added thereto for non-payment thereof, except for those contested in good faith by
appropriate

27

 

proceedings diligently conducted and for which adequate reserves are maintained on the books of the
appropriate Loan Party or Non-Loan Party, as applicable, in accordance with GAAP. Except as
specifically disclosed in Schedule 5.12, no Tax Return is under audit or examination by any
Governmental Authority and no notice of such an audit or examination or any assertion of any claim
for Taxes has been given or made by any Governmental Authority. Proper and accurate amounts have
been withheld by each Loan Party or Non-Loan Party, as applicable, from their respective employees
for all periods in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable requirements of law and such withholdings have been timely
paid to the respective governmental authorities. No Loan Party or Non-Loan Party has participated
in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011 -4(b) or has
been a member of an affiliated, combined or unitary group other than the group of which a Loan
Party is the common parent.

          5.13. Solvency.

     On the Closing Date, with respect to each of Borrower and each other Loan Party,
individually, (a) the fair value of its assets is greater than the amount of its liabilities
(including disputed, contingent and unliquidated liabilities) as such value is established and
liabilities evaluated, (b) the present fair saleable value of its assets is not less than the
amount that will be required to pay the probable liability on its debts as they become absolute
and matured, (c) it is able to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in the normal course
of business, (d) it does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature and (e) it is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for
which its property would constitute unreasonably small capital.

          5.14. Environmental Matters.

     The on-going operations of Borrower and each other Loan Party comply in all respects with all
Environmental Laws, except such non-compliance which could not (if enforced in accordance with
applicable law) reasonably be expected to result in a Material Adverse Effect. Borrower and each
other Loan Party have obtained, and maintained in good standing, all licenses, permits,
authorizations and registrations required under any Environmental Law and necessary for their
respective ordinary course operations, and Borrower and each other Loan Party are in compliance
with all material terms and conditions thereof, except where the failure to do so could not
reasonably be expected to result in material liability to Borrower or any other Loan Party and
could not reasonably be expected to result in a Material Adverse Effect. Except as set forth on
Schedule 5.14, none of Borrower, any other Loan Party or any of their respective
properties or operations is subject to any outstanding written order from or agreement with any
Federal, state or local Governmental Authority, nor subject to any judicial or docketed
administrative proceeding, nor subject to any indemnification agreement or other contractual
obligation, respecting any Environmental Law, Environmental Claim or Hazardous Substance. There
are no Hazardous Substances or other conditions or circumstances existing with respect to any
property, or arising from operations prior to the Closing Date, of Borrower or any other Loan
Party that could reasonably be expected to result in a Material Adverse Effect. Neither Borrower
nor any other Loan Party has any underground or above ground storage tanks that are not

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properly registered or permitted under applicable Environmental Laws or that are leaking or
disposing of Hazardous Substances.

          5.15. Insurance.

     Borrower and each other Loan Party and their respective properties are insured with
financially sound and reputable insurance companies which are not Affiliates of Borrower, in such
amounts, with such deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where Borrower or such
other Loan Party operates. A true and complete listing of such insurance as of the Closing Date,
including issuers, coverages and deductibles, is set forth on Schedule 5.15.

          5.16. Information.

     All information heretofore or contemporaneously herewith furnished in writing by Borrower or
any other Loan Party to Agent or any Lender for purposes of or in connection with this Agreement
and the transactions contemplated hereby is, and all written information hereafter furnished by or
on behalf of Borrower or any Loan Party to Agent or any Lender pursuant hereto or in connection
herewith will be, true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not misleading in light of
the circumstances under which made (it being recognized by Agent and Lenders that any projections
and forecasts provided by Borrower are based on good faith estimates and assumptions believed by
Borrower to be reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).

          5.17. Intellectual Property.

     Borrower and each other Loan Party owns and possesses or has a license or other right to use
all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service mark rights and copyrights as are necessary for the conduct of the business of
Borrower and the other Loan Parties, without any infringement upon rights of others which could
reasonably be expected to have a Material Adverse Effect.

          5.18. Labor Matters.

     Except as set forth on Schedule 5.18, neither Borrower nor any other Loan Party is
subject to any labor or collective bargaining agreement. There are no existing or threatened
strikes, lockouts or other labor disputes involving Borrower or any other Loan Party that singly
or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked
by and payment made to employees of Borrower and the other Loan Parties are not in violation of
the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such
matters.

          5.19. No Default.

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     No Event of Default or Default exists or would result from the incurrence by any Loan Party
of any Debt hereunder or under any other Loan Document.

          5.20. Foreign Assets Control Regulations and Anti-Money Laundering.

          5.20.1. OFAC.

     Neither any Loan Party nor any Subsidiary of any Loan Party (i) is a person whose property or
interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001) (“Executive Order
13224”), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive
order, or is otherwise associated with any such person in any manner violative of Section 2, or
(iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to
the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

          5.20.2. Patriot Act.

     Each Loan Party and each of their respective Subsidiaries is in compliance, in all material
respects, with the Patriot Act. No part of the proceeds of the Loan will be used, directly or
indirectly, for any payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.

          5.21. Gas Supply and Hedge Contracts.

     Each of the Gas Supply and Hedge Contracts is in full force and effect and constitutes the
legal, valid, binding and enforceable obligation of each party thereto.

Section 6. Affirmative Covenants.

     Until all Obligations (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted) are Paid in Full, each Loan Party agrees that, unless
at any time Required Lenders shall otherwise expressly consent in writing, it will:

          6.1. Information.

     Furnish to Agent and each Lender:

          6.1.1. Annual Report.

     Promptly when available and in any event within 90 days after the close of each Fiscal Year: a
copy of the annual audit report of Parent and its Subsidiaries for such Fiscal Year, including
therein a consolidated balance sheet and statement of earnings and cash flows of Borrower and the
Subsidiaries as at the end of such Fiscal Year, certified without qualification

30

 

by independent auditors of recognized standing selected by Borrower and reasonably acceptable to
Agent.

          6.1.2. Interim Reports.

     Promptly when available and in any event within 30 days after the end of each month,
consolidated balance sheets of Parent and Borrower and their respective Subsidiaries as of the end
of such month, together with consolidated statements of earnings and a consolidated statement of
cash flows for such month and for the period beginning with the first day of such Fiscal Year and
ending on the last day of such month, together with a comparison with the corresponding period of
the previous Fiscal Year and a comparison with the budget for such period of the current Fiscal
Year, certified by the chief financial officers of Parent and Borrower.

          6.1.3. Compliance Certificate.

     Contemporaneously with the furnishing of a copy of each annual audit report pursuant to
Section 6.1.1 and each set of statements pursuant to Section 6.1.2 for the last
month of each calendar quarter (beginning with the calendar quarter ending June 30, 2007) a duly
completed Compliance Certificate, with appropriate insertions, dated the date of such annual
report or such monthly statements, and signed by the chief financial officer of Borrower,
containing a computation of each of the financial ratios and restrictions set forth in Section
7.14 and to the effect that such officer has not become aware of any Event of Default or
Default that has occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.

          6.1.4. Reports to SEC and Shareholders.

     Promptly upon the filing or sending thereof, copies of (a) all regular, periodic or special
reports of each Loan Party filed with the Securities Exchange Commission, (b) all registration
statements of each Loan Party filed with the Securities Exchange Commission (other than on Form
S-8) and (c) all proxy statements or other communications made to security holders generally.

          6.1.5. Notice of Default; Litigation; ERISA Matters.

     Promptly upon becoming aware of any of the following, written notice describing the same and
the steps being taken by Borrower or the applicable Loan Party affected thereby with respect
thereto:

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

          (b) any litigation, arbitration or governmental investigation or proceeding not previously
disclosed by Borrower to Lenders which has been instituted or, to the knowledge of Borrower, is
threatened against Borrower or any other Loan Party or to which any of the properties of any
thereof is subject which could reasonably be expected to have a Material Adverse Effect;

31

 

          (c) the institution of any steps by any member of the Controlled Group or any other Person to
terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with
respect to a Pension Plan which could result in the requirement that Borrower or any other Loan
Party furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability, fine or penalty
(including any claim or demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any material increase in the contingent liability of Borrower or
any other Loan Party with respect to any post-retirement welfare plan benefit, or any notice that
any Multiemployer Pension Plan is in reorganization, that increased contributions may be required
to avoid a reduction in plan benefits or the imposition of an excise tax, that any such plan is or
has been funded at a rate less than that required under Section 412 of the IRC, that any such plan
is or may be terminated, or that any such plan is or may become insolvent;

          (d) any cancellation or material adverse change in any insurance maintained by Borrower or
any other Loan Party; or

          (e) any other event (including (i) any violation of any Environmental Law or the assertion of
any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation)
which could reasonably be expected to have a Material Adverse Effect.

          6.1.6. Management Report.

     Promptly upon receipt thereof, copies of all detailed financial and management reports
submitted to Borrower or any other Loan Party by independent auditors in connection with each
annual or interim audit made by such auditors of the books of Borrower or any other Loan Party.

          6.1.7. Projections.

     As soon as practicable, and in any event not later than 30 days after the commencement of
each Fiscal Year, financial projections for Parent and Borrower and their respective Subsidiaries
for such Fiscal Year (including monthly operating and cash flow budgets) prepared in a manner
consistent with the projections delivered by Parent and Borrower, respectively, to Agent prior to
the Closing Date or otherwise in a manner reasonably satisfactory to Agent, accompanied by a
certificate of a chief financial officers of Parent and Borrower to the effect that (a) such
projections were prepared by Parent and Borrower, respectively, in good faith, (b) Parent and
Borrower, respectively, has a reasonable basis for the assumptions contained in such projections
and (c) such projections have been prepared in accordance with such assumptions.

          6.1.8. Other Information.

     Promptly from time to time, such other information concerning Borrower and any other Loan
Party as any Lender or Agent may reasonably request.

          6.2. Books; Records; Inspections.

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     Keep, and cause each other Loan Party to keep, its books and records in accordance with sound
business practices sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each other Loan Party to permit, Agent (accompanied by any Lender) or any
representative thereof to inspect the properties and operations of Borrower or such other Loan
Party; and permit, and cause each other Loan Party to permit, at any reasonable time and with
reasonable notice (or at any time without notice if an Event of Default exists), Agent
(accompanied by any Lender) or any representative thereof to visit any or all of its offices, to
discuss its financial matters with its officers and its independent auditors (and Borrower hereby
authorizes such independent auditors to discuss such financial matters with any Lender or Agent or
any representative thereof), and to examine (and, at the expense of Borrower or the applicable
Loan Party, photocopy extracts from) any of its books or other records; and permit, and cause each
other Loan Party to permit, Agent and its representatives to inspect the Collateral and other
tangible assets of Borrower or such Loan Party, to perform appraisals of the equipment of Borrower
or such Party, and to inspect, audit, check and make copies of and extracts from the books,
records, computer data, computer programs, journals, orders, receipts, correspondence and other
data relating to any Collateral.

          6.3. Maintenance of Property; Insurance.

          (a) Keep, and cause each other Loan Party to keep, all property useful and necessary in the
business of Borrower or such other Loan Party in good working order and condition, ordinary wear
and tear excepted.

          (b) Maintain, and cause each other Loan Party to maintain, with responsible insurance
companies, such insurance coverage as shall be required by all laws, governmental regulations and
court decrees and orders applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly situated; provided
that in any event, such insurance shall insure against all risks and liabilities of the type
insured against as of the Closing Date and shall have insured amounts no less than, and deductibles
no higher than, those amounts provided for as of the Closing Date. Upon request of Agent or any
Lender, Borrower shall furnish to Agent or such Lender a certificate setting forth in reasonable
detail the nature and extent of all insurance maintained by Borrower and each other Loan Party.
Borrower shall cause each issuer of an insurance policy to provide Agent with an endorsement (i)
showing Agent as a loss payee with respect to each policy of property or casualty insurance and
naming Agent as an additional insured with respect to each policy of liability insurance, (ii)
providing that 30 days’ notice will be given to Agent prior to any cancellation of, or reduction or
change in coverage provided by or other material modification to such policy and (iii) reasonably
acceptable in all other respects to Agent. Borrower shall execute and deliver to Agent a collateral
assignment, in form and substance satisfactory to Agent, of each business interruption insurance
policy maintained by the Loan Parties.

          (c) Unless Borrower provides Agent with evidence of the continuing insurance coverage
required by this Agreement, Agent may purchase insurance at Borrower’s expense to protect Agent’s
and Lenders’ interests in the Collateral. This insurance may, but need not, protect Borrower’s and
each other Loan Party’s interests. The coverage that Agent purchases may, but need not, pay any
claim that is made against Borrower or any other Loan Party in connection with the Collateral.
Borrower may later cancel any insurance purchased by

33

 

Agent, but only after providing Agent with evidence that Borrower has obtained the insurance
coverage required by this Agreement. If Agent purchases insurance for the Collateral, as set forth
above, Borrower will be responsible for the costs of that insurance, including interest and any
other charges that may be imposed with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance and the costs of the insurance may be added to the
principal amount of the Loan owing hereunder.

          6.4. Compliance with Laws; Payment of Taxes and Liabilities.

          (a) Comply, and cause each other Loan Party to comply, in all material respects with all
applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except
where failure to comply could not reasonably be expected to have a Material Adverse Effect; (b)
without limiting clause (a) above, ensure, and cause each other Loan Party to ensure, that no
person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (i)
listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of
Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists
maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a
person designated under Section l (b), (c) or (d) or Executive Order 13224, any related
enabling legislation or any other similar Executive Orders; (c) without limiting clause (a) above,
comply and cause each other Loan Party to comply, with all applicable Bank Secrecy Act and
anti-money laundering laws and regulations and (d) timely prepare and file all Tax Returns
required to be filed by applicable law and pay, and cause each other Loan Party to pay, prior to
delinquency, all taxes and other governmental charges against it or any of its property, as well
as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that
the foregoing shall not require Borrower or any other Loan Party to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate proceedings and shall
set aside on its books adequate reserves with respect thereto in accordance with GAAP.

          6.5. Maintenance of Existence.

     Maintain and preserve, and (subject to Section 7.5) cause each other Loan Party to
maintain and preserve, (a) its existence and good standing in the jurisdiction of its organization
and (b) its qualification to do business and good standing in each jurisdiction where the nature of
its business makes such qualification necessary, other than any such jurisdiction where the failure
to be qualified or in good standing could not reasonably be expected to have a Material Adverse
Effect.

          6.6. Employee Benefit Plans.

     Maintain, and cause each other Loan Party to maintain, each Pension Plan in substantial
compliance with all applicable requirements of law and regulations.

          6.7. Environmental Matters.

     If any release or disposal of Hazardous Substances shall occur or shall have occurred on or
from any real property or any other assets of Borrower or any other Loan Party, cause, or direct
the applicable Loan Party to cause, the prompt containment and removal of such

34

 

Hazardous Substances and the remediation of such real property or other assets as is necessary
to comply with all Environmental Laws and to preserve the value of such real property or other
assets. Without limiting the generality of the foregoing, Borrower shall, and shall cause each
other Loan Party to, comply with each valid Federal or state judicial or administrative order
requiring the performance at any real property by Borrower or any other Loan Party of activities in
response to the release or threatened release of a Hazardous Substance. If any violation of any
Environmental Law shall occur or shall have occurred at any real property or any other assets of
Borrower or any other Loan Party or otherwise in connection with their operations, cause, or direct
the applicable Loan Party to cause, the prompt correction of such violation.

          6.8. Further Assurances.

     (a) Promptly upon request by the Agent, the Loan Parties shall (and, subject to the
limitations hereinafter set forth, shall cause each of their Subsidiaries to) take such additional
actions as the Agent may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document, (ii) to subject to the
Liens created by any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve, protect and confirm
to the Agent and Lenders the rights granted or now or hereafter intended to be granted to the
Agent and the Lenders under any Loan Document or under any other document executed in connection
therewith. Without limiting the generality of the foregoing and except as otherwise approved in
writing by Required Lenders, the Loan Parties shall cause each of their Domestic Loan Party
Subsidiaries to guaranty the Obligations and cause each such Subsidiary to grant to the Agent, for
the benefit of the Agent and Lenders, a security interest in, subject to the limitations
hereinafter set forth, all of such Subsidiary’s Property to secure such guaranty. Furthermore and
except as otherwise approved in writing by Required Lenders, Parent shall pledge the Stock and
Stock Equivalents of Borrower, and each Loan Party Subsidiary shall, and shall cause (x) each of
its Domestic Loan Party Subsidiaries to, pledge all of the Stock and Stock Equivalents of each of
its Domestic Loan Party Subsidiaries and sixty-five percent (65%) of the outstanding voting Stock
and Stock Equivalents and one hundred percent (100%) of the outstanding non-voting Stock and Stock
Equivalents) of Foreign Subsidiaries owned directly by a Loan Party Subsidiary, in each instance,
to the Agent, for the benefit of the Agent and Lenders, to secure the Obligations. In connection
with each pledge of Stock and Stock Equivalents, such Loan Party Subsidiary shall deliver, or
cause to be delivered, to the Agent, irrevocable proxies and stock powers and/or assignments, as
applicable, duly executed in blank. In the event any Loan Party (other than Parent) acquires or
leases as lessee any real Property, simultaneously with such acquisition, such Person shall
execute and/or deliver, or cause to be executed and/or delivered, to the Agent, (x) a fully
executed Mortgage, in form and substance reasonably satisfactory to the Agent together with in the
case of a lease, such lease amendments, consents and/or estoppels as Agent may reasonably request,
and in any event, together with an A.L.T.A. lender’s title insurance policy issued by a title
insurer reasonably satisfactory to the Agent, in form and substance and in an amount reasonably
satisfactory to the Agent insuring that the Mortgage is a valid and enforceable first priority
Lien on the respective property, free and clear of all defects, encumbrances and Liens, (y) then
current A.L.T.A. surveys, certified to the Agent and the Lenders by a licensed surveyor sufficient
to allow the issuer of the lender’s title

35

 

insurance policy to issue such policy without a survey exception and (z) an environmental site
assessment prepared by a qualified firm reasonably acceptable to the Agent, in form and substance
satisfactory to the Agent.

     (b) Within thirty (30) days after the Closing Date, the Loan Parties shall deliver to Agent a
deposit account or securities account, as applicable, Control Agreement for each deposit account
and securities account maintained by any Loan Party Subsidiary (other than zero balance payroll
and similar accounts and other than the “Lock-Box Account” (as such term is defined in the
Intercreditor Agreement)), in form and substance satisfactory to the Agent.

     (c) Within thirty (30) days after the Closing Date, at their own cost and expense, the Loan
Parties shall cause applications to be filed with the appropriate motor vehicle authorities to
cause all certificates of title for Titled Vehicles owned as of the Closing Date by any Loan Party
Subsidiary to indicate the name of the Agent as sole lienholder.

     (d) Within thirty (30) days after the Closing Date, the Loan Parties shall deliver to Agent
the articles of incorporation of Apollo Leasing, Inc., certified by the Secretary of State of the
State of Texas as true, complete and correct, and a good standing certificate for Apollo Leasing,
Inc. from the Secretary of State of the State of Texas.

          6.9. Collateral Access Agreements.

     Each Loan Party Subsidiary shall use commercially reasonable efforts to obtain a Collateral
Access Agreement from the lessor of each leased property, bailee in possession of any Collateral
or mortgage of any owned property with respect to each location where any Collateral is stored or
located, which Collateral Access Agreement shall be reasonably satisfactory in form and substance
to Agent.

          6.10. Board Observation Rights.

     Fourth Third shall have the right to appoint a single observer to the board of directors or
similar governing body of each Loan Party (the “Board of Directors”), who shall be entitled
to attend (or at the option of such observer, monitor by telephone) all meetings of such Board of
Directors and each committee of such Board of Directors, but shall not be entitled to vote, and who
shall receive all reports, meeting materials, notices, written consents, and other materials as and
when provided to the members of such Board of Directors. The Loan Parties shall reimburse Fourth
Third for the reasonable travel expenses incurred by any such observer appointed by Fourth Third in
connection with attendance at or participation in meetings of such Loan Party’s Board of Directors
to the extent consistent with such Loan Party’s policies of reimbursing directors generally for
such expenses.

          6.11. Reservation of Shares.

     Parent shall at all times reserve and keep available out of its authorized but unissued
shares of Warrant Stock solely for the purpose of issuance upon the exercise of the Warrant, such
number of shares of Warrant Stock as may from time to time be issuable upon the exercise of the
entire outstanding portion of the Warrant. Parent shall take all such actions as may be necessary
to assure that all such shares of Warrant Stock may be so issued without violation of any

36

 

applicable law or governmental regulation or any requirements of any domestic securities exchange
upon which shares of Warrant Stock may be listed (except for official notice of issuance which
shall be immediately delivered by Parent upon each such issuance). Parent shall not take any
action which would cause the number of authorized but unissued shares of Warrant Stock to be less
than the number of such shares required to be reserved hereunder for issuance upon exercise of the
Warrant.

7. Negative Covenants.

     Until the Obligations (other than contingent indemnification obligations to the extent no
claim giving rise thereto has been asserted) are Paid in Full, each Domestic Loan Party Subsidiary
agrees that, unless at any time Required Lenders shall otherwise expressly consent in writing, it
will:

          7.1. Debt.

     Not, and not suffer or permit any other Loan Party Subsidiary to, create, incur, assume or
suffer to exist any Debt, except:

          (a) Obligations under this Agreement and the other Loan Documents;

          (b) Debt secured by Liens permitted by Section 7.2(d), and extensions, renewals and
refinancings thereof; provided that the aggregate principal amount of all such Debt at any time
outstanding shall not exceed $1,000,000;

          (c) Debt of Borrower to any Wholly-Owned Domestic Subsidiary of Borrower or Debt of any
Wholly-Owned Domestic Subsidiary of Borrower to Borrower or another Wholly-Owned Domestic
Subsidiary of Borrower; provided that all such Debt shall be evidenced by a demand note in form
and substance reasonably satisfactory to Agent and pledged and (subject to any contrary provision
of the Intercreditor Agreement) delivered to Agent pursuant to the Guarantee and Collateral
Agreement as additional collateral security for the Obligations, and the obligations under such
demand note shall be subordinated to the Obligations hereunder in a manner reasonably satisfactory
to Agent;

          (d) Debt described on Schedule 7.1 as of the Closing Date, and any extension, renewal
or refinancing thereof so long as the principal amount thereof is not increased;

          (e) Senior Debt of Borrower and its Subsidiaries in an aggregate principal amount not
exceeding that permitted by the Intercreditor Agreement.

          (f) Contingent Obligations arising with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions permitted under Section 7.5;

          (g) Debt 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, provided
that such Debt is extinguished within two (2) Business Days of notice to Borrower or the relevant
Subsidiary of its incurrence;

37

 

          (h) Debt incurred in connection with the financing of insurance premiums in the ordinary
course of business;

          (i) guaranties by Borrower of the Debt of any Wholly-Owned Domestic Subsidiary of Borrower or
guaranties by any Subsidiary thereof of the Debt of Borrower in each case so long as such Debt is
permitted under this Section 7.1;

          (j) omitted; and

          (k) other unsecured Debt, in addition to the Debt listed above, in an aggregate principal
outstanding amount not at any time exceeding $2,000,000.

          7.2. Liens.

Not, and not suffer or permit any other Loan Party Subsidiary to, create or permit to exist
any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether
now owned or hereafter acquired), except:

          (a) Liens for taxes or other governmental charges not at the time delinquent or thereafter
payable without penalty or being diligently contested in good faith by appropriate proceedings
and, in each case, for which it maintains adequate reserves in accordance with GAAP and the
execution or other enforcement of which is effectively stayed;

          (b) Liens arising in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics, landlords and materialmen and other similar Liens imposed by law and (ii)
Liens consisting of pledges or deposits incurred in connection with worker’s compensation,
unemployment compensation and other types of social security (excluding Liens arising under ERISA)
or in connection with surety bonds, bids, performance bonds and similar obligations) for sums not
overdue or being diligently contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price of property or services
and, in each case, for which it maintains adequate reserves in accordance with GAAP and the
execution or other enforcement of which is effectively stayed;

          (c) Liens described on Schedule 7.2 as of the Closing Date;

          (d) subject to the limitation set forth in Section 7.1(b), (i) Liens arising in
connection with Capital Leases (and attaching only to the property being leased), (ii) Liens
existing on property at the time of the acquisition thereof by Borrower or any Subsidiary (and not
created in contemplation of such acquisition) and (iii) Liens that constitute purchase money
security interests on any property securing debt incurred for the purpose of financing all or any
part of the cost of acquiring such property, provided that any such Lien attaches to such property
within 60 days of the acquisition thereof and attaches solely to the property so acquired;

          (e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding
$250,000 arising in connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;

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          (f) easements, encroachments, rights of way, leases, subleases, restrictions, minor defects
or irregularities in title and other similar Liens not interfering in any material respect with
the ordinary conduct of the business of Borrower or any Subsidiary;

          (g) any interest or title of a lessor, sublessor under any lease (other than a Capital Lease)
permitted by this Agreement;

          (h) Liens arising from precautionary uniform commercial code financing statements filed under
any lease (other than a Capital Lease) permitted by this Agreement;

          (i) Liens arising under the Loan Documents;

          (j) Liens on property of Borrower and its Subsidiaries securing the Senior Debt and subject
to the terms of the Intercreditor Agreement;

          (k) omitted;

          (l) omitted; and

          (m) the replacement, extension or renewal of any Lien permitted by clause (c) above upon or
in the same property subject thereto arising out of the extension, renewal or replacement of the
Debt secured thereby (without increase in the amount thereof).

          7.3. Subsidiaries.

     Not, and not suffer or permit any other Loan Party Subsidiary to establish or acquire any
Subsidiary.

          7.4. Restricted Payments.

     Not, and not suffer or permit any other Loan Party Subsidiary to, (a) make any dividend or
other distribution to any of its equity holders, (b) purchase or redeem any of its equity interests
or any warrants, options or other rights in respect thereof, (c) pay any management or consulting
fees or similar fees to any of its equity holders or any Affiliate thereof, (d) make any
redemption, prepayment (whether mandatory or optional), defeasance, repurchase or any other payment
in respect of any Debt that is subordinated to the Obligations, or (e) set aside funds for any of
the foregoing. Notwithstanding the foregoing, (i) any Subsidiary of the Borrower may pay dividends
or make other distributions to Borrower or to a Wholly-Owned Domestic Subsidiary of Borrower; (ii)
any Loan Party may make distributions to Parent that are used by Parent to pay federal, state and
local income taxes then due and owing in respect of income from such Loan Party or any Subsidiary
of such Loan Party, franchise taxes and other similar licensing expenses incurred in the ordinary
course of business; provided that each Loan Party’s aggregate contribution to taxes as a result of
the filing of a consolidated or combined return by Parent shall not be greater, nor the aggregate
receipt of tax benefits less, than they would have been had such Loan Party not filed a
consolidated or combined return with Parent, in each case, so long as no Default or Event of
Default is continuing or would arise as a consequence thereof and (iii) Apollo Leasing, Inc. may
pay semi-annual dividends with respect to shares of its Series A Preferred Stock (non-voting) that
are outstanding on the date hereof and at a rate of not more

39

 

than $0.021852 per share; provided, that no Event of Default is continuing or would occur
as a result thereof and so long as the Borrower as of the last day of the Computation Period for
which financial statements pursuant to Section 6.1 have heen delivered most recently on or
prior to the date of such payment shall be, on a pro forma basis (as though such dividend was paid
on the first day of such Computation Period) in compliance with the financial covenants set forth
in Section7.14).

          7.5. Mergers; Consolidations; Asset Sales.

          (a) Not, and not suffer or permit any other Loan Party Subsidiary to, be a party to any
merger or consolidation, except for any such merger or consolidation of any Subsidiary of Borrower
into Borrower (so long as the Borrower survives such merger) or any Wholly-Owned Domestic
Subsidiary of Borrower, as applicable (so long such Wholly-Owned Domestic Subsidiary survives such
merger).

          (b) Not, and not suffer or permit any other Loan Party Subsidiary to, sell, transfer, dispose
of, convey or lease any of its assets or equity interests, or sell or assign with or without
recourse any receivables, except for (i) sales of inventory or used, worn-out or surplus equipment,
all in the ordinary course of business, and (ii) sales and dispositions of assets (excluding any
equity interests of Borrower or any Subsidiary of Borrower) for at least fair market value (as
determined by the Board of Directors of Borrower) so long as at least 75% of the purchase price
therefor is in cash and the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed $500,000.

          7.6. Modification of Organizational Documents.

     Not, and not suffer or permit the charter, limited liability agreement, partnership
agreement, by-laws or other organizational documents of, Parent, Borrower or any other Loan Party
to be amended or modified in any way which could reasonably be expected to materially adversely
affect the interests of Agent or any Lender.

          7.7. Use of Proceeds.

     Use the proceeds of the Loan solely to satisfy the Prior Debt, for deposit into the Interest
Reserve Account, to finance its working capital needs, to finance investments in Subsidiaries of
Parent that are permitted by Section 7.11 and to pay any financing fees and expenses
associated herewith, and not use or permit any proceeds of the Loan to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or
carrying” any Margin Stock.

          7.8. Transactions with Affiliates.

     Not, and not suffer or permit any other Loan Party Subsidiary to, enter into any transaction
with any Affiliate of the Borrower or of any such Subsidiary, except:

          (a) as expressly permitted by this Agreement; or

40

 

          (b) in the ordinary course of business and pursuant to the reasonable requirements of the
business of such Loan Party or such Subsidiary provided that, in the case of this clause (b), upon
fair and reasonable terms no less favorable to such Loan Party or such Subsidiary than would be
obtained in a comparable arm’s length transaction with a Person not an Affiliate of the Borrower or
such Subsidiary and which are disclosed in writing to the Agent.

          7.9. Inconsistent Agreements.

     Not, and not suffer or permit any other Loan Party (including Parent) to, enter into any
agreement containing any provision which would (a) be violated or breached by any borrowing by
Borrower hereunder or by the performance by Borrower or any other Loan Party (including Parent) of
any of its Obligations hereunder or under any other Loan Document, (b) prohibit Borrower or any
other Loan Party (including Parent) from granting to Agent and Lenders a Lien on any of its assets
that constitute Collateral or (c) other than pursuant to any agreement in effect on the Closing
Date, or pursuant to the Senior Debt Documents, create or permit to exist or become effective any
encumbrance or restriction on the ability of any other Loan Party Subsidiary to (i) pay dividends
or make other distributions to Borrower or any other Loan Party Subsidiary, or pay any Debt owed
to Borrower or any other Loan Party Subsidiary, (ii) make loans or advances to Borrower or any
other Loan Party Subsidiary or (iii) transfer any of its assets or properties to Borrower or any
other Loan Party Subsidiary.

          7.10. Business Activities.

     Not, and not suffer or permit any other Loan Party Subsidiary to, engage in any line of
business other than the businesses engaged in on the Closing Date and businesses reasonably related
thereto.

          7.11. Investments.

     Not, and not suffer or permit any other Loan Party Subsidiary to, make or permit to exist any
Investment in any other Person, except the following:

          (a) contributions by Borrower to the common equity of any Wholly-Owned Domestic Subsidiary of
Borrower in existence on the Closing Date, or by any Subsidiary that is a Loan Party to the
capital of any other Wholly-Owned Domestic Subsidiary of Borrower in existence on the Closing
Date, so long as the recipient of any such common equity contribution is the Borrower or at such
time is a guarantor of the Obligations and such guaranty or the Obligations is secured by a pledge
of all of its equity interests and substantially all of its real and personal property, in each
case in accordance with Section 6.8;

          (b) Investments constituting Debt permitted by Section 7.1(c);

          (c) Contingent Obligations constituting Debt permitted by Section 7.1 or Liens
permitted by Section 7.2;

          (d) Cash Equivalent Investments;

41

 

          (e) loans and advances to employees in the ordinary course of business not to exceed $100,000
in aggregate principal amount at any time outstanding; and

          (f) Investments
listed on Schedule 7.11 as of the Closing Date.

          7.12. Omitted.

          7.13. Fiscal Year.

     Not, and not suffer or permit any other Loan Party Subsidiary or Parent to, change its Fiscal
Year.

          7.14. Financial Covenants.

          7.14.1. Fixed Charge Coverage Ratio.

     Not and not suffer or permit the Fixed Charge Coverage Ratio for any Computation Period to be
less than 1.3:1.0:

          7.14.2. EBITDA.

     Not and not suffer or permit EBITDA for any Computation Period to be less than the applicable
amount set forth below for such Computation Period:

	 	 	 	 	 
	 Computation	 	 
	 Period Ending	 	EBITDA
	June 30, 2007

	 	$	1,048,292	 
	September 30,2007

	 	$	1,522,525	 
	December 31, 2007

	 	$	1,517,994	 
	March 31,2008

	 	$	1,613,472	 
	June 30,2008

	 	$	1,613,472	 
	September 30,2008

	 	$	1,613,472	 
	December 31, 2008

	 	$	1,613,472	 
	March 31, 2009

	 	$	1,600,941	 
	June 30,2009

	 	$	1,600,941	 
	September 30,2009

	 	$	1,600,941	 
	December 31, 2009

	 	$	1,600,941	 

          7.15. Deposit Accounts and Securities Accounts.

     Not, and not suffer or permit any other Domestic Loan Party Subsidiary to, maintain or
establish any deposit account or securities account other than the deposit accounts and securities
accounts set forth on Schedule 7.15 without prior written notice to Agent and unless Agent,
Borrower or such other Loan Party and the bank or securities intermediary at which such deposit
account or securities account, as applicable, is to be opened or maintained enter into a Control
Agreement regarding such deposit account or securities account, as applicable, on terms
satisfactory to Agent.

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          7.16. Sale-Leasebacks. Not and not suffer or permit any other Loan Party Subsidiary
to, engage in a sale leaseback, synthetic lease or similar transaction involving any of its assets.

          7.17. Hazardous Substances. Not, and not suffer or permit any other Loan Party
Subsidiary or Parent to, cause or suffer to exist any release of any Hazardous Substances at, to or
from any real property owned, leased, subleased or otherwise operated or occupied by any Loan Party
Subsidiary or Parent that would violate any Environmental Law, form the basis for any Environmental
Claims or otherwise adversely affect the value or marketability of any real property (whether or
not owned by any Loan Party Subsidiary or Parent), other than such violations, Environmental Claims
and effects that would not, in the aggregate, be reasonably be expected to have a Material Adverse
Effect. Notwithstanding the foregoing, under no circumstances will any Domestic Loan Party
Subsidiary cause or suffer to exist any disposal of any Hazardous Substances at, on, under or in
any real property owned, leased, subleased, or otherwise operated or occupied by any Loan Party
Subsidiary or Parent.

Section 8. Events of Default; Remedies.

          8.1. Events of Default.

     Each of the following shall constitute an Event of Default under this Agreement:

          8.1.1. Non-Payment of Credit.

     Default, in the payment when due of the principal of the Loan shall occur; or default, and
continuance thereof for 5 days, in the payment when due of any interest, fee, or other amount
payable by any Loan Party hereunder or under any other Loan Document shall occur.

          8.1.2. Default Under Other Debt.

     (a) Any default shall occur under the terms applicable to any Debt (other than the
Obligations) of any Loan Party in an aggregate amount (for all such Debt so affected and including
undrawn committed or available amounts and amounts owing to all creditors under any combined or
syndicated credit arrangement) exceeding $1,000,000 and such default shall result in the
acceleration of the maturity of such Debt or permit the holder or holders thereof, or any trustee
or agent for such holder or holders, to cause such Debt to become due and payable (or require
Borrower or any other Loan Party to purchase or redeem such Debt or post cash collateral in
respect thereof) prior to its expressed maturity.

          8.1.3. Bankruptcy; Insolvency.

     Any Loan Party becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or any Loan Party applies for, consents to,
or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party or
any property thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for any Loan Party or for a substantial part of the property of any thereof and is not
discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or

43

 

proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of any Loan Party, and if such case or proceeding is not commenced by such
Loan Party, it is consented to or acquiesced in by such Loan Party, or remains for 60 days
undismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the
foregoing.

          8.1.4. Non-Compliance with Loan Documents.

          (a) (a) Failure by Borrower or any other Loan Party to comply with or to perform any covenant
set forth in Sections 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.5(a), 6.1.7,
6.3(b) and (c), 6.5, 6.7, and 7; or (b) failure by Borrower or any other Loan
Party to comply with or to perform any other provision of this Agreement or any other Loan
Document applicable to it (and not constituting an Event of Default under any other provision of
this Section 8) and continuance of such failure described in this clause (b) for 30 days.

          8.1.5. Representations; Warranties.

     Any representation or warranty made by any Loan Party herein or any other Loan Document is
breached or is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by any Loan Party to Agent or any
Lender in connection herewith is false or misleading in any material respect on the date as of
which the facts therein set forth are stated or certified.

          8.1.6. Pension Plans.

          (a) Institution of any steps by any Person to terminate a Pension Plan if as a result of such
termination any Loan Party or any member of the Controlled Group could be required to make a
contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan,
in excess of $250,000; (b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; or (c) there shall occur any
withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability
(without unaccrued interest) to Multiemployer Pension Plans as a result of such withdrawal
(including any outstanding withdrawal liability that Borrower or any other Loan Party or any member
of the Controlled Group have incurred on the date of such withdrawal) exceeds $250,000.

          8.1.7. Judgments.

          (a) Final judgments which exceed an aggregate of $250,000 shall be rendered against any Loan
Party and shall not have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments; or

          (b) One or more non-monetary judgments, orders or decrees shall be rendered against any one
or more of the Loan Parties or any of their respective Subsidiaries which has had or would
reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect, and there shall be any period of ten (10) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect.

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          8.1.8. Invalidity of Collateral Documents.

     Any Collateral Document shall cease to be in full force and effect; or any Loan Party or
other grantor or pledgor (or any Person by, through or on behalf of any Loan Party, grantor or
pledgor) shall contest in any manner the validity, binding nature or enforceability of any
Collateral Document.

          8.1.9. Invalidity of Intercreditor Provisions.

     Any subordination provision in any document or instrument governing Debt that is intended to
be subordinated to the Obligations or any subordination provision in any subordination agreement
that relates to any such Debt, or any subordination provision in any guaranty by any Loan Party of
any such Debt, shall cease to be in full force and effect, or any Person (including the holder of
any applicable Debt) shall contest in any manner the validity, binding nature or enforceability of
any such provision.

          8.1.10. Change of Control.

     (a) Parent shall cease to directly own and control 100% of each class of the outstanding
equity interests of Borrower, (b) Borrower shall cease to, directly or indirectly, own and
control 100% of each class of the outstanding equity interests of each Subsidiary of the Borrower,
or (c) a “Change of Control” or other similar event shall occur, as defined in, or under, the
Senior Debt Documents or any other documentation evidencing or otherwise relating to any Senior
Debt.

          8.1.11. Gas Supply and Hedge Contracts.

     Any Gas Supply and Hedge Contract shall be terminated, cancelled or modified in a manner that
is materially adverse to Arizona LNG; provided, that notwithstanding the foregoing, any
Gas Supply and Hedge Contract may be replaced by a similar agreement with terms no less favorable
to Arizona LNG.

          8.2. Remedies.

     If any Event of Default described in Section 8.1.3 shall occur, the Loan and all other
Obligations shall become immediately due and payable, all without presentment, demand, protest or
notice of any kind; and, if any other Event of Default shall occur and be continuing, Agent (upon
the written request of Required Lenders) shall declare all or any part of the Loan and other
Obligations to be due and payable, whereupon the Loan and other Obligations shall become
immediately due and payable (in whole or in part, as applicable), all without presentment, demand,
protest or notice of any kind. Agent shall promptly advise Borrower of any such declaration, but
failure to do so shall not impair the effect of such declaration. Notwithstanding the foregoing,
the effect as an Event of Default of any event described in Section 8.1.1 may only be waived by the
written concurrence of each Lender, and the effect as an Event of Default of any other event
described in this Section 8 may be waived by the written concurrence of Required Lenders. Any cash
collateral delivered hereunder shall be applied by Agent to any remaining Obligations and any
excess remaining after the Obligations shall have been Paid in Full shall be delivered to Borrower
or as a court of competent jurisdiction may elect.

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Section 9.  Agent.

          9.1.
Appointment; Authorization.

          (a) Each Lender hereby irrevocably appoints, designates and authorizes Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in
any other Loan Document, Agent shall not have any duty or responsibility except those expressly
set forth herein, nor shall Agent have or be deemed to have 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 Agent.

          9.2. Delegation of Duties.

     Agent may execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.

          9.3. Limited Liability.

     None of Agent or any of its directors, officers, employees or agents shall (a) be liable for
any action taken or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except to the extent resulting
from its own gross negligence or willful misconduct as determined by a court of competent
jurisdiction), or (b) be responsible in any manner to any Lender for any recital, statement,
representation or warranty made by any Loan Party or Affiliate of any Loan Party, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (or the
creation, perfection or priority of any Lien or security interest therein), or for any failure of
any Loan Party or any other party to any Loan Document to perform its Obligations hereunder or
thereunder. Agent shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan
Party or Affiliate of any Loan Party.

          9.4. Reliance.

     Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document 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 counsel to any Loan Party), independent accountants and other experts

46

 

selected
by Agent. 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 Required Lenders (or all Lenders if expressly required hereunder) as it deems appropriate and,
if it so requests, confirmation from Lenders of their obligation to indemnify Agent against any
and all liability and expense which may be incurred by it by reason of taking or continuing to
take any such action. Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a request or consent of
Required Lenders (or all Lenders if expressly required hereunder) and such request and any action
taken or failure to act pursuant thereto shall be binding upon each Lender.

          9.5. Notice of Default.

     Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of
Default or Default except with respect to defaults in the payment of principal, interest and fees
required to be paid to Agent for the account of Lenders, unless Agent shall have received written
notice from a Lender or Borrower referring to this Agreement, describing such Event of Default or
Default and stating that such notice is a “notice of default”. Agent will notify Lenders of its
receipt of any such notice or any such default in the payment of principal, interest and fees
required to be paid to Agent for the account of Lenders. Agent shall take such action with respect
to such Event of Default or Default as may be requested by Required Lenders in accordance with
Section 8; provided that unless and until Agent has received any such request, Agent may
(but shall not be obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default or Default as it shall deem advisable or in the best interest of Lenders.

          9.6. Credit Decision.

     Each Lender acknowledges that Agent has not made any representation or warranty to it, and
that no act by Agent hereafter taken, including any review of the affairs of Borrower and the
other Loan Parties, shall be deemed to constitute any representation or warranty by Agent to any
Lender. Each Lender represents to Agent that it has, independently and without reliance upon Agent
and based on such documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property, financial and other
condition and creditworthiness of Borrower and the other Loan Parties, and made its own decision
to enter into this Agreement and to extend credit to Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon Agent 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 investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition and creditworthiness
of the Loan Parties. Except for notices, reports and other documents expressly herein required to
be furnished to Lenders by Agent, Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects, operations,
property, financial or other condition or creditworthiness of any Loan Party which may come into
the possession of Agent.

47

 

          9.7. Indemnification.

     Whether or not the transactions contemplated hereby are consummated, each Lender shall
indemnify upon demand Agent and its directors, officers, employees and agents (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so),
based on such Lender’s Pro Rata Share, from and against any and all actions, causes of action,
suits, losses, liabilities, damages and expenses, including Legal Costs, except to the extent any
thereof result from the applicable Person’s own gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for its ratable share of any costs or out of pocket expenses
(including Legal Costs) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the
extent that Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking
in this Section 9.7 shall survive repayment of the Loan, cancellation of the Notes, any foreclosure
under, or modification, release or discharge of, any or all of the Collateral Documents,
termination of this Agreement and the resignation or replacement of Agent.

          9.8. Agent Individually.

     Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any Loan Party and any Affiliate of any
Loan Party as though Agent were not Agent hereunder and without notice to or consent of any Lender.
Each Lender acknowledges that, pursuant to such activities, Agent or its Affiliates may receive
information regarding Loan Parties or their Affiliates (including information that may be subject
to confidentiality obligations in favor of any such Loan Party or such Affiliate) and acknowledge
that Agent shall be under no obligation to provide such information to them. With respect to their
portions of the Loan (if any), Agent and its Affiliates shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though Agent were not Agent, and
the terms “Lender” and “Lenders” include Agent and its Affiliates, to the extent applicable, in
their individual capacities.

          9.9. Successor Agent.

     Agent may resign as Agent at any time upon 30 days’ prior notice to Lenders. If Agent resigns
under this Agreement, Required Lenders shall, with (so long as no Event of Default exists) the
consent of Borrower (which shall not be unreasonably withheld or delayed), appoint from among
Lenders a successor agent for Lenders. If no successor agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, on behalf after consulting with Lenders and
(so long as no Event of Default exists) Borrower, a successor agent from among Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such
successor agent, and the retiring Agent’s appointment, powers and duties as Agent shall be
terminated. After any retiring Agent’s resignation hereunder as Agent, the

48

 

provisions of this Section 9 and Sections 10.4 and 10.5 shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement. If no successor agent has accepted appointment as Agent by the date which is 30
days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as Required Lenders appoint a successor agent as provided for
above.

          9.10. Collateral Matters.

     Lenders irrevocably authorize Agent, at its option and in its discretion, (a) to release any
Lien granted to or held by Agent under any Collateral Document (i) when all Obligations have been
Paid in Full; (ii) constituting property sold or to be sold or disposed of as part of or in
connection with any sale or other disposition permitted hereunder (it being agreed and understood
that Agent may conclusively rely without further inquiry on a certificate of an officer of Borrower
as to the sale or other disposition of property being made in compliance with this Agreement); or
(iii) subject to Section 10.1, if approved, authorized or ratified in writing by Required
Lenders; or (b) to subordinate its interest in any Collateral to any holder of a Lien on such
Collateral which is permitted by clause (d)(i) or (d)(iii) of Section 7.2 (it being
understood that Agent may conclusively rely on a certificate from Borrower in determining whether
the Debt secured by any such Lien is permitted by Section 7.1(b)). Upon request by Agent at any
time, Lenders will confirm in writing Agent’s authority to release, or subordinate its interest in,
particular types or items of Collateral pursuant to this Section 9.10.

Section 10. Miscellaneous.

          10.1. Waiver; Amendments.

     No delay on the part of Agent or any Lender in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any
right, power or remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement, the Notes or any of the other Loan Documents (or any subordination and
intercreditor agreement or other subordination provisions relating to any other Debt) shall in any
event be effective unless the same shall be in writing and approved by Lenders having aggregate Pro
Rata Shares of not less than the aggregate Pro Rata Shares expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this Agreement, by Required
Lenders, and then any such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No amendment, modification,
waiver or consent shall increase any Commitment, extend the date scheduled for payment of any
principal of (except as set forth below) or interest on the Loan or any fees or other amounts
payable hereunder or under the other Loan Documents or reduce the principal amount of the Loan, the
amount or rate of interest thereon (provided, that Required Lenders may rescind an imposition of
default interest pursuant to Section 2.4.1) or any fees or other amounts payable hereunder
or under the other Loan Documents, without, in each case, the consent of each Lender directly
affected thereby. No amendment, modification, waiver or consent shall release any party from its
guaranty under the Guarantee and Collateral Agreement or all or any substantial part of the
Collateral granted under the Collateral

49

 

Documents, change the definition of Required Lenders, change any provision of this Section
10.1, change the provisions of Section 2.8.2 or reduce the aggregate Pro Rata Share
required to effect any amendment, modification, waiver or consent, without, in each case, the
consent of all Lenders. No provision of Section 9 or other provision of this Agreement affecting
Agent in its capacity as such shall be amended, modified or waived without the consent of Agent.

          10.2. Notices.

     All notices hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Annex II or at such other address as
such party may, by written notice received by the other parties, have designated as its address
for such purpose. Notices sent by facsimile transmission shall be deemed to have been given when
sent; notices sent by mail shall be deemed to have been given three Business Days after the date
when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or
overnight courier service shall be deemed to have been given when received. Borrower and Lenders
each hereby acknowledge that, from time to time, Agent may deliver information and notices to
Lenders using the internet service “Intralinks” or any similar service. Each of Borrower and each
Lender hereby agree that Agent may, in its discretion, utilize Intralinks or any similar service
for such purpose.

          10.3. Computations.

     Unless otherwise specifically provided herein, any accounting term used in this Agreement
(including in Section 7.14 or any related definition) shall have the meaning customarily
given such term in accordance with GAAP, and all financial computations (including pursuant to
Section 7.14 and the related definitions, and with respect to the character or amount of
any asset or liability or item of income or expense, or any consolidation or other accounting
computation) hereunder shall be computed in accordance with GAAP consistently applied; provided
that if Borrower notifies Agent that Borrower wishes to amend any covenant in Section 7.14
(or any related definition) to eliminate or to take into account the effect of any change after the
Closing Date in GAAP on the operation of such covenant (or if Agent notifies Borrower that Required
Lenders wish to amend Section 7.14 (or any related definition) for such purpose), then
Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant (or related definition) is amended in a manner satisfactory to Borrower
and Required Lenders. The explicit qualification of terms or computations by the phrase “in
accordance with GAAP” shall in no way be construed to limit the foregoing.

          10.4. Costs; Expenses.

     Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of Agent
(including Legal Costs) in connection with the preparation, execution, syndication, delivery and
administration (including perfection and protection of Collateral) of this Agreement, the other
Loan Documents and all other documents provided for herein or delivered or to be delivered
hereunder or in connection herewith (including any proposed or actual amendment, supplement or
waiver to any Loan Document), and all reasonable out-of-pocket costs and

50

 

expenses (including Legal Costs) incurred by Agent and each Lender after an Event of Default in
connection with the collection of the Obligations and enforcement of this Agreement, the other Loan
Documents or any such other documents; provided, however, that notwithstanding the foregoing, the
Borrower shall not be required to reimburse the Agent or Lenders for expenses incurred on or prior
to the Closing Date by the Agent and Lenders in connection with the preparation, execution and
delivery of the Loan Documents in an aggregate amount in excess of $100,000. In addition, Borrower
agrees to pay, and to save Agent and Lenders harmless from all liability for, any fees of
Borrower’s auditors in connection with any reasonable exercise by Agent and Lenders of their rights
pursuant to Section 6.2. All Obligations provided for in this Section 10.4 shall
survive repayment of the Loan, cancellation of the Notes and termination of this Agreement.

          10.5. Indemnification by Borrower.

     In consideration of the execution and delivery of this Agreement by Agent and Lenders and the
agreement to extend the Commitments provided hereunder, Borrower hereby agrees to indemnify,
exonerate and hold Agent, each Lender and each of the officers, directors, employees, Affiliates
and agents of Agent and each Lender (each a “Lender Party”) free and harmless from and
against any and all actions, causes of action, suits, losses, liabilities (including, without
limitation, strict liabilities), damages, fines, penalties and expenses, including Legal Costs
(collectively, the “Indemnified Liabilities”), incurred by Lender Parties or any of them as
a result of, or arising out of, or relating to (a) any repayment of Debt, tender offer, merger,
purchase of equity interests, purchase of assets or other similar or dissimilar transaction
financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds
of the Loan, (b) the generation, use, handling, recycling, reclamation, release, emission,
discharge, transportation, storage, treatment or disposal of any Hazardous Substance at any
property owned or leased by Borrower or any other Loan Party, (c) any violation of or liability
under any Environmental Laws or any Environmental Claim with respect to conditions at any property
owned or leased by any Loan Party or the operations conducted thereon, (d) the investigation,
cleanup or remediation of offsite locations at which any Loan Party or their respective
predecessors are alleged to have directly or indirectly released or disposed of Hazardous
Substances and any related Environmental Claims or (e) the execution, delivery, performance or
enforcement of this Agreement or any other Loan Document by any Lender Party, except to the extent
any such Indemnified Liabilities result from the applicable Lender Party’s own gross negligence or
willful misconduct as determined by a court of competent jurisdiction. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which
is permissible under applicable law. All Obligations provided for in this Section 10.5
shall survive repayment of the Loan, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of, any or all of the Collateral Documents and termination of
this Agreement.

          10.6. Marshaling; Payments Set Aside.

     Neither Agent nor any Lender shall be under any obligation to marshal any assets in favor of
Borrower or any other Person or against or in payment of any or all of the Obligations. To the
extent that Borrower makes a payment or payments to Agent or any Lender, or Agent or

51

 

any Lender enforces its Liens or exercises its rights of set-off, and such payment or payments or
the proceeds of such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Agent or any Lender in its discretion) to be repaid to a trustee,
receiver or any other party in connection with any bankruptcy, insolvency or similar proceeding, or
otherwise, then (a) to the extent of such recovery, the obligation hereunder or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or setoff had not occurred and (b) each Lender
severally agrees to pay to Agent upon demand its ratable share of the total amount so recovered
from or repaid by Agent to the extent paid to such Lender.

          10.7. Nonliability of Lenders.

     The relationship between Borrower on the one hand and Lenders and Agent on the other hand
shall be solely that of borrower and lender. Neither Agent nor any Lender shall have any fiduciary
responsibility to Borrower. Neither Agent nor any Lender undertakes any responsibility to Borrower
to review or inform Borrower of any matter in connection with any phase of Borrower’s business or
operations. Execution of this Agreement by Borrower constitutes a full, complete and irrevocable
release of any and all claims which Borrower may have at law or in equity in respect of all prior
discussions and understandings, oral or written, relating to the subject matter of this Agreement
and the other Loan Documents. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agrees not to sue for, any special, indirect,
punitive or consequential damages or liabilities.

          10.8. Assignments; Participations.

          10.8.1. Assignments.

          (a) Any Lender may at any time assign to one or more Persons (any such Person, an
“Assignee”) all or any portion of such Lender’s share of the Loan, with the prior written
consent of Agent and, so long as no Event of Default exists, Borrower (which consents shall not be
unreasonably withheld or delayed and shall not be required for an assignment by a Lender to a
Lender or an Affiliate of a Lender or an Approved Fund of a Lender). Except as Agent may otherwise
agree, any such assignment (other than any assignment by a Lender to a Lender or an Affiliate or
Approved Fund of a Lender) shall be in a minimum aggregate amount equal to $2,500,000 or, if less,
the entire principal amount of the Loan being assigned. Borrower and Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the interests so assigned
to an Assignee until Agent shall have received and accepted an effective Assignment Agreement
executed, delivered and fully completed by the applicable parties thereto and a processing fee of
$3,500 to be paid by the Lender to whom such interest is assigned; provided, that no such fee
shall be payable in connection with any assignment by a Lender to a Lender or an Affiliate or
Approved Fund of a Lender. Any attempted assignment not made in accordance with this Section
10.8.1 shall be treated as the sale of a participation under Section 10.8.2. Borrower
shall be deemed to have granted its consent to any assignment requiring its consent hereunder
unless Borrower has expressly objected to such assignment within three Business Days after notice
thereof.

52

 

          (b) From and after the date on which the conditions described above have been met, (i) such
Assignee shall be deemed automatically to have become a party hereto and, to the extent that
rights and obligations hereunder have been assigned to such Assignee pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and (ii) the assigning
Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, shall be released from its rights (other than its indemnification
rights) and obligations hereunder. Upon the request of the Assignee (and, as applicable, the
assigning Lender) pursuant to an effective Assignment Agreement, Borrower shall execute and
deliver to Agent for delivery to the Assignee (and, as applicable, the assigning Lender) a Note in
the principal amount of the Assignee’s Pro Rata Share of the Loan. Each such Note shall be dated
the effective date of such assignment. Upon receipt by the assigning Lender of such Note, the
assigning Lender shall return to Borrower any prior Note held by it.

          (c) Agent, acting solely for this purpose as an agent of Borrower, shall maintain at one of
its offices in the United States a copy of each Assignment Agreement delivered to it and a register
for the recordation of the names and addresses of each Lender, and principal amount of the Loan
owing to, such Lender pursuant to the terms hereof. The entries in such register shall be
conclusive, and Borrower, Agent and Lenders may treat each Person whose name is recorded therein
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for inspection by Borrower
and any Lender, at any reasonable time upon reasonable prior notice to Agent.

          (d) Notwithstanding the foregoing provisions of this Section 10.8.1 or any other
provision of this Agreement, any Lender may at any time assign all or any portion of its Pro Rata
Share of the Loan and its Note (i) as collateral security to a Federal Reserve Bank or, as
applicable, to such Lender’s trustee for the benefit of its investors (but no such assignment
shall release any Lender from any of its obligations hereunder) and (ii) to (w) an Affiliate of
such Lender which is at least 50% owned (directly or indirectly) by such Lender or by its direct
or indirect parent company, (x) its direct or indirect parent company, (y) to one or more other
Lenders or (z) to a Approved Fund.

          10.8.2. Participations.

     Any Lender may at any time with, so long as no Event of Default is continuing and such Lender
intends to sell more than 50% of its Pro Rata Share (as of such date) of the Loan, Commitments or
other interests hereunder, the consent of the Borrower sell to one or more Persons participating
interests in its Pro Rata Share of the Loan, Commitments or other interests hereunder (any such
Person, a “Participant”). In the event of a sale by a Lender of a participating interest
to a Participant, (a) such Lender’s obligations hereunder shall remain unchanged for all purposes,
(b) Borrower and Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations hereunder and (c) all amounts payable by Borrower shall
be determined as if such Lender had not sold such participation and shall be paid directly to such
Lender. Borrower agrees that if amounts outstanding under this Agreement are due and payable (as a
result of acceleration or otherwise), each Participant shall be deemed to have the right of
set-off 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

53

 

it as a Lender under this Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share with each
Participant, as provided in Section 2.8.5. Borrower also agrees that each Participant
shall be entitled to the benefits of Section 3 and Section 10.5 as if it were a
Lender.

          10.9. Confidentiality.

     Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts
Agent or such Lender applies to maintain the confidentiality of its own confidential information)
to maintain as confidential all information provided to them by any Loan Party and designated as
confidential, except that Agent and each Lender may disclose such information (a) to Persons
employed or engaged by Agent or such Lender or any of their Affiliates (including collateral
managers of Lenders) in evaluating, approving, structuring or administering the Loan and the
Commitments; (b) to any assignee or participant or potential assignee or participant that has
agreed to comply with the covenant contained in this Section 10.9 (and any such assignee or
participant or potential assignee or participant may disclose such information to Persons employed
or engaged by them as described in clause (a) above); (c) as required or requested by any federal
or state regulatory authority or examiner, or any insurance industry association, or as reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent’s or such Lender’s counsel, is
required by law; (e) in connection with the exercise of any right or remedy under the Loan
Documents or in connection with any litigation to which Agent or such Lender is a party; (f) to any
nationally recognized rating agency or investor of a Lender that requires access to information
about a Lender’s investment portfolio in connection with ratings issued or investment decisions
with respect to such Lender; (g) that ceases to be confidential through no fault of Agent or any
Lender; (h) to a Person that is an investor or prospective investor in a Securitization that agrees
that its access to information regarding Borrower and the Loan and Commitments is solely for
purposes of evaluating an investment in such Securitization and who agrees to treat such
information as confidential; (i) to a Person that is a trustee, collateral manager, servicer,
noteholder or secured party in a Securitization in connection with the administration, servicing
and reporting on the assets serving as collateral for such Securitization; or (j) to a Person that
is an investor or prospective investor in Fourth Third or any of its Affiliates. For purposes of
this Section, “Securitization” means a public or private offering by a Lender or any of its
Affiliates or their respective successors and assigns, of securities which represent an interest
in, or which are collateralized, in whole or in part, by the Loan or the Commitments.
Notwithstanding the foregoing, Borrower consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions contemplated by
this Agreement, and Agent reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

          10.10. Captions.

     Captions used in this Agreement are for convenience only and shall not affect the
construction of this Agreement.

54

 

          10.11. Nature of Remedies.

     All Obligations of Borrower and rights of Agent and Lenders expressed herein or in any other
Loan Document shall be in addition to and not in limitation of those provided by applicable law. No
failure to exercise and no delay in exercising, on the part of Agent or any Lender, any right,
remedy, power or privilege hereunder, 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.

          10.12. Counterparts.

     This Agreement may be executed in any number of counterparts and by the different parties
hereto on separate counterparts and each such counterpart shall be
deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement. Receipt by
telecopy of any executed signature page to this Agreement or any other Loan Document shall
constitute effective delivery of such signature page.

          10.13. Severability.

     The illegality or unenforceability of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

          10.14. Entire Agreement.

     This Agreement, together with the other Loan Documents, embodies the entire agreement and
understanding among the parties hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject matter hereof and
thereof (except as relates to the fees described in Section 2.5.1) and any prior
arrangements made with respect to the payment by Borrower of (or any indemnification for) any
fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of Agent or
Lenders. This Agreement supersedes and replaces the Credit Agreement, dated as of the same date
and delivered as of February 28, 2007, and is effective as of February 28, 2007. Upon execution
and delivery of this Agreement by the Borrower, the Loan Parties, the Lender and the Agent, Agent
shall release the Durant Deposit to the Borrower.

          10.15. Successors; Assigns.

     This Agreement shall be binding upon Borrower, Lenders and Agent and their respective
successors and assigns, and shall inure to the benefit of Borrower, Lenders and Agent and the
successors and assigns of Lenders and Agent. No other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Borrower may not assign or transfer any of its
rights or Obligations under this Agreement without the prior written consent of Agent and each
Lender.

          10.16. Governing Law.

55

 

     THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

          10.17. Forum Selection; Consent to Jurisdiction.

     ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORKAND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH LOAN PARTY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          10.18. Waiver of Jury Trial.

     EACH LOAN PARTY, AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER
LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[signature pages follow]

56

 

     The parties hereto have caused this Agreement to be duly executed and delivered by their duly
authorized officers as of the date first set forth above.

	 	 	 	 	 
	EARTH BIOFUELS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis McLaughlin	 	 
	Name:

	 	 

Dennis McLaughlin
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Earth Biofuels]

 

 

	 	 	 	 	 
	EARTH LNG, INC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis G. McLaughlin, III	 	 
	Name:

	 	 

Dennis G. McLaughlin, III
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Earth LNG]

 

 

	 	 	 	 	 
	APPLIED

	 	LNG TECHNOLOGIES USA, L.L.C.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis G. McLaughlin, III	 	 
	Name:

	 	 

Dennis G. McLaughlin, III
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Applied LNG]

 

 

	 	 	 	 	 
	FLEET STAR, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis McLaughlin	 	 
	Name:

	 	 

Dennis McLaughlin
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Fleet Star]

 

 

	 	 	 	 	 
	APOLLO LEASING, ING.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis G. McLaughlin, III	 	 
	Name:

	 	 

Dennis G. McLaughlin, III
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Apollo Leasing]

 

 

	 	 	 	 	 
	ARIZONA LNG, L.L.C.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Dennis G. McLaughlin, IV	 	 
	Name:

	 	 

Dennis G. McLaughlin, IV
	 	 
	Title:

	 	CEO	 	 

[Earth
LNG Credit Agreement - Arizona]

 

 

	 	 	 	 	 	 	 
	 	 	FOURTH THIRD LLC,

as Agent and a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ [ILLEGIBLE]	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 
	 

	 	 	 	 	 	 

[Earth
LNG Credit Agreement - Fourth Third LLC]

 

 

ANNEX I

Commitments and Pro Rata Shares

	 	 	 	 	 	 	 	 	 
	Lender	 	Loan Commitment	 	 Pro Rata Share
	Fourth Third LLC

	 	$	15,000,000	 	 	 	100	%

I-1

 

Annex II

Addresses

Loan Parties:

Address for Notices:

3100 Knox Street, Suite 403

Dallas, Texas 75205

Attention:       Darren L. Miles

Telephone:      (214) 634-6291

Telecopy:       (214) 520-0507

FOURTH THIRD LLC,

as Agent and a Lender

Address for Notices:

Fourth Third Capital LLC

375 Park Avenue

Suite 3304

New York, New York 10152 

Attention: Brian J. Cavanaugh

Chief Financial Officer

Telephone:      (212)759-0777 

Telecopier:      (212)759-0091

copies to
 

King & Spalding LLP

1185 Avenue of the Americas

New York, New York 10036

Attention: Robert S. Finley 

Telephone:       (212) 556-2142

Telecopier:       (212) 556-2222
 

Address for Payments:

	 	 	 
	Bank: 

ABA: 

FFC: 

A/C:

	 	First Republic Bank, New York Branch 79

321-0816-69

Fourth Third LLC

979-0007-9652

II-1

 

	 	 	 
	Address:

	 	1230 Avenue of the Americas
	 

	 	New York, New York 10020

II-2

 

Exhibit A

Form of Assignment Agreement

     This Assignment Agreement (this “Assignment Agreement”) is entered into as of
                     by and between the Assignor named on the signature page hereto (“Assignor”) and
the Assignee named on the signature page hereto (“Assignee”), Reference is made to the
Credit Agreement dated as of February  , 2007 (as amended, supplemented, restated or otherwise
modified from time to time, the “Credit Agreement”) among APOLLO LNG, INC., a Texas
corporation d/b/a EARTH LNG, INC.(“Borrower”), the financial institutions party thereto
from time to time, as Lenders, and FOURTH THIRD LLC, as Agent. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the Credit Agreement.

Assignor and Assignee agree as follows:

1. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from
Assignor the interests set forth on the schedule attached hereto, in and to Assignor’s rights and
obligations under the Credit Agreement and the other Loan Documents as of the Effective Date (as
defined below). Such purchase and sale is made without recourse, representation or warranty except
as expressly set forth herein.

2. Assignor (i) represents that as of the Effective Date, that it is the legal and beneficial
owner of the interests assigned hereunder free and clear of any adverse claim, (ii) makes no other
representation or warranty and assumes no responsibility with respect to any statement, warranties
or representations made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any Loan
Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any other Person or the performance or observance by any Loan Party of its
Obligations under the Credit Agreement or the Loan Documents or any other instrument or document
furnished pursuant thereto.

3. Assignee (i) represents and warrants that it is legally authorized to enter into this
Assignment Agreement; (ii) confirms that it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant thereto and such other
documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (iii) agrees that it will, independently and
without reliance upon Agent, Assignor 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 decisions in
taking or not taking action under the Credit Agreement; (iv) appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers under the Credit Agreement as are
delegated to Agent by the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all obligations which by
the terms of the Credit Agreement are required to be performed by it as a Lender; (vi) represents
that on the date of this Assignment Agreement it is not presently aware of any facts that would
cause it to make a claim under the Credit Agreement; and (vii) if organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the Internal

A-1

 

Revenue Service of the United States, which have been duly executed, certifying as to Assignee’s
exemption from United States withholding taxes with respect to all payments to be made to Assignee
under the Agreement or such other documents as are necessary to indicate that all such payments are
subject to such tax at a rate reduced by an applicable tax treaty.

4. The effective date for this Assignment Agreement shall be as set forth on the schedule attached
hereto (the “Effective Date”). Following the execution of this Assignment Agreement, it
will be delivered to Agent for acceptance and recording by Agent pursuant to the Credit Agreement.

5. Upon such acceptance and recording, from and after the Effective Date, (i) Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment Agreement, have the
rights and obligations of a Lender thereunder and (ii) Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights (other than indemnification rights) and be
released from its obligations under the Credit Agreement.

6. Upon such acceptance and recording, from and after the Effective Date, Agent shall make all
payments in respect of the interest assigned hereby (including payments of principal, interest,
fees and other amounts) to Assignee. Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to the Effective Date with respect to the making of this assignment
directly between themselves.

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

8. This Assignment may be executed in any number of counterparts and by the different parties
hereto on separate counterparts and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Assignment. Receipt by
telecopy of any executed signature page to this Assignment shall constitute effective delivery of
such signature page.

A-2

 

The parties hereto have caused this Agreement to be executed and delivered as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	ASSIGNOR:
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE:
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[Consented to:
	 
	 	 	 	 	 	 
	 	 	FOURTH THIRD LLC,

as Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	]
	 

	 	 	 	 	 
	 

	[	 	 	 	 	 
	 	 	   
	 
	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	]
	 

	 	 	 	 	 	 

A-3

 

Schedule to Assignment Agreement

	 	 	 	 	 
	Assignor:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Assignee:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Effective Date:
	 	 	 	 
	 

	 	 	 	 

Credit Agreement dated as of February  , 2007 among APOLLO LNG, INC. d/b/a

EARTH LNG, INC., as Borrower, Earth Biofuels, Inc., the financial

institutions party thereto from time to time, as Lenders, and FOURTH THIRD

LLC, as Agent

Interests Assigned:

	 	 	 	 	 
	Loan	 	Loan
	Assignor Amounts

	 	$	 	 
	Amounts Assigned

	 	$	 	 
	Assignee Amounts (post-assignment)

	 	$	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Assignee Information: 

Address for Notices:	 	 	 	Address for Payments:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Bank:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	ABA  #:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:	 	 	 	Account #:	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:  	 	 	 	Reference:
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

A-4

 

Exhibit B

Form of Compliance Certificate

     Please refer to the Credit Agreement dated as of February  , 2007 (as amended, supplemented,
restated or otherwise modified from time to time, the “Credit Agreement”) among the
undersigned (“Borrower”), the financial institutions party thereto and FOURTH THIRD LLC, as
Agent. This certificate (this “Certificate”), together with supporting calculations attached
hereto, is delivered to Agent and Lenders pursuant to the terms of the Credit Agreement. Terms used
but not otherwise defined herein are used herein as defined in the Credit Agreement.

     [Enclosed herewith is a copy of the [annual audited/monthly] report of Borrower as
at                      (the “Computation Date”), which report fairly presents in all material
respects the financial condition and results of operations [(subject to the absence of footnotes
and to normal year-end adjustments)] of Borrower as of the Computation Date and has been prepared
in accordance with GAAP consistently applied.]

     Borrower hereby certifies and warrants that the computations set forth on the schedule
attached hereto correspond to the ratios and/or financial restrictions contained in the Credit
Agreement and such computations are true and correct as at the [Computation Date].

     Borrower
further certifies that no Event of Default or Default has occurred
and is continuing.

     Borrower has caused this Certificate to be executed and delivered by its officer thereunto
duly authorized on                     .

	 	 	 	 	 
	 	APOLLO LNG, INC. d/b/a EARTH LNG, INC.

 	 
	 	By:  	 	 
	 	Title:	 	 
	 	 	 	 

B-1 

 

	 	 	 	 	 

Schedule to Compliance Certificate

Dated as of                                         

	 	 	 	 	 	 	 	 	 
	 	A.	 	 	Section 7.14.1
– Minimum Fixed Charge Coverage Ratio
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	1.	 	 	Consolidated Net Income
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	2.	 	 	Plus: Interest Expense
	 	$	                    	 
	 	 	 	 	income tax expense
	 	$	                    	 
	 	 	 	 	depreciation
	 	$	                    	 
	 	 	 	 	amortization
	 	$	                    	 
	 	 	 	 	management fees
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	3.	 	 	Total (EBITDA)
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	4.	 	 	Income taxes paid/tax distributions
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	5.	 	 	Capital Expenditures
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	6.	 	 	Sum of (4) and (5)
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	7.	 	 	Remainder of (3) minus (6)
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	8.	 	 	Interest Expense accrued and payable in cash
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	9.	 	 	Required payments of principal of Debt (including The Loan)
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	10.	 	 	Management Fees
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	11.	 	 	Sum of (8), (9) and (10)
	 	$	                    	 
	 	 	 	 	 
	 	 	 	 
	 	12.	 	 	Ratio of
(7) to (11)
	 	______ to 1
	 	 	 	 	 
	 	 	 	 
	 	13.	 	 	Minimum Required
	 	______ to l
	 	 	 	 	 
	 	 	 	 
	 	B.	 	 	Section 7.14.2-Minimum EBITDA
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	1.	 	 	EBITDA

	 	$	                    	 
	 	 	 	 	(from Item A(3) above)
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	2.	 	 	Minimum required
	 	$	                    	 

B-2 

 

Exhibit C

Form of Note

      

			
	$                                         
	 	New York, New York

The undersigned (“Borrower”), for value received, promises to pay to the order of
                     (“Lender”) at the principal office of FOURTH THIRD LLC (the “Agent”) in
New York City, New York the aggregate unpaid amount of the Loan made to Borrower by Lender
pursuant to the Credit Agreement referred to below, such principal amount to be payable on the
dates set forth in the Credit Agreement.

     Borrower further promises to pay interest on the unpaid principal amount of the Loan from the
date of such Loan until such Loan is Paid in Full, payable at the rate(s) and at the time(s) set
forth in the Credit Agreement. Payments of both principal and interest are to be made in lawful
money of the United States of America to the deposit account located in New York City and
identified in the Credit Agreement.

     This Note evidences indebtedness incurred under, and is subject to the terms and provisions
of, the Credit Agreement, dated as of February  , 2007 (as amended, supplemented, restated or
otherwise modified from time to time, the “Credit Agreement”; terms not otherwise defined
herein are used herein as defined in the Credit Agreement), among Borrower, Earth Biofuels, Inc.,
a Delaware corporation, the other Loan Parties named therein, the financial institutions
(including Lender) party thereto from time to time and Agent, to which Credit Agreement reference
is hereby made for a statement of the terms and provisions under which this Note may or must be
paid prior to its due date or its due date accelerated.

     This Note is made under and governed by the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

	 	 	 	 	 
	 	APOLLO LNG, INC. d/b/a EARTH LNG, INC.

 	 
	 	By:  	 	 
	 	Title:	 	 
	 	 	 	 

C-1 

 

	 	 	 	 	 

Exhibit D

Form of Warrant

See Tab ___

 

 

Exhibit E

Form of Warrant Purchase Agreement

See Tab ___

 

 

Schedule 4.1 

Prior Debt

	 	 	 	 	 
	Amount	 	 	Payee
	$	6,617,845.00	 	 	FCC, LLC d/b/a First Capital

	$	1,704,259.19	 	 	Lloyd Plyler Construction, LLC (Mechanic’s Lien — Durant property)

	$	104,889.00	 	 	Simplex Grinnell, LP (Mechanic’s Lien -Durant property)

	$	2,500,000.00	 	 	Oliver Kendall Kelley (Kelley family of companies)

 

 

Schedule 5.6

Litigation

Earth Biofuels, Inc.

Litigation Schedule

As of February 16, 2007

	 	 	 	 	 	 	 
	Type	 	Description	 	Comment	 	Date Served
	Arbitration

	 	     The Company initiated an
action against South
Louisiana Ethanol Plant
(“SLE-HPS”). The
parties are currently
negotiating a settlement.
	 	     Management expects to
recapture its
investment. SLE-HPS has
made a settlement offer.
	 	11/09/06
	 
	 	 	 	 	 	 
	Demand Letter

	 	     The Company has issued a
demand letter to Airo
Wireless Media, Inc.
regarding a Restated
Convertible Promissory
Note.
	 	     Management expects a
positive result without
litigation.
	 	11/25/06
	 
	 	 	 	 	 	 
	Granted Lien

	 	     Lloyd Plyler
Construction, LLC has
filed a Mechanics
Lien against the Durant
property in the amount of
$1.7 million.
	 	     Loan Closing Use of
Funds -Durant Biodiesel
Plant Construction.
	 	12/18/06
	 
	 	 	 	 	 	 
	Dispute over
pricing agreement
to repurchase

	 	     Elbow River Marketing, LP
Re: Settlement agreement
with unpaid balance of
$244,000
	 	     Past Due A/P
	 	12/29/06
	 
	 	 	 	 	 	 
	Contract Dispute

	 	     Cranshire Capital, L.P.
invested $1.5 million in
the form of convertible
debentures in Earth
Biofuels, Inc. The
Company is currently in
negotiations.
	 	     Management has been and
currently is in
negotiations.
	 	01/18/07

All current and pending litigation is being reviewed by General Counsel and company attorneys.

The company considers these suits to be part of the common course of business.

 

 

Schedule 5.8

Capitalization

Earth Biofuels, Inc.

	 	 	 	 	 	 	 	 	 
	 	 	Number of Shares	 	Percent of
	Name of Beneficial Owner	 	Beneficially Owned(1)	 	Outstanding Shares(i)
	Apollo Resources International, Inc.
	 	 	139,118,793	 	 	 	55.50	%
	Dennis G. Mc Laughlin, III
	 	 	2,857,313	 	 	 	1.14	%
	Tommy Johnson
	 	 	1,507,659	 	 	 	.60	%
	Morgan Freeman
	 	 	6,000,000	 	 	 	2.39	%
	William O. Luckett, Jr.
	 	 	3,004,342	 	 	 	1.20	%
	Willie Nelson
	 	 	*7,075,000	 	 	 	2.82	%
	Brace Blackwell
	 	 	1,500,000	 	 	 	60	%
	Darren Miles
	 	 	500,000	 	 	 	.20	%
	Kit Chambers
	 	 	500,000	 	 	 	.20	%
	Herbert Meyer
	 	 	1,000,000	 	 	 	.40	%
	Robert Dubek
	 	 	250,000	 	 	 	.10	%
	Officers and directors as a group (10 persons)
	 	 	24,194,314	 	 	 	9.65	%

For the purposes of this table, all percentages are calculated based upon a total of
250,661,502 shares out standing as of February 21, 2007.

Shares issuable upon conversion of convertible debt and exercise of outstanding warrants:
88,068,525.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	State of	 	 	 	 
	 	 	 	 	Incorporation or	 	 	 	 
	#	 	Name	 	Organization	 	Classification	 	Ownership
	2

	 	Earth LNG, Inc.*
	 	Texas
	 	Corporation
	 	100% Earth Biofuels, Inc.
	 
	 	 	 	 	 	 	 	 
	3

	 	Durant Biofuels, LLC
	 	Oklahoma
	 	Limited Liability
Company
	 	100% Earth Biofuels, Inc.
	 
	 	 	 	 	 	 	 	 
	4

	 	Applied LNG
Technologies USA,
LLC*
	 	Delaware
	 	Limited Liability
Company
	 	100% Earth LNG, Inc.
	 
	 	 	 	 	 	 	 	 
	5

	 	Arizona LNG, LLC*
	 	Nevada
	 	Limited Liability
Company
	 	100% Earth LNG, Inc.
	 
	 	 	 	 	 	 	 	 
	6

	 	Fleet Star, Inc.*
	 	Texas
	 	Corporation
	 	100% Applied LNG
Technologies USA, LLC
	 
	 	 	 	 	 	 	 	 
	7

	 	Apollo Leasing,
Inc. fka
Alternative Dual
Fuels, Inc.*
	 	Texas
	 	Corporation
	 	100% Alternative Fuels
Technologies, LLC

 

* Certificates are in the possession of FCC, LLC dba First Capital to be released at
Closing.

 

 

	 	 	 
	Entity	 	Offer Rights
	 
	K Street

	 	The Company shall deliver a written notice of any proposed or intended issuance or sale or
exchange of the securities being offered in a Subsequent Placement, which Offer Notice shall (w)
identify and describe the Offered Securities, (x) describe the price and other terms upon which
they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (y) identify the persons or entities (if known) to which or with
which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue
and sell to or exchange with such Buyers a pro rata portion of 25% of the Offered Securities,
allocated among such Buyers (a) based on such Buyer’s pro rata portion of the aggregate shares
of Common Stock purchased hereunder, and (b) with respect to each Buyer that elects to
purchase its Basic Amount, any additional portion of the Offered Securities attributable to the
Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the
other Buyers subscribe for less than their Basic Amounts.

 

 

Schedule 5.12

Taxes

Tax
Returns under audit or examination:

None.

 

 

Schedule 5.15 

Insurance

See attached insurance for Applied LNG Technologies USA, LLC

	 	 	 	 	 	 	 
	Coverage	 	Insurer	 	Policy #	 	Deductible
	Property and
Commercial Inland
Marine Coverage

	 	Liberty Mutual
	 	 3D438496001
	 	See policy
	 
	 	 	 	 	 	 
	Commercial Liability

	 	First Mercury Insurance
Company
	 	FMTX001795
	 	See policy
	 
	 	 	 	 	 	 
	Excess Liability

	 	Axis Specialty Insurance
Company
	 	EAU725827/01/2006
	 	See policy
	 
	 	 	 	 	 	 
	Excess Liability &
Lead Umbrella

	 	Lexington Insurance Company
	 	 668126
	 	See policy

Durant Biofuels

	 	 	 	 	 	 	 
	Coverage	 	Insurer	 	Policy #	 	Deductible
	Crime and Fidelity

	 	Nationwide
Agribusiness
Insurance Company
	 	CPP123522A
	 	See policy
	 
	 	 	 	 	 	 
	Business Auto
Coverage

	 	Nationwide
Agribusiness
Insurance Company
	 	CA123522A
	 	See policy
	 
	 	 	 	 	 	 
	Commercial Output

	 	Nationwide
Agribusiness
Insurance Company
	 	COP123522A
	 	See policy
	 
	 	 	 	 	 	 
	Workers’ Comp.

	 	PMC Insurance Group
	 	WC00531165300
	 	See policy

 

 

Schedule 5.18

Labor Matters

None.

 

 

Schedule 7.1

Existing Debt

Guaranty Agreement of Durant Biofuels, LLC in favor of Jack B. Kelley, Inc. and Golden

Spread Energy, Inc., dated as of February 28, 2007, pursuant to which Durant Biofuels, LLC

guarantees the obligations of Applied LNG Technologies, L.L.C. and Apollo Resources

International, Inc. to Jack B. Kelley, Inc. and Golden Spread Energy, Inc.

 

 

Schedule 7.2

Existing Liens

Banc of America holds a lien on certain equipment pursuant to an equipment lease with Jack B
Kelley, Inc. as Lessor.

Oliver Kendall Kelley, Jack B. Kelley, Inc. and Golden Spread Energy, Inc. have filed UCC
financing statements covering assets located at the Durant, Oklahoma facility. These parties
have agreed to subordinate their liens to Lender.

Lloyd Plyler Construction, LLC holds a mechanic’s lien on the Durant property.

Simplex Grinnell, LP holds a mechanic’s lien on the Durant property.

 

 

Schedule 7.11

Existing Investments

	 	 	 	 	 
	Investments	 	Total	 
	Vertex Processing
	 	 	4,870,000	 
	NC Ethanol Plant
	 	 	3,150,000	 
	Blue Wireless & Data, Inc.
	 	 	100,000	 
	New Orleans
	 	 	27,075,872	 
	Moses Lake
	 	 	296,125	 
	Biodiesel Investment
	 	 	5,000,000	 
	LNG
	 	 	38,193,704	 
	Trucker’s Corner
	 	 	3,152,521	 
	 
	 	 	 
	Grand total
	 	 	81,938,223	 
	 
	 	 	 

 

 

Execution Copy

GUARANTEE AND COLLATERAL AGREEMENT

DATED AS OF FEBRUARY 28, 2007

BY

EARTH BIOFUELS, INC.

EARTH LNG, INC.

APPLIED LNG TECHNOLOGIES USA, L.L.C.

FLEET STAR, INC.

APOLLO LEASING, INC.

AND

ARIZONA LNG, L.L.C.

AS GRANTORS,

IN FAVOR OF

FOURTH THIRD LLC,

AS AGENT

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Section 1. Definitions
	 	 	1	 
	1.01. Definition of Terms Used Herein Generally
	 	 	1	 
	1.02. Definition of Certain Terms Used Herein
	 	 	1	 
	1.03. Definition of certain Terms Used Herein
	 	 	7	 
	Section 2.      Guarantee
	 	 	7	 
	2.01. Guarantee
	 	 	7	 
	2.02. Right of Contribution
	 	 	8	 
	2.03. Subrogation
	 	 	8	 
	2.04. Amendements, etc. with respect to the Borrower Obligations
	 	 	9	 
	2.05. Guarantee Absolute and Unconditional
	 	 	9	 
	2.06. Reinstatement
	 	 	10	 
	2.07. Payments
	 	 	10	 
	2.08. Waiver of Subrogation
	 	 	10	 
	Section 3.      Grant of Security Interest
	 	 	12	 
	Section 4.      Authorization to File Financing Statements
	 	 	13	 
	Section 5.      Relation to Other Security Documents
	 	 	14	 
	5.01. Real Estate Documents
	 	 	14	 
	5.02. Patent and Trademark Security Agreement Supplements
	 	 	14	 
	Section 6.      Representations and Warranties
	 	 	14	 
	6.01. Grantors’ Legal Status
	 	 	14	 
	6.02. Grantors’ Legal Names
	 	 	14	 
	6.03. Grantor’s Locations
	 	 	14	 
	6.04. Representations in the Credit Agreement
	 	 	14	 
	6.05. Title to Collateral
	 	 	15	 
	6.06. Nature of Collateral
	 	 	15	 
	6.07. Compliance with Laws
	 	 	15	 
	6.08. Validity of Security Interest
	 	 	15	 
	6.09. Perfection Certificate; Intellectual Property Filings
	 	 	16	 
	6.10. Investment Property
	 	 	16	 
	6.11. Receivables
	 	 	16	 
	6.12. Accounts
	 	 	17	 
	6.13.
Equipment and Inventory
	 	 	17	 

-i-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	Section 7.      Convenants
	 	 	17	 
	7.01. Grantors’ Legal Status
	 	 	17	 
	7.02. Grantor’s Names
	 	 	17	 
	7.03. Grantor’s Organizational Numbers
	 	 	17	 
	7.04. Locations
	 	 	17	 
	7.05. Covenants in Credit Agreement
	 	 	17	 
	7.06. Promissory Notes and Tangible Chattel Paper
	 	 	17	 
	7.07. Deposit Accounts
	 	 	18	 
	7.08. Investment Property
	 	 	18	 
	7.09. Collateral in the Possession of a Bailee
	 	 	20	 
	7.10. Electronic Chattel Paper and Transferable Records
	 	 	20	 
	7.11. Letter-of-Credit Rights
	 	 	21	 
	7.12. Commercial Tort Claims
	 	 	21	 
	7.13. Intellectual Property
	 	 	21	 
	7.14. Maintenance of Collateral; Compliance with Laws
	 	 	24	 
	7.15. Dispositions of Collateral
	 	 	24	 
	7.16. Maintenance of Insurance
	 	 	24	 
	7.17. Other Actions as to any and all Collateral
	 	 	24	 
	7.18. Other Actions as to any and all Collateral
	 	 	24	 
	Section 8.      Inspection an Verification
	 	 	25	 
	Section 9.      Collateral Protection Expenses; Preservation of Collateral
	 	 	25	 
	9.01. Expenses Incurred by the Agent
	 	 	25	 
	9.02. Agent’s Obligations and Duties
	 	 	26	 
	9.03. Duties as to Pledged Securities
	 	 	26	 
	Section 10.     Securities and Deposits
	 	 	27	 
	Section 11.     Notification to Account Debtors and Other Persons Obligated on Collateral
	 	 	28	 
	Section 12.      Power of Attorney
	 	 	28	 
	12.01. Appointment and Powers of Agent
	 	 	28	 
	12.02. Failure of Grantor to Perform
	 	 	30	 
	12.03. Expenses of Attorney-in-Fact
	 	 	30	 
	12.04. Ratification by Grantor
	 	 	30	 
	12.05. No Duty on Secured Party
	 	 	30	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	Section 13.      Remedies
	 	 	30	 
	13.01. Default
	 	 	30	 
	13.02. Remedies Upon Default
	 	 	30	 
	13.03. Grant of License to Use Intellectual Property
	 	 	32	 
	13.04. Waivers by Grantors
	 	 	32	 
	13.05. Application of Proceeds
	 	 	32	 
	13.06. Surplus, Deficiency
	 	 	33	 
	13.07. Information Related to the Collateral
	 	 	33	 
	13.08. Sale Exempt from Registration
	 	 	33	 
	13.09. Rights and Remedies Cumulative
	 	 	33	 
	13.10. No Direct Enforcement by Secured Parties
	 	 	34	 
	Section 14.      Standards for Exercising Remedies
	 	 	34	 
	14.01. Commercially Reasonable Manner
	 	 	34	 
	14.02. Standard of Care
	 	 	34	 
	Section 15.      Waivers by Grantor; Obligations Absolute
	 	 	35	 
	15.01. Specific Waviers
	 	 	35	 
	15.02. Obligations Absolute
	 	 	35	 
	Section 16.      Marshalling
	 	 	35	 
	Section 17.      Interest
	 	 	35	 
	Section 18.      Reinstatement
	 	 	36	 
	Section 19.      Miscellaneous
	 	 	36	 
	19.01. Notices
	 	 	36	 
	19.02. GOVERNING LAW; CONSENT TO JURISDICTION
	 	 	36	 
	19.03. WAIVER OF JURY TRIAL, ETC
	 	 	36	 
	19.04. Counterparts
	 	 	37	 
	19.05. Headings
	 	 	37	 
	19.06. No Strict Construction
	 	 	37	 
	19.07. Severability
	 	 	37	 
	19.08. Survival of Agreement
	 	 	37	 
	19.09. Fees and Expenses; Indemnification
	 	 	37	 
	19.10. Binding Effect; Several Agreement
	 	 	38	 
	19.11. Waivers; Amendment
	 	 	38	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	19.12. Set-Off
	 	 	38	 
	19.13. Integration
	 	 	39	 
	19.14. Acknowledgments
	 	 	39	 
	19.15. Additional Grantors and Guarantors
	 	 	39	 
	19.16. Releases
	 	 	39	 
	19.17. Intercompany Debt
	 	 	40	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	7.07(a) Deposit Accounts
	 	 	 	 

	 	 	 
	EXHIBITS
	 
	 	 
	A
	 	Perfection Certificate
	B
	 	Form of Copyright Security Agreement Supplement
	C
	 	Form of Patent Security Agreement Supplement
	D
	 	Form of Trademark Security Agreement Supplement
	E
	 	Form of Control Agreement (Deposit Accounts)
	F
	 	Form of Control Agreement (Uncertificated Securities)
	G
	 	Form of Control Agreement (Securities Accounts)
	H
	 	Form of Control Agreement (Commodities Contracts)
	I
	 	Form of Control Agreement (Letter-of-Credit Rights)
	 
	 	 
	ANNEXES
	 
	 	 
	1
	 	Form of Assumption Agreement

 

 

     GUARANTEE AND COLLATERAL AGREEMENT, dated as of February 28, 2007, by each of the signatories
hereto identified on the signature pages hereto as a grantor (together with any other entity that
may become a party hereto as a grantor as provided herein, each a “Grantor” and
collectively, jointly and severally, the “Grantors”) in favor of Fourth Third LLC as Agent
(in such capacity, the “Agent”) for (i) itself in its capacity as the Agent and a Lender
under the Credit Agreement (as hereinafter defined) (the “Lender”), together with the
banks and other financial institutions or entities (collectively, the “Lenders”) from time
to time parties to the Credit Agreement, dated as of February 28, 2007 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”) among Earth LNG, Inc.
(the “Borrower”), Earth Biofuels, Inc. (“Parent”), the other Loan Parties named
therein, the Lenders and the Agent and (ii) the other Secured Parties (as hereinafter defined).

W I T N
E S S E T H:

     WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make extensions of
credit to the Borrower upon the terms and conditions set forth therein;

     WHEREAS, the Borrower is a member of an affiliated group of companies that includes each
other Grantor;

     WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the making of extensions of credit
under the Credit Agreement; and

     WHEREAS, it is a condition precedent to the obligations of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall
have executed and delivered this Agreement to the Agent.

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     Section 1.
Definitions.

          1.01. Definition of Terms Used Herein Generally. Except as otherwise provided herein,
all capitalized terms used but not defined herein shall have the meanings set forth in the Credit
Agreement. Except as specifically provided herein, all terms used herein and defined in the NYUCC
shall have the same definitions herein as specified therein as of the date hereof;
provided, however, that if a term is defined in Article 9 of the NYUCC differently
than in another Article of the NYUCC, the term has the meaning specified in Article 9 of the NYUCC
as of the date hereof.

          1.02. Definition of Certain Terms Used Herein. As used herein, the following terms
shall have the following meanings:

     “After-Acquired Intellectual Property”: as defined in Section 7.13.

     “Agent”: as defined in the preamble.

 

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     “Agreement”: this Guarantee and Collateral Agreement, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.

     “Borrower”: as defined in the preamble.

     “Borrower Obligations”: the collective reference to the Obligations (as defined in the
Credit Agreement).

     “Collateral”: as defined in Section 3.

     “Copyright License”: any written agreement, now or hereafter in effect, granting any
right to any third party under any Copyright now or hereafter owned by any Grantor or that the
Grantor otherwise has the right to license, or granting any right to any Grantor under any
Copyright now or hereafter owned by any third party, and all rights of any Grantor under any such
agreement.

     “Copyright Office”: the United States Copyright Office.

     “Copyrights”: (i) all copyrights, whether or not the underlying works of authorship
have been published, and all works of authorship and other intellectual property rights therein,
all copyrights of works based on, incorporated in, derived from or relating to works covered by
such copyrights, all right, title and interest to make and exploit all derivative works based on or
adopted from works covered by such copyrights, and all copyright registrations and copyright
applications, and any renewals or extensions thereof, including, without limitation, each
registration and application identified in Schedule 7(b) to the Perfection Certificate,
(ii) the rights to print, publish and distribute any of the foregoing, (iii) the right to sue or
otherwise recover for any and all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all Copyright Licenses
entered into in connection therewith, and damages and payments for past, present or future
infringements thereof), and (v) all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.

     “Copyright Security Agreement Supplement”: a supplement to this Agreement, executed
by one or more Grantors in favor of the Secured Party, substantially in the form of Exhibit B
hereto.

     “Credit Agreement”: as defined in the preamble.

     “Disposition”: with respect to any Property, and except as otherwise provided in
Sections 7.13(a)(x) and 7.15, any sale, lease, license, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof, but not including the issuance of
capital stock or other equity interests by the Borrower; and the terms “Dispose” and
“Disposed of” shall have correlative meanings.

     “Event”: as defined in Section 9.03 hereof.

     “Event of Default”: as defined in the Credit Agreement.

     “Excluded Assets”: collectively (a) any General Intangible to the extent that (i) the
terms of the agreement between the applicable Grantor and the account debtor or other contract
party

 

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with respect to such General Intangible prohibits, restricts or requires the consent of the account
debtor to, the assignment or transfer of, or creation, attachment or perfection of a security
interest in, such General Intangible, or provides that the assignment or transfer or creation,
attachment or perfection of such security interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination or remedy and (ii) such terms are
effective under Sections 9-406, 9-407 or 9-408 of the NYUCC, (b) any property that is subject to a
Lien permitted under Section 7.2 of the Credit Agreement pursuant to documents that
prohibit the applicable Grantor from granting other liens in such property, and (c) all property or
proceeds thereof now owned or hereafter acquired by Parent, other than (i) all capital stock of the
Borrower now owned or hereafter acquired by Parent and (ii) all Proceeds and products of any and
all of the property listed in clause (i) and all collateral security and guarantees given by any
Person with respect to any of such property.

     “Excluded Foreign Subsidiary Voting Stock”: the voting capital stock or other equity
interests of any Foreign Subsidiary owned by the Borrower or a Domestic Subsidiary thereof.

     “Fully Satisfied”: with respect to the Secured Obligations, Guarantor Obligations or
Borrower Obligations, as the case may be, at any time that (a) all principal constituting Secured
Obligations, Guarantor Obligations or Borrower Obligations, as the case may be, and all interest
(including interest that shall have accrued after the commencement of a bankruptcy proceeding with
respect to the Borrower or any Guarantor at the rate provided in the Loan Documents) accrued to
such time on such principal and on all other Secured Obligations, Guarantor Obligations or
Borrower Obligations, as the case may be, shall have been paid in full in cash, (b) all fees,
expenses and other amounts (including contingent obligations, including those in respect of
indemnification provisions contained in the Loan Documents, but excluding obligations in respect
of such indemnification provisions for which no claim has been made and for which no notice of
claim has been given) unpaid as of such time which constitute Secured Obligations, Guarantor
Obligations or Borrower Obligations, as the case may be, shall have been paid in full in cash, and
(c) the Commitments shall have expired or been terminated.

     “General Intangibles”: all “general intangibles” as such term is defined in Section
9-102(42) of the NYUCC as in effect on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements, instruments and indentures and
all licenses and permits issued by Governmental Authorities in any form, and portions thereof, to
which such Grantor is a party or under which such Grantor has any right, title or interest or to
which such Grantor or any property of such Grantor is subject, as the same may from time to time
be amended, supplemented, replaced or otherwise modified, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect thereto, (iii) all rights of such Grantor to damages arising
thereunder, (iv) all rights of such Grantor to receive any tax refunds, and (v) all rights of such
Grantor to terminate and to perform, compel performance and to exercise all remedies thereunder.

     “Grantor”: as defined in the preamble.

     “Guarantor Obligations”: with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel

 

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to any Secured Party that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).

     “Guarantor Payment”: as defined in Section 2.11(a).

     “Guarantors”: the collective reference to each Grantor other than the Borrower.

     “Intellectual Property”: all intellectual and similar property of any Grantor of
every kind and nature now owned or hereafter acquired by any Grantor, including (i) all
inventions, designs, Patents, Patent Licenses, Trademarks, Trademark Licenses, Copyrights,
Copyright Licenses, Trade Secrets, designs, confidential or proprietary technical and business
information, know how, show how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and franchises, licenses
for any of the foregoing and all license rights and all additions, improvements and accessions to,
and books and records describing or used in connection therewith, (ii) all computer software and
software systems (including, without limitation, data, databases and related documentation), and
(iii) all Internet web sites and domain names.

     “Intellectual Property Security Agreement”: each of a Copyright Security Agreement
Supplement, a Patent Security Agreement Supplement and a Trademark Security Agreement Supplement.

     “Intercompany Debt”: as defined in Section 19.17.

     “Intercompany Note”: any promissory note evidencing loans made by any Grantor to any
of its Subsidiaries or any loan made by any Grantor to another Grantor.

     “Investment Property”: the collective reference to (i) all “investment property” as
such term is defined in Section 9-102(48) of the NYUCC on the date hereof including, without
limitation, all certificated securities and uncertificated securities, all security entitlements,
all securities accounts, all commodity contracts and all commodity accounts (other than any
Excluded Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Stock”), (ii)
security entitlements, in the case of any United States Treasury book-entry securities, as defined
in 31 C.F.R. section 357.2, or, in the case of any United States federal agency book-entry
securities, as defined in the corresponding United States federal regulations governing such
book-entry securities, and (iii) whether or not constituting “investment property” as so defined,
all Pledged Notes, all Pledged Stock, all Pledged Security Entitlements and all Pledged Commodity
Contracts.

     “Issuers”: the collective reference to each issuer of a Pledged Security.

     “Lease”: any lease of personal property under which any Grantor is the lessee.

     “NYUCC”: the Uniform Commercial Code as in effect in the State of New York from time
to time.

     “Parent”: as defined in the preamble.

     “Patent License”: any written agreement, now or hereafter in effect, granting to any
third party any right to make, use or sell any invention on which a Patent, now or hereafter owned
by

 

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any Grantor or that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any third party, is in existence, and all rights of any Grantor under any such
agreement.

     “Patents”: all of the following now owned or hereafter acquired by any Grantor: (a)
all letters patent of the United States or any other country, all registrations and recordings
thereof, and all pending applications for letters patent of the United States or any other
country, including registrations, recordings and applications in the PTO or in any similar office
or agency of the United States, any State or Territory thereof, or any other country, including
those identified in Schedule 7(a) to the Perfection Certificate, and (b) all reissues,
continuations, divisions,
continuations-in-part, renewals or extensions thereof and the inventions disclosed or claimed
therein, including the right to make, use and/or sell inventions disclosed or claimed therein.

     “Patent Security Agreement Supplement”: a supplement to this Agreement, executed by
one or more Grantors in favor of Secured Party, substantially in the form of Exhibit C
hereto.

     “Perfection Certificate”: shall mean a certificate substantially in the form of
Exhibit A hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by the Grantors.

     “Perfection Supplement”: shall have the meaning assigned to such term in
Section 7.17.

     “Person”: any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.

     “Pledged Commodity Contracts”: all commodity contracts listed in Section 8 of
the Perfection Certificate, and all other commodity contracts to which any Grantor is party from
time to time.

     “Pledged Debt Securities”: the debt securities listed in Section 9 of the
Perfection Certificate, together with any other certificates, options, rights or security
entitlements of any nature whatsoever in respect of the debt securities of any Person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect.

     “Pledged Notes”: all promissory notes listed in Section 9 of the Perfection
Certificate, all Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes in an aggregate principal
amount for all Grantors not to exceed $250,000 at any time outstanding issued in connection with
extensions of trade credit by any Grantor in the ordinary course of business).

     “Pledged Securities”: the collective reference to the Pledged Debt Securities, the
Pledged Notes and the Pledged Stock.

     “Pledged Security Entitlements”: all security entitlements with respect to the
financial assets listed on Section 8 of the Perfection Certificate and all other security
entitlements of any Grantor.

     “Pledged Stock”: the shares of capital stock or other equity interests listed in
Section 8 of the Perfection Certificate, together with any other shares, stock
certificates, options, rights or security entitlements of any nature whatsoever in respect of the
capital stock or other equity

 

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interests of any Person that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; provided that in no event shall more than 65% of the total outstanding
voting capital stock of any Foreign Subsidiary be required to be pledged hereunder or any capital
stock of any Foreign Subsidiary owned by a Foreign Subsidiary be required to be pledged hereunder;
provided, further, that in no event shall capital stock or other equity interests of any Subsidiary
of Parent that is not a Loan Party be required to be pledged hereunder.

     “Proceeds”: all “proceeds” as such term is defined in Section 9-102(64) of the NYUCC
in effect on the date hereof and, in any event, shall include, without limitation, all dividends
or other income from the Pledged Securities, collections thereon or distributions or payments with
respect thereto.

     “Property”: any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including capital stock or other
equity interests.

     “PTO”: the United States Patent and Trademark Office.

     “Receivable”: any right to payment on account of any obligation that could create any
right to receive money, whether or not such right is evidenced by an instrument or chattel paper
and whether or not it has been earned by performance (including, without limitation, any account or
payment intangible).

     “Secured Obligations”: the Borrower Obligations and the Guarantor Obligations.

     “Secured
Parties”: collectively, the Agent and the Lenders.

     “Securities Act”: the Securities Act of 1933, as amended.

     “Security Documents”: this Agreement, the Intellectual Property Security Agreements,
all deposit account control agreements and similar agreements, all landlord waivers, bailee
letters and similar documents and all other pledge or security agreements, “Mortgages” (as such
term is defined in the Credit Agreement), assignments or other similar agreements or instruments
executed and delivered by any Guarantor pursuant to Section 6.8 or Section 6.9 of
the Credit Agreement or otherwise in connection with the transactions contemplated thereby, in
each case as amended, modified, restated or supplemented from time to time.

     “Security Interest”: the security interest granted pursuant to Section 3, as
well as all other security interests created or assigned as additional security for the Secured
Obligations pursuant to the provisions of this Agreement.

     “Subsidiary Guarantor”: any Guarantor that is a Subsidiary of Borrower.

     “Trade Secret License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trade Secret, including, without limitation,
any of the foregoing referred to on Schedule 7(a) to the Perfection Certificate.

     “Trade Secrets”: (i) all trade secrets and all confidential and proprietary
information, including know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, technical data, financial, marketing
and

 

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business data, pricing and cost information, business and marketing plans, and customer and
supplier lists and information, including, without limitation, those identified in Schedule
7(a) to the Perfection Certificate, (ii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection therewith, and damages
and payments for past, present or future infringements thereof), and (iv) all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto.

     “Trademark License”: any written agreement, now or hereafter in effect, granting to
any third party any right to use any Trademark now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, or granting to any Grantor any right to use any
Trademark now or hereafter owned by any third party, and all rights of any Grantor under any such
agreement.

     “Trademark Security Agreement Supplement”: a supplement to this Agreement, executed
by the Grantor in favor of Secured Party, substantially in the form of Exhibit D hereto.

     “Trademarks”: (i) all trademarks, service marks, trade names, corporate names, company
names, business names, domain names, trade dress, trade styles, logos, or other indicia of origin
or source identification, trademark and service mark registrations, and applications for trademark
or service mark registrations and any renewals thereof, including, without limitation, those
identified in Schedule 7(a) to the Perfection Certificate, (ii) the right to sue or
otherwise recover for any and all past, present and future infringements and misappropriations
thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all Trademark Licenses
entered into in connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together in each case with the goodwill of the business connected with the use
of, and symbolized by, each of the above.

     “UCC”: the Uniform Commercial Code as in effect in any jurisdiction (except as otherwise
contemplated in Section 7.18). References to particular sections of Article 9 of the UCC
shall be, unless otherwise indicated, references to Revised Article 9 of the UCC adopted and
effective in certain jurisdictions on or after July 1, 2001.

          1.03. Rules of Interpretation. The rules of interpretation specified in Section
1.03 of the Credit Agreement shall be applicable to this Agreement. References to “Sections”,
“Exhibits” and “Schedules” shall be to Sections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined in this Section 1
may, unless the context otherwise requires, be used in the singular or the plural depending on
the reference. All references to statutes and related regulations shall include (unless otherwise
specifically provided herein) any amendments of same and any
successor statutes and regulations.

     Section 2.
Guarantee

          2.01. Guaranteee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Agent, for the ratable benefit of the Secured
Parties and their respective successors, indorsees, transferees and assigns, the prompt and

 

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complete payment and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

               (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable federal, state and
other laws relating to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.02).

               (c) Each Guarantor agrees that the Borrower Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of any Secured Party
hereunder.

               (d) The guarantee contained in this Section 2 shall remain in full force and effect
until all the Borrower Obligations and Guarantor Obligations shall have been Fully Satisfied
notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be
free from any Borrower Obligations.

               (e) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other
Person or received or collected by any Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or in payment of the
Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability
of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Secured Obligations or any payment received or collected
from such Guarantor in respect of the Secured Obligations), remain liable for the Borrower
Obligations up to the maximum liability of such Guarantor hereunder until the Borrower Obligations
are Fully Satisfied.

          2.02. Right of Contribution. Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid at least its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 2.03. The
provisions of this Section 2.02 shall in no respect limit the obligations and liabilities
of any Guarantor to the Secured Parties and each Guarantor shall remain liable to the Secured
Parties for the full amount guaranteed by such Guarantor hereunder.

          2.03. Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any
set-off or application of funds of any Guarantor by any Secured Party, (i) no Guarantor shall be
entitled to be subrogated to any of the rights of any Secured Party against the Borrower or any
other Guarantor or Grantor or any collateral security or guarantee or right of offset held by any
Secured Party for the payment of the Borrower Obligations, (ii) no Guarantor shall seek or be
entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor or
Grantor in respect of payments made by such Guarantor hereunder, and (iii) each Guarantor hereby
expressly and irrevocably waives any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation co-obligor, in each case, until all Borrower
Obligations are Fully Satisfied. If any amount shall be paid to any Guarantor on

 

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account of such subrogation rights at any time when all of the Borrower Obligations shall not have
been Fully Satisfied, such amount shall be held by such Guarantor in trust for the Secured
Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form received by such Guarantor (duly endorsed
by such Guarantor to the Agent, if required), to be applied against the Borrower Obligations,
whether matured or unmatured, in such order as the Agent may determine. Each Guarantor
acknowledges and agrees that this waiver is intended to benefit the Secured Parties and shall not
limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this
Section 2.03, and that the Secured Parties and their respective successors and assigns are
intended third party beneficiaries of the waivers and agreements set forth in this Section
2.03, and their rights under this Section 2.03, shall survive payment in full of the
Obligations.

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

          2.05. Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or
proof of reliance by any Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower Obligations, except as
required pursuant to the Credit Agreement. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment and performance without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document (other than this Agreement), any
of the Borrower Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by any Secured Party, (b) any
defense, set-off or counterclaim (other than a defense of payment or performance hereunder) which
may at any time be available to or be asserted by the Borrower or any other Person against any
Secured Party, or (c) any other circumstance whatsoever (with or without notice to or

 

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knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations, or of
such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any
other instance. When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, any Secured Party may, but shall be under no obligation to, make
a similar demand on or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and any failure by any
Secured Party to make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Party against any Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal proceedings.

          2.06. Reinstatement. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Borrower Obligations is rescinded or must otherwise be restored or returned by any
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
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, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been made.

          2.07. Payments. Each Guarantor hereby guarantees that payments hereunder will be paid
to the Agent without set-off or counterclaim in Dollars in immediately available funds to the
deposit account of Agent specified in Annex II to the Credit Agreement and that all such payments
will be subject to the provisions of Section 2.8 of the Credit Agreement.

          2.08. Waiver of Subrogation. Notwithstanding anything to the contrary in this
Agreement or in any other Loan Document, and except as set forth in
Section 2.11, each
Guarantor hereby expressly and irrevocably waives until all Secured Obligations have been paid in
full and the Commitments have been terminated pursuant to the Credit Agreement any and all rights
at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or
set off and any and all defenses available to a surety, guarantor or accommodation co-obligor.
Each Guarantor acknowledges and agrees that this waiver is intended to benefit the Secured Parties
and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability
of this Section 2.08, and that the Secured Parties and then-respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set forth in this
Section 2.08, and their rights under this
Section 2.08, shall survive payment in
full of the Obligations. The foregoing waiver shall not be deemed to limit or prohibit the payment
of indebtedness or other obligations of any Guarantor to any other Guarantor or other Person which
is incurred in the ordinary course of business and which is otherwise permitted under this
Agreement or any other Loan Document.

          2.09. Election of Remedies. If any Secured Party may, under applicable law, proceed to
realize its benefits under any of the Loan Documents giving such Secured Party a Lien upon any
Collateral, whether owned by any Guarantor or by any other Person, either by judicial foreclosure
or by non judicial sale or enforcement, such Secured Party may, at its sole option,

 

11

determine which of its remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 2. If, in the exercise of any of its rights and remedies, any
Secured Party shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Guarantor or any other Person, whether because of any applicable
laws pertaining to “election of remedies” or the like, each Guarantor hereby consents to such
action by such Secured Party and waives, to the extent permitted by applicable law, any claim based
upon such action, even if such action by such Secured Party shall result in a full or partial loss
of any rights of subrogation that each Guarantor might otherwise have had but for such action by
such Secured Party. Any election of remedies that results in the denial or impairment of the right
of any Secured Party to seek a deficiency judgment against any Guarantor shall not impair any other
Guarantor’s obligation to pay the full amount of the Obligations. In the event any Secured Party
shall bid at any foreclosure or trustee’s sale or at any private sale permitted by law or the Loan
Documents, such Secured Party may bid all or less than the amount of the Obligations and the amount
of such bid need not be paid by the such Secured Party but shall be credited against the
Obligations. The amount of the successful bid at any such public sale, whether such Secured Party
or any other party is the successful bidder, shall be conclusively deemed to be the fair market
value of the Collateral and the difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this
Section 2, notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which any Secured Party might
otherwise be entitled but for such bidding at any such sale.

          2.10. Limitation. Notwithstanding any provision herein contained to the
contrary, each Guarantor’s liability under this Section 2 (which liability is in any
event in addition to amounts for which such Guarantor is primarily liable under Section 2 of the Credit
Agreement) shall be limited to an amount not to exceed as of any date of determination the greater of:

     (a) the net amount of any portion of the Loan advanced to any other Grantor and then
re-loaned or otherwise transferred to, or for the benefit of, such Guarantor; and

     (b) the amount that could be claimed by the Agent and the Lenders from such Guarantor under
this Section 2.10 without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account,
among other things, such Guarantor’s right of contribution and indemnification from each other
Guarantor under Section 2.11.

          2.11. Contribution with Respect to Guaranty Obligations.

     (a) To the extent that any Guarantor shall make a payment under this Section 2.11 of
all or any of the Obligations (a “Guarantor Payment”) that, taking into account all other
Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount
that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable
Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to
the aggregate Allocable Amounts of each of the Guarantors as determined immediately prior to the
making of such Guarantor Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed

 

12

by, each other Guarantor for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor
Payment.

     (b) As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to
the maximum amount of the claim that could then be recovered from such Guarantor under this
Section 2 without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.

     (c) This Section 2.11 is intended only to define the relative rights of Guarantors
and nothing set forth in this Section 2.11 is intended to or shall impair the obligations
of Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including Section 2.1. Nothing
contained in this Section 2.11 shall limit the liability of Borrower to pay the Loan and
accrued interest, fees and expenses with respect thereto for which Borrower shall be primarily
liable.

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

     (e) The rights of the indemnifying Guarantors against other Loan Parties under this
Section 2.11 shall be exercisable upon the full and indefeasible payment of the
Obligations and the termination of the Commitments.

     Section 3.
Grant of Security Interest.

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

          a. all accounts, including health-care receivables;

          b. all chattel paper, whether tangible or electronic;

          c. all goods;

          d. all documents;

          e. all equipment;

          f. all fixtures;

          g. all general intangibles, including all payment intangibles;

          h. all instruments;

          i. all Intellectual Property;

 

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          j. all inventory;

          k. all Investment Property;

          l. all Leases;

          m. all letter-of-credit rights;

          n. all money;

          o. all supporting obligations;

          p. all tort claims;

          q. all other property not otherwise described above;

          r. all deposit accounts, all claims now or hereafter arising therefrom, all funds
now or hereafter held therein, all amounts now or hereafter credited thereto and
all certificates and instruments, if any, from time to time representing or
evidencing such bank accounts;

          s. all books and records pertaining to the Collateral; and

          t. to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing,

     Notwithstanding the foregoing, none of the Excluded Assets shall, to the extent and for so
long as they are Excluded Assets, constitute Collateral. If at any time, by reason of any change
in law or the receipt of any required consent or otherwise, any General Intangible that was an
Excluded Asset ceases to meet the conditions set forth in the definition of “Excluded Assets”
found in Section 1 of this Agreement, then such general intangible shall immediately and
automatically cease to be an Excluded Asset and the security interest herein granted shall
immediately and automatically attach thereto without necessity of any further act or deed by any
Grantor.

     Section 4.
Authorization To File
Financing Statements. Each Grantor
hereby irrevocably authorizes the Agent at any time and from time to time to file in any
jurisdiction in which the UCC has been adopted any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all assets of such Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral falls within the
scope of Article 9 of the NYUCC or such jurisdiction, or (ii) as being of an equal or lesser scope
or with greater detail, and (b) contain any other information required by part 5 of Article 9 of
the UCC for the sufficiency or filing office acceptance of any initial financing statement or
amendment, including (i) whether such Grantor is an organization, the type of organization and any
organization identification number issued to such Grantor and, (ii) in the case of a financing
statement filed as a fixture filing or indicating Collateral as timber to be cut or as-extracted
collateral, a sufficient description of real property to which such Collateral relates. Each
Grantor agrees to furnish any such information to the Agent promptly upon request. Each Grantor
also

 

14

ratifies its authorization for the Agent to have filed in any UCC jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date hereof.

     Section 5. Relation to Other Security Documents.

          5.01. Real Estate Documents. The provisions of this Agreement supplement the
provisions of any real estate mortgage or deed of trust granted by any Grantor to the Agent and
securing the payment or performance of any of the Secured Obligations. Nothing contained in any
such real estate mortgage or deed of trust shall derogate from any of the rights or remedies of
the Agent or the Secured Party hereunder.

          5.02. Patent and Trademark Security Agreement Supplements. Concurrently herewith
certain of the Grantors are executing and delivering to the Agent for recording in the PTO or the
Copyright Office, as applicable, the Patent Security Agreement Supplement, the Trademark Security
Agreement Supplement and the Copyright Security Agreement Supplement. The provisions of any
current or any future Patent Security Agreement Supplement, Trademark Security Agreement
Supplement or Copyright Security Agreement Supplement are supplemental to the provisions of this
Agreement. Nothing contained in any current or future Patent Security Agreement Supplement,
Trademark Security Agreement Supplement or Copyright Security Agreement Supplement shall derogate
from any of the rights or remedies of the Secured Party hereunder, nor shall anything contained in
any such current or future Patent Security Agreement Supplement, Trademark Security Agreement
Supplement or Copyright Security Agreement Supplement be deemed to prevent or extend the time of
attachment or perfection of any Security Interest in such Collateral created hereby.

     Section 6. Representations and Warranties. To induce the Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Secured Parties that:

          6.01. Grantors’ Legal Status. (a) Such Grantor is an organization as set forth in the
Perfection Certificate; (b) such organization is of the type, and is organized in the
jurisdiction, set forth in the Perfection Certificate; and (c) the Perfection Certificate sets
forth such Grantor’s correct organizational identification number or states that such Grantor has
none.

          6.02. Grantors’ Legal Names. Such Grantor’s exact legal name is that set forth on the
Perfection Certificate and on the signature page hereof.

          6.03. Grantors’ Locations. The Perfection Certificate sets forth such Grantor’s place
of business or (if it has more than one place of business) its chief executive office, as well as
its mailing address if different. Such Grantor’s place of business or (if it has more than one
place of business) its chief executive office (if such Grantor is an organization) is located in a
jurisdiction that has adopted the UCC or whose laws generally require that information concerning
the existence of nonpossessory security interests be made generally available in a filing,
recording or registration system as a condition or result of the security interest obtaining
priority over the rights of a lien creditor with respect to the
collateral.

          6.04. Representations in the Credit Agreement. The representations and warranties set
forth in Section 5 of the Credit Agreement as they relate to such Guarantor or to the Loan
Documents to which such Guarantor is a party, each of which is hereby incorporated herein

 

15

by reference, are true and correct in all material respects, and the Secured Parties shall be
entitled to rely on each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the Borrower’s knowledge shall, for the
purposes of this Section 6.04, be deemed to be a reference to such Grantor’s knowledge.

          6.05. Title to Collateral. The Collateral of such Grantor is owned by such Grantor
free and clear of any Lien, except for Liens expressly permitted pursuant to the Credit Agreement.
Such Grantor has not filed or consented to the filing of (a) any financing statement or analogous
document under the UCC or any other applicable laws covering any of its Collateral, (b) any
assignment in which such Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with the PTO or the Copyright Office or (c) any assignment in
which such Grantor assigns any Collateral or any security agreement or similar instrument covering
any Collateral with any foreign governmental, municipal or other office, which financing statement
or analogous document, assignment, security agreement or similar instrument is still in effect,
except, in each case, with respect to Liens expressly permitted pursuant to the Credit Agreement.

          6.06. Nature of Collateral. None of the Collateral of such Grantor constitutes, or is
the proceeds of, farm products and none of the Collateral has been purchased or will be used by
such Grantor primarily for personal, family or household purposes, and as of the Closing Date,
except as indicated in the Perfection Certificate and as of any date of any Perfection Supplement,
except as indicated in such Perfection Supplement or in the Perfection Certificate:

               (a) none of the account debtors or other persons obligated on any of the Collateral of such
Grantor is a governmental authority subject to the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral;

               (b) such Grantor holds no commercial tort claims;

               (c) such Grantor has no deposit accounts or other bank accounts;

               (d) such Grantor owns no motor vehicles;

               (e) such Grantor has no securities accounts or securities entitlements or commodities
accounts or commodities contracts;

               (f) such Grantor holds no interest in, title to or power to transfer, any Patents, Patent
Licenses, Trademarks, Trademark Licenses, Trade Secrets, Trade Secret Licenses, Copyrights or
Copyright Licenses; and

               (g) such Grantor holds no interest in, title to or power to transfer any Intellectual
Property that is eligible for registration in the PTO or the Copyright Office.

          6.07.
Compliance with Laws. Such Grantor has at all times operated its business in
compliance with all laws, except as could not reasonably be expected to have a Material Adverse
Effect.

          6.08. Validity of Security Interest. Except with respect to assets which in the
aggregate for all Grantors do not have a value exceeding $250,000, (a) the Security Interest
granted by such Grantor constitutes a legal and valid security interest in all of the Collateral
of

 

16

such Grantor securing the payment and performance of the Secured Obligations and (b) upon the
giving of value, the filing of financing statements describing the Collateral in the offices listed
on the Perfection Certificate, the recording in the PTO of the Trademark Security Agreement
Supplement and the Patent Security Agreement Supplement and in the Copyright Office of the
Copyright Security Agreement Supplement, and the taking of all applicable actions in respect of
perfection contemplated by Sections 7.06, 7.07, 7.08, 7.09, 7.10, 7.11 and 7.12 in
respect of Collateral (in which a security interest cannot be perfected by the filing of a
financing statement or such recordings in the PTO or the Copyright Office), the Security Interest
will be valid, enforceable and perfected in all Collateral of such Grantor. The Security Interest
is and shall be prior to any other Lien on the Collateral, other than Liens expressly permitted to
be prior to the Security Interest under the Credit Agreement.

          6.09. Perfection Certificate; Intellectual Property Filings.

               (a) All information set forth on the Perfection Certificate is, and all information set forth
on each Perfection Supplement shall be, accurate and complete.

               (b) A fully executed Patent Security Agreement Supplement, Trademark Security Agreement
Supplement and a Copyright Security Agreement Supplement containing a description of all
Collateral of such Grantor consisting of United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are pending) and
United States registered Copyrights have been delivered to the Secured Party for recording by the
PTO and the Copyright Office, as necessary, pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17
U.S.C. § 205 and the regulations thereunder, as applicable.

          6.10. Investment Property.

               (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all of the
issued and outstanding shares of all classes of the capital stock or other equity interests of
each Issuer owned by such Grantor or, in the case of any Excluded Foreign Subsidiary Voting Stock,
65% of the outstanding Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.

               (b) All the shares of the Pledged Stock pledged by such Grantor have been duly and validly
issued and are fully paid and nonassessable.

               (c) The terms of any uncertificated limited liability company interests and partnership
interests included in the Pledged Stock expressly provide that they are securities governed by
Article 8 of the Uniform Commercial Code in effect from time to time in the “issuer’s
jurisdiction” of each Issuer thereof (as such term is defined in the UCC in effect in such
jurisdiction).

               (d) Such Grantor is the record and beneficial owner of, and has good and marketable title to,
the Pledged Securities pledged by it hereunder, free of any and all Liens or options in favor of,
or claims of, any other Person, except the Security Interest created by this Agreement.

          6.11. Receivables. No amount exceeding $50,000 and payable to such Grantor under or
in connection with any Receivable is evidenced by any instrument or chattel paper which has not
been delivered to the Agent.

 

17

          6.12. Accounts. (i) Each account of such Grantor is genuine and in all material
respects what they purport to be, (ii) each account arises out of (A) a bona fide sale of goods
sold and delivered by such Grantor (or is in the process of being delivered) or (B) services
theretofore actually rendered or to be rendered by such Grantor to the account debtor named
therein, (iii) no material account of such Grantor is evidenced by any instrument or chattel paper
unless such instrument or chattel paper has been theretofore endorsed over and delivered to, or
submitted to the control of, the Agent and (iv) no surety bond was required or given in connection
with any account of such Grantor or the contracts or purchase orders out of which they arose and
the right to receive payment under each account is assignable.

          6.13. Equipment and Inventory. With respect to any material equipment and/or material
inventory of such Grantor, each such Grantor has exclusive possession and control of such
equipment and inventory of such Grantor except for (i) equipment leased by such Grantor as a
lessor or (ii) equipment or inventory in transit with common or other carriers. No material
inventory is held by such Grantor pursuant to consignment, sale or return, sale on approval or
similar arrangement.

     Section 7. Covenants. Each Grantor covenants and agrees with the Agent, in
each case at such Grantor’s own cost and expense, as follows.

          7.01. Grantors’ Legal Status. Such Grantor shall not change its type of organization,
jurisdiction of organization or other legal structure except, upon not less than twenty (20) days’
prior written notice to the Agent,

          7.02. Grantors’ Names. Such Grantor shall not change its name, except upon not less
than twenty (20) days’ prior written notice to the Agent.

          7.03. Grantors’ Organizational Numbers. Without providing at least twenty (20) days’
prior written notice to the Agent, such Grantor shall not change its organizational identification
number if it has one. If such Grantor does not have an organizational identification number and
later obtains one, such Grantor shall forthwith notify the Agent of such organizational
identification number promptly upon obtaining such identification number.

          7.04. Locations. Without providing at least twenty (20) days’ prior written notice to
the Agent, such Grantor shall not (a) change its place of business or (if it has more than one
place of business) its chief executive office and shall promptly notify the Agent of any new
location of Collateral owned by the Borrower or a Domestic Subsidiary thereof that is not set
forth on a Perfection Certificate or Perfection Supplement.

          7.05. Covenants in Credit Agreement. Each Guarantor shall take, or shall refrain from
taking, as the case may be, each action that is necessary to be taken or not taken, as the case
may be, so that no Default or Event of Default is caused by the failure to take such action or to
refrain from taking such action by such Guarantor or any of its Subsidiaries.

          7.06. Promissory Notes and Tangible Chattel Paper. If such Grantor, together with the
other Grantors, shall at any time hold or acquire any promissory notes or tangible chattel paper
in an aggregate principal amount of more than $50,000, such Grantor shall forthwith endorse,
assign and deliver the same to the Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Agent may from time to time specify to be held by the
Agent as Collateral pursuant to this Agreement.

 

18

          7.07. Deposit Accounts. For each deposit account that such Grantor at any time opens or
maintains, such Grantor shall, at the Agent’s request and option, either (a) cause the depository
bank to enter into a written agreement or other authenticated record with the Agent, in form and
substance reasonably satisfactory to the Agent, pursuant to which such depository bank shall agree,
among other things, to comply at any time with instructions from the Agent to such depository bank
directing the disposition of funds from time to time credited to such deposit account, without
further consent of the Grantor such agreement to be substantially in the form of Exhibit E
or such other form as the Agent shall approve, or (b) arrange for the Agent to become the customer
of the depository bank with respect to the deposit account; provided, however, that
notwithstanding the foregoing, the requirements of this
Section 7.07 shall not apply to (i)
any zero balance payroll or similar disbursement account maintained by any Grantor (and each
Grantor agrees not to deposit in any payroll account or similar disbursement account maintained by
it any funds, except funds needed at the time of deposit (or within three days thereafter) to meet
payroll needs of such Grantor), (ii) any deposit account maintained by any Grantor as of the
Closing Date and listed on Schedule 7.07(a) until the date sixty (60) days following the
Closing Date.

          7.08. Investment Property.

               (a) If any of the Collateral shall be or become evidenced or represented by an uncertificated
security, such Grantor shall cause the Issuer thereof either (i) to register the Agent as the
registered owner of such uncertificated security, upon original issue or registration of transfer
or (ii) to agree in writing with such Grantor and the Agent that such Issuer will comply with
instructions with respect to such uncertificated security originated by the Agent without further
consent of such Grantor, such agreement to be in substantially the form of Exhibit F or
such other form as the Agent shall approve.

               (b) If any of the Collateral shall be or become evidenced or represented by a security
entitlement, such Grantor shall cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Agent as having such security entitlement
against such securities intermediary or (ii) to agree in writing with such Grantor and the Agent
that such securities intermediary will comply with entitlement orders originated by the Agent
without further consent of such Grantor, such agreement to be in substantially the form of
Exhibit G or such other form as the Agent shall approve.

               (c) If any of the Collateral shall be or become evidenced or represented by a commodity
contract, such Grantor shall cause the commodity intermediary with respect to such commodity
contract to agree in writing with such Grantor and the Agent that such commodity intermediary will
apply any value distributed on account of such commodity contract as directed by the Agent without
further consent of such Grantor, such agreement to be in substantially the form of Exhibit
H or such other form as the Agent shall approve.

               (d) If any of the Collateral shall be or become evidenced or represented by or held in a
securities account or a commodity account, such Grantor shall, in the case of a securities
account, comply with subsection (b) of this Section 7.08 with respect to all security
entitlements carried in such securities account and, in the case of a commodity account, comply
with subsection (c) of this Section 7.08 with respect to all commodity contracts carried
in such commodity account.

 

19

               (e) If such Grantor shall receive any stock or other ownership certificate (including,
without limitation, any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the capital stock or other
equity interests of any Issuer, whether in addition to, in
substitution of, as a conversion of, or
in exchange for, any shares of or other ownership interests in the Pledged Stock, or otherwise in
respect thereof, such Grantor shall accept the same as the agent of the Secured Parties, hold the
same in trust for the Secured Parties and deliver the same forthwith to the Agent in the exact
form received, duly endorsed by such Grantor to the Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and with, if the
Agent so requests, signature guaranteed, to be held by the Agent, subject to the terms hereof, as
additional collateral security for the Secured Obligations.

               (f) Subject
to Section 7.08(h) hereof, such Grantor shall be
entitled:

                         (i) to exercise, as it shall think fit, but in a manner not inconsistent with the terms
hereof and the Credit Agreement, the voting power with respect to the Pledged Stock of such
Grantor, and for that purpose the Agent shall (if any Pledged Stock shall be registered in the
name of the Agent or its nominee) execute or cause to be executed from time to time, at the
expense of such Grantor, such proxies or other instruments in favor of such Grantor or its
nominee, in such form and for such purposes as shall be reasonably required by such Grantor and
shall be specified in a written request therefor, to enable it to exercise such voting power with
respect to the Pledged Stock; and

                         (ii) except as otherwise provided in paragraphs (g) and (h) of this Section 7.08, to
receive and retain for its own account any and all payments made in respect of the Pledged
Securities to the extent such are permitted pursuant to the terms of the Credit Agreement.

               (g) Any sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Agent to be held by it hereunder as additional
collateral security for the Secured Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be distributed upon or with
respect to the Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the Agent, be
delivered to the Agent to be held by it hereunder as additional collateral security for the
Secured Obligations. If any sums of money or property so paid or distributed in respect of the
Pledged Securities shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral security for the
Secured Obligations.

               (h) Upon the occurrence and during the continuance of any Event of Default, all rights of
such Grantor to exercise or refrain from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 7.08(f)(i) hereof and to
receive the payments pursuant to Section 7.08(f)(ii) hereof shall cease, and thereupon the
Agent shall be entitled to exercise all voting power with respect to the Pledged Securities and to
receive and retain, as additional collateral hereunder, any and all such payments any time
declared or paid upon any of the Pledged Securities during such an Event of Default and otherwise
to act with respect to the Pledged Securities as outright owner thereof.

 

20

               (i) At any time and from time to time with respect to Pledged Securities other than Pledged
Stock the Borrower or a Subsidiary of the Borrower and at any time and from time to time during
the continuance of an Event of Default with respect to Pledged Stock of a Subsidiary of the
Borrower, the Agent may cause all or any of the Pledged Securities to be transferred to or
registered in its name or the name of its nominee or nominees.

               (j) Without the prior written consent of the Agent, such Grantor will not (i) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of the
Investment Property or Proceeds thereof or any interest therein (except pursuant to a transaction
permitted by the Credit Agreement), (ii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the Security Interests created by this Agreement and
except for non-consensual Liens permitted by the Credit Agreement, or (iii) enter into any
agreement or undertaking expressly restricting the foreclosure of the Agent’s Security Interest in
any of the Investment Property or Proceeds thereof or any interest therein.

               (k) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Pledged Securities issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Agent
promptly in writing of the occurrence of any of the events described in Section 7.08(e) or
Section 7.08(g) with respect to the Pledged Securities issued by it and (iii) the terms of
Section 13.04(c) shall apply to it, mutatis mutandis, with respect to all actions that may
be required of it with respect to the Pledged Securities issued by it. Each Grantor which is an
Issuer consents to the grant of a Security Interest in capital stock or other equity interests of
such Issuer the exercise of rights by the Agent in respect of such capital stock or other equity
interests, including (to the extent permitted hereunder) the foreclosure thereon and the Agent, its
nominee or transferee becoming a partner or member of any such Issuer that is a partnership or
limited liability company.

          7.09.
Collateral in the Possession of a Bailee. If any goods with a value in excess of
$50,000 are at any time in the possession of a bailee, such Grantor shall promptly notify the
Agent thereof and, if requested by the Agent, shall promptly obtain an acknowledgement from such
bailee, in form and substance reasonably satisfactory to the Agent, that such bailee holds such
Collateral for the benefit of the Secured Parties, provided, that, notwithstanding the foregoing,
this Section 7.09 shall not apply to any goods constituting.

          7.10. Electronic Chattel Paper and Transferable Records. If such Grantor, together
with the other Grantors, shall at any time hold or acquire interests in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, in excess of $250,000 in
the aggregate, such Grantor shall promptly notify the Agent thereof and, at the request of the
Agent, shall take such action as the Agent may reasonably request to vest in the Agent control,
under Section 9-105 of the UCC, of such electronic chattel paper or control under Section 201 of
the federal Electronic Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Agent agrees with such Grantor that the Agent shall arrange,
pursuant to procedures reasonably satisfactory to the Agent and so long as such procedures will
not result in the Agent’s loss of control, for such Grantor to make alterations to the electronic
chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may
be, Section 201

 

21

of the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by such Grantor with respect to such electronic
chattel paper or transferable record.

          7.11. Letter-of-Credit Rights. If such Grantor, together with the other Grantors,
shall at any time be beneficiaries under one or more letters of credit, now or hereafter issued,
having aggregate undrawn amounts of more than $250,000, such Grantor shall promptly notify the
Agent thereof and, at the request and option of the Agent, such Grantor shall either (a) arrange,
for the issuer and any nominated person with respect to such letter of credit to consent, pursuant
to an agreement or other authenticated record with and in the form of Exhibit I or in such
other form and in substance satisfactory to the Agent, to an assignment to the Secured Party of
the proceeds of any drawing under the letter of credit or (b) arrange for the Agent to become the
transferee beneficiary of the letter of credit.

     7.12. Commercial Tort Claims. If such Grantor shall at any time hold or acquire a
commercial tort claim, such Grantor shall immediately notify the Agent in a writing signed by such
Grantor of the brief details thereof and grant to the Agent for the benefit of the Secured Parties
in such writing a security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably satisfactory to the
Agent.

     7.13. Intellectual Property.

               (a) Except in any respect that would not materially impair the right, power, authority and
ability of any Grantor to use its intellectual property as necessary or convenient for the
profitable conduct of their businesses and would not reasonably be expected to have a Material
Adverse Effect:

                         (i) Such Grantor (either itself or through licensees) will
(A) continue to use each material Trademark on each and every trademark class of goods in the
ordinary course of business in order to maintain such Trademark in full force free from any claim
of abandonment for non-use in any class of goods for which registration was obtained,(B) maintain in the ordinary course of business the quality of products and services offered under
such Trademark and take all necessary steps to ensure that all licensed users of such Trademark
maintain as in the past such quality, (C) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable Requirements of Law, (D) not
adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark
unless the Agent, for the ratable benefit of the Secured Parties, shall obtain a perfected security
interest in such mark pursuant to this Agreement and the Intellectual Property Security Agreement,
and (E) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any way.

                         (ii) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any material Patent may become forfeited, abandoned or dedicated to the public.

                         (iii) Such Grantor (either itself or through licensees) (A) will employ each material
Copyright and (B) will not (and will not permit any licensee or sublicensee

 

22

thereof to) do any act or knowingly omit to do any act whereby any material portion of the
Copyrights may become invalidated or otherwise impaired. Such Grantor will not (either itself or
through licensees) do any act whereby any material portion of the Copyrights may fall into the
public domain,

                         (iv) Such Grantor (either itself or through licensees) will not do any act that knowingly
uses any material Intellectual Property to infringe the intellectual property rights of any other
Person.

                         (v) Such Grantor (either itself or through licensees) will use proper statutory notice in
connection with the use of each material Patent, Trademark and Copyright included in the
Intellectual Property.

                         (vi) Such Grantor will take all reasonable and necessary steps, including, without limitation,
in any proceeding before the PTO, the Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of material Intellectual
Property, including, without limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the PTO and the Copyright Office, the filing of applications
for renewal or extension, the filing of affidavits of use and affidavits of incontestability, the
filing of divisional, continuation, continuation-in-part, reissue, and renewal applications or
extensions, the payment of maintenance fees, and the participation in interference, reexamination,
opposition, cancellation, infringement and misappropriation proceedings.

                         (vii) Such Grantor (either itself or through licensees) will not, without the prior written
consent of the Agent, discontinue use of or otherwise abandon any Intellectual Property or abandon
any right to file an application for letters patent, trademark, or copyright, unless such Grantor
shall have previously determined that such use or the pursuit or maintenance of such Intellectual
Property is no longer desirable in the conduct of such Grantor’s business and that the loss
thereof could not reasonably be expected to have a Material Adverse Effect and, in which case,
such Grantor shall give prompt notice of any such abandonment to the Agent in accordance herewith.

                         (viii) In the event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall (A) take such actions as such Grantor shall
reasonably deem appropriate under the circumstances to protect such Intellectual Property and (B)
if such Intellectual Property is of material economic value, promptly notify the Agent after it
learns thereof and sue for infringement, misappropriation or dilution, to seek injunctive relief
where appropriate and to recover any and all damages for such infringement, misappropriation or
dilution.

                         (ix) Such Grantor will do all things that are necessary and proper within such Grantor’s
power and control to keep each license of Intellectual Property held by such Grantor as licensee
or licensor in full force and effect except to the extent that (A) such Grantor has reasonably
determined that the failure to keep any such license in full force and effect could not be
reasonably expected to have a Material Adverse Effect or (B) any such license would expire by its
terms or is terminable at will by a Person other than Grantor.

 

23

                         (x) In the event that such Grantor shall create any nonexclusive license in any Trademark,
Copyright, Patent or other Intellectual Property or General Intangible, in each case owned by or
licensed to such Grantor (whether pursuant to a local marketing agreement, time broadcasting
agreement or otherwise) and such license is (x) for a duration of more than eighteen (18) months,
(y) not terminable at the option of such Grantor and (z) not by its terms expressly subject and
subordinate to the Security Interest, then, and in any such event, such license shall constitute a
Disposition of the licensed property. In the event such Grantor creates any license in Trademark,
Copyright, Patent, other Intellectual Property or General Intangible owned by or licensed to such
Grantor that does not meet the requirements of the immediately preceding sentence, such license
shall not constitute a Disposition of such Trademark, Copyright, Patent, other Intellectual
Property or General Intangible.

                         (xi) Such Grantor shall maintain all of its rights to its domain names in full force and
effect, other than any, the loss of which could not reasonably be expected to result in a Material
Adverse Effect.

               (b) Such Grantor will notify the Agent immediately if it knows, or has reason to know, that
any registration relating to any material Intellectual Property has been or could reasonably be
expected to be forfeited, abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such determination or
development in, any proceeding in the PTO, the Copyright Office or any court or tribunal in any
country) regarding such Grantor’s ownership of, or the validity of, any material Intellectual
Property or such Grantor’s right to register the same or to own and maintain the same.

               (c) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual Property with the
PTO, the Copyright Office or any similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the Agent within five Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon request of the Agent,
such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Agent may request to evidence the Secured Parties’ Security Interest
in any Copyright, Patent, Trademark or other Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.

               (d) Such Grantor agrees that, should it obtain an ownership interest in any item of
Intellectual Property which is not now a part of the Intellectual Property Collateral (the
“After-Acquired Intellectual Property”), (i) the provisions of Section 3 shall
automatically apply thereto, (ii) any such After-Acquired Intellectual Property, and in the case
of trademarks, the goodwill of the business connected therewith or symbolized thereby, shall
automatically become part of the Collateral, (iii) it shall give prompt (and, in any event within
twenty (20) days after the date of such acquisition) written notice thereof to the Agent in
accordance herewith, and (iv) it shall provide the Agent promptly (and, in any event within twenty
(20) days after the date of such acquisition) with an amended Perfection Certificate and amended
schedules to the applicable Intellectual Property Security Agreement reflecting the acquisition of
such After-Acquired Intellectual Property. Such Grantor authorizes the Agent to modify this
Agreement by amending the Perfection Certificate and to modify the schedules to the applicable
Intellectual Property Security Agreement if such Grantor fails to provide the Agent with
satisfactory amended schedules hereto or thereto within the time period required hereunder (and
will cooperate with the Agent in effecting any such amendment) to include any After-Acquired
Intellectual Property

 

24

which becomes part of the Intellectual Property Collateral under this Section, and to record any
such modified agreement with the PTO, the Copyright Office, or any other applicable Governmental
Authority.

               (e) Such Grantor assumes all responsibility and liability arising from the use of the
Intellectual Property and hereby indemnifies and holds the Secured Parties harmless from and
against any claim, suit, loss, damage or expense (including reasonable attorneys’ fees arising out
of any alleged defect in any product manufactured, promoted or sold by such Grantor (or any
affiliate or subsidiary thereof) in connection with such Intellectual Property or out of the
manufacture, promotion, labeling, sale or advertisement of any such product by such Grantor (or
any affiliate or subsidiary thereof), except for any claim, suit, loss, damage or expense arising
solely from the gross negligence or willful misconduct of a Secured Party as finally determined by
a court of competent jurisdiction.

               (f) Such Grantor agrees to execute one or more applicable Intellectual Property Security
Agreements with respect to its Intellectual Property in order to record the Security Interest
granted herein to the Agent for the ratable benefit of the Secured Parties with the PTO, the
Copyright Office, and any other applicable Governmental Authority.

          7.14. Maintenance of Collateral; Compliance with Laws. (a) Such Grantor shall keep
the Collateral provided by it in good order and repair and shall not use the same in violation of
any law to the extent that such violation could reasonably be expected to have a Material Adverse
Effect.

          7.15. Dispositions of Collateral. Such Grantor shall not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral provided by it or any interest therein
except for dispositions permitted by the Credit Agreement. In the event that such Grantor shall
create any lease of any personal property owned by or leased to such Grantor and such lease is (x)
for a duration of more than eighteen (18) months, (y) not terminable at the option of such Grantor
and (z) not by its terms expressly subject and subordinate to the Security Interest, then, and in
any such event, such lease shall constitute a Disposition of the leased property. In the event
such Grantor creates any lease in any personal property owned by or leased to such Grantor that
does not meet the requirements of the immediately preceding sentence, such lease shall not
constitute a Disposition of such personal property.

          7.16. Maintenance of Insurance. Such Grantor, at its sole cost and expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to the Collateral
provided by it in accordance with the Credit Agreement.

          7.17. Periodic Certification. From time to time on demand (which demand, absent an
Event of Default, shall be no more frequent that once every four months) from the Agent, but in no
event less frequently than annually, such Grantor shall deliver to the Agent a supplemental
perfection certificate (each, a “Perfection Supplement”) executed by such Grantor setting
forth the information required pursuant to the Perfection Certificate or confirming that there has
been no change in such information since the date of such certificate or the date of the most
recent certificate delivered pursuant to this Section 7.17.

          7.18. Other Actions as to any and all Collateral. Such Grantor further agrees to take
any other action reasonably requested by the Agent to insure the attachment, perfection and, first
priority of, and the ability of the Agent to enforce, the Security Interest in any and all of

 

25

the Collateral provided by such Grantor including, without limitation, (a) executing, delivering
and, where appropriate, filing financing statements and amendments relating thereto under the UCC,
to the extent, if any, that such Grantor’s signature thereon is required therefor; (b) causing the
Agent’s name to be noted as secured party on any certificate of title for a titled good if such
notation is a condition to attachment, perfection or priority of, or ability of the Agent to
enforce, the Security Interest in such Collateral; (c) complying with any provision of any statute,
regulation or treaty of the United States of America as to any Collateral if compliance with such
provision is a condition to the attachment, perfection or priority of, or the ability of the Agent
to enforce, the Security Interest in such Collateral; (d) obtaining governmental and other third
party consents and approvals, including without limitation any consent of any licensor, lessor or
other person obligated on such Collateral; (e) obtaining waivers from mortgagees, bailees,
landlords and any other person who has possession of or any interest in any Collateral or any real
property on which any such Collateral may be located, in form and substance satisfactory to the
Agent; (f) providing to the Agent “control” over such Collateral, to the extent that perfection can
only be achieved under the UCC by control or where obtaining perfection by control provides more
protection to the Secured Parties that perfection by filing a financing statement; and (g) taking
all actions required by the UCC or by other law, as applicable in any relevant UCC jurisdiction, or
by other law as applicable in any foreign jurisdiction; provided, however, that
nothing contained in paragraphs (d) or (e) shall require such Grantor to pay any consideration
(other than any governmental application, processing, filing or recording fees) in order to obtain
any consent or waiver referred to in such paragraphs.

          7.19. Treatment of Accounts. No Grantor shall grant or extend the time for payment of
any material account, or compromise or settle any account for less than the full amount thereof,
or release any person or property, in whole or in part, from payment thereof, or allow any credit
or discount thereon, other than as normal and customary in the ordinary course of a Grantor’s
business.

     Section 8. Inspection And Verification. The Agent and such Persons as the Agent
may designate shall have the right, at each Grantor’s own cost and expense, to inspect the
Collateral of such Grantor, all records related thereto (and to make extracts and copies
from such records) and the premises upon which any of the Collateral of such Grantor is
located, to discuss such Grantor’s affairs with the officers of such Grantor (i) in the
absence of an Event of Default, upon reasonable prior notice and during regular operating
hours for such Grantor and (ii) otherwise, at any time as the Agent shall decide in its
sole discretion.

     Section 9.
Collateral Protection
Expenses; Preservation of Collateral.

          9.01. Expenses Incurred by the Agent. In its discretion, the Agent may, if the
relevant Grantor fails to do so, discharge taxes and other encumbrances at any time levied or
placed on any material portion of the Collateral, make repairs thereto and pay any necessary
filing fees or insurance premiums. Each Grantor agrees to reimburse the Agent on demand for any
and all expenditures so made, and all sums disbursed by the Agent in connection with this
Section 9.01, including reasonable attorneys’ fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by such Grantor to the Agent shall bear
interest at the per annum rate specified in Section 17 and shall constitute additional
Secured Obligations. The Agent shall have no obligation to any Grantor to make any such
expenditures, nor shall the making thereof relieve any Grantor of any default.

 

26

          9.02. Agent’s Obligations and Duties.

               (a) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each contract or agreement comprised in the Collateral provided by it to be observed or performed
by such Grantor thereunder. Neither the Agent nor any other Secured Party shall have any obligation
or liability under any such contract or agreement by reason of or arising out of this Agreement or
the receipt by the Agent or any other Secured Party of any payment relating to any of the
Collateral, nor shall the Agent or any other Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any such contract or agreement, to make
inquiry as to the nature or sufficiency of any payment received by the Agent or any other Secured
Party in respect of the Collateral or as to the sufficiency of any performance by any party under
any such contract or agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been assigned to the Agent or
any other Secured Party or to which the Agent or any other Secured Party may be entitled at any
time or times.

               (b) The Agent’s sole duty with respect to the custody, safe keeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the NYUCC or otherwise, shall be to
deal with such Collateral in the same manner as the Secured Party deals with similar property for
its own account.

               (c) Neither the Agent, nor any other Secured Party nor any of their respective officers,
directors, partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Secured
Parties hereunder are solely to protect the Secured Parties’ interests in the Collateral and shall
not impose any duty upon any Secured Party to exercise any such powers. The Secured Parties shall
be accountable only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, partners, employees, agents,
attorneys and other advisors, attorneys-in-fact or affiliates shall be responsible to any Grantor
for any act or failure to act hereunder, except to the extent that any such act or failure to act
is found by a final and nonappealable decision of a court of competent jurisdiction to have
resulted from their respective gross negligence or willful misconduct.

               (d) Each Grantor acknowledges that the rights and responsibilities of the Agent under this
Agreement with respect to any action taken by the Agent or the exercise or non-exercise by the
Agent of any option, voting right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Agent and the Grantors, the Agent
shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

          9.03. Duties as to Pledged Securities.

               (a) With respect to any calls, conversions, exchanges, redemptions, offers, tenders or
similar matters relating to any such Pledged Securities (herein called “Events”),

 

27

any duty in connection therewith imposed on the Agent by applicable law shall be fully satisfied
if:

                         (i) the Agent exercises reasonable care to ascertain the
occurrence and to give reasonable notice to the applicable Grantor
of any Events applicable to any Pledged Securities that are
registered and held in the name of Secured Party or its nominee;

                         (ii) the Agent gives the applicable Grantor reasonable notice of the occurrence of any Events
of which the Agent has received actual knowledge, which Events are applicable to any securities
that are in bearer form or are not registered and held in the name of the Agent or its nominee
(each Grantor agreeing to give the Agent reasonable notice of the occurrence of any Events of
which such Grantor has knowledge, which Events are applicable to any securities in the possession
of the Agent); and

                         (iii) the Agent endeavors to take such action with respect to any of the Events as the
applicable Grantor may reasonably and specifically request in writing in sufficient time for such
action to be evaluated and taken or, if the Agent reasonably believes that the action requested
would adversely affect the value of the Pledged Securities as collateral or the collection of the
Secured Obligations, or would otherwise prejudice the interests of any Secured Party, the Agent
gives reasonable notice to such Grantor that any such requested action will not be taken and, if
the Agent makes such determination or if such Grantor fails to make such timely request, the Agent
takes such other action as it reasonably deems advisable in the
circumstances.

               (b) Except as hereinabove specifically set forth, neither the Agent nor any other Secured
Party shall have any further obligation to ascertain the occurrence of, or to notify any Grantor
with respect to, any Events and shall not be deemed to assume any such further obligation as a
result of the establishment by the Agent or any other Secured Party of any internal procedures
with respect to any securities in its possession, nor shall the Agent or any other Secured Party
be deemed to assume any other responsibility for, or obligation or duty with respect to, any
Pledged Securities or its use of any nature or kind, or any matter or proceedings arising out of
or relating thereto, including, without limitation, any obligation or duty to take any action to
collect, preserve or protect its or any Grantor’s rights in the Pledged Securities or against any
prior parties thereto, but the same shall be at such Grantor’s sole risk and responsibility at all
times.

               (c) Nothing
contained in this Section 9.03 shall be deemed to create any obligation
in respect of Events on the Agent, the purpose of this Section 9.03 being solely to
provide standards, in the event that applicable law imposes any obligations on the Agent as to
Events.

     Section 10.
Securities and Deposits. Without limitation of Section 7.08, but subject
to Section 7.08(i), the Agent may at any time at its option, transfer to itself or any
nominee any securities constituting Collateral, and, subject to Section 7.08(f)(ii),
receive any income thereon and hold such income as additional Collateral or apply it to the Secured
Obligations. The Agent may after the occurrence and during the continuance of an Event of Default
demand, sue for, collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral. Regardless of the adequacy of Collateral or any other security for the
Secured Obligations, any deposits or other sums at any time credited by or due from the Agent or
any other Secured Party to any Grantor may at any time be applied to or set off against any of the
Secured Obligations whether or not due and owing.

 

28

     Section 11.
Notification to Account
Debtors and Other Persons
Obligated on Collateral. If an Event of Default shall have occurred and be continuing,
each Grantor shall, at the request of the Agent, notify account debtors and other persons
obligated on any of the Collateral of such Grantor of the Security Interest in any account,
chattel paper, general intangible, instrument or other claims constituting Collateral that
payment thereof is to be made directly to the Agent or to any financial institution
designated by the Agent as the Agent’s agent therefor, and the Agent may itself, if an
Event of Default shall have occurred and be continuing, without notice to or demand upon
any Grantor, so notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, each Grantor shall hold
any proceeds of collection of accounts, chattel paper, general intangibles, instruments and
other claims constituting Collateral received by the Grantor as trustee for the Secured
Parties without commingling the same with other funds of the Grantor and shall turn the
same over to the Agent in the identical form received, together with any necessary
endorsements or assignments. The Agent shall have no liability or responsibility to any
Grantor for acceptance of a check, draft or other order for payment of money bearing the
legend “payment in full” or words of similar import or any other restrictive legend or
endorsement or be responsible for determining the correctness of any remittance. Without
limitation of the foregoing, during the continuation of an Event of Default (1) the Agent
shall have the right, but not the obligation, to make test verifications of the accounts in
any manner and through any medium that it reasonably considers advisable, and the Grantors
shall furnish all such assistance and information as the Agent may require in connection
with such test verifications, and (2) the Agent in its own name or in the name of others
may communicate with account debtors on the accounts to verify with them to the Agent’s
satisfaction the existence, amount and terms of any accounts. The Agent may apply the
proceeds of collection of accounts, chattel paper, general intangibles, instruments and
other claims constituting Collateral received by the Agent or any other Secured Party to
the Secured Obligations or hold such proceeds as additional Collateral, at the option of
the Agent. The provisions of Section 9-209 of the NYUCC shall not apply to any account,
chattel paper or payment intangible as to which notification of assignment has been sent to
the account debtor or other person obligation on the Collateral, whether under this
Section 11, Section 12 or Section 13.

     Section 12.
Power of Attorney.

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

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

 

29

               (b) in the case of any Intellectual Property, execute and deliver, and have recorded, any and
all agreements, instruments, documents and papers as the Agent may request to evidence the
Security Interest in such Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;

               (c) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or provide any insurance and pay all or any part of the premiums
therefor and the costs thereof;

               (d) execute,
in connection with any sale provided for in Section 13, any
endorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral;

               (e) exercise all rights of such Grantor as owner of the Pledged Securities or as party to any
partnership, limited liability company or similar agreement, including, without limitation, the
right to sign any and all amendments, instruments, certificates, proxies, and other writings and
exercise all voting and consent rights with respect to the Pledged Securities;

               (f) (1) direct any party liable for any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly to the Agent or as the Agent shall
direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or arising out of any
Collateral; (3) sign and endorse any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any
suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Agent may deem appropriate; (7) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark
pertains) throughout the world for such term or terms, on such conditions, and in such manner, as
the Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all purposes, and do, at the
Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things
which the Agent deems necessary to protect, preserve or realize upon the Collateral and the
Security Interest therein and to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do; and

               (g) to the extent that such Grantor’s authorization given in Section 4 is not
sufficient, to file such financing statements or similar documents under the laws of any
jurisdiction with respect hereto, with or without such Grantor’s signature, or a photocopy of this
Agreement in substitution for a financing statement or such other document, as the Agent may deem
appropriate and to execute in such Grantor’s name such financing statements, other such documents
and amendments thereto and continuation statements which may require such Grantor’s signature.

Anything in this Section 12.01 to the contrary notwithstanding, the Agent agrees that it
will not exercise any rights under the power of attorney provided for
in this Section 12.01
(other than

 

30

under paragraph (g) of this Section 12.01) unless an Event of Default shall have
occurred and be continuing.

          12.02. Failure of Grantor to Perform. If any Grantor fails to perform or comply with
any of its agreements contained herein, the Agent, at its option, but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

          12.03. Expenses of Attorney-in-Fact. The expenses of the Agent incurred in connection
with actions undertaken as provided in this Section 12, together with interest thereon
at a rate per annum equal to the Default Rate, from the date of payment by the Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Agent on demand.

          12.04. Ratification by Grantor. To the extent permitted by law, each Grantor hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this
Section 12. This power of attorney is a power coupled with an interest and is irrevocable.

          12.05. No Duty on Secured Party. The powers conferred on the Agent, its directors,
officers and agents pursuant to this Section 12 are solely to protect the Secured Parties’
interests in the Collateral and shall not impose any duty upon any of them to exercise any such
powers. Each Secured Party shall be accountable only for the amounts that it actually receives as
a result of the exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure to act, except for
such Secured Party’s own gross negligence or willful misconduct.

     Section 13. Remedies.

          13.01. Default. Grantors shall be in default under this Agreement (a) whenever any
Event of Default has occurred and is continuing (and each of the Grantors shall thereupon be in
default hereunder without regard to whether or to what degree any Grantor individually may have
caused, participated in, or had any knowledge of the occurrence of such Event of Default) and (b)
at all times after the Loan has become due and payable and remains unpaid beyond any applicable
grace period, whether at maturity, upon acceleration pursuant to the Credit Agreement or
otherwise.

          13.02. Remedies Upon Default. At any time when any Grantor is in default under this
Agreement as set forth in Section 13.01, the Agent may exercise and enforce, in any order,
(i) each and all of the rights and remedies available to a secured party upon default under the
NYUCC or any other applicable UCC or other applicable law, (ii) each and all of the rights and
remedies available to it under the Credit Agreement or any other Loan Document and (iii) each and
all of the following rights and remedies:

               (a) Collection Rights. Without notice to any Grantor or any other Loan Party, the
Agent may notify any or all account debtors and obligors on any accounts, instruments, general
intangibles or other claims constituting Collateral of the Secured Parties’ Security Interests
therein and may direct, demand and enforce payment thereof directly to the Agent. The provisions
of Section 9-209 of the NYUCC shall not apply to any account, chattel paper or payment intangible
as to which notification of assignment has been sent to the account debtor.

 

31

               (b)Taking Possession. The Agent may (i) enter upon any and all premises owned or leased
by any Grantor where Collateral is located (or believed by the Agent to be located), with or (to
the fullest extent permitted by law) without judicial process and without any obligation to pay
rent, (ii) prior to the disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to the extent the
Agent deems appropriate, (iii) take possession of any Grantor’s premises or place custodians in
exclusive control thereof, remain on such premises and use the same and any Grantor’s equipment for
the purpose of completing any work in process or otherwise preparing the Collateral for sale or
selling or otherwise transferring the Collateral, (iv) take possession of all items of Collateral
that are not then in its possession, either upon such premises or by removal from such premises,
and (v) require any Grantor or the Person in possession thereof to deliver such Collateral to the
Agent at one or more locations designated by the Agent and reasonably convenient to it and each
Grantor owning an interest therein.

               (c) Foreclosure. The Agent may sell, lease, license or otherwise dispose of or
transfer any or all of the Collateral or any part thereof in one or more parcels at public sale or
in private sale or transaction, on any exchange or market or at the Agent’s offices or on any
Grantor’s premises or at any other location, for cash, on credit or for future delivery, and may
enter into all contracts necessary or appropriate in connection therewith, without any notice
whatsoever unless required by law. Where permitted by law, one or more of the Secured Parties may
be the purchasers at any such sale and in such event, if such bid is made by all of the Lenders or
otherwise whenever a credit bid is expressly permitted under the Credit Agreement or approved in
writing by the Agent and the Required Lenders, the Secured Parties bidding at such sale may bid
part or all of the Obligations owing to them without necessity of any cash payment on account of
the purchase price, even though any other purchaser at such sale is required to bid a purchase
price payable in cash. Each Grantor agrees that at least ten (10) calendar days’ written notice to
such Grantor of the time and place of any public sale of Collateral owned by it (or, to the extent
such Grantor is entitled by law to notice thereof, the public sale of any other Collateral), or the
time after which any private sale of Collateral owned by it (or, to the extent such Grantor is
entitled by law to notice thereof, the private sale of any other Collateral) is to be made, shall
be commercially reasonable. For purposes of such notice, to the fullest extent permitted by law (i)
each Grantor waives notice of any sale of Collateral owned by any other Grantor and (ii) each
Grantor agrees that notice given to the Borrower shall constitute notice given to such Grantor. The
giving of notice of any such sale or other disposition shall not obligate the Agent to proceed with
the sale or disposition, and any such sale or disposition may be postponed or adjourned from time
to time, without further notice.

               (d) Voting Rights. The Agent may exercise any and all rights of any Grantor as the
owner of any Pledged Securities, including, without limitation, voting rights, rights to give or
withhold consent under any agreement under which any Pledged Security is issued and all other
rights referred to in Section 12.01(e).

               (e) Use of Intellectual Property. The Agent may, on a royalty-free basis, use and
license use of any Trademark, Trade Secret, trade name, trade style, Copyright, Patent, technical
knowledge or process or other Intellectual Property owned, held or used by any Grantor in respect
of any Collateral as to which any right or remedy of the Agent is
exercised or enforced. In
addition, the Agent may exercise and enforce such rights and remedies for collection as may be
available to it by law or agreement. Each Grantor grants a license pursuant to Section
13.03 in connection therewith.

 

32

               (f) Use
of Collateral. With respect to any Collateral in the possession of the Agent
or any other Secured Party, or a bailee or other third party holding on its behalf, the Agent or
such other Secured Party may use or operate such Collateral in any manner and to the extent
determined by the Agent or such Secured Party.

          13.03. Grant of License to Use Intellectual Property. For the purpose of enabling the
Agent to exercise rights and remedies under this Section 13 at such time as the Agent shall
be lawfully and otherwise entitled to exercise such rights and remedies, each Grantor hereby grants
to the Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other
compensation to such Grantor) to use, license or sub-license any of the Collateral consisting of
Intellectual Property now owned or hereafter acquired by the Grantor to the extent that such
Grantor is not legally or contractually prohibited from doing so (Grantor agreeing to use
commercially reasonable efforts not to enter into, after the Closing Date, any such contractual
prohibition), and wherever the same may be located, and including in such license reasonable access
to all media in which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof. The use of such license by the
Agent shall be exercised, at the Agent’s option, only upon the occurrence and during the
continuation of an Event of Default; provided that any license, sub-license or other transaction
entered into by the Agent in accordance herewith shall be binding upon each Grantor notwithstanding
any subsequent cure, waiver or other termination of an Event of Default.

          13.04. Waivers by Grantors. Each Grantor hereby irrevocably waives (a) all rights of
redemption from any foreclosure sale, (b) the benefit of all valuation, appraisal, exemption and
moratorium laws, (c) to the fullest extent permitted by law, all rights to notice or a hearing
prior to the exercise by the Agent of its right to take possession of any Collateral, whether by
self-help or by legal process and any right to object to the Agent taking possession of any
Collateral by self-help, and (d) if the Agent seeks to obtain possession of any Collateral by
replevin, claim and delivery, attachment, levy or other legal process, (i) any notice or demand
for possession prior to the commencement of legal proceedings, (ii) the posting of any bond or
security in any such proceedings, and (iii) any requirement that the Agent retain possession and
not dispose of any Collateral until after a trial or final judgment in such proceedings.

          13.05. Application of Proceeds. Except as expressly provided elsewhere in this
Agreement, all proceeds received by the Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of the Agent, be held by
the Agent as Collateral for, or then, or at any other time thereafter, applied in full or in part
by the Agent against, the Secured Obligations in the following order of priority:

     FIRST: to the payment of all reasonable costs and expenses of such sale, collection
or other realization, including reasonable compensation to the Agent and its agents and
counsel, and all other reasonable expenses, liabilities and advances made or incurred by
the Agent in connection therewith, and all amounts for which the Agent is entitled to
indemnification hereunder and all reasonable advances made by the Agent hereunder for the
account of any Grantor, and to the payment of all reasonable costs and expenses paid or
incurred by the Agent in connection with the exercise of any right or remedy hereunder,
all in accordance with Section 19.09;

     SECOND: to the payment of all other Secured Obligations (for the ratable benefit of
the holders thereof) then due and payable in the manner and order provided in the Credit
Agreement;

 

33

     THIRD:
to any payments required by Sections 9-608(a)(l)(C) or 9-615(a)(3) of the
NYUCC; and

     FOURTH, to the payment to or upon the order of the Grantor entitled thereto, or to
whomsoever may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.

          13.06. Surplus, Deficiency. Any surplus proceeds of any sale or other disposition by
the Agent of any Collateral remaining after discharge of the Credit Agreement and after all Secured
Obligations are paid in full and in cash and any payments required by Sections 9-608(a)(l)(C) or
9-615(a)(3) of the NYUCC are paid in full shall be paid over to the Grantor entitled thereto, or to
whomever may be lawfully entitled to receive such surplus or as a court of competent jurisdiction
may direct, but prior to termination and discharge of the Credit Agreement, such surplus proceeds
may be retained by the Agent and held as Collateral until termination and discharge of the Credit
Agreement. The Borrower and each Guarantor shall be and remain liable for any deficiency.

          13.07. Information Related to the Collateral. If, during the continuance of an Event
of Default, the Agent determines to sell or otherwise transfer any Collateral, each Grantor shall,
and shall cause any Person controlled by it to, furnish to the Agent all information the Agent may
request that pertains or could pertain to the value or condition of the Collateral or that would
or might facilitate such sale or transfer. The Agent shall have the right, notwithstanding any
confidentiality obligation or agreement otherwise binding upon it, freely (but not in violation of
any law, including federal securities laws) to disclose such information, and any and all other
information (including confidential information) pertaining in any manner to the Collateral or the
assets, liabilities, results of operations, business or prospects of any Secured Parties, freely
to any Person that the Agent in good faith believes to be a potential or prospective purchaser in
such sale or transfer, without liability for any disclosure, dissemination or use that may be made
as to such information by any such Person.

          13.08. Sale Exempt from Registration. The Agent shall be entitled at any such sale or
other transfer, if it deems it advisable to do so, to restrict the prospective bidders or
purchasers to Persons who will provide assurances satisfactory to the Agent that the Collateral
may be offered and sold to them without registration under the Securities Act, and without
registration or qualification under any other applicable state or federal law. Upon the
consummation of any such sale, the Agent shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof the Collateral so sold. The Agent may solicit offers to buy
the Collateral, or any part of it, from a limited number of investors deemed by the Agent, in its
good faith judgment or in good faith reliance upon advice of its counsel, to meet the requirements
to purchase securities under Regulation D promulgated under the Securities Act (or any other
regulation of similar import). If the Agent solicits such offers from such investors, then the
acceptance by the Agent of the highest offer obtained from any of them shall be deemed to be a
commercially reasonable method of disposition of the Collateral.

          13.09.
Rights and Remedies Cumulative. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other rights, powers or
privileges or remedies provided by law or in equity, or under any other instrument, document or
agreement. The Agent may exercise and enforce each right and remedy available to it either before
or concurrently with or after, and independently of, any exercise or enforcement of any other
right or remedy of the Agent or any other Secured Party against any

 

34

Person or property. All such rights and remedies shall be cumulative, and no one of them shall
exclude or preclude any other.

          13.10. No Direct Enforcement by Secured Parties. The Agent may freely exercise and
enforce any and all of its rights and remedies hereunder, for the benefit of the Secured Parties.
No Secured Party, other than the Agent, shall have any independent right to collect, take
possession of, foreclose against or otherwise enforce the Security Interests granted hereby.

     Section 14.
Standards for Exercising
Remedies.

          14.01. Commercially Reasonable Manner. To the extent that applicable law imposes
duties on the Agent to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for
the Agent (a) to fail to incur
expenses reasonably deemed significant by the Agent to prepare
Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or other finished
products for disposition or to postpone any such disposition pending any such preparation or
processing; (b) to fail to obtain third party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or disposed of; (c) to
fail to exercise collection remedies against account debtors or other persons obligated on
Collateral or to remove any Lien on or any adverse claims against Collateral; (d) to exercise
collection remedies against account debtors and other persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists; (e) to advertise
dispositions of Collateral through publications or media of general circulation, whether or not the
Collateral is of a specialized nature; (f) to contact other persons, whether or not in the same
business as such Grantor, for expressions of interest in acquiring all or any portion of the
Collateral; (g) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature; (h) to dispose of Collateral
by utilizing Internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of
assets; (i)  to dispose of assets in wholesale rather than
retail markets; (j) to disclaim
disposition warranties; (k) to purchase insurance or credit enhancements to insure the Agent against
risks of loss, collection or disposition of Collateral or to provide to the Agent a guaranteed
return from the collection or disposition of Collateral; or (1) to the extent deemed appropriate by
the Agent, to obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section 14 is to provide non-exhaustive
indications of what actions or omissions by the Agent would not be commercially unreasonable in the
Agent’s exercise of remedies against the Collateral and that other actions or omissions by the
Agent shall not be deemed commercially unreasonable solely on account of not being indicated in
this Section 14. Without limiting the foregoing, nothing contained in this Section
14 shall be construed to grant any rights to any Grantor or to impose any duties on the Agent
that would not have been granted or imposed by this Agreement or by applicable law in the absence
of this Section 14.

     14.02. Standard of Care. The powers conferred on the Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the Agent shall have
no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against

 

35

prior parties or to protect, preserve, vote or exercise any rights pertaining to any Collateral.
The Agent shall be deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment substantially equal to that
which the Agent accords its own property or if it selects, with reasonable care, a custodian to
hold such Collateral on its behalf.

     Section 15. Waivers by Grantor; Obligations Absolute.

          15.01. Specific Waivers. Each Grantor waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and notices of any
description other than those required pursuant to the Credit Agreement or any other Loan Documents
to which such Grantor is a party.

          15.02. Obligations Absolute. All rights of the Agent hereunder, the Security Interest
and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Secured Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any other Loan Document, or any other
agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or departure from or any
acceptance of partial payment thereon and or settlement, compromise or adjustment of any Secured
Obligation or of any guarantee, securing or guaranteeing all or any of the Secured Obligations, or
(d) any other circumstance that might otherwise constitute a defense available to, or a discharge
of, any Grantor in respect of the Secured Obligations or this Agreement other than the prompt and
complete performance and payment in full of the Secured Obligations.

     Section 16.
Marshalling. The Agent shall not be required to marshal any present or future
collateral security (including but not limited to this Agreement and the Collateral) for, or other
assurances of payment of, the Secured Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of its rights hereunder
and in respect of such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights, however existing or arising. To the extent that it lawfully may,
each Grantor hereby agrees that it shall not invoke any law relating to the marshalling of
collateral which might cause delay in or impede the enforcement of the Agent’s rights under this
Agreement or under any other instrument creating or evidencing any of the Secured Obligations or
under which any of the Secured Obligations is outstanding or by which any of the Secured
Obligations is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

     Section 17.
Interest. Until paid, all amounts due and payable by each Grantor hereunder shall
be a debt secured by the Collateral and shall bear, whether before or after judgment, interest at
a rate per annum equal to the Default Rate, from the date of payment by the Agent to the date
reimbursed by such Grantor, and such interest shall be payable by such Grantor to the Agent on
demand.

 

36

     Section 18.
Reinstatement. The obligations of each Grantor pursuant to this Agreement shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of the Secured Obligations is rescinded or otherwise must be restored or returned by the
Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of such Grantor or any other obligor or otherwise, all as though such payment had
not been made.

     Section 19.
Miscellaneous.

          19.01. Notices. All notices, requests and demands to or upon the Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 10.2 of the Credit
Agreement.

          19.02. GOVERNING LAW: CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR FN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY HERETO HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY
SUCH LITIGATION AS SET FORTH ABOVE. EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE
OF NEW YORK. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAM THAT ANY SUCH LITIGATION
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          19.03.
WAIVER OF JURY TRIAL, ETC. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED FN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

37

          19.04. Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.

          19.05. Headings. The headings of each section of this Agreement are for convenience
only and shall not define or limit the provisions thereof.

          19.06. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

          19.07. Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions of this Agreement or any instrument or
agreement required hereunder.

          19.08. Survival of Agreement. All representations, warranties and agreements made by
or on behalf of any Grantor or any other Loan Party in this Agreement and in the other Loan
Documents shall survive the execution and delivery hereof or thereof and the making and repayment
of the Loan. In addition, notwithstanding anything herein or under applicable law to the contrary,
the provisions of this Agreement and the other Loan Documents relating to indemnification or
payment of costs and expenses, including, without limitation, the provisions of Sections 3.1,
3.2, 3.3 and 10.5 of the Credit Agreement, shall survive the payment in full of the
Loan, the termination of the Commitments and any termination of this Agreement or any of the other
Loan Documents.

          19.09. Fees and Expenses; Indemnification.

               (a) The Grantors, jointly and severally, agree to pay upon demand the amount of any and all
reasonable expenses, including the fees, disbursements and other charges of counsel and of any
experts or agents, which (i) any Secured Party may incur in connection with (x) collecting against
any Grantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents, (y) the exercise,
enforcement or protection of any of the rights of such Secured Party hereunder or (z) the failure
of any Grantor to perform or observe any of the provisions hereof, and (ii) the Agent may incur in
connection with (x) the administration of this Agreement (including the customary fees and charges
of such Secured Party for any audits conducted by it or on its behalf with respect to the accounts
receivable or inventory) or (y) the custody or preservation of, or the sale of, collection from or
other realization upon any of the Collateral.

               (b) Each Grantor agrees to pay, and to save the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the Borrower would be
required to do so pursuant to Section 10.5 of the Credit Agreement.

 

38

               (c) The agreements in this Section shall survive repayment of the Obligations and all other
amounts payable under the Credit Agreement and the other Loan Documents.

               (d) Each Grantor agrees that the provisions of Section 3.1 of the Credit Agreement
are hereby incorporated herein by reference, mutatis mutandis, and each Secured Party shall be
entitled to rely on each of them as if they were fully set forth herein.

          19.10.
Binding Effect; Several Agreement. This Agreement is binding upon each Grantor
and the Secured Parties and their respective successors and permitted (in accordance with
Section 10.8.1 of the Credit Agreement) assigns, and shall inure to the benefit of the
Grantors, the Secured Parties and their respective successors and permitted (in accordance with
Section 10.8.1 of the Credit Agreement) assigns, except that no Grantor shall have any
right to assign or transfer its rights or obligations hereunder or any interest herein, except as
specifically permitted by the Credit Agreement, without the prior written consent of the Agent
(and any such assignment or transfer shall be void).

          19.11. Waivers; Amendment.

               (a) No failure or delay of the Agent in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Secured Parties hereunder and of the Secured Parties under the Credit Agreement and other Loan
Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provisions of this Agreement or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Grantor in any case shall entitle such
or any other Grantor to any other or further notice or demand in similar or other circumstances.

               (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Agent and each affected
Grantor; provided, that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Agent in a written instrument executed by the Agent in accordance
with Section 10.1 of the Credit Agreement.

          19.12. Set-Off. Each Grantor hereby irrevocably authorizes each Secured Party at any
time and from time to time while an Event of Default shall have occurred and be continuing,
without notice to such Grantor or any other Grantor, any such notice being expressly waived by
each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits, indebtedness r 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 Secured Party to or for the credit or the account of
such Grantor, or any part thereof in such amounts as such Secured Party may elect, against and on
account of the obligations and liabilities of such Grantor to such Secured Party hereunder and
claims of every nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or
otherwise, as such Secured Party may elect, whether or not any Secured Party

 

 

39

has made any demand for payment and although such obligations, liabilities and claims may
be contingent or unmatured. Each Secured Party shall notify such Grantor promptly of any such
set-off and the application made by such Secured Party of the proceeds thereof, provided that the
failure to give such notice shall not affect the validity of such set-off and application. The
rights of each Secured Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Secured Party may have.

     19.13. Integration. This Agreement and the other Loan Documents constitute the
entire contract among the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof
(except for the Fee Letter).

     19.14. Acknowledgments. Each Grantor hereby acknowledges that:

          (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;

          (b) no Secured Party has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Secured Parties, 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 Secured Parties or
among the Grantors and the Secured Parties.

     19.15. Additional Grantors and Guarantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.8 of the Credit
Agreement shall become a Grantor and Guarantor for all purposes of this Agreement upon execution
and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

     19.16. Releases.

          (a) Notwithstanding anything to the contrary contained in the Credit
Agreement, herein or in any other Loan Document, upon request of the Borrower in connection with
any Disposition of Property permitted by the Loan Documents, the Agent shall (without notice to or
vote or consent of any other Secured Party) take such actions as shall be required to release the
Security Interest in any Collateral being Disposed of in such Disposition, to the extent necessary
to permit consummation of such Disposition in accordance with the Loan Documents, provided that the
Borrower shall have delivered to the Agent, at least five (5) Business Days prior to the date of
the proposed release, a written request for release identifying the relevant Collateral being
Disposed of in such Disposition and the terms of such Disposition in reasonable detail, including
the date thereof, the price thereof and any estimated expenses in connection therewith, together
with a certification by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents and that the proceeds of such Disposition will be applied in
accordance with the Credit Agreement and the other Loan Documents.

          (b) At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released
from its obligations hereunder in the event that all the capital stock or

 

40

other equity interests of such Subsidiary Guarantor shall be Disposed of in a transaction
permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Agent,
at least five (5) Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Subsidiary Guarantor and the terms of the Disposition in
reasonable detail, including the price thereof and any expenses in connection therewith, together
with a certification by the Borrower stating that such transaction is in compliance with the
Credit Agreement and the other Loan Documents and that the Proceeds of such Disposition will be
applied in accordance therewith.

     19.17. Intercompany Debt.

          (a) Each Grantor hereby agrees that any intercompany Debt or other intercompany payables or
receivables directly or indirectly made by or owed to such Grantor by any other Grantor
(collectively, “Intercompany Debt”), of whatever nature at any time outstanding shall be
subordinate and subject in right of payment to the prior payment in full in cash of the Borrower
Obligations. Each Grantor hereby agrees that following a single written notice to the Borrower,
such Grantor will not, while any Event of Default is continuing, accept any payment, including by
offset, on any Intercompany Debt until all Secured Obligations have been paid in full and the
Commitments have been terminated, in each case, except with the prior written consent of the Agent.

          (b) In the event that any payment on any Intercompany Debt shall be
received by a Grantor other than as permitted by this Section 19.17 before all Secured Obligations
have been paid in full, the Commitments have been terminated pursuant to the Credit Agreement, such
Grantor shall receive such payments and hold the same in trust for, segregate the same from its own
assets and shall immediately pay over to, the Agent for the benefit of the Agent and Lenders all
such sums to the extent necessary so that the Agent and the Lenders shall have been paid in full,
in cash, all Borrower Obligations owed or which may become owing.

          (c) Upon any payment or distribution of any assets of any Grantor of
any kind or character, whether in cash, property or securities by set-off, recoupment or otherwise,
to creditors in any liquidation or other winding-up of such Grantor or in the event of any case,
proceeding or other action described in Section 8.1.3 of the Credit Agreement, the Agent and
Lenders shall first be entitled to receive payment in full in cash, in accordance with the terms of
the Borrower Obligations and of this Agreement, of all amounts payable under or in respect of such
Borrower Obligations, before any payment or distribution is made on, or in respect of, any
Intercompany Debt, in any such case, proceeding or other action, any distribution or payment, to
which the Agent or any Lender would be entitled except for the provisions hereof shall be paid by
such Grantor, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution directly to the Agent (for the benefit of the Agent and the
Lenders) to the extent necessary to pay all such Borrower Obligations in full in cash, after giving
effect to any concurrent payment or distribution to the Agent and Lenders (or to the Agent for the
benefit of the Agent and Lenders).

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

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

GRANTORS:

EARTH BIOFUELS, INC.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis Mc Laughlin
 

Dennis Mc Laughlin

	 	 
	

Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Earth Biofuels]

 

 

EARTH ING, INC.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis G. Mc Laughlin, III
 

Dennis G. Mc Laughlin, III

	 	 
	

Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Earth LNG]

 

 

APPLIED LNG TECHNOLOGIES USA, L.L.C.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis G. Mc Laughlin, III
 

Dennis G. Mc Laughlin, III
	 	 
	

Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Applied LNG]

 

 

FLEET STAR, INC.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis Mc Laughlin, III
 

Dennis Mc Laughlin, III

	 	 
	

Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Fleet Star]

 

 

APOLLO LEASING, INC.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis G. Mc Laughlin, III
 

Dennis G. Mc Laughlin, III
	 	 
	
Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Apollo Leasing]

 

 

ARIZONALNG L.L.C.

	 	 	 	 	 
	By: 

Name:

	 	/s/ Dennis G. Mc Laughlin, III
 

Dennis G. Mc Laughlin, III
	 	 
	
Title:

	 	
 

CEO
	 	 

[Earth LNG Guarantee — Arizona LNG]

 

 

Accepted:
as to Sections 9.02 and 9.03

FOURTH THIRD LLC,

as Agent

	 	 	 	 	 
	By: 

Name:

	 	/s/ Seth Taube
 

Seth Taube
	 	 
	
Title:

	 	
 

Authorized Signatory
	 	 

[Earth LNG Guarantee — Fourth Third LLC]

 

 

Schedule 7.07(a)

Principal Deposit Accounts

	 	 	 	 	 
	Grantor

	 	Account Bank
	 	Account Number
	 

	 	 
	 	 

Schedule 7.07(a)-l

 

Exhibit A to Security Agreement

PERFECTION CERTIFICATE

See Tab (21)

A-1

 

1

Exhibit B to Guarantee and Collateral Agreement

SUPPLEMENT TO GUARANTEE AND COLLATERAL AGREEMENT

(COPYRIGHTS)

WHEREAS, [           ], a [           ] corporation (herein referred to as “Grantor”), having
an address at [                     ], has adopted, used and is using the copyrights listed on the
annexed Schedule 1-A, which copyrights are registered in the United States Copyright Office (the
“Copyrights”);

WHEREAS, the Grantor has entered into a Guarantee and Collateral Agreement (said Guarantee and
Collateral Agreement, as it may hereafter be amended or otherwise modified from time to time being
the “Security Agreement”, the terms defined therein and not otherwise defined herein being used
herein as therein defined) in favor of the Secured Party; and

WHEREAS, pursuant to the Security Agreement, the Grantor has granted to Secured Party a security
interest in all right, title and interest of the Grantor in and to the Copyrights, and the
registrations and recordings thereof in the United States Copyright Office or any other country or
any political subdivision thereof, all whether now or hereafter owned or licensable by the Grantor
and all extensions or renewals thereof and all Copyright Licenses, and all proceeds of all of the
foregoing, including, without limitation, any claims by the Grantor against third parties for
infringement thereof (the “Collateral”), to secure the payment and performance of the Secured
Obligations.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the
Grantor does hereby further confirm, and put on the public record, its grant to Secured Party of a
security interest in and mortgage on the Collateral to secure the prompt payment and performance
of the Secured Obligations.

The Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured
Party with respect to the assignment of and grant of a security interest in the Collateral made
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.

Secured Party’s address is [                                         ], Attention:                      
                  .

 

2

IN WITNESS WHEREOF, the Grantor has duly executed or caused this Agreement to be duly executed as
of [           ].

	 	 	 	 	 
	 	[           ]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

3

STATE OF           )

                               ) ss.:

COUNTY OF        )

On this    
               
  day of           
          ,    
              
   , before me personally appeared   
      
                                , to
me known, who, being by me duly sworn, did depose and say that he/she resides at
              
                                              and that he/she is                         
                of the
Grantor; that he/she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was affixed pursuant to authority of the Board of Directors of said
corporation and that he/she signed his/her name thereto in his/her capacity as an authorized
officer of said corporation pursuant to such authority.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Notary Public
	 	 

 

4

Schedule 1-A to the SUPPLEMENT TO GUARANTEE

AND COLLATERAL AGREEMENT

(COPYRIGHTS)

	 	 	 	 	 
	Copyright

	 	Registration Date
	 	Registration No.
	 

	 	 
	 	 

 

Exhibit C to Guarantee and Collateral Agreement

SUPPLEMENT TO GUARANTEE AND COLLATERAL AGREEMENT

(PATENTS)

WHEREAS, [           ], a [           ] corporation (herein referred to as “Grantor”), having
an address at [                     ], owns the letters patent and/or applications for letters patent of the United States of America more particularly described on Schedule 1-A annexed hereto as part
hereof (the “Patents”):

WHEREAS, the Grantor has entered into a Guarantee and Collateral Agreement (said Guarantee and
Collateral Agreement, as it may hereafter be amended or otherwise modified from time to time being
the “Security Agreement”, the terms defined therein and not otherwise defined herein being used
herein as therein defined) in favor of the Secured Party; and

WHEREAS, pursuant to the Security Agreement, the Grantor has granted to Secured Party a security
interest in all right, title and interest of Grantor in and to the Patents, together with all
registrations and recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country or any political subdivision thereof,
all whether now or hereafter owned or licensable by Grantor, and all reissues, divisions,
continuations, continuations-in-part, term restorations or extensions thereof, all Patent Licenses
and all proceeds of all of the foregoing, including, without limitation, any claims by Grantor
against third parties for infringement thereof for the full term of the Patents (the
“Collateral”), to secure the prompt payment and performance of the Secured Obligations.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the
Grantor does hereby further confirm, and put on the public record, its grant to Secured Party of a
security interest in and mortgage on the Collateral to secure the prompt payment and performance
of the Secured Obligations.

The Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured
Party with respect to the assignment of and grant of a security interest in the Collateral made
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.

Secured Party’s address is [                                         ], Attention:                     .

C-1

 

2

IN WITNESS WHEREOF, the Grantor has duly executed or caused this Agreement to be duly executed as
of [           ].

	 	 	 	 	 	 	 
	 	 	[                     ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: 

Title:
	 	 

 

3

STATE OF           )

                              
) ss,:

COUNTY OF        )

On
this                     day of  
                
    , before me personally appeared      
               
                    , to me
known, who, being by me duly sworn, did depose and say that he/she resides at
               
                                      
        and that he/she is  
           
         of the
Grantor; that he/she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was affixed pursuant to authority of the Board of Directors of
said corporation and that he/she signed his/her name thereto in his/her capacity as an authorized
officer of said corporation pursuant to such authority.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

 

4

Schedule 1-A to the SUPPLEMENT TO GUARANTEE

AND COLLATERAL AGREEMENT

(PATENTS)

	 	 	 	 	 
	 

	 	Date Filled
	 	Serial No. or
	Title

	 	or Granted
	 	Patent No.
	 

	 	 
	 	 

 

1

Exhibit D to Guarantee and Collateral Agreement

SUPPLEMENT TO GUARANTEE AND COLLATERAL AGREEMENT

(TRADEMARKS)

WHEREAS, [           ], a [           ] corporation (herein referred to as “Grantor”), having

an address at [                     ], (1) has adopted, used and is using, or (2) has intended to use and

filed an application indicating that intention, but has not yet filed an allegation of use under
Section l(c) or l(d) of the Trademark Act, or (3) has filed an application based on an intention to
use and has since used and has filed an allegation of use under Section l(c) or l(d) of the
Trademark Act, the trademarks, trade names, trade styles and service marks listed on the annexed
Schedule 1-A, which trademarks, trade names, trade styles and service marks are registered, or for
which applications for registration have been filed in the United States Patent and Trademark
Office (the “Trademarks”): and

WHEREAS, the Grantor has entered into a Guarantee and Collateral Agreement (said Guarantee and
Collateral Agreement, as it may hereafter be amended or otherwise modified from time to time being
the “Security Agreement”, the terms defined therein and not otherwise defined herein being used
herein as therein defined) in favor of the Secured Party; and

WHEREAS, pursuant to the Security Agreement, the Grantor has granted to Secured Party a security
interest in all right, title and interest of the Grantor in and to the Trademarks, together with
all prints and labels on which said Trademarks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, and the goodwill of the
business symbolized by the Trademarks and the applications, registrations and recordings in the
United States Patent and Trademark Office or in any similar office or agency of the United States
of America, any State thereof, or any other country or any political subdivision thereof, all
whether now or hereafter owned or licensable by Grantor, and all reissues, extensions or renewals
thereof, all Trademark Licenses and all proceeds of all of the foregoing, including, without
limitation, any claims by Grantor against third parties for infringement thereof (the
“Collateral”), to secure the payment and performance of the Secured Obligations.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the
Grantor does hereby further confirm, and put on the public record, its grant to Secured Party of a
security interest in and mortgage on the Collateral to secure the prompt payment and performance
of the Secured Obligations.

The Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured
Party with respect to the grant of, security interest in and mortgage on the Collateral made
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
hereby incorporated herein by reference as if fully set forth herein.

Secured Party’s address is
[             
              
              
               
               ],
Attention:                     .

 

2

     IN WITNESS WHEREOF, the Grantor has duly executed or caused this Agreement to be duly executed as
of [           ].

	 	 	 	 	 
	 	[                     ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

3

STATE OF           )

                               ) ss,:

COUNTY OF        )

On this
                     day of                      ,                     , before me personally appeared
      
      
       
  
   
           
      , to
me known, who, being by me duly sworn, did depose and say that he/she resides at
              
             
           
      
    
          
  and that he/she is   
  
          
        
        
          of the
Grantor; that he/she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was affixed pursuant to authority of the Board of Directors of said
corporation and that he/she signed his/her name thereto in his/her capacity as an authorized
officer of said corporation pursuant to such authority.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

 

4

Schedule 1-A to the SUPPLEMENT TO GUARANTEE

AND COLLATERAL AGREEMENT

(TRADEMARKS)

	 	 	 	 	 
	 

	 	Application or
	 	Application Serial No.
	Trademark

	 	Registration Date
	 	or Registration No.
	 

	 	 
	 	 

 

 

Exhibit E to Guarantee and Collateral Agreement

FORM OF CONTROL AGREEMENT

This CONTROL AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Control Agreement”) dated as of
                     , 200                     , is made by and
among
                                        
, a                      corporation (the “Grantor”). Fourth Third LLC, as
Agent (in such capacity, the “Agent”) for the
Secured Parties (as defined in the Guarantee and Collateral Agreement
referred to below), and

                                         , a                                
          (the “Depository
Bank”).

     WHEREAS, the Depository Bank maintains for the Grantor a deposit account, Account No.                                          (the
“Pledged Account”), in the name of the Grantor.

     WHEREAS, the Grantor has granted to the Agent for the benefit of the Secured Parties a
security interest in the Pledged Account, all claims arising therefrom, all funds now or hereafter
therein, all amounts now or hereafter credited thereto and all Proceeds thereof (collectively, the
“Collateral”) pursuant to a Guarantee and Collateral
Agreement, dated as of
[          ] (as
amended, supplemented, replaced or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”), by the Grantor and the other persons party thereto as grantors in favor
of the Agent.

     WHEREAS, the following terms which are defined in Article 9 of the Uniform Commercial Code in
effect in the State of New York on the date hereof (the “UCC”) are used herein as so defined
(whether or not such terms are capitalized in the UCC): Bank, Bank’s Jurisdiction, Control,
Deposit Account and Proceeds.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows;

     SECTION 1. Notice of Security Interest. The Grantor, the Agent and the Depository
Bank are entering into this Control Agreement to perfect, and to confirm the priority of, the
Agent’s security interest in the Collateral. The Depository Bank acknowledges that this Control
Agreement constitutes written notification to the Depository Bank of the Agent’s security interest
in the Collateral. The Depository Bank agrees to promptly make all necessary entries or notations
in its books and records to reflect the Agent’s security interest in the Collateral. The
Depository Bank acknowledges that the Agent has control over the Pledged Account, all claims
arising therefrom, all funds now or hereafter therein all amounts now or hereafter credited
thereto and all Proceeds thereof.

     SECTION
2. Collateral; Pledged Account. (a) The Grantor agrees with the Agent and the
Depository Bank that the Grantor will direct that, all funds transferred by the Grantor to the
Depository Bank, deposited by the Grantor with the Depository Bank, or otherwise held by the
Depository Bank for the Grantor, be credited to the Pledged Account, another deposit account with
the Depository Bank subject to a Control Agreement or, in accordance with Section 7.07 of the
Guarantee and Collateral Agreement, a zero balance payroll or similar disbursement account.

     (b) The Depository Bank hereby represents and warrants to, and agrees with the Grantor and the
Agent, that (i) the Depository Bank is a Bank, (ii) the Pledged Account is and shall remain a
Deposit Account, (iii) the Bank’s Jurisdiction is, and during the term of this

 

 

Control Agreement shall remain, the State of New York and (iv) Schedule 1 contains a
true and complete statement of the Pledged Account and credit balance therein as of the date
hereof. The Depository Bank will not, so long as this Control Agreement is in effect, enter into
any agreement with any other person that provides Control over the Pledged Account to such person.
The Depository Bank will not advance credit to the Grantor secured by the Collateral (other than
the fees and charges referred to in Section 7).

     (c) The Agent hereby instructs the Depository Bank, and the Depository Bank hereby confirms and
agrees that, unless the Agent shall otherwise direct the Depository Bank in writing, all funds
transferred by the Grantor to the Depository Bank, deposited by the Grantor with the Depository
Bank, or otherwise held by the Depository Bank for the Grantor shall be credited to the Pledged
Account, another deposit account with the Depository Bank subject to a Control Agreement or a zero
balance payroll or similar disbursement account with the Depository Bank.

     SECTION
3. Control. The Depository Bank hereby agrees, upon written direction from the
Agent and without further consent from the Grantor, (a) to comply with all instructions originated
by the Agent directing disposition of the funds in the Pledged Account and all other instructions
regarding the Pledged Account originated by the Agent and to the extent directed by the Agent and
to pay over to the Agent all proceeds without any setoff or deduction, and (b) except as otherwise
directed by the Agent, not to comply with the instructions or directions of any kind originated by
the Grantor or any other person regarding the Pledged Account or disposition of the funds therein;
provided, however, that notwithstanding the foregoing provisions of this paragraph (b), the
Depository Bank may comply with instructions regarding disposition of funds in the Pledged Account
originated by the Grantor except during any period beginning at the time that the Depository Bank
has received from the Agent a notice, substantially in the form of Exhibit 1 hereto (a
“Notice of Default”) and ending at the time that the Depository Bank has received from the Agent a
written notice withdrawing such Notice of Default.

     SECTION
4. Other Agreements; Termination. The Depository Bank shall simultaneously send to
the Agent copies of all notices given and statements rendered pursuant to the Pledged Account. The
Depository Bank shall notify promptly the Agent and the Grantor if any other person asserts any
lien, encumbrance, claim (including any adverse claim) or security interest in or against any of
the Collateral. As long as the Guarantee and Collateral Agreement remains in effect, neither the
Grantor nor the Depository Bank shall terminate the Pledged Account without [thirty (30) days’]
prior written notice to the other party and the Agent. In the event of any conflict between the
provisions of this Control Agreement and any other agreement governing the Pledged Account or the
Collateral, the provisions of this Control Agreement shall control.

     SECTION
5. Protection of Depository Bank. The Depository Bank may rely and shall be
protected in acting upon any notice, instruction or other communication that it reasonably believes
to be genuine and authorized.

     SECTION
6. Termination. This Control Agreement shall terminate automatically upon receipt
by the Depository Bank of written notice executed by the Agent terminating this Agreement.

     SECTION
7. Waiver; Priority of Agent’s Interests. Other than with respect to its fees and
customary charges with respect to the Pledged Account, the Depository Bank hereby waives

 

 

its right to set off any obligations of the Grantor to the Depository Bank against any or all of
the Collateral and hereby agrees that any and all liens, encumbrances, claims or security interests
which the Depository Bank may have against the Collateral, either now or in the future in
connection with the Pledged Account (other than in respect of such fees and customary charges) are
and shall be subordinate and junior to the prior payment in full in immediately available funds of
all obligations of the Grantor now or hereafter existing under the Credit Agreement, the Guarantee
and Collateral Agreement, and all other documents related thereto, whether for principal, interest
(including, without limitation, interest as provided in the Credit Agreement, whether or not such
interest accrues after the filing of such petition for purposes of the federal Bankruptcy Code or
is an allowed claim in such proceeding), indemnities, fees, premiums, expenses or otherwise. Except
for the foregoing and claims and interests of the Agent and the Grantor in the Collateral and the
rights of the Depository Bank therein, the Depository Bank does not know of any claim to or
security interest or other interest in the Collateral.

     SECTION
8. Exculpation and Indemnity. The Depository Bank shall not be liable, except for
its own gross negligence or willful misconduct or its breach of the express terms of this Control
Agreement and, except with respect to claims based upon such gross negligence or willful misconduct
or any such breach that are successfully asserted against the Depository Bank, the Grantor shall
indemnify and hold harmless the Depository Bank (and any successor Depository Bank) from and
against any and all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorneys’ fees and disbursements arising out of and in connection with this Control
Agreement.

     SECTION
9. Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, to the Grantor’s and the Agent’s addresses as set forth in the Guarantee and Collateral
Agreement, and to the Depository Bank’s address as set forth below, or to such other address as any
party may give to the others in writing for such purpose:

	 	 	 	 	 	 	 	 	 
	[Name

	 	of
	 	Depository
	 	Bank]
	[Address

	 	of
	 	Depository
	 	Bank]
	Attention:

	 	 	 	 	 	 	 	 
	Telephone:

	 	(  )
	 	 
	Telecopy: ( )

	 	 
	 	 
	 	 

     SECTION
10. Amendments in Writing. None of the terms or provisions of this Control
Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument
executed by the parties hereto.

     SECTION
11. Entire Agreement. This Control Agreement and the Guarantee and Collateral
Agreement constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter hereof.

     SECTION
12. Execution in Counterparts. This Control Agreement may be executed in any number
of counterparts (including by telecopy), each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

 

 

     SECTION
13. Successors and Assigns. This Control Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns, except that the
Grantor may not assign, transfer or delegate any of its rights or obligations under this Control
Agreement without the prior written consent of the Agent.

     SECTION
14. Governing Law and Jurisdiction. This Control Agreement has been delivered to
and accepted by the Agent and will be deemed to be made in the State of New York. THIS CONTROL
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. Each of the parties hereto submits for itself and its property in any legal
action or proceeding relating to this Control Agreement, 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.

     SECTION
15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CONTROL
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FOURTH THIRD LLC, as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NAME OF DEPOSITORY BANK]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

Exhibit 1 to Control Agreement

[Date]

To: [Name of Depository Bank
        Address
of Depository Bank]

Attention:

Telecopy:

Dear_______;

We refer
to the Control Agreement, dated ___ (as heretofore amended, modified or
supplemented, the “Control Agreement”) by and among [Name of Depository Bank,] [name of Grantor]
and us. Except as otherwise provided herein, terms defined in the Control Agreement, when used
herein, shall have the respective meanings therein provided.

This constitutes a Notice of Default under and as such term is defined in the Control Agreement.
Until the Depository Bank receives a written notice from us withdrawing this Notice of Default, the
Depository Bank shall not comply with any instructions regarding disposition of funds in the
Pledged Account.

Very truly yours,

FOURTH THIRD LLC,

as Agent

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

 

 

Exhibit F to Guarantee and Collateral Agreement

FORM OF CONTROL AGREEMENT

     This CONTROL AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Control Agreement”) dated as of                     , 200                    is made by and
among
                    ,
a                     corporation (the “Grantor”). Fourth Third LLC, as
Agent (in such capacity, the “Agent”) for the Secured Parties (as defined in the Guarantee and
Collateral Agreement referred to below), and
                    , a                      corporation (the
“Issuer”).

     WHEREAS, the Grantor has granted to the Agent for the benefit of the Secured Parties a security
interest in the uncertificated securities of the Issuer owned by the Grantor from time to time
(collectively, the “Pledged Securities”), and all additions thereto and substitutions and Proceeds
thereof (collectively, with the Pledged Securities, the
“Collateral”) pursuant to a
Guarantee and Collateral Agreement, dated as of [                    ] (as amended, supplemented,
replaced or otherwise modified from time to time, the
“Guarantee and Collateral Agreement”), by the
Grantor and the other persons party thereto as grantors in favor of the Agent.

     WHEREAS, the following terms which are defined in Articles 8 and 9 of the Uniform Commercial Code
in effect in the State of New York on the date hereof (the
“UCC”) are used herein as so defined
(whether or not such terms are capitalized in the UCC): Adverse Claim, Control, Instruction,
Issuer’s Jurisdiction, Proceeds and Uncertificated Security.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION
1. Notice of Security Interest. The Grantor, the Agent and the Issuer are entering
into this Control Agreement to perfect, and to confirm the priority of, the Agent’s security
interest in the Collateral. The Issuer acknowledges that this Control Agreement constitutes written
notification to the Issuer of the Agent’s security interest in the Collateral. The Issuer agrees to
promptly make all necessary entries or notations in its books and records to reflect the Agent’s
security interest in the Collateral and, upon request by the Agent, to register the Agent as the
registered owner of any or all of the Pledged Securities. The Issuer acknowledges that the Agent
has control over the Collateral.

     SECTION
2. Collateral. The Issuer hereby represents and warrants to, and agrees with the
Grantor and the Agent that (i) the terms of any limited liability company interests or partnership
interests included in the Collateral from time to time shall expressly provide that they are
securities governed by Article 8 of the Uniform Commercial Code in effect from time to time in the
State of
[                    ], (ii) the Pledged Securities are Uncertificated
Securities, (iii) the Issuer’s Jurisdiction is, and during the term of this Control Agreement shall remain, the State of
[                    ], (iv) Schedule 1 contains a true and complete description of the Pledged
Securities as of the date hereof and (v) except for the claims and interests of the Agent and the
Grantor in the Collateral, the Issuer does not know of any claim to or security interest or other
interest in the Collateral.

     SECTION
3.
Control. The Issuer hereby agrees, upon written direction from the Agent and
without further consent from the Grantor, (a) to comply with all Instructions and directions of
every kind originated by the Agent concerning the Collateral, to liquidate or otherwise dispose of

 

 

the Collateral as and to the extent directed by the Agent and to pay over to the Agent all Proceeds
of the Collateral without any setoff or deduction, and (b) except as otherwise directed by the
Agent, not to comply with the Instructions or directions of any kind originated by the Grantor or
any other person with respect to the Collateral.

     SECTION
4. Other Agreements. The Issuer shall notify promptly the Agent and the Grantor if
any other person asserts any lien, encumbrance, claim (including any adverse claim) or security
interest in or against any of the Collateral. In the event of any conflict between the provisions
of this Control Agreement and any other agreement governing the Pledged Securities or the
Collateral, the provisions of this Control Agreement shall control.

     SECTION
5. Protection of Issuer. The Issuer may rely and shall be protected in acting upon
any notice, instruction or other communication that it reasonably believes to be genuine and
authorized.

     SECTION
6. Termination. This Control Agreement shall terminate automatically upon receipt
by the Issuer of written notice executed by the Agent terminating this Agreement.

     SECTION
7. Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, to the Grantor’s and the Agent’s addresses as set forth in the Guarantee and Collateral
Agreement, and to the Issuer’s address as set forth below, or to such other address as any party
may give to the others in writing for such purpose:

	 	 	 	 	 	 	 
	 	 	[Name of Issuer]	 	 
	 	 	[Address of Issuer]	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Telephone: (  )
	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Telecopy: (  )
	 	 	 	 
	 

	 	 	 	 

	 	 

     SECTION
8. Amendments in Writing. None of the terms or provisions of this Control Agreement
may be waived, amended, supplemented or otherwise modified except by a written instrument executed
by the parties hereto.

     SECTION
9. Entire Agreement. This Control Agreement and the Guarantee and Collateral
Agreement constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter hereof.

     SECTION
10. Execution in Counterparts. This Control Agreement may be executed in any number
of counterparts (including by telecopy), each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     SECTION
11. Successors and Assigns. This Control Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns, except that the
Grantor may not assign, transfer or delegate any of its rights or obligations under this Control
Agreement without the prior written consent of the Agent.

 

 

     SECTION
12. Governing Law and Jurisdiction. This Control Agreement has been delivered to
and accepted by the Agent and will be deemed to be made in the State of New York. THIS CONTROL
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. Each of the parties hereto submits for itself and its property in any legal
action or proceeding relating to this Control Agreement, 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.

     SECTION
13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CONTROL
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FOURTH THIRD LLC, as Agent 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NAME OF ISSUER] 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

Exhibit G
to Guarantee and Collateral Agreement

FORM OF CONTROL AGREEMENT

     This CONTROL AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Control Agreement”) dated as of ___,
200___, is made by and
among ___, a corporation (the “Grantor”), Fourth Third LLC, as
Agent (in such capacity, the “Agent”) for the Secured Parties (as defined in the Guarantee and
Collateral Agreement referred to below), and, a corporation (the
“Broker”).

     WHEREAS,
the Broker maintains for the Grantor a securities account, Account No. (the
“Pledged Account”), in the name of the Grantor.

     WHEREAS, the Grantor has granted to the Agent for the benefit of the Secured Parties a security
interest in the Pledged Account, the financial assets and any free credit balance carried therein,
all security entitlements with respect thereto, and all additions thereto and substitutions and
Proceeds thereof (collectively, the “Collateral”) pursuant to a Guarantee and Collateral
Agreement, dated as [          ] (as amended, supplemented, replaced or otherwise
modified from time to time, the “Guarantee and Collateral
Agreement”), by the Grantor and
the other persons party thereto as grantors in favor of the Agent.

     WHEREAS, the following terms which are defined in Articles 8 and 9 of the Uniform Commercial Code
in effect in the State of New York on the date hereof (the
“UCC”) are used herein as so defined
(whether or not such terms are capitalized in the UCC): Adverse Claim, Commodity Account, Commodity
Contract, Control, Entitlement Order, Financial Asset, Investment Property, Proceeds, Securities
Account, Securities Intermediary, Securities Intermediary’s
Jurisdiction and Security Entitlement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION
1. Notice of Security Interest. The Grantor, the Agent and the Broker are entering
into this Control Agreement to perfect, and to confirm the priority of, the Agent’s security
interest in the Collateral. The Broker acknowledges that this Control Agreement constitutes written
notification to the Broker of the Agent’s security interest in the Collateral. The Broker agrees to
promptly make all necessary entries or notations in its books and records to reflect the Agent’s
security interest in the Collateral. The Broker acknowledges that the Agent has control over the
Pledged Account, all Financial Assets contained therein from time to time, and all Security
Entitlements with respect thereto.

     SECTION
2. Collateral; Pledged Account, (a) The Grantor hereby agrees with the Agent and
the Broker that that Grantor shall direct that all Investment Property (other than any Commodity
Contract or Commodity Account) held by the Broker for the Grantor be credited to the Pledged
Account or another securities account subject to a Control Agreement maintained with the Broker.

     (b) The Broker hereby represents and warrants to, and agrees with the Grantor and the Agent that
(i) the Broker is a Securities Intermediary with respect to the Grantor and the Pledged Account is
a Securities Account, (ii) all assets, property and items from time to time

 

 

carried in the Pledged Account, including, without limitation, any Investment Property,
are, and will continue to be, Financial Assets, (iii) the Securities Intermediary’s Jurisdiction
is, and during the term of this Control Agreement shall remain, the State of New York, (iv)
Schedule 1 contains a true and complete statement of the Pledged Account and the Financial
Assets carried therein and any free credit balance therein as of the date hereof, (v) no Financial
Asset included in the Collateral is registered in the name of, payable to the order of, or
specially indorsed to, the Grantor, which has not been indorsed to the Broker or in blank, and
(vi) the Pledged Account is and shall remain a cash account, and the Broker will not extend,
directly or indirectly, any “purpose credit” (within the meaning of such term under Regulation T
of the Board of Governors of the Federal Reserve System of the United States) to the Grantor in
respect of the Pledged Account. The Brokers will not, so long as this Control Agreement is in
effect, enter into any agreement with any other Person that provides Control over the Pledged
Account to such other Person.

     (c) The Agent hereby instructs the Broker, and the Broker hereby confirms and agrees that,
unless the Agent shall otherwise direct the Broker in writing, the Investment Property (other than
any Commodity Contract or Commodity Account) from time to time held by the Broker for the Grantor
shall be credited only to, and carried only in, the Pledged Account or another securities account
subject to a Control Agreement maintained with the Broker.

     SECTION
3. Control. The Broker hereby agrees, upon written direction from the Agent
and without further consent from the Grantor, (a) to comply with all instructions, Entitlement
Orders and directions of every kind originated by the Agent concerning the Collateral, to liquidate
or otherwise dispose of the Collateral as and to the extent directed by the Agent and to pay over
to the Agent all proceeds without any setoff or deduction, and (b) except as otherwise directed by
the Agent, not to comply with the instructions, Entitlement Orders or directions of any kind
originated by the Grantor or any other person.

     SECTION
4. Other Agreements; Termination; Successor Brokers. The Broker shall
simultaneously send to the Agent copies of all notices given and statements rendered pursuant to
the Pledged Account. The Broker shall notify promptly the Agent and the Grantor if any other
person asserts any lien, encumbrance, claim (including any adverse claim) or security interest in
or against any of the Collateral. As long as the Guarantee and Collateral Agreement remains in
effect, neither the Grantor nor the Broker shall terminate the Pledged Account without [thirty
(30)] days’ prior written notice to the other party and the Agent. In the event of any conflict
between the provisions of this Control Agreement and any other agreement governing the Pledged
Account or the Collateral, the provisions of this Control Agreement shall control. In the event
the Broker no longer serves as Broker for the Collateral, the Pledged Account and the Financial
Assets carried therein shall be transferred to a successor broker or custodian satisfactory to the
Agent, provided, that prior to such transfer, such successor broker or custodian shall execute an
agreement that is substantially in the form of this Control Agreement or is otherwise in form and
substance satisfactory to the Agent.

     SECTION
5. Protection of Broker Indemnification. The Broker may rely and shall be
protected in acting upon any notice, instruction or other communication that it reasonably
believes to be genuine and authorized. The Broker shall not be liable, except for its own gross
negligence or willful misconduct or its breach of the express terms of this Control Agreement and,
except with respect to claims based upon such gross negligence or willful misconduct or any such
breach that are successfully asserted against the Broker, the Grantor shall indemnify and hold
harmless the Broker (and any successor Broker) from and against any and all losses,

 

 

liabilities, claims, actions, damages and expenses, including reasonable attorneys’ fees
and disbursements arising out of and in connection with this Control Agreement.

     SECTION
6. Termination. This Control Agreement shall terminate automatically upon
receipt by the Broker of written notice executed by the Agent
terminating this Agreement.

     SECTION
7. Waiver: Priority of Agent’s Interests. Other than with respect to its fees
and customary commissions with respect to the Pledged Account, the Broker hereby waives its right
to set off any obligations of the Grantor to the Broker against any or all of the Collateral and
hereby agrees that any and all liens, encumbrances, claims or security interests which the Broker
may have against the Collateral, either now or in the future in connection with the Pledged
Account, are and shall be subordinate and junior to the prior payment in full in immediately
available funds of all obligations of the Grantor now or hereafter existing under the Credit
Agreement, the Guarantee and Collateral Agreement, and all other documents related thereto, whether
for principal, interest (including, without limitation, interest as provided in the Credit
Agreement, whether or not such interest accrues after the filing of such petition for purposes of
the federal Bankruptcy Code or is an allowed claim in such proceeding), indemnities, fees,
premiums, expenses or otherwise. Except for the foregoing and claims and interests of the Agent and
the Grantor in the Collateral and the rights of the Broker therein, the Broker does not know of any
claim to or security interest or other interest in the Collateral.

     SECTION
8, Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy) and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when delivered, or
three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, to the Grantor’s and the Agent’s addresses as set forth in the Guarantee and
Collateral Agreement, and to the Broker’s address as set forth below, or to such other address as
any party may give to the others in writing for such purpose:

	 	 	 	 	 	 	 
	 

	 	[Name of Broker]	 	 	 	 
	 

	 	[Address of Broker]	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Telephone:

Telecopy:
	( )
( )	
 

   
	 	 

     SECTION 9. Amendments in Writing. None of the terms or provisions of this Control
Agreement may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the parties hereto.

     SECTION 10. Entire Agreement. This Control Agreement and the Guarantee and Collateral
Agreement constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter
hereof.

     SECTION 11. Execution in Counterparts. This Control Agreement may be executed in any
number of counterparts (including by telecopy), each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement.

 

 

     SECTION
12. Successors and_Assigns. This Control Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, except
that the Grantor may not assign, transfer or delegate any of its rights or obligations under this
Control Agreement without the prior written consent of the Agent.

     SECTION
13. Governing Law and Jurisdiction. This Control Agreement has been delivered
to and accepted by the Agent and will be deemed to be made in the State of New York. THIS CONTROL
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. Each of the parties hereto submits for itself and its property in any legal
action or proceeding relating to this Control Agreement, 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,

     SECTION 14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS CONTROL AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

	 	 	 	 	 
	 	

[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FOURTH THIRD LLC, as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NAME OF BROKER]

 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

Exhibit H to Guarantee and Collateral Agreement

FORM OF CONTROL AGREEMENT

     This CONTROL AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Control Agreement”) dated as of                     , 200_______, is made by and
among                     , a                      corporation (the “Grantor”), Fourth Third LLC, as
Agent (in such capacity, the “Agent”) for the Secured Parties (as defined in the Guarantee
and Collateral Agreement referred to below), and , ________a________  corporation (the
“Broker”).

     WHEREAS, the Broker maintains for the Grantor a commodity account, Account No.                     
(the “Pledged Account”), in the name of the Grantor.

     WHEREAS, the Grantor has granted to the Agent for the benefit of the Secured Parties a
security interest in the Pledged Account, the commodity contracts and any free credit balance
carried therein, and all additions thereto and substitutions and Proceeds thereof (collectively,
the “Collateral”) pursuant to a Guarantee and Collateral Agreement, dated as of [                    ] (as
amended, supplemented, replaced or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”), by the Grantor and the other persons party thereto as grantors in favor
of the Agent.

     WHEREAS, the following terms which are defined in Articles 8 and 9 of the Uniform Commercial
Code in effect in the State of New York on the date hereof (the “UCC”) are used herein as
so defined (whether or not such terms are capitalized in the UCC): Commodity Account, Commodity
Contract, Commodity Intermediary’s Jurisdiction, Control and Proceeds.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. Notice of Security Interest. The Grantor, the Agent and the Broker are
entering into this Control Agreement to perfect, and to confirm the priority of, the Agent’s
security interest in the Collateral. The Broker acknowledges that this Control Agreement
constitutes written notification to the Broker of the Agent’s security interest in the Collateral.
The Broker agrees to promptly make all necessary entries or notations in its books and records to
reflect the Agent’s security interest in the Collateral. The Broker acknowledges that the Agent
has control over the Pledged Account and all Commodity Contracts and any free credit balance
carried therein from time to time.

     SECTION
2. Collateral; Pledged Account. (a) The Grantor hereby agrees with the Agent
and the Broker that the Grantor shall direct that all Commodity Contracts carried by the Broker on
its books for the Grantor be credited to the Pledged Account or another commodity account subject
to a Control Agreement maintained with the Broker.

     (b) The Broker hereby represents and warrants to, and agrees with the Grantor and the Agent
that (i) the Broker is a Commodity Intermediary with respect to the Grantor and the Pledged
Account is a Commodity Account, (ii) the Commodity Intermediary’s Jurisdiction is, and during the
term of this Control Agreement shall remain, the State of New York, (iii) Schedule 1
contains a true and complete statement of the Pledged Account and the Commodity Contracts and
any free credit balance carried therein as of the date hereof, and (iv) the Pledged Account is and

 

 

shall remain a cash account, and the Broker will not extend, directly or indirectly, any “purpose
credit” (within the meaning of such term under Regulation T of the Board of Governors of the
Federal Reserve System of the United States) to the Grantor in respect of the Pledged Account. The
Broker will not, so long as this Control Agreement is in effect, enter into any agreement with any
other person that provides Control over the Pledged Account to such other person.

     (c) The Agent hereby instructs the Broker, and the Broker hereby confirms and agrees that,
unless the Agent shall otherwise direct the Broker in writing, all Commodity Contracts carried by
the Broker on its books for the Grantor shall be credited only to, and carried only in, the
Pledged Account or another commodity account subject to a Control Agreement maintained with the
Broker.

     SECTION 3. Control. The Broker hereby agrees, upon written direction from the Agent
and without further consent from the Grantor, (a) to apply any value distributed on account of the
Commodity Contracts carried in the Pledged Account as directed by the Agent, to liquidate or
otherwise dispose of the Collateral as and to the extent directed by the Agent and to pay over to
the Agent all proceeds and other value therefrom or otherwise distributed with respect thereto
without any setoff or deduction, and (b) except as otherwise directed by the Agent, not to apply
any value distributed on account of any Commodity Contract carried in the Pledged Account as
directed by the Grantor or any other person.

     SECTION 4. Other Agreements; Termination; Successor Brokers. The Broker shall
simultaneously send to the Agent copies of all notices given and statements rendered pursuant to
the Pledged Account. The Broker shall notify promptly the Agent and the Grantor if any other person
asserts any lien, encumbrance, claim or security interest in or
against any of the Collateral. As
long as the Guarantee and Collateral Agreement remains in effect, neither the Grantor nor the
Broker shall terminate the Pledged Account without [thirty (30)] days’ prior written notice to the
other party and the Agent. In the event of any conflict between the provisions of this Control
Agreement and any other agreement governing the Pledged Account or the Collateral, the provisions
of this Control Agreement shall control. In the event the Broker no longer serves as Broker for the
Collateral, the Pledged Account, the Commodity Contracts and any free credit balance carried
therein shall be transferred to a successor broker, custodian or futures commission merchant
satisfactory to the Agent, provided, that prior to such transfer, such successor broker, custodian
or futures commission merchant shall execute an agreement that is substantially in the form of this
Control Agreement or is otherwise in form and substance satisfactory
to the Agent.

     SECTION
5. Protection of Broker Indemnification. The Broker may rely and shall be
protected in acting upon any notice, instruction or other communication that it reasonably believes
to be genuine and authorized. The Broker shall not be liable, except for its own gross negligence
or willful misconduct or its breach of the express terms of this Control Agreement and, except with
respect to claims based upon such gross negligence or willful misconduct or any such breach that
are successfully asserted against the Broker, the Grantor shall indemnify and hold harmless the
Broker (and any successor Broker) from and against any and all losses, liabilities, claims,
actions, damages and expenses, including reasonable attorneys’ fees and disbursements arising out
of and in connection with this Control Agreement.

     SECTION 6. Termination. This Control Agreement shall terminate automatically upon
receipt by the Broker of written notice executed by the Agent terminating this Agreement.

 

 

     SECTION 7. Waiver; Priority of Agent’s Interests. Other than with respect to its fees
and customary commissions with respect to the Pledged Account, the Broker hereby waives its right
to set off any obligations of the Grantor to the Broker against any or all of the Collateral and
hereby agrees that any and all liens, encumbrances, claims or security interests which the Broker
may have against the Collateral, either now or in the future in connection with the Pledged
Account, are and shall be subordinate and junior to the prior payment in full in immediately
available funds of all obligations of the Grantor now or hereafter existing under the Credit
Agreement, the Guarantee and Collateral Agreement, and all other documents related thereto, whether
for principal, interest (including, without limitation, interest as provided in the Credit
Agreement, whether or not such interest accrues after the filing of such petition for purposes of
the federal Bankruptcy Code or is an allowed claim in such proceeding), indemnities, fees,
premiums, expenses or otherwise. Except for the foregoing and claims and interests of the Agent and
the Grantor in the Collateral and the rights of the Broker therein, the Broker does not know of any
claim to or security interest or other interest in the Collateral.

     SECTION 8. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy) and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when delivered, or
three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, to the Grantor’s and the Agent’s addresses as set forth in the Guarantee and
Collateral Agreement, and to the Broker’s address as set forth below, or to such other address as
any party may give to the others in writing for such purpose:

[Name of Broker]

[Address of Broker]

Attention:                                              

Telephone: ( )                                        

Telecopy: ( )                                          

     SECTION 9. Amendments in Writing. None of the terms or provisions of this Control
Agreement may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the parties hereto.

     SECTION 10. Entire Agreement. This Control Agreement and the Guarantee and Collateral
Agreement constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter
hereof.

     SECTION 11. Execution in Counterparts. This Control Agreement may be executed in any
number of counterparts (including by telecopy), each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement.

     SECTION 12. Successors and Assigns. This Control Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, except
that the Grantor may not assign, transfer or delegate any of its rights or obligations under this
Control Agreement without the prior written consent of the Agent.

     SECTION 13. Governing Law and Jurisdiction. This Control Agreement has been delivered
to and accepted by the Agent and will be deemed to be made in the State of New York.

 

 

THIS CONTROL AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK. Each of the parties hereto submits for itself and its property in any
legal action or proceeding relating to this Control Agreement, 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.

     SECTION 14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CONTROL
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FOURTH THIRD LLC, as
 Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  

Title:	 	 
	 
	 	[NAME OF BROKER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Exhibit I to Guarantee and Collateral Agreement

FORM OF CONTROL AGREEMENT

     This CONTROL AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Control Agreement”) dated as
of,_________ 200_, is made by and among
                     , a                      corporation (the “Beneficiary”), FOURTH THIRD LLC, as
Agent (in such capacity, the “Agent”) for the Secured Parties (as defined in the Guarantee and
Collateral Agreement referred to below), and                     , a                      (the “Issuer”).

     WHEREAS, the Issuer has issued Letter of Credit No.                      (together with all
accepted amendment or other modifications thereto, the “Credit”) in favor of the
Beneficiary.

     WHEREAS, the Beneficiary has granted to the Agent for the benefit of the Secured Parties a
security interest in and assignment of all proceeds of and all of the Beneficiary’s other
Letter-of-Credit Rights with respect to the Credit (the “Collateral”) pursuant to a
Guarantee and Collateral Agreement, dated as of [                    ] (as amended, supplemented, replaced or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”), by the
Beneficiary and the other persons named as “Grantors” therein in favor of the Agent.

     WHEREAS, the following terms which are defined in Article 9 of the Uniform Commercial Code in
effect in the State of New York on the date hereof (the “UCC”) are used herein as so defined
(whether or not such terms are capitalized in the UCC): Letter-of-Credit Rights and Proceeds.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. Notice of Security Interest. The Beneficiary, the Agent and the Issuer are
entering into this Control Agreement to perfect, and to confirm the priority of, the Agent’s
security interest in the Collateral. The Issuer acknowledges that this Control Agreement
constitutes written notification to the Issuer of the Agent’s security interest in the Collateral.
The Issuer agrees, upon its receipt of the original Credit (which the Beneficiary agrees to
transmit forthwith to the Issuer), to promptly make a notation to reflect the Agent’s security
interest in the Collateral upon the original Credit and thereafter return the original Credit to
the Beneficiary. The Issuer also agrees to promptly make such other necessary entries or notations
in its books and records to reflect the Agent’s security interest in the Collateral. The Issuer
acknowledges that the Agent has control over the Collateral.

     SECTION 2. Control. For the purposes of Sections 5-114(c) and 9-107 of the UCC, the
Issuer hereby consents to the grant to the Agent of a security interest in the Letter-of-Credit
Rights under the Credit and to the assignment to the Agent of the Proceeds of the Credit. The
Issuer will pay all Proceeds of the Credit to the Agent in accordance with the Agent’s written
instructions. The Beneficiary agrees to immediately return to the Issuer any Proceeds of the
Credit inadvertently paid to the Beneficiary. The Issuer will not consent to any other assignment
of Proceeds of the Credit or to any other security interest in the Collateral.

     SECTION 3. Extent of Agreement. This Control Agreement (a) is not a transfer or
assignment of the Credit, (b) does not give the Agent any interest in the Credit or any documents
presented thereunder or any right to draw on the Credit or to consent or to refuse to consent to

 

 

amendments to the Credit or to the cancellation thereof, (c) does not affect whether the
Beneficiary can transfer its right to draw on the Credit and (d) does not affect the Beneficiary’s
right to draw on the Credit or the Beneficiary’s or the Issuer’s right to consent or to refuse to
consent to amendments to the Credit or to the cancellation thereof.

     SECTION
4. Representations and Warranties. The Beneficiary represents and warrants
that:

     (a) other than as set forth herein, the Beneficiary has not and will not, by transfer or
assignment of the Credit, by negotiation of drafts, by drawing drafts to a third party or
otherwise, assign the right to receive the whole or any portion of the Collateral or give any
other control rights, authorization or direction in respect of the Collateral to any other party;

     (b) the Beneficiary has not and will not, without the prior written consent of the Issuer,
present to anyone but the Issuer any documents under the Credit;

     (c) the Beneficiary’s execution, delivery and performance of this Control Agreement (i) are
within its powers, (ii) have been duly authorized, (iii) do not contravene any charter provision,
by-law, resolution, contract or other undertaking binding on or affecting the Beneficiary or any
of its properties, (iv) do not violate any applicable domestic or foreign law, rule or regulation
and (v) do not require any notice, filing or other action to, with or by any governmental
authority;

     (d) this Control Agreement has been duly executed and delivered by the Beneficiary and is the
Beneficiary’s legal, valid and binding obligation; and

     (e) the transactions underlying the Credit (and any shipment of goods or provision of services
and any related financial arrangements) and this Control Agreement do not violate any applicable
United States or other law, rule or regulation.

     SECTION 5. Other Agreements; Termination; Successor Issuers. The Issuer shall
simultaneously send to the Agent copies of all notices given and statements rendered pursuant to
the Credit. The Issuer shall notify promptly the Agent and the Beneficiary if any other person
asserts any lien, encumbrance, claim (including any adverse claim) or security interest in or
against any of the Collateral. Until the Agent has notified the Issuer and Beneficiary that this
Agreement has been terminated in accordance with
Section 7, neither the Beneficiary nor
the Issuer shall terminate the Credit before its stated maturity without [thirty (30)] days’ prior
written notice to the other party and the Agent. In the event of any conflict between the
provisions of this Control Agreement and any other agreement governing the Credit or the
Collateral, the provisions of this Control Agreement shall control. In the event the Issuer no
longer serves as Issuer for the Credit, the Credit shall be transferred to a successor Issuer
satisfactory to the Agent, provided, that prior to such transfer, such successor Issuer shall
execute an agreement that is substantially in the form of this Control Agreement or is otherwise
in form and substance satisfactory to the Agent.

     SECTION 6. Protection of Issuer; Indemnification. The Issuer may rely and shall be
protected in acting upon any notice, instruction or other communication that it reasonably
believes to be genuine and authorized. The Issuer shall not be liable, except for its own gross
negligence or willful misconduct or its breach of the express terms of this Control Agreement and,
except with respect to claims based upon such gross negligence or willful misconduct or any

 

 

such breach that are successfully asserted against the Issuer, the Beneficiary shall indemnify and
hold harmless the Issuer (and any successor Issuer) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including reasonable attorneys’ fees and
disbursements arising out of and in connection with this Control
Agreement.

     SECTION
7. Termination. This Control Agreement shall terminate automatically upon
receipt by the Issuer of written notice executed by the Agent terminating this Agreement.

     SECTION 8. Waiver. The Issuer hereby waives its right to set off any obligations of
the Beneficiary to the Issuer against any or all of the Collateral.

     SECTION 9. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when delivered, or three
days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, to the Beneficiary’s and the Agent’s addresses as set forth in the Guarantee and
Collateral Agreement, and to the Issuer’s address as set forth below, or to such other address as
any party may give to the others in writing for such purpose:

[Name of Issuer]

[Address of Issuer]

Attention:                                               

Telephone: ( )                                         

Telecopy: ( )                                           

     SECTION 10. Amendments in Writing. None of the terms or provisions of this Control
Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument
executed by the parties hereto.

     SECTION 11. Entire Agreement. This Control Agreement and the Guarantee and Collateral
Agreement constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter hereof.

     SECTION 12. Execution in Counterparts. This Control Agreement may be executed in any
number of counterparts (including by telecopy), each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement.

     SECTION 13. Successors and Assigns. This Control Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, except
that the Beneficiary may not assign, transfer or delegate any of its rights or obligations under
this Control Agreement without the prior written consent of the Agent.

     SECTION 14. Governing Law and Jurisdiction. This Control Agreement has been delivered
to and accepted by the Agent and will be deemed to be made in the State of New York. This Control
Agreement is made subject to the practice rules (e.g., UCP 500 or ISP 98) to which the Credit is
subject. THIS CONTROL AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK. Each of the parties hereto submits for itself and its
property in any legal action

 

 

or proceeding relating to this Control Agreement, 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.

     SECTION 15. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CONTROL
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

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

	 	 	 	 	 
	 	[NAME OF BENEFICIARY],

as Beneficiary

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FOURTH THIRD LLC,

as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[NAME OF ISSUER],

as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Annex 1 to Guarantee and Collateral Agreement

     ASSUMPTION AGREEMENT, dated as of                     , 200___, made by
                                        , a                      corporation (the “Additional Grantor”), in favor
of Fourth Third LLC, as Agent (in such capacity, the “Agent”) for (i) the lenders (the
“Lenders”) party to the Credit Agreement referred to below and (ii) the other Secured
Parties (as defined in the Guarantee and Collateral Agreement (as hereinafter defined)). All
capitalized terms not defined herein shall have the meaning ascribed to them in such Credit
Agreement.

W I T N E S S E T H:

     WHEREAS [                      ], (“Borrower”), [                    ], the Lenders
and the Agent have entered into a Credit Agreement, dated as of [___] (as amended,
supplemented, replaced or otherwise modified from time to time, the “Credit Agreement”);

     WHEREAS, in connection with the Credit Agreement, the Borrowers and certain of its Affiliates
(other than the Additional Grantor) have entered into the Guarantee and Collateral
Agreement, dated as of [                    ] (as amended, supplemented or otherwise modified
from time to time, the “Guarantee and Collateral Agreement”) in favor of the Agent for the
benefit of the Secured Parties;

     WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the
Guarantee and Collateral Agreement; and

     WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in
order to become a party to the Guarantee and Collateral Agreement;

     NOW, THEREFORE, IT IS AGREED:

     1. Guarantee and Collateral Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 19.15 of the Guarantee and
Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Grantor
and Guarantor thereunder with the same force and effect as if originally named therein as a Grantor
and Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor and Guarantor thereunder. The information set forth in
Annex 1-A hereto is hereby added to the information set forth in the Perfection Certificate or
Perfection Supplement most recently delivered pursuant to the terms of the Guarantee and Collateral
Agreement. The Additional Grantor hereby represents and warrants that each of the representations
and warranties as to the Additional Grantor contained in Section 6 of the Guarantee and
Collateral Agreement is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.

     2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

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

	 	 	 	 	 
	 	[ADDITIONAL GRANTOR]

 	 

 

 

	 	 	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Execution Copy

EARTH BIOFUELS, INC.

WARRANT PURCHASE AND

REGISTRATION RIGHTS AGREEMENT

     This Warrant Purchase and Registration Rights Agreement (the “Agreement”) is entered into as
of February 28, 2007, by and between Earth Biofuels, Inc., a Delaware corporation (the “Company”)
and Fourth Third LLC (the “Purchaser”).

     WHEREAS, the Company wishes to sell to the Purchaser a warrant (together with any replacements
or additional warrants issued in connection therewith, the “Warrant”) to purchase 13,549,816 shares
of the Company’s Warrant Stock (as defined in the Warrant), upon the terms and subject to the
conditions hereinafter set forth; and

     WHEREAS, in connection with the issuance and sale of the Warrant by the Company to the
Purchaser, the Company desires to provide the Purchaser certain rights with respect to
registration of the shares of Warrant Stock held by it and certain other rights with respect to
such shares as an inducement to the Purchaser to purchase the Warrant.

     NOW, THEREFORE, in consideration of the mutual agreements, covenants and conditions contained
herein, the Company and the Purchaser hereby agree as follows:

	  1.	 	DEFINED TERMS

     Capitalized terms used but not defined herein have the meanings ascribed to them in the
Credit Agreement. As used in this Agreement, the following terms shall have the meanings set forth
below:

          “Commission” shall mean the Securities and Exchange Commission or any other federal agency at
the time administering the Securities Act.

          “Credit Agreement” shall mean the Credit Agreement, dated as of February 28, 2007, as
amended, restated, modified or supplemented from time to time, among the Company, the Borrower,
Durant Biofuels, LLC, the other Loan Parties named therein, the Lenders named therein and Fourth
Third LLC, as Agent.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
successor federal statute and the rules and regulations thereunder, all as the same shall be in
effect from time to time.

          “Holder” shall mean the Purchaser and any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in compliance with
Section 2.11 hereof.

 

 

          “Initiating Holders” shall mean any Holder or Holders of Registrable Securities who in the
aggregate hold(s) not less than a majority in interest of the Registrable Securities.

          “Other Stockholders” shall mean persons other than Holders who, by virtue of other agreements
with the Company, are entitled to include their securities in certain registrations hereunder.

          “Registrable Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to
the exercise of the Warrant and (ii) any Common Stock issued as a dividend or other distribution
with respect to or in exchange for or in replacement of the shares referenced in (i) above;
provided, however, that Registrable Securities shall not include (1) any shares of
Common Stock which have previously been registered, (2) any shares of Common Stock which have been
sold to the public either pursuant to an effective registration statement or an exemption from
registration under the Securities Act (including Rule 144) or (3) any shares of Common Stock which
have been sold in a private transaction in which the transferor’s rights under this Agreement are
not assigned.

          The terms “register,” “registered” and “registration” shall refer to a registration effected
by preparing and filing a registration statement on Form S-l, Form S-3 or any other applicable
form(s) or any such successor form(s) in compliance with the Securities Act and applicable rules
and regulations thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

          “Registration Expenses” shall mean all expenses incurred in effecting any registration
pursuant to this Agreement, including, without limitation, all registration, qualification, and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company,
blue sky fees and expenses, and expenses of any regular or special audits incident to or required
by any such registration; provided that Registration Expenses shall not include Selling
Expenses.

          “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that may be promulgated
by the Commission.

          “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that may be promulgated
by the Commission.

          “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as the same shall be in effect from
time to time.

          “Selling Expenses” shall mean all underwriting discounts, selling commissions, fees and
expenses of counsel for the Holders requesting registration pursuant to Section 2.1 or
Section 2.3 hereof and stock transfer taxes applicable to the sale of Registrable
Securities.

-2-

 

SECTION 2. WARRANT PURCHASE

     1.1. Purchase and Sale of Warrant.

     (a) In consideration of the making of the Loan pursuant to the Credit Agreement to Borrower,
and subject to the terms and conditions herein set forth, the Company agrees that it will issue
and sell to the Purchaser and the Purchaser agrees that it will acquire from the Company on the
Closing Date, the Warrant for a deemed purchase price, for the purposes of Treasury Regulation of
§ 1.1273-2(h), of $200,000.00 (which purchase price shall be deemed paid with a like amount of
proceeds of the Loan made by the Purchaser to Borrower). The Warrant is being issued substantially
in the form of Exhibit A hereto.

     (b) The Company and the Purchaser acknowledge that the purchase price set forth above for the
Warrant represents its fair market value, and agree to be bound by this allocation for all tax
purposes pursuant to Treasury Regulation § 1.1273-2(h).

     1.2. Conditions.

     The obligation of the Purchaser to purchase the Warrant is subject to the satisfaction of
each of the conditions set forth in Section 4 of the Credit Agreement.

     1.3 Closing.

     The purchase and issuance of the Warrant under Section 1.1 shall take place at the
closing (the “Closing”) to be held at the offices of King & Spalding LLP in New York City on
February 28, 2007 or at such other time and place as the parties may agree upon (the date and time
of the Closing, the “Closing Date”). On the Closing Date, the Company shall deliver the Warrant to
the Purchaser against delivery by the Purchaser to the Company of the purchase price therefor,
such purchase price to be paid by the Purchaser making the Loan to the Borrower and the Borrower
using a portion of such Loan proceeds equal to the purchase price to remit the purchase price to
the Company.

     1.4 Financial Accounting Positions; Tax Reporting.

     Each of the parties hereto agrees to take reporting and other positions with respect to the
Warrant that are consistent with the purchase price of the Warrant set forth herein for all
financial accounting purposes, unless otherwise required by applicable GAAP or Commission rules (in
which case the parties agree not to take positions inconsistent with the purchase price of the
Warrant set forth herein unless the Purchaser has consented thereto). Each of the parties to this
Agreement agrees to take reporting and other positions with respect to the Warrant that are
consistent with the purchase price of the Warrant set forth herein for all other purposes,
including, without limitation, for all federal, state and local tax purposes.

-3-

 

     1.5 Representations and Warranties of Purchaser

Purchaser hereby represents and warrants to the Company as follows:

(a) Authorization; No Contravention

The execution, delivery and performance by it of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the purchase of the Warrant: (a)
is within its power and authority and has been duly authorized by all necessary action; (b) does
not contravene the terms of its organizational documents or any amendment thereof; and (c) will
not violate, conflict with or result in any breach or contravention of any of its contractual
obligations, or any order or decree directly relating to it.

(b) Binding Effect

This Agreement has been duly executed and delivered by it and assuming that it is binding on and
enforceable against the Company, this Agreement constitutes the Purchaser’s legal, valid and
binding obligation, enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles relating to enforceability.

(c) No Legal Bar

The execution, delivery and performance of this Agreement by it will not violate any requirement
of law applicable to it.

(d) Purchase for Own Account

The Warrant to be acquired by it pursuant to this Agreement and the shares of Warrant Stock
underlying the Warrant are being or will be acquired for its own account and with no present
intention of distributing or reselling such Warrant and shares of Warrant Stock or any part thereof
without prejudice, however, to its right at all times to sell or otherwise dispose of all or any
part of the Warrant and the shares of Warrant Stock underlying the Warrant under an effective
registration statement under the Securities Act, or under an exemption from such registration
available under the Securities Act, and subject, nevertheless, to the disposition of its property
being at all times within its control, subject to the terms and conditions of the Loan Documents
and the Company’s organizational documents. If the Purchaser should in the future decide to dispose
of the Warrant and/or the membership interests, the Purchaser understands and agrees that it may do
so only in compliance with the Securities Act and applicable state securities laws, as then in
effect, and subject to any applicable provisions of the Company’s organizational documents (in the
case of the Warrant and underlying shares of Warrant Stock) and any Loan Documents to which any
Purchaser is a party or is bound. The Purchaser agrees to the imprinting of a legend on the Warrant
(and the certificates evidencing the shares of Warrant Stock underlying the Warrant) to the
following effect: “THE SECURITY REPRESENTED BY THIS CERTIFICATE WAS ORIGINALLY ISSUED ON FEBRUARY
28, 2007, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

-4-

 

(e) Broker’s, Finder’s or Similar Fees

There are no brokerage commissions, finder’s fees or similar fees or commissions payable in
connection with the transactions contemplated hereby based on any agreement, arrangement or
understanding with it or any action taken by it.

(f) Governmental Authorization; Third Party Consent

No approval, consent, compliance, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person in respect of any requirement of law,
and no lapse of a waiting period under a requirement of law, is necessary or required in connection
with the execution, delivery or performance by it or enforcement against it of this Agreement or
the transactions contemplated hereby.

(g) Accredited Investor

It is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities
Act.

(h) Anti-Money Laundering Representation

It is not aware of, has not been advised of, and has no reason to believe that any facts or
circumstances exist which would cause the Purchaser and/or through the Purchaser, the Company to
violate the federal Bank Secrecy Act, as amended, in connection with the Purchaser’s acquisition
of the Warrant from the Company.

1.6 Representations and Warranties of the Company

(a) Private Offering

No form of general solicitation or general advertising was used by the Company or its
representatives in connection with the offer or sale of the Warrant. Assuming the accuracy and
validity of representations of the Purchaser in Section 1.5 hereof, no registration of the
Warrant pursuant to the provisions of the Securities Act or the state securities or “blue sky”
laws will be required in connection with the offer, sale or issuance of the Warrant pursuant to
this Agreement, the Company covenants and agrees that neither it, nor anyone acting on its behalf,
will offer or sell the Warrant or any other security so as to require the registration of the
Warrant pursuant to the provisions of the Securities Act or any state securities or “blue sky”
laws, unless such Warrant is so registered.

(b) Broker’s, Finder’s or Similar Fees

There are no brokerage commissions, finder’s fees or similar fees or commissions payable in
connection with the transactions contemplated under this Agreement based on any agreement,
arrangement or understanding with the Company.

-5-

 

(c) Representations in Credit Agreement

The Company hereby repeats and restates, mutatis mutandis, as of the date hereof and as of the
Closing Date, each of the representations and warranties as to the Company set forth in the Credit
Agreement.

	  2.	 	RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS.

     2.1 Requested Registration.

          (a) If the Company shall receive from the Initiating Holders a written request that the
Company effect any registration with respect to all or a part of the Registrable Securities, the
Company shall:

               (i) promptly give written notice of the proposed registration to all
other Holders in accordance with Section 3.4 hereof; and

               (ii) subject to the terms and conditions of this Section 2.1, as soon as practicable,
but in any event within one hundred twenty (120) days after receipt of a request for registration,
use its best efforts to effect such registration (including, without limitation, filing
post-effective amendments, appropriate qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with the Securities Act) as would permit or facilitate
the sale and distribution of all or such portion of such Registrable Securities as are specified
in such request, together with all of the Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request received by the Company within twenty (20)
days after such written notice from the Company is mailed or delivered in accordance with
Section 3.4 hereof.

     The Company shall not be obligated to effect, or to take any action to effect, any such
registration pursuant to this Section 2.1:

                    (A) in any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration, qualification, or
compliance, unless the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act;

                    (B) if the Company has, pursuant to this Agreement, effected registration of all
Registrable Securities requested to be registered, which registration has been declared or
order effective and pursuant to which securities have been sold;

                    (C) during the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of filing of a Company-initiated registration;
provided that the Company is actively employing in good faith all reasonable efforts
to cause such registration statement to become effective; or

-6-

 

                    (D) if the Initiating Holders propose to dispose of shares of Registrable Securities
which may be immediately registered on Form S-3 pursuant to a request made under
Section 2.3 hereof.

          (b) Subject to the foregoing clauses (A) through (E), the Company shall file a
registration statement covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the request of the Initiating Holders; provided,
however, that if (i) in the good faith judgment of the Board of Directors of the Company, such registration would be
materially detrimental to the Company and the Board of Directors of the Company concludes, as
a result, that it is essential to defer the filing of such registration statement at such
time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors of the Company, it would be
materially detrimental to the Company for such registration statement to be filed in the near
future and that it is, therefore, essential to defer the filing of such registration
statement, then the
Company shall have the right to defer such filing, for a period of not more than one hundred
twenty (120) days after receipt of the request of the Initiating Holders, and, provided further, that
the Company shall not defer its obligation in this manner more than one (1) time in any
twelve
(12) month period. If the Company elects to defer such filing pursuant to this Section
2.1(b), the
Company shall use its best efforts to file a registration statement covering the Registrable
Securities so requested to be registered within thirty (30) days of the expiration of the one
hundred twenty (120) day deferral period.

     The registration statement filed pursuant to the request of the Initiating Holders may,
subject to the provisions of Section 2.1(d) hereof, include other securities of the
Company, with respect to which registration rights have been granted and may include securities of
the Company being sold for the account of the Company.

          (c) If the requested registration is an underwritten offering, the right of any
Holder to registration pursuant to Section 2.1(a) shall be conditioned upon such
Holder’s
participation in such underwriting and the inclusion of such Holder’s Registrable Securities
in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating
Holders and such Holder with respect to such participation and inclusion) to the extent
provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable
Securities such Holder holds. If a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such underwriting, such person shall be
excluded therefrom by written notice from the Company, the underwriter or the Initiating
Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting shall also be
withdrawn from such registration. If Registrable Securities or other securities are so
withdrawn from the registration and if the number of shares to be included in such registration was
previously reduced as a result of marketing factors pursuant to Section 2.1(d), then
the Company shall offer to all Holders who have retained rights to include securities in the registration
the right to include additional securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional
inclusion in accordance with Section 2.1(d).

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          (d) If the Company shall request inclusion of securities being sold for its own account
in any registration pursuant to Section 2.1 or Section 2.3, or if other persons
shall request inclusion in any registration pursuant to Section 2.2, the Initiating Holders
shall, on behalf of all Holders, offer to include such securities in the underwriting and may
condition such offer on their acceptance of the further applicable provisions of this Section 2. If the registration pursuant to Section 2.1 or Section 2.3 is pursuant to an
underwritten offering, the Company shall (together with all Holders and other persons proposing to
distribute their securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters selected for such
underwriting by the Initiating Holders, to which the Company has reasonably consented.
Notwithstanding any other provision of this Section 2.1, if the representative of the
underwriters advises the Initiating Holders in writing that marketing factors require a limitation
on the number of shares to be underwritten, the securities of the Company shall first be excluded
from such registration to the extent required by such limitation; to the extent that additional
shares need to be excluded to conform to such limitation, the securities held by Other Stockholders
shall next be excluded; and, to the extent that additional shares need to be excluded to conform to
such limitation, the number of shares that may be included shall be allocated pro rata among the
Holders requesting registration in proportion to the respective amounts of Registrable Securities
and other securities that such Holders have requested to be included in the registration. The
Company shall advise all Holders of securities requesting registration as to the number of shares
or securities that may be included in the registration and underwriting as allocated in the
foregoing manner.

     2.2 Company Registration.

          (a) If the Company shall determine to register any of its securities either for its own
account or the account of a security holder or holders exercising their respective demand
registration rights (other than pursuant to Sections 2.1 or 2.3 hereof), other than
a registration relating solely to employee benefit plans, or a registration relating to a corporate
reorganization or other transaction under Rule 145, the Company will:

               (i) promptly give to each Holder written notice thereof in accordance with Section
3.4; and

               (ii) use its best efforts to include in such registration (and any related qualification
under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and
in any underwriting involved therein, all of the Registrable Securities specified in a written
request or requests, made by any Holder and received by the Company within twenty (20) days after
the written notice from the Company described in clause (i) above is mailed or delivered by the
Company in accordance with Section 3.4 hereof. Such written request may specify all or a
part of a Holder’s Registrable Securities be included in the registration described in the notice.

          (b) If the registration of which the Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise the Holders as a part of the written notice
given pursuant to Section 2.2(a)(i). In such event, the right of any Holder to request
registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s

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participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the Other Stockholders) enter into
an underwriting agreement in customary form with the representative of the underwriter or
underwriters selected by the Company.

          (c) Notwithstanding any other provision of this Section 2.2, if the
representative of the underwriters advises the Company in writing that marketing factors require a
limitation on the number of shares to be underwritten, the number of shares that may be included
shall be allocated pro rata among the Holders requesting registration in proportion to the
respective amounts of Registrable Securities and other securities that such Holders, Other
Stockholders and the Company had requested to be included in the registration. If any Holder or
Other Stockholder does not agree to the terms of any such underwriting, such Holder or Other
Stockholder shall be excluded therefore by written notice from the Company or the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.

          (d) If shares are so withdrawn from the registration or if the number of Registrable
Securities to be included in such registration was previously reduced as a result of marketing
factors, the Company shall then offer to all persons who have retained the right to include
Registrable Securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to
be allocated among the persons requesting additional inclusion in accordance with Section
2.2(c) hereof.

          (e) The Company shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in accordance with
Section 2.4 hereof.

     2.3 Registration on Form S-3.

          (a) After its initial public offering, the Company shall use its best efforts to qualify for
registration on Form S-3 under the Securities Act or any other applicable or successor form or
forms. After the Company has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of this Section 2, Holders of Registrable Securities
shall have the right to request registrations on Form S-3 (such requests shall be in writing and
shall state the number of shares of Registrable Securities to be disposed of and the intended
methods of disposition of such shares by such Holder or Holders); provided, however, that
the Company shall not be obligated to use its best efforts to effect any such registration: (i) if
the Holders, together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such other securities
(if any) on Form S-3 at an aggregate price to the public of less than One Million Dollars
($1,000,000); (ii) in the event that the Company shall furnish the certification described in
Section 2.1(b) (but subject to the limitations set forth therein); (iii) if in any six (6)
month period, the Company has already

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effected one (1) registration in such period which has been declared or ordered effective; (iv) if
the Company has already effected a total of three (3) such registrations within one hundred eighty
(180) days of the effective date of any other Company registration statement (other than on Form
S-8 or Form S-3 with respect to employees’ stock); or (v) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance.

          (b) If a request complying with the requirements of Section 2.3(a) hereof is
delivered to the Company, the provisions of Sections 2.1(a)(i) and (ii) and Section
2.1 (b) hereof shall apply to such registration. If the registration is for an underwritten
offering, the provisions of Sections 2.1 (c) and 2.1(d) hereof shall in addition apply to
such registration.

     2.4 Expenses of Registration. All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Sections 2.1, 2.2 and 2.3
hereof shall be borne by the Company and all Selling Expenses relating to securities so registered
shall be borne by the Holders of such securities pro rata on the basis of the number of shares of
securities so registered on their behalf; provided, however, that if the registration
pursuant to Section 2.1 or 2.3 hereof is subsequently withdrawn at the request of
the Holders of a majority of the Registrable Securities to be registered, the Holders shall forfeit
their right to one demand registration pursuant to Section 2.1 with respect to a
registration statement on Form S-l or to demand registration pursuant to Section 2.3 with
respect to a demand registration on Form S-3, unless the Holders of a majority of the Registrable
Securities elect to reimburse the Company for the expenses incurred by the Company attributable to
the registration of such Registrable Securities, which expenses shall be paid within thirty (30)
days after receiving the Company’s statement of Registration Expenses following such withdrawal, in
which case the Holders of such Registrable Securities shall not be deemed to have exercised their
right to require the Company to register Registrable Securities pursuant to Section 2.1 or
2.3, as applicable; provided, further, however, that if at the time of such withdrawal, the
Holders have learned of a material change in the condition, business, or prospects of the Company
which was not known to the Holders at the time of their request and the Holders have withdrawn the
request with reasonable promptness following disclosure by the Company of such material adverse
change, then the Holders shall not be required to pay any of the Registration Expenses and shall
retain their rights pursuant to Section 2.1 and 2.3 hereof.

     2.5 Registration Procedures. In the case of each registration affected by the Company
pursuant to Section 2, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. At its expense, the Company will
as expeditiously as practicable use its best efforts to:

          (a) Keep such registration effective for a period of one hundred eighty (180) days or until
the Holder or Holders have completed the distribution described in the registration statement
relating thereto, whichever first occurs; provided, however, that (i) such one hundred
eighty (180) day period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the request of an underwriter
of Common Stock (or other securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed

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basis, such one hundred eighty (180) day period shall be extended, if necessary, to keep the
registration statement effective until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous
or delayed basis;

          (b) Prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement;

          (c) Furnish such number of prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

          (d) Notify each seller of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
occurrence of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing, and at the request of any
such seller, prepare and furnish to such seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then existing;

          (e) Use its best efforts to cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or market on which similar securities issued by
the Company are then listed;

          (f) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
to such registration statement and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration;

          (g) Otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make publicly available to all of its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with the first month after the effective
date of the Registration Statement, which earnings statement shall conform materially with the
provisions of Section 1l (a) of the Securities Act; and

          (h) If the registration is in connection with any underwritten offering pursuant to
Section 2.1 or Section 2.3 hereof, the Company will enter into an underwriting
agreement in form reasonably necessary to effect the offer and sale of Common Stock,
provided that such underwriting agreement contains customary underwriting provisions and
provided further that if

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the underwriter so requests the underwriting agreement will contain customary contribution
provisions.

     2.6 Indemnification.

          (a) The Company will indemnify each Holder, each of such Holder’s officers, directors,
managers, members and partners and each person controlling such Holder within the meaning of
Section 15 of the Securities Act with respect to which registration, qualification, or compliance
has been effected pursuant to this Section 2, against all expenses, claims, losses,
damages, and liabilities (or actions, proceedings or settlements in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related registration statement,
notification, or the like) incident to any such registration, qualification, or compliance, or
based on any omission (or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any violation by the Company
of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with any such
registration, qualification, or compliance, and will reimburse each such Holder, each of such
Holder’s officers, directors, managers, members and partners and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, for any legal and any other expenses
reasonably incurred in connection with investigating and defending or settling any such claim,
loss, damage, liability, or action; provided, however, that the Company will not be liable
in any such case to the extent that any such claim, loss, damage, liability, or expense arises out
of or is based on any untrue statement or omission based upon written information furnished to the
Company by such Holder and stated to be specifically for use therein. It is agreed that the
indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent has not been unreasonably withheld).

          (b) Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification, or compliance is being effected, indemnify
the Company, each of its directors and officers, and each other such Holder and Other Stockholder,
and each of their officers, directors, managers, members, partners, and each person controlling
such Holder or Other Stockholder, against all expenses, claims, losses, damages and liabilities (or
actions, proceedings or settlements in respect thereof) arising out of or based on any untrue
statement of a material fact contained in any such registration statement, prospectus, offering
circular or other document, (including any related registration statement, notification, or the
like) incident to any such registration, qualification, or compliance, or based on any omission to
state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, managers, members, partners, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability, or action, in each case to the extent but only to the extent that
such untrue statement or omission is made in (or omitted from) such registration statement,
prospectus, offering circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be specifically for use

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therein; provided, however, that the obligations of such Holder hereunder shall not apply
to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld); provided, further, that in no event shall any
indemnity under this Section 2.6(b) exceed the net proceeds from the offering received by
such Holder less any underwriting discounts, selling commissions and stock transfer taxes paid by
such Holder in the offering.

          (c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such
claim or any litigation resulting therefore; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such party’s expense;
provided, further, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this Section 2, to
the extent such failure is not materially prejudicial. No Indemnifying Party shall, in the defense
of any such claim or litigation, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection with the defense of such claim
and litigation resulting therefrom.

          (d) If the indemnification provided for in this Section 2.6 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss,
liability, claim, damage, or expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements or omissions that
resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or omission.

          (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

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     2.7 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company
such information regarding such Holder and the distribution proposed by such Holder as the Company
may reasonably request in writing and as shall be reasonably required in connection with any
registration, qualification, or compliance referred to in this Section 2.

     2.8 Limitations on Subsequent Registration Rights. From and after the date of this Agreement,
the Company shall not, without the prior written consent of the Holders of at least a majority of
the Registrable Securities enter into any agreement with any holder or prospective holder of any
securities of the Company giving such holder or prospective holder any registration rights senior
to the registration rights granted to the Holders hereunder.

     2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to use its best efforts to:

          (a) Make and keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times from and after ninety
(90) days following the effective date of the first registration statement under the Securities Act
filed by the Company for an offering of its securities to the general public;

          (b) file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act at any time after it has become subject
to such reporting requirements; and

          (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
written request as to the Company’s compliance with the reporting requirements of Rule 144 (at any
time from and after ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities without registration.

     2.10 Delay of Registration; Furnishing Information.

          (a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.

          (b) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Section 2.1, 2.2 or 2.3 that the Holders requesting registration shall
furnish to the Company such information regarding such Holders, the Registrable Securities held by
such Holders and the intended method of disposition of such securities as shall be required to
effect the registration of such Holders’ Registrable Securities.

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     2.11 Transfer or Assignment of Registration Rights. The rights to cause the Company to
register securities granted to a Holder by the Company under this Section 2 may be
transferred or assigned by a Holder of such securities to any Person to whom an assignment has been
or is concurrently being made of an interest in the Loan in accordance with the Credit Agreement
and the Warrant in accordance with the Warrant, and so long as the number of Registrable Securities
purchasable pursuant to the portion of the Warrant so transferred represents not less than the pro
rata portion of the Loan held or being assigned to such Person.

     2.12 “Market Stand-Off” Agreement. If requested by the Company and an underwriter of
Common Stock (or other securities) of the Company, a Holder shall not sell or otherwise transfer or
dispose of any Common Stock (or other securities) of the Company held by such Holder (other than
those included in the registration) during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the Securities Act with
respect to an underwritten public offering.

     The obligations of this Section 2.12 shall not apply to a registration relating
solely to employee benefit plans on Form S-3 or Form S-8 or similar forms that may be promulgated
in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4
or similar forms that may be promulgated in the future. The Company may impose stop-transfer
instructions with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of such one hundred eighty (180) day period.

     2.13 Allocation of Registration Opportunities. The Company shall not limit the number of
Registrable Securities to be included in a registration pursuant to this Agreement in order to
include shares held by stockholders with no registration rights or any other shares of stock issued
to employees, officers, directors, or consultants pursuant to a Company Stock Option Plan, or with
respect to registrations under Sections 2.1 or 2.3 hereof, in order to include in
such registration securities registered for the Company’s own account.

     2.14 Termination of Registration Rights. The rights of a Holder to request registration of
Registrable Securities pursuant to this Agreement shall terminate as to any Holder when all of such
Holder’s Registrable Securities cease to be “Registrable Securities” as defined in Section
1 hereof.

     2.15 Directed Shares. In the event of a firm commitment underwritten public offering of the
Company’s Common Stock pursuant to which the underwriters permit the Company to direct the
purchasers of any public offering shares, the Holders will be offered the right to purchase, or to
assign the right to purchase, subject to compliance with Federal securities laws, a percentage of
such publicly offered shares equal to such Holder’s pro rata share of the Company’s Common Stock
outstanding immediately prior to such issue.

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SECTION 3. MISCELLANEOUS.

     3.1 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).

     3.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, permitted assigns,
heirs, executors and administrators of the parties hereto.

     3.3 Entire Agreement; Amendment; Waiver. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by the Company and the
Holders of at least a majority of the Registrable Securities. Any such amendment, waiver, discharge
or termination shall be binding on all holders, but in no event shall the obligation of any Holder
hereunder be materially increased, except upon the written consent of such Holder.

     3.4 Notices. All notices and other communications required or permitted hereunder shall be
in writing and shall be mailed by United States certified mail, sent by facsimile or delivered
personally by hand or nationally recognized courier addressed (a) if to a Holder as indicated on
the signature page, or at such other address as such Holder or permitted assignee shall have
furnished to the Company in writing, or (b) if to the Company, at such address or facsimile number
as the Company shall have furnished to each Holder in writing. All such notices and other written
communications shall be effective on the date of certified mailing, facsimile transfer or delivery.

     3.5 Delays or Omissions. No delay on the part of any Holder in the exercise of any right,
power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any
of them of any right, power or remedy preclude other or further exercise thereof, or the exercise
of any other right, power or remedy. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder of any breach or default under this Agreement or any waiver on
the part of any Holder of any provisions or conditions of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any Holder, shall be cumulative and
not alternative.

     3.6 Rights; Severability. Unless otherwise expressly provided herein, a Holder’s rights
hereunder are several rights, not rights jointly held with any of the other Holders. The
illegality or unenforceability of any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required hereunder.

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     3.7 Information Confidential. Each party acknowledges that the information received by
them pursuant hereto may be confidential and for its use only, and it will not use such
confidential information in violation of the Securities Act or Exchange Act or reproduce, disclose
or disseminate such information to any other person (other than its employees or agents having a
need to know the contents of such information, and its attorneys), except in connection with the
exercise of rights under this Agreement, unless the Company has made such information available to
the public generally or such party is required to disclose such information by a governmental body.

     3.8 Consent to Jurisdiction, Etc. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT,
AT HOLDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF EACH
LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE COMPANY HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     3.9 Captions. Captions used in this Agreement are for convenience only and shall not affect
the construction of this Agreement.

     3.10 Counterparts. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the same Agreement.
Receipt by telecopy of any executed signature page to this Agreement shall constitute effective
delivery of such signature page.

[signature pages to follow]

-17-

 

[Signature page to Earth BioFuels, Inc.

Warrant Purchase and Registration Rights Agreement]

     IN WITNESS WHEREOF, the parties have executed this Warrant Purchase and Registration Rights
Agreement as of the day and year first ahove written.

	 	 	 	 	 
	 	EARTH BIOFUELS, INC.

 	 
	 	By:  	/s/ Dennis McLaughlin
 	 
	 	Name: Dennis McLaughlin	 
	 	Title: CEO	 
	 	Address for notices:	 
	 

 

 

[Signature page to Earth BioFuels, Inc.

Warrant Purchase and Registration Rights Agreement]

	 	 	 	 	 
	 	FOURTH THIRD LLC

 	 
	 	By:  	/s/ Seth Taube
 	 
	 	Name: Seth Taube	 
	 	Title: Authorised Signatory	 
	 	Address for notices:exv10w93

 

EXHIBIT 10.93

LOAN AND SECURITY AGREEMENT

(dated as of March 1, 2007)

between

GREENFIELD COMMERCIAL CREDIT, L.L.C.

and

APPLIED LNG TECHNOLOGIES USA, L.L.C.

ARIZONA LNG, L.L.C.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	1.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	REVOLVING CREDIT LOAN
	 	 	2	 
	 
	 	 	 	 	 	 
	3.

	 	COLLATERAL	 	 	3	 
	 
	 	 	 	 	 	 
	4.

	 	CHARGES AND INSURANCE
	 	 	4	 
	 
	 	 	 	 	 	 
	5.

	 	EXAMINATION OF RECORDS; REPORTING
	 	 	5	 
	 
	 	 	 	 	 	 
	6.

	 	OTHER LIENS
	 	 	5	 
	 
	 	 	 	 	 	 
	7.

	 	GENERAL WARRANTIES AND REPRESENTATIONS
	 	 	5	 
	 
	 	 	 	 	 	 
	8.

	 	CONDITIONS TO OBLIGATIONS OF LENDER
	 	 	7	 
	 
	 	 	 	 	 	 
	9.

	 	AFFIRMATIVE COVENANTS
	 	 	9	 
	 
	 	 	 	 	 	 
	10.

	 	NEGATIVE COVENANTS
	 	 	10	 
	 
	 	 	 	 	 	 
	11.

	 	DEFAULT
	 	 	11	 
	 
	 	 	 	 	 	 
	12.

	 	YOUR RIGHTS AND REMEDIES
	 	 	12	 
	 
	 	 	 	 	 	 
	13.

	 	WAIVER; AMENDMENTS; SUCCESSORS AND ASSIGNS
	 	 	12	 
	 
	 	 	 	 	 	 
	14.

	 	BANKRUPTCY PROVISIONS
	 	 	13	 
	 
	 	 	 	 	 	 
	15.

	 	MISCELLANEOUS
	 	 	14	 
	 
	 	 	 	 	 	 
	16.

	 	WAIVER OF JURY TRIAL
	 	 	16	 
	 
	 	 	 	 	 	 
	17.

	 	NO ORAL AGREEMENTS
	 	 	16	 
	 
	 	 	 	 	 	 

i

 

LOAN AND SECURITY AGREEMENT

GREENFIELD COMMERCIAL CREDIT, L.L.C.

Gentlemen:

     This Agreement, effective as of the date accepted by you, sets forth the terms and conditions
upon which you will make loans and advances and extend other financial accommodations to the
undersigned (whether one or more in number, referred to herein as “we,” “us” or “our” and which,
if two or more in number, shall be jointly and severally bound):

     1. DEFINITIONS. As used herein:

          (A) “Advances” means loans to us under this Agreement and the Revolving Credit Loan Rider,
and for which our obligation to repay is evidenced by the Revolving Credit Note.

          (B) “Collateral” means all of our presently owned and hereafter acquired or arising:

	 	(i)	 	accounts (whether or not earned by
performance), letter of credit rights, chattel paper, contracts,
contract rights, instruments, documents and supporting obligations
that relate to accounts (individually and collectively referred to as
“Receivables”);
	 
	 	(ii)	 	goods, inventory, merchandise and other
personal property, wherever located, to be furnished under any contract
of service or held for sale or lease, all raw materials, work in
process, finished goods and materials and supplies of any kind, nature
or description which are or might be used or consumed in our business
or used in connection with the manufacture, packing, shipping,
advertising, selling or finishing of such goods, merchandise and other
personal property including without limitation such goods which give
rise to any Receivables and which goods have been returned to or
repossessed or stopped in transit by us (“Inventory”);
	 
	 	(iii)	 	property now or at any time hereafter in your
possession (including monies, deposit accounts, claims and credit
balances);
	 
	 	(iv)	 	books, blueprints, drawings and records
related to any of the foregoing as described in subsection (i) through
(iii) above;

and all proceeds (including proceeds of any insurance policies, including business interruption or
business income insurance policies) and products of and accessions to all the foregoing described
property in which we may have any right, title or interest.

          (C) “Default” shall have the meaning set forth in Paragraph 11 of this Agreement.

          (D) “Indebtedness” means all of our present and future obligations, liabilities, debts, claims
and indebtedness, contingent, fixed or otherwise, however evidenced, created, incurred acquired,
owing or arising, whether under written or oral agreement, operation of law, or otherwise, and
includes,

 

 

without limiting the foregoing (i) Obligations, (ii) obligations and liabilities of any Person
secured by a lien, claim, encumbrance, or security interest upon property owned by us, even though
we have not assumed or become liable therefor, (iii) obligations and liabilities created or
arising under any lease (including capitalized leases) or conditional sales contract or other
title retention agreement with respect to property used or acquired by us, even though the rights
and remedies of the lessor, seller or lender are limited to repossession, (iv) all unfunded
pension fund obligations and liabilities, and (v) deferred taxes.

          (E) “Loan Account” means an account maintained by you for the Loan.

          (F) “Loan” means the Revolving Credit Loan.

          (G) “Note”  means the Revolving Credit Note.

          (H) “Obligations” means all present and future loans, advances, debts, liabilities,
obligations, covenants, duties and Indebtedness owing by us to you, whether evidenced by any note,
or other instrument or document, whether arising from an extension of credit, opening of a letter
of credit, loan, guaranty, indemnification or otherwise, whether direct or indirect (including,
without limitation, those acquired by assignment and any participation by you in our debts owing
to others), absolute or contingent, due or to become due, including, without limitation, all
interest, charges, expenses, fees, attorneys’ fees and any other sums chargeable to us hereunder
or under any other agreement with you.

          (I) “Obligor” means us or any guarantor of the Obligations, individually or collectively.

          (J) “Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, government, or any agency or political
division thereof, or any other entity.

          (K) “Prime Rate” means the rate published from day to day in the WALL STREET JOURNAL in its
“Money Rates” column as the “Prime Rate.” Should such publication not continue to publish the
Prime Rate or a substitute rate, then Lender will select a comparable announced rate. The Prime
Rate will change at any time the published “Prime Rate” changes.

          (L) “Term Sheet” means any document attached to this Agreement and to any Rider which
contains other terms and conditions of this transaction.

          (M) Any accounting terms used in this Agreement, unless otherwise indicated, shall have the
meanings customarily given to them in accordance with generally accepted accounting principles.

          (N) All other terms contained in this Agreement, unless otherwise indicated, shall have the
meanings provided by the Uniform Commercial Code of the state set forth in Paragraph 15(B)
(“Code”) to the extent the same are defined therein.

    2. REVOLVING CREDIT LOAN.

          (A) Revolving Credit Loan; Loan Advances. You will establish a revolving credit loan facility
(the “Revolving Credit Loan” [or the “Loan”]) in the amount of the Maximum Loan Amount as set
forth on the Term Sheet, and, subject to the terms of this Agreement, you may, upon our request,
but at all times in your sole discretion, make Advances to us from time to time, pursuant to the
Revolving Credit Loan Rider attached hereto and made a part hereof (the “Rider”). You may, in your
sole discretion

2

 

and without notice to us, disburse any or all of the proceeds of any or all of the Advances
made by you to such person or persons as you deem necessary to insure that the security interest
in or lien upon the Collateral shall at all times have the priority represented by us in this
Agreement. You may, in your sole discretion, at any time reduce the Percentage Advance Rate or the
Advance amounts set forth in any Rider. You may, from time to time, reimburse yourself for any
loan, interest due, fees or expenses, or any third party for any of our Obligations by charging
our Loan Account. You may deduct from the Advances under this Agreement reserves for accrued
interest and such other reserves as you deem proper and necessary

          (B) Revolving Credit Loan Note. Our obligation to repay Advances under the Revolving Credit
Loan shall be evidenced by a Revolving Credit Loan Note (the “Note”) executed by us, in form
satisfactory to you executed simultaneously herewith, the terms of which are incorporated herein by
this reference.

          (C) Interest and Other Charges. We shall pay you interest on the daily outstanding balance of
the Note at the rates as set forth in the applicable Rider. In addition, we shall also pay you on
the first day of each month, with respect to the prior calendar month or portion thereof one
quarter of one percent (.25%) of the average amount of the Maximum Loan Amount not utilized during
the prior month. In no event whatsoever shall the interest rate and other charges charged hereunder
exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in
the final determination, deem applicable hereto. In the event that a court determines that you
have received interest or other charges hereunder in excess of the highest rate applicable hereto,
you shall promptly, in your sole discretion, either apply such amount to the Obligations or refund
such amount to us and the provisions herein shall be deemed amended to provide for such permissible
rate.

Termination; Prepayment. We shall have the right at any time or from time to time upon three (3)
business days’ written notice to you to prepay the Note in whole or in part provided that if we
prepay the Revolving Credit Loan Note in full and terminate the Revolving Credit Loan, then we
shall pay, in addition to such prepayment, a prepayment penalty equal to three percent (3%) of the
Maximum Loan Amount

          (D) Term. The Term of this Agreement and of the Loan shall be on demand, but if demand is not
made, then no later than the date set forth on the Term Sheet (the “Maturity Date”).

          (E) Monthly Accounting. You will provide us, monthly, with an accounting of Advances,
charges and payments made pursuant to this Agreement. Such accounting shall be deemed correct,
accurate and binding upon us and an account stated (except for reverses and reapplications of
payments made as provided in Paragraph 15(G) hereof, and corrections or errors discovered by you),
unless we notify you in writing to the contrary within thirty (30) days after each accounting is
rendered.

     3. COLLATERAL.

          (A) Grant of Security Interest. As security for the Obligations, we hereby grant you a
continuing security interest in and lien upon, and a right of setoff against and we hereby pledge
and assign to you, all of the Collateral, including any Collateral not deemed eligible for
Advances. We acknowledge that nothing contained in this Agreement or in any Rider shall be (i)
construed as your agreement to resort or look to a particular type of Collateral as security for
any loan to us, or limit in any way your right to resort to any or all of the Collateral as
security for any of the Obligations, or (ii) deemed to limit or reduce any security interest in or
lien upon any portion of the Collateral for the Obligations.

3

 

          (B) Perfection and Protection of Security Interest. We shall, at our expense, perform
all steps requested by you at any time to perfect, maintain, protect, and enforce your security
interest in the Collateral, including, without limitation, executing and filing financing,
continuation statements and amendments thereof, and searches to confirm the priority of your
security interests, in form and substance satisfactory to you, placing notations on our books of
account to disclose your security interest therein, and taking such other steps as are deemed
necessary by you to maintain your control of and security interest in the Collateral, and
delivering to you all letters of credit on which we are named beneficiary. You may file, without
our signature, one or more financing statements disclosing your security interest under this
Agreement. We agree that a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement. If any Collateral
is at any time in the possession or control of any warehouseman,
bailee or any of our agents or
processors, we shall notify such person of your security interest in such Collateral and, upon your
request, instruct them to hold all such Collateral for your account subject to your instructions.
From time to time, we shall, upon your request, execute and deliver confirmatory written
instruments pledging to you the Collateral, but our failure to do so shall not affect or limit your
security interest or other rights in and to the Collateral. Until all Obligations have been fully
satisfied, your security interest in the Collateral shall continue in full force and effect.

          (C) Attorney-in-Fact. We hereby appoint you and any designee of yours as our
attorney-in-fact and authorize you or such designee, at our sole expense, to exercise at any times
in your or such designee’s discretion all or any of the following powers, which powers of attorney,
being coupled with an interest, shall be irrevocable until all Obligations have been paid in full:
(a) receive, take, endorse, assign, deliver, accept and deposit, in your name or our name, any and
all cash, checks, commercial paper, drafts, remittances and other instruments and documents
relating to the Collateral or the proceeds thereof, (b) transmit to account debtors, other obligors
or any bailees notice of your interest in the Collateral or request from account debtors or such
other obligors or bailees at any time, in our name or your name or any designee, information
concerning the Collateral and any amounts owing with respect thereto, (c) notify account debtors or
other obligors to make payment directly to you, or notify bailees as to the disposition of
Collateral, (d) take or bring, in your name or our name, all steps, actions, suits or proceedings
deemed by you necessary or desirable to effect collection of or other realization upon the accounts
and other Collateral, (e) after a Default, change the address for delivery of mail to us and to
receive and open mail addressed to us, (f) extend the time of payment of, compromise or settle for
cash, credit, return of merchandise, and upon any terms or conditions, any and all accounts or
other Collateral which includes a monetary obligation and discharge or release the account debtor
or other obligor, without affecting any of the Obligations, and (g) execute in our name and file
against us in your favor financing statements or amendments with respect to the Collateral.

     4. CHARGES AND INSURANCE.

          (A) You may, in your discretion, at any time discharge any lien or encumbrance or bond the
same, pay any insurance, maintain guards, pay any service bureau, or obtain any record and charge
the cost thereof to our Loan Account.

          (B) We shall at all times insure the Collateral in your name against loss or damage by fire,
theft, burglary, pilferage, loss in transit, business interruption and such other hazards as you
shall specify in amounts, under policies and by insurers reasonably acceptable to you. Each
policy shall include a provision for thirty (30) days prior written notice to you of any
cancellation or substantial modification and shall show you as mortgagee/secured party, loss payee
and additional insured in a manner reasonably acceptable to you. We shall execute and deliver to
you simultaneously herewith and at any other time hereafter such assignments of policies of
insurance, including business interruption

4

 

insurance, as you shall require. All premiums shall be paid by us and the policies shall be
delivered to you. If we fail to do so, you may (but shall not be required to) procure such
insurance at our expense.

     5. EXAMINATION OF RECORDS; REPORTING.

          (A) You may at all reasonable times have access to, examine, audit, make extracts from and
inspect our records, files, books of account and the Collateral. We will deliver to you any
instrument necessary for you to obtain records from any service bureau maintaining records for us.
All instruments and certificates prepared by us showing the value of any of the Collateral shall
be accompanied, upon request, by copies of related purchase orders and invoices. You may, at any
time after and during the continuation of a Default, remove from our premises our books and records
or require us to deliver them to you and you may, without expense to you, use such of our
personnel, supplies and premises as may be reasonably necessary for maintaining or enforcing your
security interest.

          (B) We shall furnish you, upon request, information and statements showing our business
affairs, financial condition and the results of our operations. We will provide you with (i)
original sales invoices, customer statements and credit memos issued, remittance advices and
reports and copies of deposit slips, daily, (ii) copies of shipping and delivery documents, upon
request, (iii) within thirty (30) days after the end of each Interim Financial Statement Period set
forth on the Term Sheet, our internally prepared income statement and balance sheet prepared on a
basis consistent with such statement prepared in prior months and in accordance with generally
accepted accounting principles, and within ninety (90) days after the end of each of our fiscal
years, our financial statements prepared by our independent, certified public accountants
acceptable to you prepared in accordance with generally accepted accounting principles applied on a
basis consistent with prior year-end statements (said interim and year-end financial statements
hereinafter referred to as “Financials”) (the scope of the CPA’s engagement is set forth on the
Term Sheet), (iv) complete copies of all tax returns when filed, and (v) certificates relating to
the foregoing as you may request.

     6. OTHER LIENS. We represent and warrant that all Collateral is and will continue to be owned
by us free and clear of all liens, claims and encumbrances whatsoever, whether prior or
subordinate to the liens we have granted you, except for Permitted Liens, if any, as set forth on
the Term Sheet; and that we will not, without your prior written approval, which may be withheld in
your sole discretion, sell, encumber or dispose of or permit the sale, encumbrance or disposal of
any Collateral, except for sales of Inventory in the ordinary course of business.

     7. GENERAL WARRANTIES AND REPRESENTATIONS. We warrant and represent that:

          (A) We are duly organized and existing in good standing under the laws of the Formation State
set forth on the Term Sheet, are qualified to do business and are in good standing in all states in
which qualification and good standing are necessary in order for us to conduct our business and own
our property and have all requisite power and authority to conduct our business, to own our
property and to execute, deliver and perform all of our Obligations;

          (B) We have not, during the preceding five (5) years, been known by or used any other Assumed
Names or Trade Names other than as set forth on the Term Sheet;

          (C) The execution, delivery and performance by us of this Agreement will not constitute a
violation of any applicable law or of our Articles or Certificate of Incorporation, By-Laws or Code
of Regulations or any agreement, or document to which we are a party or bound;

5

 

          (D) We possess adequate assets, licenses, patents, patent applications, copyrights,
trademarks, trademark applications, and tradenames for the conduct of our business;

          (E) We have capital sufficient to conduct our business, are solvent and able to pay our debts
as they mature and own property having a fair value greater than the amount required to pay our
debts;

          (F) Except for trade payables arising in the ordinary course of our business and except as
heretofore disclosed to you in writing, we have (i) no pending or threatened litigation, actions or
proceedings which would materially and adversely affect our business assets, operations or
condition, financial or otherwise, or the Collateral and (ii) no Indebtedness, other than the
Obligations;

          (G) We have good, indefeasible, and merchantable title to the Collateral, and there is no lien
or encumbrance thereon other than the security interest granted to you and Permitted Liens as set
forth on the Term Sheet;

          (H) We are not subject to judgment, decree or order materially and adversely affecting our
business, assets, operations or condition, financial or otherwise, and are not subject to any
labor dispute; and, no labor contract is scheduled to expire during the term of this Agreement,
except as heretofore disclosed to you in writing;

          (I) We are not in violation of any applicable statute, regulation or ordinance, in any
respect materially and adversely affecting the Collateral or our business, assets, operations or
condition, financial or otherwise;

          (J) We are not in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed or other agreement to which we are a party or bound;

          (K) The financial statements delivered to you fairly present our financial condition and
results of operations and those of such other Persons described therein as of the date thereof; and
there has been no material and adverse change in such financial condition or operations since the
date of the statements;

          (L) We have received no notice that we are not in full compliance with any of the
requirements of the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and its
regulations and, to the best of our knowledge, there exists no event described in Section 4043 of
ERISA, excluding subsections 4043(b)(2) and 4043(b)(3) thereof, with respect to us;

          (M) We have filed all tax returns and other reports we are required by law to file and have
paid all taxes and similar charges that are due and payable;

          (N) Our Chief Executive Office, Principal Place of Business and the Location of Collateral
Records is at the location set forth on the Term Sheet;

          (O) We have not received any notice alleging and are not aware of any facts indicating
noncompliance with any State or Federal law governing the use, generation, storage or release of
any hazardous waste or substance;

          (P) We have no Subsidiaries or Affiliates other than as set forth on the Term
Sheet;

6

 

          (Q) We own all properties on which Collateral is located other than the Leased
Properties set forth on the Term Sheet; and

          (R) All Collateral which is tangible personal property is kept only at the Collateral
Locations set forth on the Term Sheet.

8. CONDITIONS TO OBLIGATIONS OF LENDER.

          (A) Conditions for Closing. Your obligation to close the Loan(s) hereunder is
subject to receipt by you of the following documents, fully executed, and completion of the
following matters, all in form and substance satisfactory to you:

                (i) Charter Documents. Certificates of recent date of the appropriate
authority or official of our state of incorporation (listing all of our charter documents on file
in that office if such listing is available) certifying as to our good standing and corporate
existence together with copies of such charter documents, certified as of a recent date by such
authority or official and certified as true and correct as of the date hereof by us by a duly
authorized officer;

                (ii) Certification of Good Standing. Certificates of recent date of the
appropriate authority or official of each state in which we are legally qualified to do business,
each certifying as to our good standing;

                (iii) By-Laws and Corporate Authorizations. Copies of our by-laws
together with all authorizing resolutions and evidence of other corporate action taken by us to
authorize the execution, delivery and performance by us of this Agreement and all documents and
instruments executed in connection therewith (the “Loan Documents”), and the consummation by us of
the transactions contemplated hereby, certified as true and correct as of the date hereof by us by
a duly authorized officer;

                (iv) Incumbency Certificates. A certificate of incumbency for us
containing, and attesting to the genuineness of, the signatures of those officers authorized to
act on our behalf in connection with the Loan Documents to which we and the consummation by us of
the transactions contemplated hereby, certified as true and correct as of the date hereof by us by
a duly authorized officer;

                (v) Note. The Revolving Credit Note duly executed by us;

                (vi) Security Documents. This Loan and Security Agreement duly executed
on our behalf granting to you, as collateral security for the Obligations, the Collateral intended
to be provided pursuant to Section 3, together with the following in fully executed form:

	 	a.	 	Recording, Filing, Etc. Evidence of the recordation, filing and
other action (including payment of any applicable taxes or
fees) in such jurisdictions as you may deem necessary or
appropriate with respect to any security interest, including
the filing of financing statements and similar documents
which you may deem necessary or appropriate to create,
preserve or perfect the liens, security interests and other
rights intended to be granted to you thereunder, together
with Uniform Commercial Code record searches in such offices
as you may request;

7

 

	 	b.	 	Guarantor Security Documents.

	 	(1)	 	A Guaranty constituting the unconditional,
unlimited guaranty of the Obligations by Earth
Biofuels, Inc. and Earth LNG, Inc. (“Corporate
Guarantors”) and the Validity Guaranty of Dennis
McLaughlin (“Validity Guarantor”);

	 	c.	 	Casualty and Other Insurance.
Evidence that the casualty and other insurance required pursuant
to Section 4 of this Agreement is in full force and effect
and assignments of policies of insurance as you shall
require;

               (vii) Closing Certificate; Borrowing Authorization. A Closing Certificate
and a Borrowing Authorization in form satisfactory to you duly executed by us by a duly authorized
officer;

               (viii) Legal Opinions. The favorable written opinion of counsel for us [and the
Guarantor] with respect to such matters as you may reasonably request;

               (ix) Consents, Approvals, Etc. Copies
of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations or filings, if
any, required on our part in connection with the execution, delivery and performance of the Loan
Documents or the transactions contemplated hereby or as a condition to the legality, validity or
enforceability of the Loan Documents, certified as true and correct and in full force and effect
as of the date hereof by us by a duly authorized officer of Borrower, or, if none is required, a
certificate of such officer to that effect;

               (x) Fee. The balance of the Commitment Fee in the amount of One Hundred
Thousand and 00/100 Dollars ($100,000.00). At our option, the Commitment Fee may be over advanced
and amortized over six months from this date. Any unused amount of the Due Diligence Investigation
Fees of Fifteen Thousand and 00/100 Dollars ($15,000.00) paid to you to date shall be credited
against amounts due hereunder. The Commitment Fee shall be deemed fully earned upon deposit of the
first Advance in the Loan Account;

               (xi) Payoff Letters and Lien Terminations. A payoff letter from First
Capital Corporation, addressed to you, in form and substance acceptable to you, together with UCC
financing statement terminations and other documents and instruments necessary or reasonably
desired by you to effect and evidence the release and discharge of all liens and security
interests of in their favor with respect to the Collateral;

               (xii) Subordination Agreements. Subordination agreements executed by
Oliver Kendall Kelley (each as “Creditor”), us and you subordinating all indebtedness and liens of
each Creditor to the Loan and security interests in support thereof in all respects in form
satisfactory to you;

               (xiii) Other Matters. Such other documents, and completion of such other matters, as you
may reasonably request.

          (B) Further Conditions for Disbursement. Your obligation to make any Advance
(including the first Advance) is further subject to the satisfaction of the following conditions
precedent:

8

 

               (i) The representations and warranties contained in Section 7 hereof and in
any of the Loan Documents shall be true and correct on and as of the date such Advance is made
(both before and after such Advance is made) as if such representations and warranties were made on
and as of such date;

               (ii) No Default shall exist or shall have occurred and be continuing on the date such
Advance is made (whether before or after such Advance is made); and

               (iii) In the case of any Advance under the Revolving Credit Loan, you shall
have received, when due, all Reports required pursuant to Section 5(B) as of the close of business
on the last business day of the week next preceding the date such Advance is made.

We shall be deemed to have made a representation and warranty to you at the time of the making of,
and the continuation or conversion of, each Advance to the effects set forth in clauses (A) and
(B) of this Section 8. For purposes of this Section 8(B), the representations and warranties
contained in Section 7 hereof shall be deemed made with respect to both the financial statements
referred to therein and the most recent financial statements delivered pursuant to Section 5(B).

          (C) Post-Closing Conditions. After the date hereof, we agree to provide you with the
following:

               (i) UCC Searches. Uniform Commercial Code searches in all jurisdictions in which you
have filed UCC Financing Statements or in which we conduct business;

               (ii) Evidence of Use of Loan Proceeds. All documents you require to evidence the use
by us of the proceeds of the Loan;

     9. AFFIRMATIVE
COVENANTS. We covenant that, so long as any Obligations remain outstanding and this Agreement is in effect, we shall:

          (A) Pay to you on demand all fees and expenses which you incur in connection with (i) the
forwarding of loan proceeds, (ii) the processing of loan advances, (iii) the establishment and
maintenance of the lock box and of all other accounts created in connection with the transaction
contemplated hereby, and (iv) examination of the Collateral;

          (B) Promptly file all tax returns and other reports which we are required to file and promptly
pay all taxes, assessments and other charges;

          (C) Promptly notify you in writing of any litigation affecting us, whether or not the claim is
covered by insurance, and of any suit or administrative proceeding which may materially and
adversely affect the Collateral or our business, assets, operations or condition, financial or
otherwise;

          (D) Notify you in writing (i) promptly upon the occurrence of any event described in Section
4043 of ERISA, other than a termination, partial termination or merger of a “Plan” (as defined in
ERISA) or a transfer of a Plan’s assets, and (ii) prior to any termination, partial termination or
merger of a Plan or a transfer of a Plan’s assets;

          (E) Give you thirty (30) days prior written notice of our opening or closing any place of
business;

9

 

          (F) Maintain our corporate existence and our qualification and good standing in all states
necessary to conduct our business and own our property and maintain adequate assets, licenses,
patents, copyrights, trademarks and tradenames to conduct our business;

          (G) Promptly notify you in writing of any labor dispute to which we are or may become subject
and the expiration of any labor contract to which we are a party or bound;

          (H) Promptly notify you in writing of any violation of any law, statute, regulation or
ordinance of any governmental entity, or of any agency thereof, applicable to us which may
materially and adversely affect the Collateral or our business, assets, operations or condition,
financial or otherwise;

          (I) Notify you in writing within five (5) business days of our default under any note,
indenture, loan agreement, mortgage, lease, or other agreement to which we are a party or bound;

          (J) Promptly notify you in writing of any default under any Indebtedness or indebtedness owing
to us;

          (K) Execute and deliver to you, upon request, such documents and agreements as you may, from
time to time, reasonably request to carry out the terms and conditions of this Agreement;

          (L) Promptly, and in any event within five (5) days of the receipt thereof, deliver any
communication in any way concerning any act or omission on our part regarding the use, generation,
storage or release of a hazardous waste or substance. We agree to indemnify and hold you harmless
from any and all loss, damage, cost, liability or expense (including reasonable attorney fees)
arising out of our use, generation, storage or release of any hazardous waste or substance;

          (M) Promptly, and in any event within five (5) days of the receipt thereof, deliver to you a
copy of any communication from the Federal Department of Labor concerning any alleged act or
omission on our part in connection with the payment of minimum and/or overtime wages to an
employee;

          (N) Promptly, and in any event within five (5) days of the receipt thereof, deliver to you a
copy of any communication concerning any violation of a state or Federal law which could result in
the forfeiture of the Collateral;

          (O) Deliver to you photocopies of our monthly bank statements; and

          (P) Maintain the liens and security interests granted to you as first, prior and only liens
upon the Collateral, except for Permitted Liens.

     10. NEGATIVE COVENANTS. Without your prior written consent, we covenant that, so long
as any Obligations remain outstanding and this Agreement is in effect, we shall not:

          (A) Merge or consolidate with or acquire any other Person;

          (B) Make any capital expenditures materially affecting our business, assets,
operations or conditions, financial or otherwise except as permitted by the Initial Term Credit
Agreement (as such term is defined in the Intercreditor Agreement by and among Greenfield
Commercial Credit LLC, Fourth Third LLC as Agent, Apollo LNG, Inc. d/b/a Earth LNG, Inc. et al
[“Intercreditor Agreement]);

10

 

          (C) Declare or pay cash dividends upon any of our stock or distribute any of our property or
make (except in the ordinary course of business) any loans or extensions of credit, or investments
in, any Person, or redeem, retire, purchase or acquire, directly or indirectly any of our stock, or
make any material change in our capital structure or in our business or operations which might
adversely affect the repayment of the Obligations, other than payments of dividends or
distributions to an Obligor;

          (D) Enter into any transaction which materially and adversely affects the Collateral or our
ability to repay the Obligations, including any secondary liens thereon except as permitted by the
Initial Term Credit Agreement;

          (E) Become liable for the indebtedness (other than Term Loan Obligations, as such term is
defined in the Intercreditor Agreement) of any Person, except by endorsement of instruments for
deposit;

          (F) Incur Indebtedness (other than Term Loan Obligations, as such term is defined in the
Intercreditor Agreement and Indebtedness permitted by the Initial Term Credit Agreement, as such
term is defined in the Intercreditor Agreement), other than trade payables arising in the ordinary
course of our business, and the Obligations;

          (G) Make a sale to any customer on a bill-and-hold, guaranteed sale, sale and return, sale on
approval, consignment, or any other repurchase or return basis;

          (H) Remove the Collateral which is tangible personal property from the Collateral Locations
set forth on the Term Sheet unless we give you thirty (30) days prior written notice and the same
is removed to a location within the continental United States of America;

          (I) Use any other corporate or fictitious name;

          (J) Prepay any Indebtedness, except the Loan and the Term Loan Obligations, as such term is
defined in the Intercreditor Agreement; or

          (K) Pay salary increases, bonuses or commissions to any principal or officer out of the
ordinary course of business;

     11. DEFAULT. Any one or more of the following events shall constitute a default (“Default”)
under this Agreement: (a) we shall fail to pay when due, or breach, any Obligations, or (b)
Obligor shall (i) become insolvent, (ii) generally not pay its respective debts as they become
due, (iii) make an assignment for the benefit of creditors, (iv) attempt to enter into a
composition of debts, or (v) make any misrepresentation to you or fail to observe or perform any
covenants or conditions in connection with this Agreement, any Rider or any other instrument
related to the Loan hereto, or (c) there shall be filed by or against any Obligor a petition in
bankruptcy for liquidation or for reorganization, or a custodian, receiver or agent is appointed
or authorized to take charge of its properties, or any Obligor authorizes any such action, or (d)
there hereafter occur any material and adverse change in the business, assets, operations and
condition, financial or otherwise, of any Obligor, or (e) any Obligor shall be in default under
any agreement to which it is a party, or (f) any guaranty of the Obligations shall be terminated
or revoked, or (g) you in good faith believe that either (i) the prospect of payment or
performance of the Obligations is impaired or (ii) the Collateral is not sufficient to secure
fully the Obligations.

11

 

     OBLIGOR ACKNOWLEDGES THAT WHILE THERE ARE EVENTS OF DEFAULT SET FORTH, THE OBLIGATIONS ARE
DUE UPON DEMAND, AND IF DEMAND IS NOT MADE, THEN UPON THE MATURITY DATE [OR EXTENDED MATURITY
DATE, AS APPLICABLE,] SET FORTH IN THE TERM SHEET. DEMAND MAY OCCUR WITH OR WITHOUT THERE BEING AN
EVENT OF DEFAULT.

     12. YOUR RIGHTS AND REMEDIES.

          (A) If a Default has occurred under this Agreement and is continuing or you have made demand,
you may, at your election, without notice of your election and without demand, do any one or more
of the following: (a) declare our Obligations, whether evidenced by a revolving credit note, a
term note or otherwise, to be immediately due and payable; (b) stop advancing money or extending
credit to or for our benefit under the Agreement or any Rider; (c) exercise any and all of the
rights accruing to a secured party under the Code and any other applicable law; (d) take possession
of the Collateral and keep it on our premises, at no cost to you, or remove any part of it to such
other place(s) as you may desire or we shall, upon your demand, at our cost, assemble the
Collateral and make it available to you at a place reasonably convenient to you; (e) seek the
appointment of a receiver or trustee under the laws of any court having jurisdiction for such
appointment (to which appointment we consent to in advance and waive any rights to object to or
oppose).

          (B) In the event of a Default hereunder, you may sell and deliver any Collateral at public or
private sales, for cash, upon credit or otherwise, at such prices and upon such terms as you deem
advisable, at your discretion, and may, if you deem it reasonable, postpone or adjourn any sale of
the Collateral by an announcement at the time and place of sale of such postponed or adjourned sale
without giving a new notice of sale. We agree that you have no obligation to preserve rights to
the Collateral or marshall any Collateral for the benefit of any Person. You are hereby granted a
license or other right to use, without charge, our labels, patents, copyrights, name, trade
secrets, trade names, trademarks and advertising matter, or any similar property, in completing
production, advertising or selling any Collateral and our rights under all licenses and all
franchise agreements shall inure to your benefit. Any requirement of reasonable notice shall be met
if such notice is mailed, postage prepaid to us at our address set forth below at least five (5)
days before sale or other disposition. The proceeds of sale shall be applied first to all expenses
of sale, including attorneys’ fees, and second to (in whatever order you elect) all Obligations.
You will return any excess to us and we shall remain liable for any deficiency.

          (C) IN THE EVENT OF A DEFAULT HEREUNDER, WE HEREBY WAIVE ALL RIGHTS TO NOTICE AND HEARING
PRIOR TO THE EXERCISE BY YOU OF YOUR RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR
TO REPLEVY, ATTACH OR LEVY UPON SUCH COLLATERAL WITHOUT NOTICE OR HEARING AND ALL RIGHTS OF SET-OFF
AND COUNTERCLAIM AGAINST YOU.

     13. WAIVER; AMENDMENTS; SUCCESSORS AND ASSIGNS. Your failure to exercise any right,
remedy or option under this Agreement or any Rider or other agreement between you and us or delay
by you in exercising the same will not operate as a waiver. No waiver by you will be effective
unless in writing and then only to the extent stated. No waiver by you shall affect your right to
require strict performance of this Agreement. Your rights and remedies will be cumulative and not
exclusive. This Agreement cannot be changed or terminated orally. All terms, conditions,
promises, covenants, provisions and warranties shall inure to the benefit of and bind your and our
respective representatives, successors and assigns.

12

 

     14. BANKRUPTCY PROVISIONS. In consideration of your agreements hereunder and under the Loan
Documents, we agree that, in the event any one or more of us (as a “Debtor” or “Debtors”) files
for relief under Title 11 of the United States Code (“Bankruptcy Code”) or is otherwise subject to
an order for relief under the Bankruptcy Code, that as to each Debtor:

          (A) Relief From Stay. You shall be entitled to relief from the automatic stay imposed by
Bankruptcy Code Section 362 on or against the exercise of any and all rights and remedies available
to you under this Agreement, the Loan Documents or applicable law, if Debtor fails to file a Plan
of Reorganization within 120 days or fails to obtain confirmation of a Plan of Reorganization
within 180 days, after entry of the order for relief. We specifically acknowledge that “cause”
exists for such relief within the meaning of Section 362(d) of the Bankruptcy Code.

          (B) Cash Collateral. Any attempt by Debtor to use “Cash Collateral” (as defined in Section
363 of the Bankruptcy Code) shall be subject to the prior entry of an order pursuant to Section 363
of the Bankruptcy Code (“Cash Collateral Order”) specifically incorporating the principal terms set
forth on Schedule 14(B) attached hereto and the Debtor shall under no circumstances seek to use
Cash Collateral other than on the terms provided in this Agreement. Any such Cash Collateral
Order shall permit the use of Cash Collateral only until the earliest to occur of: (i) a Default
under any of the provisions of this Agreement or the Loan Documents (other than a Default
occasioned solely by the bankruptcy of Debtor), (ii) the appointment of a Chapter 11 trustee or
examiner in Debtor’s case, (iii) the dismissal of Debtor’s case or its conversion to a case under
Chapter 7 of the Bankruptcy Code, or (iv) the entry of an order modifying or terminating the
automatic stay or prohibiting the further use of cash collateral. Upon the occurrence of any of
the events described in (i) through (iv) of the preceding sentence, Debtor’s ability to use Cash
Collateral shall terminate immediately and automatically; such termination shall not, however,
affect or impair the rights, interests or liens granted to you under this Agreement or the other
Loan Documents.

     All existing and future revenue and cash shall constitute Cash Collateral, subject to your
choate, fully perfected and presently enforceable liens and security interests, and, to the extent
they are used and consumed by Debtor after filing of the petition or entry of the order for
relief, Debtor specifically agrees that they are collateral for your secured claims under Section
506 of the Bankruptcy Code in the amount so used.

     To the extent it is determined that Section 552(a) of the Bankruptcy Code applies to limit
your interest under the Loan Documents and this Agreement you shall be deemed to have, as adequate
protection for the use of Cash Collateral, a continuing perfected protection for the use of Cash
Collateral, a continuing perfected post-bankruptcy lien and security interest in all Collateral,
and all revenue and cash, whether derived from operations prior to or subsequent to or the filing
of a voluntary of involuntary petition for relief with respect to Debtor. As further adequate
protection for Debtor’s use of Cash Collateral, Debtor shall maintain at all times an adequate and
appropriate amount and type of coverage of insurance, including endorsements issued therewith
covering the Collateral in amounts not less than that required under the Loan Documents. To the
extent that the collateral securing your claims in Debtor’s bankruptcy case is deemed or proves to
be insufficient to pay your claims in full, your secured claims shall be deemed to have been
inadequately protected by the provisions of the Cash Collateral Order, and they shall therefore
have administrative expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code, which superpriority shall be equal to the priority provided under the provisions of Section
364(c)(l) of the Bankruptcy Code over all other costs and administrative expenses incurred in the
case of the kind specified in, or ordered pursuant to, Sections 105, 326, 327, 330, 331, 503(b),
506(c), 507(a), 507(b) or 726 of the Bankruptcy Code and shall at all times be senior to the rights
of Debtor or any successor trustee in the resulting bankruptcy proceeding or any subsequent
proceeding under the Bankruptcy Code.

13

 

     During the pendency of Debtor’s bankruptcy, if it is determined that any of the rights
granted hereunder or by any of the Loan Documents are security interests or liens, they shall be
deemed perfected without the necessity of the filing of any documents or commencement of
proceedings otherwise required under non-bankruptcy law for the perfection of security interests,
with such perfection being binding upon any subsequently appointed trustee, either in Chapter 11
or under any other Chapter of the Bankruptcy Code, and upon other creditors of Debtor who have or
may hereafter extend secured or unsecured credit to Debtor.

          (C) Surcharge Waiver. Debtor and/or any other representative of Debtor’s bankruptcy
estate waives any right to seek a surcharge of your collateral under 11 U.S.C. § 506(c) or any
other provision of applicable law.

          (D) Other
Waivers. Debtor waives any right to seek an order under 11 U.S.C.
§§ 363, 364, 1129 or any other provision of the Bankruptcy Code, imposing liens or security interests of senior
or equal priority with your liens and security interests in the Collateral or the Cash Collateral.

          (E) Other Actions Not Prohibited. Nothing contained in this Section 14 shall be deemed to
limit or restrict your rights to seek in the bankruptcy court any relief that you may deem
appropriate in the event of a bankruptcy commenced by or against Debtor, and in particular, you
shall be free to seek the dismissal or conversion of any case filed by Debtor, the appointment of a
trustee or examiner, and relief from the automatic stay.

15. MISCELLANEOUS.

          (A) If any provision of this Agreement shall be prohibited or invalid, under
applicable law, it shall be ineffective only to such extent, without invalidating the remainder of
this Agreement.

          (B) This Agreement shall be interpreted in accordance with the Governing Law of the state set
forth on the Term Sheet.

          (C) All of our representations and warranties contained in this Agreement shall survive the
execution, delivery and acceptance thereof by the parties.

          (D) No termination of this Agreement or of any guaranty of the Obligations shall affect or
impair the powers, obligations, duties, rights, warranties, representations or liabilities of the
parties hereto and all shall survive such termination.

          (E) Each Obligation may, in your discretion, be evidenced by notes or other instruments
issued or made by us to you. If not so evidenced, such Obligation shall be evidenced solely by
entries upon your books and records.

          (F) All Obligations shall constitute one loan secured by the Collateral. You may, in your
sole discretion: (i) exchange, enforce, waive or release any of the Collateral or (ii) apply
Collateral and direct the order or manner without affecting your right to take any other action
with respect to any other Collateral.

          (G) You shall have the continuing and exclusive right to apply or reverse and re-apply any
and all payments to any portion of the Obligations. To the extent that we make a payment or you
receive any payment or proceeds of the Collateral for our benefit, which are subsequently
invalidated,

14

 

declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor
in possession, receiver or any other party under any bankruptcy law, common law or equitable cause,
then, to such extent, the Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by you.

          (H) We shall reimburse you for all expenses incurred or to be incurred by you in connection
with (a) the negotiation, preparation and closing of this Agreement; (b) the protection,
perfection or preservation of your security interest in or lien upon the Collateral; (c) your
inspection or verification of the Collateral; (d) any court or bankruptcy proceeding relating to
the Agreement or any claim or action by any Person against you which would not have been asserted
were it not for your relationship with us hereunder or otherwise; (e) actions taken with respect
to the Collateral and your security interest or lien therein; and (f) enforcement of any of your
rights and remedies with respect to the Obligations or Collateral. The foregoing expenses shall
include, without limitation: (i) reasonable fees, costs and expenses of your attorneys and
paralegals; (ii) interest on the foregoing at the highest applicable interest rate provided under
this Agreement, which shall be part of the Obligations, payable on demand and secured by the
Collateral. In addition, we shall pay those fees set forth on the Term Sheet at the times
specified therein. In recognition of your right to have all your expenses incurred or to be
incurred in connection with this Agreement and the fees due you secured by the Collateral, you
shall not be required to record any discharge of your lien or termination of your security
interest unless and until we deliver to you a general release acceptable to you.

          (I) We agree to give you written notice of any action or omission by you or your agents in
connection with this Agreement that may be actionable against you or that may be a defense to
payment of the Obligations for any reasons. We further agree that unless such a notice
specifically describing the action or omission is given by us within thirty (30) days after we
have knowledge or with the exercise of reasonable diligence should have had knowledge of the
occurrence of said action or omission we shall not assert, and we shall be deemed to have waived,
any claim or defense arising therefrom.

          (J) If you shall breach your obligation under this Agreement to make an advance under the
terms of this Agreement, notwithstanding our conformance with the provisions thereof, we agree
that our sole remedy on account thereof shall be to recover liquidated damages on account of such
breach, computed as hereinafter provided, in recognition of the fact that the damages which we
might incur are uncertain and speculative. Liquidated damages to which we shall be entitled shall
be equal to sixty (60) times the interest payable for one day on the loans outstanding as of the
day that you are deemed to have failed to fund. In any event, you shall never be liable to us for
special, indirect and consequential damages, whatever the nature of your breach hereunder.

          (K) We authorize and direct you to disburse, for our account, the proceeds of loans made by
you to us to such Person as any of our officers or directors shall direct, whether in writing or
orally.

          (L) Any notice required hereunder shall be in writing, and addressed to the party to be
notified as follows:

	 	 	 	 	 
	 

	 	If to you:
	 	Donald G. Barr, Jr., President
	 

	 	 	 	Greenfield Commercial Credit, L.L.C.
	 

	 	 	 	300 E. Long Lake, Ste 180
	 

	 	 	 	Bloomfield   Hills,   Michigan    48304

15

 

	 	 	 	 	 
	 

	 	If to us:
	 	The Borrower’s Address set forth
	 

	 	 	 	on the Term Sheet.

or to such other address as each party may designate for itself by like notice.

          (M) We represent and warrant to you that, with respect to the financing transaction herein
contemplated, no Person is entitled to any brokerage fee or other commission and we agree to
indemnify and hold you harmless against any and all such claims.

          (N) The paragraph titles contained in this Agreement are without substantive meaning and are
not part of the Agreement.

          (O) We hereby release and exculpate you, your officers, employees and designee, from any
liability arising from any acts under this Agreement or in furtherance thereof, whether as
attorney-in-fact or otherwise, whether of omission or commission, and whether based upon any error
of judgment or mistake of law or fact, except for willful misconduct. In no event will you have any
liability to us for lost profits or other special or consequential damages.

          (P) You may, at your option, cure any default by us under any agreement with a third party or
pay or bond on appeal any judgment entered against us, discharge taxes, liens, security interests
or other encumbrances at any time levied on or existing with respect to the Collateral and pay any
amount, incur any expense or perform any act which, in your sole judgment, is necessary or
appropriate to preserve, protect, insure, maintain, or realize upon the Collateral. You may charge
our Loan Account for any amounts so expended, such amounts to be repayable by us on demand. You
shall be under no obligation to effect such cure, payment, bonding or discharge, and shall not, by
doing so, be deemed to have assumed any obligation or liability of ours.

          (Q) All representations and warranties by us contained in this Agreement or any of the other
agreements contemplated herein shall survive the execution and delivery of this Agreement until
the termination hereof and the indefeasible satisfaction in full of all Obligations.

     16. WAIVER OF JURY TRIAL. Our legal counsel has advised us that (i) there may be a
constitutional right to a jury trial in connection with any claim, dispute or lawsuit arising out
of this Agreement or any Rider and (ii) such constitutional right may be waived. After
consultation with our counsel (which has included our counsel’s review of this Agreement), we
believe that it is in our best interest in this commercial transaction to waive such right.
Accordingly, we hereby waive our right to a jury trial, and further agree that the best forum for
hearing any claim, dispute or lawsuit, if any, arising in connection with this Agreement or any
Rider or our relationship with you, shall be a court of competent jurisdiction sitting without a
jury.

     17. NO ORAL AGREEMENTS. We acknowledge that this Agreement and each Rider represents the
final agreement between you and us and the terms of such documents may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements that may have or will be
exchanged between you (including your officers, employees and agents) and us.

16

 

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	ARIZONA LNG, L.L.C.	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	By: Earth LNG, Inc., a Texas corporation	 	 
	 	 	Its:  Sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	/s/ John Morrison	 	 
	 

	 	 	 

John Morrison
	 	 
	 

	 	Its:
	President	 	 
	 
	 	 	 	 	 	 
	 

	 	and	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	APPLIED LNG
TECHNOLOGIES USA, L.L.C.,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 	 	By: Earth LNG, Inc., a Texas corporation	 	 
	 	 	Its:  Sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	/s/ John Morrison	 	 
	 

	 	 	 

John Morrison
	 	 
	 

	 	Its:
	President	 	 

	 	 	 	 	 
	Accepted at: Dallas, Texas on March 1, 2007
	 
	 	 	 	 
	GREENFIELD COMMERCIAL CREDIT, L.L.C.,
	a Michigan limited liability company
	By:

	 	GCC Management, Inc.	 	 
	Its:

	 	Manager	 	 
	 
	 	 	 	 
	By:

	 	/s/ Edward P. Lewan	 	 
	 

	 	 

Edward P. Lewan
	 	 
	Its:

	 	Senior Vice President	 	 

17

 

SCHEDULE
14(B)

CASH COLLATERAL ORDER PRINCIPAL TERMS

     In addition to such terms and conditions as Debtor and you shall mutually agree, the Cash
Collateral Order shall contain the following principal terms:

     1. An acknowledgment by Debtor that the indebtedness owed to you constitutes the valid and
binding obligation of Debtor and is secured by liens and security interests granted by Debtor to
you in Debtor’s tangible and intangible personal property as described in the Loan Documents; and
your security interests and liens in the Collateral are valid, properly perfected and recorded and
are unavoidable and indefeasible in the pending bankruptcy proceeding; nor are they subject to
avoidance, defeasance, offset, defense or counterclaim of any kind.

     2. Debtor may use Cash Collateral only for “necessary operating expenses.” The term
“necessary operating expenses” shall be limited to the payment of current taxes incurred after the
petition date, unpaid withholding taxes for the last pay period before and pay periods after the
petition date, wages and salaries, property insurance, necessary repairs and maintenance,
utilities, purchase of inventory and other ordinary charges necessary for Debtor’s operations. The
term “necessary operating expenses” does not include payments to pay or cure any prepetition
obligations of Debtor including any arrearages under any lease, equipment or a statutory contract
obligation, except that such expenses may be paid with your prior written consent.

     3. All principal, interest, costs and expenses, including reasonable attorneys’ fees
heretofore, now or hereafter incurred by you in connection with the indebtedness or in the
administration of this bankruptcy proceeding, and all sums at any time owing by Debtor under this
Cash Collateral Order, the Notes or any other notes or other agreements with you, is and shall
continue to be secured by a post-petition first and senior security interest in and lien upon all
property of Debtor and property of the estate of whatever kind or nature, acquired by Debtor or the
estate on or after the petition date.

     4. You shall continue to receive all reports as provided under the Loan Documents. You shall
continue to have access to Debtor’s books and records for the purpose of conducting audits of the
Collateral. All of the provisions of the Loan Documents shall remain in full force and effect and
Debtor shall continue to provide to you all other documents and information required to be provided
to you under the Loan Documents.

     5. Interest will continue to accrue and be paid at the non-default rate or the default rate of
interest, whichever is in effect as of the petition date and shall continue to accrue under the
Notes.

     6. Until the indebtedness to you is repaid in full, Debtor will not without your prior written
consent engage in any transaction which is not in the ordinary course of its business, including
the dispositions of any assets, engaging in any new or different business activities, increase its
investment in fixed or capital assets, or create, assume or suffer to exist any lien or security
interest in favor of any person other than you in any of the collateral.

     7. Such other reasonable and ordinary terms and conditions as you shall require subject to
approval of the bankruptcy court.

Schedule-1

 

 

LOAN AND SECURITY AGREEMENT

DATED AS OF MARCH 1, 2007

TERM SHEET

	 	 	 	 	 
	Paragraph	 	Provisions	 	Terms
	2(A)

	 	Maximum Loan Amount:
	 	$5,000,000.00
	 
	 	 	 	 
	2(C)

	 	Interest Rate:
	 	Prime Rate plus 2%;
Prime Rate plus 6% after
Default
	 
	 	 	 	 
	2(D)

	 	Maturity Date:	 	Earlier of demand or one
year from date hereof
	 
	 	 	 	 
	
5(B)

	 	
Interim Financial Statement Period
	 	
Monthly
	 
	 	 	 	 
	5(B)

	 	Scope of CPA Engagement:
	 	audited
	 
	 	 	 	 
	7(A)

	 	Formation State:
	 	Nevada and Delaware
	 
	 	 	 	 
	7(B)

	 	Assumed Names or Trade Names:
	 	Earth LNG, Inc.
	 
	 	 	 	 
	7(G)

	 	Permitted Liens
	 	Fourth Third LLC, as Agent
	 
	 	 	 	 
	7(N)

	 	Chief Executive Office, Principal Place
of Business and Location of Collateral
Records:
	 	3001 Knox Street, Ste

403, Dallas, TX 75205
	 
	 	 	 	 
	7(P)

	 	Subsidiaries or Affiliates:
	 	Fleet Star,
Inc./Apollo Leasing, Inc.
d/b/a Alternative Dual
Fuels, Inc.
	 
	 	 	 	 
	7(Q)

	 	Leased Properties:
	 	n/a
	 
	 	 	 	 
	7(R)

	 	Collateral Locations:
	 	3001 Knox Street, Ste

403, Dallas, TX 75205
	 
	 	 	 	 
	15(B)

	 	Governing Law:
	 	Michigan

Term Sheet-1

 

 

	 	 	 	 	 
	Paragraph	 	Provisions	 	Terms
	15(H)

	 	Fees:	 	 
	 
	 

	 	(i) Commitment Fee:
	 	$100,000.00, which may be
over advanced and amortized
over 6 months from date
hereof;
	 
	 	 	 	 
	 

	 	(ii) Under Utilization Fee:
	 	.25% of Maximum Loan
Amount of Loan not drawn —
payable monthly;
	 
	 	 	 	 
	 

	 	(iii) Loan Processing Fee:
	 	.57% of average loan
outstanding, payable monthly;
	 
	 	 	 	 
	 

	 	(iv) Collateral Evaluation Fee:
	 	$1,000 per day plus expenses
for examination of Collateral.
All monthly fees are payable
with interest payment; and
	 
	 	 	 	 
	 

	 	(v) Fees for Lockbox
and Other Accounts:
	 	as specified by depository
institutions.
	 
	 	 	 	 
	15(L)

	 	Borrower’s Address:
	 	3001 Knox Street, Ste 403,

Dallas, Texas 75205

     We understand that this Term Sheet defines certain terms used in the attached Loan
and Security Agreement (“Attachment”). We have read the Attachment and this Term Sheet and
fully understand their relationship. By executing both documents, we acknowledge the
foregoing.

	 	 	 	 	 	 	 	 	 
	LENDER:	 	 	 	BORROWER:
	 
	 	 	 	 	 	 	 	 
	GREENFIELD COMMERCIAL CREDIT, L.L.C.,	 	 	 	ARIZONA LNG, LLC.
	a Michigan limited liability company	 	 	 	a Nevada limited liability company
	 
	 	 	 	 	 	 	 	 
	By:

	 	GCC Management, Inc.
	 	 	 	By:
	 	Earth LNG, Inc., a Texas corporation
	Its:

	 	Manager
	 	 	 	Its:
	 	Sole Member
	By:

	 	/s/ Edward P. Lewan
	 	 	 	By:
	 	/s/ John Morrison
	 

	 	 
	 	 	 	 	 	 
	 

	 	Edward P. Lewan
	 	 	 	 	 	John Morrison
	Its:

	 	Senior Vice President
	 	 	 	Its:
	 	President
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	and	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPLIED LNG TECHNOLOGIES USA,
	 	 	 	 	 	 	LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Earth LNG, Inc., a Texas corporation
	 

	 	 	 	 	 	Its:
	 	Sole Member
	 

	 	 	 	 	 	By:
	 	/s/ John Morrison
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	John Morrison
	 

	 	 	 	 	 	Its:
	 	President

Term Sheet-2

 

 

REVOLVING CREDIT LOAN NOTE

$5,000,000.00

			
	 	 	 
	Due Date: The earlier of demand 

or one year from date hereof
	 	Dated: March 1, 2007
	 	 	 

     FOR VALUE RECEIVED, the undersigned (whether one or more in number, “Borrower”, and if two or
more in number, shall be jointly and severally bound), promises to pay to the order of GREENFIELD
COMMERCIAL CREDIT, L.L.C., a Michigan limited liability company (the “Lender”), at its office at
300 East Long Lake Road, Suite 180, Bloomfield Hills, Michigan 48304, or at such other place as
Lender may designate in writing, the principal sum of Five Million and 00/100 Dollars
($5,000,000.00), or such lesser sum as shall have been advanced by Lender to Borrower pursuant to
that certain Loan and Security Agreement dated as of this date between Borrower and Lender (which,
together with all amendments and modifications thereof, is hereinafter referred to as the “Loan
Agreement”), plus interest as hereinafter provided, all lawful money of the United States of
America, in accordance with the terms hereof.

     The unpaid principal balance of this Revolving Credit Loan Note (“Note”) shall bear interest
computed upon the basis of a year of 360 days for the actual number of days elapsed in a month, at
a rate of interest (the “Effective Rate”) which is equal to two percentage points (2%) above the
prime rate (hereafter defined), as such rate shall vary from time to time, upwards and downwards,
and each such Prime Rate change shall cause an identical change in the Effective Rate to occur
effective immediately. “Prime Rate” means that rate of interest published from day to day in the
WALL STREET JOURNAL in its Money Rates column as the “Prime Rate.” Should such publication not
continue to publish the Prime Rate or a substitute rate, then Lender will select a comparable
announced rate.

     Interest on all principal amounts advanced by Lender from time to time and unpaid by Borrower
shall be paid on the first day of the month following execution of this Note, and on the same day
of each month thereafter until the Due Date, upon which date the entire unpaid principal balance
of this Note, together with all accrued and unpaid interest, shall be due and payable in full.
Borrower shall pay to Lender a late charge of five percent (5%) of any monthly payment not
received by Lender within ten (10) calendar days after said payment is due, which late charge
shall be payable on the next monthly payment date or on demand. In addition to the foregoing,
Borrower shall pay to Lender on the first day of each month with respect to the prior calendar
month or portion thereof, the amount, if any, necessary to pay the fees as set forth in the Loan
Agreement.

     Advances of principal, repayment, and readvances may be made under this Note from time to
time, upon the terms set forth in the Loan Agreement and said Loan Agreement is incorporated
herein by reference. Mandatory repayments of principal before the Due Date shall be made by
Borrower to Lender pursuant to the Loan Agreement. If, prior to the Due Date, Borrower pays the
balance of the Note after demand or terminates the Loan, whether voluntarily or involuntarily,
Borrower shall pay to Lender as liquidated damages and as compensation for the costs of being
prepared to make funds available under the Loan Agreement a termination fee as set forth in the
Loan Agreement.

 

 

     All advances made hereunder shall be charged to a loan account in Borrower’s name on Lender’s
books, and Lender shall debit to such account the amount of each advance made to, and credit to
such account the amount of each repayment made by Borrower. Lender shall furnish Borrower with a
monthly statement of Borrower’s loan account, which statement shall be deemed to be correct,
accepted by, and binding upon Borrower, unless Lender receives a written statement of exceptions
from Borrower within thirty (30) days after such statement has been furnished. Borrower expressly
assumes all risks of loss or delay in the delivery of any payments made by mail, and no course of
conduct or dealing shall affect Borrower’s assumption of these risks.

     Upon the Due Date, which Borrower acknowledges may be upon demand, Lender, without prior
notice to Borrower, may declare the entire unpaid principal balance of this Note and all accrued
interest, together with all other indebtedness of Borrower to Lender, to be immediately due and
payable. Upon the occurrence of any Default specified on the Loan Agreement or upon demand, the
unpaid principal balance of this Note shall bear interest at a rate which is four percent (4%)
greater than the Effective Rate otherwise applicable. After Default or demand, Lender may apply its
own indebtedness or liability to Borrower to any indebtedness due under this Note. Borrower agrees
to pay all of the Lender’s costs incurred in the collection of this Note as provided in the Loan
Agreement.

     Acceptance by Lender of any payment in an amount less than the amount then due shall be
deemed an acceptance on account only. Upon any Default, neither the failure of the Lender promptly
to exercise its right to declare the outstanding principal and accrued unpaid interest hereunder
to be immediately due and payable, nor the failure of the Lender to demand strict performance of
any other obligation of the Borrower or any other person who may be liable hereunder, shall
constitute a waiver of any such rights, nor a waiver of such rights in connection with any future
default on the part of the Borrower or any other person who may be liable hereunder.

     Borrower acknowledges that no Default is necessary for Lender to make demand.

     Borrower and all endorsees, sureties and guarantors hereof hereby jointly and severally waive
presentment for payment, demand, notice of non-payment, notice of protest or protest of this Note,
and Lender diligence in collection or bringing suit, and do hereby consent to any and all
extensions of time, renewals, waivers or modifications as may be granted by Lender with respect to
payment or any other provisions of this Note, and to the release of any collateral or any part
thereof, with or without substitution. The liability of Borrower under this Note shall be absolute
and unconditional, without regard to the liability of any other party. This Note and all rights and
obligations hereunder shall be governed by the laws of the State of Michigan.

     In no event whatsoever shall the interest rate and other charges charged hereunder exceed the
highest rate permissible under any law which a court of competent jurisdiction shall, in the final
determination, deem applicable hereto. In the event that a court determines that Lender has
received interest or other charges hereunder in excess of the highest rate applicable hereto,
Lender shall either, in its sole discretion, promptly apply such amounts to the principal due
hereunder or refund such amount to Borrower and the provisions herein shall be deemed amended to
provide for such permissible rate.

2

 

     This Note is issued pursuant to the terms of the Loan Agreement and is secured by the
Collateral, as defined in the Loan Agreement. All of the terms, covenants and conditions of the
Loan Agreement are hereby made a part of this Note and are hereby incorporated by reference.

	 	 	 	 	 
	 	 	“BORROWER”
	 
	 	 	 	 
	 	 	ARIZONA LNG, L.L.C.
	 	 	a Nevada limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Earth LNG, Inc., a Texas corporation
	 

	 	Its:
	 	Sole Member
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Morrison
	 

	 	 	 	 
	 

	 	 	 	John Morrison
	 

	 	Its:
	 	President
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 	 	APPLIED LNG TECHNOLOGIES USA,
	 	 	L.L.C., a Delaware limited liability
	 	 	company
	 
	 	 	 	 
	 

	 	By:
	 	Earth LNG, Inc., a Texas corporation
	 

	 	Its:
	 	Sole Member
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Morrison
	 

	 	 	 	 
	 

	 	 	 	John Morrison
	 

	 	Its:
	 	President

 3

 

 

ENDORSEMENT

     Pay to the order of Wells Fargo Foothill, LLC, as Agent.

	 	 	 	 	 	 	 
	 	 	GREENFIELD COMMERCIAL CREDIT L.L.C., a Michigan
	 	 	limited liability company
	 
	 	 	 	 	 	 
	 	 	By:	 	GCC Management, Inc., its sole Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Gerald V. Greve
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Gerald V. Greve
	 

	 	 	 	Its:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 
	Date: 3-7-07
	 	 	 	 	 	 

 

 

GUARANTY

Dated as of March 1, 2007

GREENFIELD COMMERCIAL CREDIT, L.L.C.

     THIS GUARANTY, effective as of the date accepted by you, sets forth the terms and conditions
upon which the undersigned (whether one or more in number, referred to herein as “we,” “us” or
“our” and whom, if two or more in number, shall be jointly and severally bound) agrees to guaranty
certain loans made by you:

     1. Underlying Facts.

          (a) You have agreed to extend credit to Applied LNG Technologies USA, L.L.C. and Arizona LNG,
L.L.C. (together “Borrower”) in an amount up to $5,000,000.00 (the “Loan”), as evidenced by one or
more promissory notes executed by Borrower (individually and collectively, the “Note”).

          (b) Borrower has executed and delivered to you a Loan and Security Agreement of even date,
together with one or more Riders of even date (collectively, the “Loan Agreement”), and other loan
documents executed in connection therewith, (the Loan Agreement, Note and other loan documents are
referred to collectively herein as the “Loan Documents”).

          (c) You require as a condition of making the Loan that we execute and deliver this
Guaranty.

     2. Amount of Guaranty. In order to induce you to make the Loan to Borrower, we absolutely and
unconditionally guarantee to you the due and prompt payment and performance of any and all
indebtedness, liabilities and obligations of Borrower to you whether now existing or hereinafter
purchased or incurred, direct or indirect, absolute or contingent, secured or unsecured, matured or
unmatured, joint or several, including without limitation, all indebtedness evidenced by the Loan
Documents, whether for principal, interest, fees, expenses, costs of enforcement, including
reasonable attorneys’ fees, or otherwise (the “Obligations”). In addition, we shall pay you all
costs incurred, including reasonable attorneys’ fees, in enforcing payment and performance of this
Guaranty.

     3. Your Authority. You may from time to time without notice to us and/or without our consent
and upon such terms and conditions as you may deem advisable without affecting this Guaranty:

	 	(a)	 	release Borrower, any maker, guarantor, surety or other person
liable for payment of all or any part of the Obligations;
	 
	 	(b)	 	make any agreement extending or otherwise altering the time for
or the terms of payment of all or any part of the Obligations;
	 
	 	(c)	 	modify, waive, forbear, compromise, release, subordinate,
resort to, exercise or refrain from exercising any right you may have
hereunder, or under any of the Loan Documents;
	 
	 	(d)	 	accept or decline additional security or guarantees of any kind;
	 
	 	(e)	 	endorse, transfer or assign the Note or any other security to any other party;
	 
	 	(f)	 	accept partial payment or payments on account of the Obligations;
	 
	 	(g)	 	make further or additional loans or give or extend credit to or for the benefit
of Borrower;

 

 

	 	(h)	 	release, settle or compromise any of your claims against Borrower or any other
person, firm, corporation, guarantor, or account debtor whose obligation is held
by you as collateral security for the Obligations;
	 
	 	(i)	 	release or substitute collateral, guaranties or guarantors; and/or
	 
	 	(j)	 	amend the Loan Agreement by accepting any new Receivables Loan Rider, Inventory
Loan Rider or Term Loan Rider, whether or not such amendment increases the
likelihood of our liability under this Guaranty.

     4. Our Waivers. We unconditionally and absolutely waive:

	 	(a)	 	any obligation you may have to protect, secure or insure any of the
collateral given to secure the payment of the Obligations or to ensure Borrower’s
compliance with any such obligation imposed on Borrower under the Loan Documents;
	 
	 	(b)	 	any right to participate in any of the collateral given as security for the
payment of the Loan;
	 
	 	(c)	 	notice of your acceptance of this Guaranty;
	 
	 	(d)	 	any right to notice of presentment, notice of demand for payment, notice of
non- performance, protest, notice of protest and notice of dishonor, notice of
non-payment and notice of partial payment;
	 
	 	(e)	 	any right to notice of any default under any of the Loan Documents or in the
performance of any of the covenants and agreements contained therein or in any
instrument given as security for the Loan;
	 
	 	(f)	 	any defense, offset or claim Borrower may have against you;
	 
	 	(g)	 	any limitation or exculpation of liability on the part of Borrower whether
contained in the Loan Documents or otherwise;
	 
	 	(h)	 	the right to notice and the right to consent or object to the transfer or
sale by Borrower of any collateral or any diminution in value of any collateral or any
release of any collateral;
	 
	 	(i)	 	any defense, offset or claim of lack of commercial reasonableness in the method,
manner,
time, place and terms of the disposition of collateral given as security for the
Obligations;
	 
	 	(j)	 	any failure, neglect or omission on your part to realize upon or protect the
Obligations or
any collateral given as security therefor;
	 
	 	(k)	 	any right to insist that you prosecute collection of the Obligations or
resort to any collateral given as security for the Obligations or to proceed against
Borrower or against any other guarantor or surety prior to enforcing this Guaranty;
provided, however, in your sole discretion you may, either in a separate action or in
an action pursuant to this Guaranty, pursue your remedies against Borrower or any
other guarantor or surety, without affecting your rights under this Guaranty;
	 
	 	(l)	 	any right to participate in or direct such action or proceeding in 4(k) above;
	 
	 	(m)	 	any right to notice of advances made to Borrower under the Loan Documents;

2

 

	 	(n)	 	any right relating to notice or any order, method or
manner of application of any payments on the Obligations; and/or
	 
	 	(o)	 	any right to insist that you disburse the full
principal amount of the Loan to Borrower or the order, method, manner or
amounts disbursed under the Loan Documents.

     5. Our Revocation. This Guaranty shall remain in full force and effect and be binding upon us
and shall inure to your benefit until thirty (30) days after the date this Guaranty is expressly
terminated by notice in writing delivered personally to or received by registered mail by you at
300 East Long Lake Road, Suite 180, Bloomfield Hills, Michigan 48304, or such other address you
specify in writing to us; provided, however, that this Guaranty shall remain in full force and
effect regardless of such termination with respect to all Obligations in existence on the date of
such termination (including any subsequent extension, renewal, modification, amendment or
compromise thereof and all subsequently accruing interest and other charges thereon) until all such
Obligations are fully satisfied and paid to you. In the absence of any termination of this Guaranty
in accordance with the provisions of this Section 5, we agree that until all Obligations and our
obligations under this Guaranty are satisfied, this Guaranty shall remain in full force and effect
notwithstanding that from time to time Borrower may be free from all Obligations.

     6. Additional Waivers. We will not assert against you and do hereby unconditionally
and absolutely waive all defenses of Borrower and any defenses we may have against you, including,
but not limited to, defenses of waiver, release, discharge, bankruptcy, statute of limitations, res
judicata, statute of frauds, anti-deficiency statute, fraud, fraudulent conveyance, insolvency,
lack of consideration, merger of claims under this Guaranty with the Obligations, ultra vires acts,
usury, illegality or unenforceability, any defense which, under principles of guaranty, suretyship
or other applicable law, would operate to impair or diminish our liability under this Guaranty, any
setoff available against you by Borrower whether or not on account of a related transaction, and we
shall be and remain liable for any deficiency remaining after foreclosure of any mortgage or any
security interest securing the Obligations notwithstanding any provisions of law that may prevent
you from enforcing such deficiency against Borrower.

     7. Effect of Bankruptcy. Our liability shall not be affected nor impaired by any voluntary
or involuntary dissolution, sale or other disposition of all or substantially all of the collateral
or assets of Borrower, receivership, insolvency proceeding, bankruptcy, assignment for the benefit
of creditors, reorganization proceeding, arrangement, composition or readjustment of, or other
similar event or proceeding affecting Borrower or any of its assets and that upon the institution
of any of the above actions, at your sole discretion and without notice thereof or demand therefor,
our obligations hereunder shall become due and payable and enforceable against us, whether or not
the Obligations are then due and payable.

     8. Marshaling of Assets. We waive any defense or claim relating to any obligation you may have
to marshal the collateral or other assets of Borrower for our benefit, and we agree that you shall
be under no duty to marshal the assets of Borrower for our benefit or any third party.

     9. Absolute and Unconditional. No act or thing, except for payment in full, which but for
this provision might or could in law or in equity act as a release of our liabilities, shall in any
way affect or impair this Guaranty. This shall be a continuing, absolute and unconditional
Guaranty, and our liability on this Guaranty shall be immediate. You may have immediate recourse
against us for full and immediate payment and performance of the Obligations, or any part thereof,
at any time after the Obligations have not been paid or performed when due (whether by acceleration
or otherwise). Subject to Section 5 hereof, this Guaranty shall remain in full force and effect
until the Obligations have been paid in full notwithstanding any change or modification of our
relationship with Borrower which exists as of the date hereof.

     10. Subordination. All indebtedness and liability now or at any time or times hereafter owing
to us by Borrower is hereby subordinated to the Obligations and any payment of indebtedness or
liabilities of Borrower to us shall be held by us in trust for you, segregated from other funds,
and shall, immediately upon our receipt, be turned over to you in the exact form received by us
(duly endorsed to you, if required), to be applied against the Obligations, whether matured or
miniatured, in such order as you may determine.

3

 

     11. Subrogation. We waive any claim or other right which we may now have or may
hereafter acquire against Borrower or any other person that is primarily or contingently liable on
the obligations that arise from the existence or performance of our obligations under this
Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy you may have against
Borrower or any collateral security therefor, which you now have or hereafter acquire, whether or
not such claim, remedy or right arises in equity, or under contract, statute or common law. If any
amount shall be paid to us contrary to the terms of this Section 11, such amount shall be held by
us in trust for you, segregated from our other funds, and shall, immediately upon receipt by us, be
turned over to you in the exact form received by us (duly endorsed to you, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as you may determine.

     12. Setoff. Upon the occurrence and continuation of a Default (as defined in the Loan
Agreement) under the Loan Documents, we hereby authorize you at any time and from time to time to
set off and apply any deposit held and any other indebtedness at any time owing by you to us or for
our account against our Obligations and liabilities to you.

     13. Reinstatement. This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of all or any part of the Obligations is rescinded or must
otherwise be returned by you upon the insolvency, bankruptcy, reorganization, liquidation or
dissolution of Borrower or otherwise, all as if such payment had not been made. We hereby
indemnify and hold you harmless from and against all costs and expenses you may incur, including
reasonable attorneys’ fees, in connection with the defense of a bankruptcy preference action,
fraudulent conveyance action, lien avoidance action, or other action relating to your right to
retain amounts previously paid to you in respect of the Obligations, and for all costs and expenses
you may incur relating to the Obligations or the security therefor during any applicable redemption
period following the foreclosure of any mortgage or security interest in any collateral, including
but not limited to, taxes and insurance costs in respect of such collateral, whether or not
Borrower would be liable to you for such costs and expenses.

     14. Your Reliance. We acknowledge that this Guaranty is executed in order to induce you to
make and disburse the Loan with the intent that you will rely upon it in making and disbursing the
Loan with the knowledge that you would not disburse the Loan but for execution of this Guaranty.
Disbursement of any part of the Loan, without any further action or notice, shall constitute
conclusive evidence of your reliance hereon.

     15. Representations and Covenants. Each of the undersigned hereby represent and agree as
follows:

	 	(a)	 	the fair saleable value of our assets exceeds our liabilities,
including the liability undertaken pursuant to this Guaranty; we are meeting
our current liabilities as they mature; our financial statements furnished to
you are true and correct; since the date of such financial statements, there
have been no material adverse change in our financial condition; there are not
now pending any material court or administrative proceedings or any
undischarged judgments against us, and no federal or state tax liens have been
filed or threatened against us, nor are we in default or claimed default under
any agreement for borrowed money.
	 
	 	(b)	 	we agree to immediately give you written notice of any material
adverse change in our financial condition, including but not limited to
litigation commenced, tax liens filed, defaults claimed under our indebtedness
for borrowed money or bankruptcy proceedings commenced by or against us. Upon
your request, we agree to deliver to you timely annual financial statements for
the preceding year and supporting federal and state tax returns, and at such
reasonable time as you request, to furnish our current financial statement.
	 
	 	(c)	 	we are fully aware of the financial condition of Borrower and
deliver this Guaranty based solely upon our own independent investigation and
in no part upon any representation or statement made by you with respect
thereto. We are in a position to and hereby assume full responsibility for
obtaining any additional information concerning Borrower’s

4

 

	 	 	 	financial condition as we may deem material to our obligations
hereunder. We are not relying upon nor expecting you to furnish us any
information in your possession concerning Borrower’s financial condition.
	 
	 	(d)	 	other than proceeds of loan advances to the Borrower which may
be used by the Borrower to pay us salary, bonuses or dividends, none of the
loan advances will be used for (i) our personal, family or household purposes,
or (ii) to purchase or otherwise obtain title to residential property which is
security for our obligations under this Guaranty.

     16. Security. The performance of our obligations under this Guaranty is unsecured, other
than for such rights of set-off which you may have by virtue of your holding our property.

     17. Miscellaneous.

	 	(a)	 	No right or remedy conferred upon or reserved to you under this Guaranty is intended to be
exclusive of any other available remedy or remedies but each and every remedy shall be cumulative
and shall be in addition to every other remedy given under this Guaranty, or the Loan Documents, or
as may now or hereafter exist at law or in equity. No waiver, amendment, release or modification
of this Guaranty shall be established by conduct, custom or course of dealing, but only by an
instrument in writing duly executed by you.
	 
	 	(b)	 	Whenever the context requires or permits the singular shall include the plural, the plural
shall include the singular and the masculine, feminine and neuter shall be freely interchangeable.
	 
	 	(c)	 	This Guaranty is delivered in and made in, is executed with respect to and shall in all
respects be construed pursuant to and governed by the laws of the State of Michigan.
	 
	 	(d)	 	This Guaranty and each and every part hereof, shall be binding us and our heirs,
administrators, representatives and executors and shall inure to your benefit, and your successors
and assigns, including each and every holder of the Note.
	 
	 	(e)	 	This Guaranty may be executed by one or more of the parties hereto on any number of
separate counterparts and all of the counterparts taken together shall constitute one and the same
instrument.
	 
	 	(f)	 	This Guaranty constitutes the joint and several obligation of each guarantor of the
Obligations, including the undersigned, and shall be fully binding upon and enforceable against any
or all of such parties or persons and their sole and separate estates. Neither the death nor
release of any guarantor of the Obligations shall affect or release the joint and several liability
of any other person or party. You may at your option enforce this Guaranty against one or more or
all of the guarantors of the Obligations; provided you shall not be required to resort to
enforcement against each and every guarantor of the Obligations and the failure to proceed against
or join each and every of the guarantors of the Obligations shall not affect the joint and several
liability of each of the guarantors of the Obligations.
	 
	 	(g)	 	This Guaranty is intended by us as a final expression of our agreement and is intended as
a complete statement of the terms and conditions to which we are bound.

     18. Waiver of Jury Trial. Our legal counsel has advised us that (a) there may be a
constitutional right to a jury trial in connection with any claim, dispute or lawsuit arising out
of this Guaranty, and (b) such constitutional right may be waived. After consultation with our
counsel (which has included our counsel’s review of this Guaranty), we believe that it is in our
best interest in this commercial transaction to waive such right. Accordingly, we hereby waive
our right to a jury trial and further agree that the best forum for hearing any claim, dispute or
lawsuit, if any, arising in connection with this Guaranty or our relationship with you, shall be a
court of competent jurisdiction sitting without a jury.

5

 

     WE GIVE THIS GUARANTY FREELY AND VOLUNTARILY TO YOU WITHOUT ANY DURESS OR COERCION. WE
HAVE CONSULTED WITH COUNSEL AND WE HAVE CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND
PROVISIONS OF THIS GUARANTY.

	 	 	 	 	 
	 	 	EARTH LNG, INC.,
	 	 	a Texas corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dennis G. McLaughlin III
	 

	 	 	 	 
	 

	 	 	 	Dennis G. McLaughlin III
	 

	 	Its:
	 	Chief Executive Officer
	 
	 	 	 	 
	 	 	EARTH BIOFUELS, INC.
	 	 	a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dennis G. McLauglin III
	 

	 	 	 	 
	 

	 	 	 	Dennis G. McLauglin III
	 

	 	Its:
	 	Chief Executive Officer

6

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